/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/111207.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, December 7, 2011, Vol. 15, No. 339 Headlines 600 WILLIAM: Case Summary & 20 Largest Unsecured Creditors A.B.C. LANDCLEARING: Case Summary & 15 Largest Unsecured Creditors AMERICAN AIRLINES: Wins Interim Nod to Pay Insurance Obligations AMERICAN AIRLINES: Wins Interim Nod to Pay Surety Bond Programs AMERICAN AIRLINES: Proposes Reclamation Claims Process AMERICAN AIRLINES: Unions, PBGC Among 9 Selected for Committee AMERICAN AIRLINES: USAir Mum About Potential Merger AMTRUST FINANCIAL: Emerges From Bankruptcy Protection ARIN ENTERPRISES: Voluntary Chapter 11 Case Summary ASHRIA ENTERPRISES: Voluntary Chapter 11 Case Summary ATLANTIC & PACIFIC: Union Members Accept Wage, Benefits Cuts BELLISIO FOODS: Moody's Rates Proposed Credit Facilities at 'B1' BERNARD L. MADOFF: Trustee Has Expedited Appeal on JPMorgan Suit BORDERS GROUP: Jefferies Entitled to $250T Liquidation Fee BOZEL S.A.: U.S. Trustee Appoints 3-Member Creditors' Panel BOZEL S.A: Committee Retains Pick & Zabicki as Counsel CAPMARK FINANCIAL: Goldman Alleges Forum-Shopping in $147M Suit CARBON RESOURCES: Can Sell Substantially All Assets to Delta Coal CHRISTIAN BROTHERS: Panel Taps Paul Richler as Insurance Counsel CITIZENS CORP: Wants Lenders Punished Over FiData Control CITIZENS CORP: Initial Conference Scheduled for Dec. 8 CITIZENS CORP: Sec. 341 Creditors' Meeting Set for Jan. 5 CIVIC PARTNERS: Must Respond to Bank's Document Request CLEARWIRE CORP: Amends 4G MVNO Agreement with Sprint Spectrum CLEARWIRE CORP: Intends to Offer $300 Million of Class A Shares CREDITRON FINANCIAL: Sold to Y&B for $600T; Closing Date on Jan. 3 CROATAN SURF: Hires Village Realty as Real Estate Broker D&B SWINE: Stern Limits Court's Role in Contract Dispute DALE MARTIN: Court Rejects Bid to Dismiss Lee-Taylor Suit DEBUT BROADCASTING: Incurs $252,000 Net Loss in Third Quarter DELTA AIR: Reports $765-Mil. Profit in Third Quarter DIAMOND RANCH: Delays Filing of Form 10-Q for Sept. 30 Qtr. DELUXE ENTERTAINMENT: Moody's Rates Proposed Term Loan at 'B1' DESERT GARDENS: U.S. Bank Wants Cash Collateral Access Denied DIRECT BUY: Cut by Moody's to 'Caa3' as Debt Restructuring Mulled DREIER LLP: Court Okays Accord With Hedge Fund, Founder's Ex-Wife DUMBARTON HOME: Case Summary & 3 Largest Unsecured Creditors DYNEGY INC: Debtors File Reorganization Plan DYNEGY INC: U.S. Trustee Drops Oaktree as Committee Member DYNEGY INC: Dynegy Holdings Cuts Assets to $7.56 Billion DYNEGY INC: Terminates Stockholder Protection Rights Agreement E-DEBIT GLOBAL: Incurs $241,000 Net Loss in Third Quarter EAT AT JOE'S: Incurs $199,600 Net Loss in Third Quarter EFD LTD: Court Reschedules Hearing on Valuation Until Jan. 6 EGPI FIRECREEK: Delays Filing of Form 10-Q for Sept. 30 Quarter ELITE PHARMACEUTICALS: Posts $13.9MM Net Income in Sept. 30 Qtr. EMMIS COMMUNICATIONS: Alden Global Owns 0 Class A Shares ENERTECK CORP: Incurs $946,000 Net Loss in Third Quarter ESCO-VINA LLC: Involuntary Chapter 11 Case Summary EVERGREEN ENERGY: Iroquois Discloses 1% Equity Stake EXTENDED STAY: Blackstone, et al., Seek Dismissal of $8-Bil. Suits EXTENDED STAY: Fixes Mezzanine Facilities Claims for $3 Billion FRIEDMAN'S INC: Postpetition Payments Don't Affect Preference GATEWAY METRO: Can Obtain $350,000 DIP Loan from Flying Tigers GATEWAY METRO: Wants to Pay Property Tax Using Impounded Funds GAY NINETIES: First Creditors' Meeting Set for Dec. 29 GERDAU AMERISTEEL: Moody's Withdraws 'Ba1' Corp. Family Rating GETTY PETROLEUM: Case Summary & 30 Largest Unsecured Creditors GOLD AMERICAS: Fitch Affirms Issuer Default Rating at 'B+' GRAFTECH INT'L: Moody's Upgrades Corp. Family Rating to 'Ba1' GREEN EARTH: Incurs $2.2 Million Net Loss in Sept. 30 Quarter GUIDED THERAPEUTICS: Incurs $2.6 Million Net Loss in 3rd Quarter GUIDED THERAPEUTICS: Amends 2.6 Million Common Shares Offering HALO COMPANIES: Incurs $558,000 Net Loss in Third Quarter HARMAN INT'L: Moody's Raises Corporate Family Rating to 'Ba1' HARRIBURG,PA: Residents File Suit Over State Takeover HARRISBURG, PA: Judge Explains Decision to Dismiss Chapter 9 Case HARRISBURG, PA: Judge Approves David Unkovic as Receiver HELEN KELLER: Moody's Affirms 'Ba1' Rating on Fixed Rate Bonds HIGH LINER: Moody's Assigns 'B1' Corporate Family Rating HOOD PROPERTIES: Case Summary & 3 Largest Unsecured Creditors HORIZON LINES: To Offer Common Shares, Warrants and Notes HOTEL AIRPORT: Gets 10-Day Plan Exclusivity Extension INTERVAL ACQUISITION: Moody's Affirms 'Ba3' Corp. Family Rating J.C. EVANS: Plans to Lay Off About 300 Employees JULIA HOOK: Dist. Court Says Plan Default Warrants Case Dismissal KEVEN A MCKENNA: Former Paralegal Entitled to $2T Claim KEVIN KENERLY: Files for Chapter 11 Bankruptcy Protection L.A. DODGERS: Magic Johnson Joins Group to Bid on Firm LEHMAN BROTHERS: Now A Step Closer to Emerging From Bankruptcy LEHMAN BROTHERS: Wins Nod to Form Director Selection Committee LEHMAN BROTHERS: Committee Backs Natural Gas Dispute Deal LEHMAN BROTHERS: Won't End Health Benefit as Part of ACESO Deal LEHMAN BROTHERS: RBS to Pay $215MM to Settle Swap Dispute LINCOLN LOGS: Dist. Court Affirms Ruling on Constructive Trust LOS ANGELES DODGERS: Magic Johnson Joins Bid to Buy LA Dodgers LOVELAND ESSENTIAL: Case Summary & 7 Largest Unsecured Creditors M&M STONE: Univest Bank Wants Cash Collateral Access Denied MAKENA GREAT: Case Summary & XX Largest Unsecured Creditors MARONDA HOMES: Can Continue Using Cash Collateral Until Jan. 10 MCCORMICK & SCHMICK: Moody's Says Landry Buyout Won't Have Impact MEGA-C POWER: 9th Cir. Affirms Ruling on Battery Ownership Dispute MESA AIR: Files Post-Confirmation Report for 3rd Quarter MESA AIR: Reaches Settlement With SBCC and Rolls-Royce MF GLOBAL: Corzine Disregarded Former Chief Risk Officer's Warning MF GLOBAL: American Farmers Unlikely Victims of Demise MF GLOBAL: Kim Eng Decides Not to Buy Asian Business MF GLOBAL: Trustee to Receive $1.3 Billion From Harris Bank MF GLOBAL: Wind-Down Fees May Reach $100 Million In A Year MSR RESORT: Sues Hilton Over Undisclosed Tenant-Lender Agreements NALCO CO: Moody's Lifts Senior Unsecured Debt Rating From 'Ba2' NATIONAL CENTURY: Ex-VP's Sentence Cut to 4 Years in Fraud Case NATIONAL CENTURY: Poulsen Wants Settlement Agreements Unsealed NATIONAL CENTURY: Claims vs. Credit Suisse Entities Dismissed NCI BUILDING: Moody's Revises Outlook on 'B3' to Negative NEW CLINTON: Voluntary Chapter 11 Case Summary NEWPAGE CORP: Creditors Seek to Probe Cerberus's Dealings O&G LEASING: Deal on Automatic Stay OK'd, to Pay $4MM WSB's Claim OFFICEMAX INC: Moody's Affirms 'B1' Corporate; Outlook Stable ONCURE HOLDINGS: Moody's Lowers CFR to 'Caa1'; Outlook Negative OPPENHEIMER PARTNERS: Case Summary & 16 Largest Unsec. Creditors OXLEY DEVELOPMENT: U.S. Trustee Unable to Form Committee PAETEC HOLDING: Moody's Raises Corp. Family Rating to 'Ba3' PARC AT ROGERS: Withdraws Request for Authorization for Cash Use PARK GREEN: Case Summary & 4 Largest Unsecured Creditors PACIFIC RUBIALES: Fitch Rates Proposed $250-Mil. Debt at 'BB' PETTUS PROPERTIES: Court OKs Caudle & Spears for VFC Dispute PINTAIL POINT: Case Summary & 20 Largest Unsecured Creditors PORTER HAYDEN: Subpoena Dispute Goes to Maryland Court PREMIER TRAILER: Court Confirms Prepackaged Plan of Reorganization PURE BEAUTY: Obtains Final OK to Use Cash Collateral Until Dec. 18 PURE BEAUTY: Court Approves Bid Protocol; Jan. 13 Auction Sale Set PURE BEAUTY: Files Schedules of Assets and Liabilities PUTNAM STRUCTURED: Moody's Affirms 'C' Ratings on 2 Note Classes R.E. LOANS: Gets Final Approval for $20MM Wells Fargo DIP Loan R.E. LOANS: Debt Exchange OK'd to Market Interests in the Loans R.E. LOANS: Asks Court to Reset Section 341 Meeting to Jan. 17 REAL MEX: Seeks Approval of Key Employee Incentive Plan RELIANCE GROUP: Chamber Asks High Court to Nix Claims v. Deloitte RIO RANCHO: Court Continues Plan Outline Hearing Until Jan. 10 ROCKWOOD SQUARE: Judge Converts Case to Chapter 7 Liquidation ROSELAND VILLAGE: VCB Wants to Foreclose Share on Project ROTHSTEIN ROSENFELDT: 2 More Ex-Employees Charged in Ponzi Scheme ROUND TABLE: Creditors Seek Post-Confirmation Committee RUDEN MCCLOSKY: Law Firm Sold to Greenspoon Marder SHUANEY IRREVOCABLE: Case Summary & 20 Largest Unsecured Creditors SOLYNDRA LLC: Judicial Watch Sues DOE, White House for Docs SIXTH AVENUE: Alco Capital Liquidates Assets SOTERA DEFENSE: Moody's Affirms 'B3' CFR, Outlook Negative SP NEWSPRINT: Schedules Filing Deadline Extended to Jan. 16 SP NEWSPRINT: Can Use Cash Collateral on an Interim Basis SP NEWSPRINT: Section 341(a) Meeting Scheduled for Jan. 9 STARWOOD HOTELS: Fitch Says Share Repurchase No Impact on IDR SUFFOLK OTB: Court Dismisses Chapter 9 Case SUMMER VIEW: Plan Outline Hearing Scheduled for Jan. 11 TALISMAN ENERGY: Fitch Assigns 'BB+' Preferred Stock Rating TAPATIO SPRINGS: Court Dismisses Chapter 11 Case TAYLOR BEAN: Trustee Sues AIG, Others Over Fraudulent Transfers TEE INVESTMENT: Receiver Wants to Use Cash Collateral to Pay Costs THINKFILM INC: Judge Gives Trustee Control of Pangea Media TMP DIRECTIONAL: Case Summary & 30 Largest Unsecured Creditors TOWN CENTER: Seeks Emergency Hearing on DIP Financing, Plan Deal TRADE UNION: Plan Effective Date Occurred on October 31 TRIUS THERAPEUTICS: Michael Powell Discloses 12.8% Equity Stake UNITED CONTINENTAL: Airlines May Lose Fight over CO2 Caps UNITED CONTINENTAL: Faces Mobile Check-In Patents Lawsuits US AIRWAYS: Mum About Potential Merger With American U.S. EAGLE: Hires Hilco Real as Real Estate Broker VENTO FAMILY: BNLV Wins Ch. 11 Case Dismissal VILLAGE AT PENN: Seeks to Employ McElroy Deutsch as Attorneys VILLAGE AT PENN: Seeks to Hire Latsha Davis as Healthcare Counsel VILLAGE AT PENN: Seeks to Employ SF & Company as Accountants VILLAGE AT PENN: Opposes Patient Care Ombudsman Appointment VILLAGE AT PENN: Seeks to Tap Pepper Hamilton as Litig. Counsel VILLAGE AT PENN: Seeks to Employ RBC Capital as Broker WACHOVIA: NCUA Files Suit Over Securities Law Violations WEST END FINANCIAL: Sets Jan. 26 Plan Confirmation Hearing WESTERN CORPORATE: Wachovia Forced Credit Unions Into Liquidation WORLDWIDE ENERGY: Signs Forbearance Pact with Bank of the West W.R. GRACE: Wants PwC Waived From 6 Minute Increments in Billing W.R. GRACE: Zonolite-Related Class Action Lawsuits Remain Stayed W.R. GRACE: To Improve Albany, Oregon Manufacturing Facility Z TRIM HOLDINGS: Five Directors Elected at Annual Meeting * Interest Drops Below Contract Rate After Confirmation * Denial of Dismissal for Abuse is Appealable Order * South-Central Texas Bankruptcy Filings Hit Lowest Level in Nov. * S&P's Global Corporate Default Tally Rises to 43 Issuers * S&P: Global Default Rate Increases After 5 Mos. of Declines * Massachusetts Sues Five Banks over Foreclosures * Oaktree Capital Wraps Up Latest European Distressed Fund * Judit Fabian Joins Cassel Salpeter as Venture Capital Director * Michael Cho Joins Allegiance Capital's Dallas Office * Joseph Smith Joins Cassel Salpeter & Co. as Director * Skadden's Jay Goffman Earns Spot in Law360's Bankruptcy MVP * Kirkland & Ellis' Sathy Named as One of Law360's Bankruptcy MVP * Upcoming Meetings, Conferences and Seminars ********* 600 WILLIAM: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: 600 William Penn Partners, LLC 2404 Wilshire Blvd., Suite 12A Los Angeles, CA 90057 Bankruptcy Case No.: 11-59441 Chapter 11 Petition Date: December 2, 2011 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Peter Carroll Debtor's Counsel: Gwendolen D. Long, Esq. LEVENE NEALE BENDER YOO BRILL LLP 10250 Constellation Blvd #1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 E-mail: gdl@lnbyb.com Scheduled Assets: $5,600,018 Scheduled Debts: $4,844,705 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb11-59441.pdf The petition was signed by David Frank, authorized agent. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Broadway/Workman LLC 11-47977 09/06/11 Covina Palms Center, LLC 11-44683 08/15/11 Star News Building, L.P. 11-28697 04/29/11 York Square, LLC 11-15554 02/09/11 A.B.C. LANDCLEARING: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: A.B.C. Landclearing and Development, Inc. 1130 Peachtree St. Cocoa, FL 32922 Bankruptcy Case No.: 11-18039 Chapter 11 Petition Date: December 1, 2011 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Judge: Arthur B. Briskman Debtor's Counsel: Michael A. Paasch, Esq. MATEER & HARBERT PA P.O. Box 2854 Orlando, FL 32802 Tel: (407) 425-9044 Fax: (407) 423-2016 E-mail: mpaasch@mateerharbert.com Scheduled Assets: $876,431 Scheduled Debts: $1,560,062 A list of the Company's 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb11-18039.pdf The petition was signed by James A. Goins, president. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- A.B.C. Landclearing and Development, LLC 11-18041 12/01/11 AMERICAN AIRLINES: Wins Interim Nod to Pay Insurance Obligations ---------------------------------------------------------------- AMR Corp. and its debtor-affiliates sought and obtained interim authority to continue their insurance programs and pay all insurance obligations, whether arising prepetition or postpetition. The Court also modified the automatic stay to allow the Debtors' employees to proceed with their workers' compensation claims. In connection with the operation of their business, the Debtors maintain workers' compensation programs and various liability, property, and other insurance programs through several different insurance carriers, Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, informed the Court. He noted that the Insurance Programs include coverage for, among other things, liabilities and losses related to workers' compensation, war, terrorism, commercial crimes, breach of officers' and directors' duties, operation of aircraft, personal injury, operation of vehicles, transportation of cargo, and various other property- related and general liabilities. The Debtors also maintain various liability and property related Insurance Programs, which provide the Debtors with insurance coverage for liabilities relating to, among other things, damage to the Debtors' aircraft, personal injuries, war, terrorism, commercial crimes, breach of officers' and directors' duties, operation of vehicles, transportation and storage of cargo, and various other property-related and general liabilities. Mr. Karotkin asserted that these policies are essential to the ongoing operation of the Debtors' business. The Debtors are required to pay premiums under the Liability and Property Insurance Programs based upon a fixed rate established and billed by each Insurance Carrier. The aggregate annual Insurance Premiums for the Liability and Property Insurance Programs is approximately $100 million. The Debtors believe that all Insurance Premiums due to be paid before the Petition Date have been fully paid. Additional Insurance Premiums of approximately $50 million are owed under the current Liability and Property Insurance Programs, but not due as of Petition Date, Mr. Karotkin said. The Debtors employ insurance brokers to assist them with the procurement and negotiation of their Insurance Programs. In 2011, the Debtors paid the Brokers approximately $1.9 million in brokers' fees. The Debtors believe that all Brokers' Fees have been fully paid as of the Petition Date. * * * A hearing to consider final approval of the request is scheduled for December 22, 2011, at 10:00 a.m. Objections are due December 15. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AMERICAN AIRLINES: Wins Interim Nod to Pay Surety Bond Programs --------------------------------------------------------------- AMR Corp. and its debtor-affiliates sought and obtained, on an interim basis, the bankruptcy court's authority to maintain, continue and renew, in their sole discretion, their letter of credit and surety bond programs on an uninterrupted basis, including the maintenance of cash collateral. The authority would allow the Debtors to: -- pay all amounts arising under the Letter of Credit and Surety Bond Programs due and payable whether arising pre- or postpetition; -- renew or obtain new letters of credit and surety bonds as needed in the ordinary course of business; and -- direct any non-Debtor subsidiaries who have obtained letters of credit or surety bonds on the Debtors' behalf to pay or to renew, as applicable. The Court also authorized the Debtors to assume an indemnity agreement relating to the issuance of surety bonds and perform all obligations thereunder, and to continue their corporate credit card program. Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, related that in the ordinary course of their business, the Debtors and certain non-Debtor subsidiaries are required to provide to third parties letters of credit and surety bonds to secure the Debtors' payment or performance of certain obligations, including those owed to municipalities, related to international operations or in obtaining permits, fuel and liquor taxes, airport-related obligations and customs requirements. Failure to provide, maintain or to timely replace these letters of credit and surety bonds would surely impair the Debtors' ongoing operations, Mr. Karotkin argued. The lending institutions, sureties and insurance carriers that provide the Debtors with letters of credit or surety bonds are JPMorgan Chase Bank, National Association, Citigroup, Inc., and Travelers Casualty and Surety Company of America, St. Paul Fire and Marine Insurance Company. As of the Petition Date, the Debtors and their non-Debtor subsidiaries had posted approximately $40 million in outstanding letters of credit. Mr. Karotkin assured the Court that all or substantially all of these letters of credit are cash collateralized. The Debtors do not believe there are any material prepetition obligations outstanding in connection with these letters of credit. As of the Petition Date, the Debtors also have approximately $55 million in outstanding surety bonds, collateralized by approximately $40 million of cash collateral. The premiums for most of the surety bonds are determined on an annual basis and are paid by the Debtors when the bonds are issued and thereafter annually. For 2011, premiums for the Debtors' surety bonds aggregate approximately $500,000. The Debtors' surety is Travelers. The issuance of a surety bond shifts the risk of the Debtors' nonperformance or non-payment from the Debtors to the surety and, unlike an insurance policy, if a provider incurs a loss on a surety bond, it is entitled to recover the full amount of that loss from the principal, Mr. Karotkin said. He noted that this right to recovery is usually set forth in an indemnity agreement between the provider and the principal, and is a condition to the issuance of surety bonds. AMR Corp. is a party to that certain General Contract of Indemnity by and between AMR Corp. and Travelers dated December 17, 2007. Mr. Karotkin further related that the Debtors are party to a Corporate Services Commercial Account Agreement, as amended, with American Express Travel Related Services Company, Inc. Pursuant to the Corporate Credit Card Program, AMEX provides the Debtors certain corporate purchasing cards, and the ability to pay certain specified third-party vendors using AMEX to transfer funds. The cards are used by certain employees at various operating stations throughout the Debtors' system to make business-critical purchases on short notice. The cards can only be used at certain businesses, restricted by SIC code. Mr. Karotkin contended the cards are critical to maintaining ongoing operations and not easily replaceable either on a timely basis or without substantial disruption to the ability of the Debtors to obtain items necessary for continued flight operations. In view of these circumstances, the Debtors believe it is essential that they have the authority to maintain the Corporate Credit Card Program on an ongoing basis. To the extent any LoC or surety bond or related agreement is deemed an executory contract within the meaning of Section 365 of the Bankruptcy Code, the Order does not constitute the postpetition assumption of those LoCs or surety bonds or related agreements under Section 365. * * * The Court will convene a hearing to consider final approval of the request on December 22, 2011, at 10:00 a.m. Objections are due December 15. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AMERICAN AIRLINES: Proposes Reclamation Claims Process ------------------------------------------------------ American Airlines, Inc. and its affiliated debtors filed a motion to implement a procedure for the treatment of claims of suppliers who seek to reclaim their goods. Under the proposed procedure, the claimants have to follow certain requirements before they are entitled to recover their claims, which include submitting a written demand within a fixed deadline. The proposed procedure gives the Debtors an option to enter into a settlement with the claimants, and gives any party that disagrees with the settlement the opportunity to file its objection. A copy of the proposed order detailing the proposed process is available without charge at: http://bankrupt.com/misc/AmAir_ReclamationProcess.pdf The Debtors proposed that the procedure be the only method for resolving reclamation claims. They asked the Court to prohibit any supplier from prosecuting their claims through lawsuits or any other means. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AMERICAN AIRLINES: Unions, PBGC Among 9 Selected for Committee -------------------------------------------------------------- The U.S. Trustee on Monday selected airplane maker Boeing Co., a handful of unions, three financial-services companies and the U.S. agency that insures private pensions to serve on the committee representing unsecured creditors in the Chapter 11 case of American Airlines parent AMR Corp. Tracy Hope Davis, United States Trustee for Region 2, SCHEDULED AN organizational meeting on Dec. 5, 2011, at 10:00 a.m. in the bankruptcy case of AMR Corporation and American Airlines Inc. Pension Benefit Guaranty Corporation Director Josh Gotbaum released a statement on the agency's appointment to the AMR bankruptcy unsecured creditors committee. "We're committed to working with American Airlines, their workers, retirees and other parties, so the company can successfully reorganize while also preserving its pension plans. Based on early estimates, American Airlines employees and retirees could lose at least a billion dollars in pension benefits if the airline terminates their plans," Gotbaum said. "In addition to seeing their pensions cut, workers have also lost healthcare benefits when companies terminate their pension plans. As we did with Visteon, and with some plans at Delta and Northwest Airlines, we will encourage American to fix its financial problems and still keep its pension plans." American Airlines sponsors four traditional pension plans that cover almost 130,000 participants. As of today, the plans collectively had about $8.3 billion in assets to cover about $18.5 billion in benefits. If American Airlines were to end its plans, the agency would be responsible for paying about $17 billion in benefits; at least a billion dollars in benefits would be lost. A termination would also weaken the financial condition of PBGC, which has a record $26 billion deficit as a result of failed plans the agency has already assumed. In cases where plans cannot be saved, PBGC steps in and pays benefits. Currently, the agency is responsible for about 1.5 million people in more than 4,300 failed plans. Each month, on average, PBGC pays about $460 million to more than 870,000 retirees and is responsible for future payments to 628,000 people who haven't retired. About PBGC PBGC protects the pension benefits of 44 million Americans in 27,500 private-sector pension plans. The agency is directly responsible for paying the benefits of more than 1.5 million people in failed pension plans. PBGC receives no taxpayer dollars and never has. Its operations are financed by insurance premiums and with assets and recoveries from failed plans. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AMERICAN AIRLINES: USAir Mum About Potential Merger --------------------------------------------------- Susan Carey, writing for The Wall Street Journal, reports that US Airways Group Inc.'s chief financial officer Derek Kerr said at an investor conference Tuesday the airline continues to be a proponent of industry consolidation. Mr. Kerr said on top of four major industry mergers since 2005, "there is possibly room for more." WSJ notes Mr. Kerr didn't mention any potential pairings, much less a role for his carrier, and wasn't asked about and didn't mention the rampant speculation that US Airways could wind up combining with American Airlines parent AMR Corp. WSJ also relates that before Mr. Kerr's remarks at a Rodman & Renshaw LLC airline conference in Boston, a US Airways spokeswoman reiterated the company's view that consolidation make sense for the industry with or without US Airways' participation. USAir resulted from a 2005 merger of US Airways and America West Airlines. USAir made a hostile run at Delta Air Lines Inc. when that company was in bankruptcy protection a few years ago, and talked twice with United Airlines about a combination. Delta went on to buy Northwest Airlines and United and Continental Airlines merged to form United Continental Holdings Inc. Southwest Airlines Co. acquired discounter AirTran Airways. About US Airways US Airways -- http://www.usairways.com/-- along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 190 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition (Bankr. E.D. Va. Case No. 04-13820) on Sept. 12, 2004. Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). As of Sept. 30, 2010, US Airways had $8.006 billion in total assets, $3.049 billion in current liabilities, $4.883 billion in non-current liabilities, and $74 million in stockholders' equity. * * * US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp. family rating and probability of default rating. Outlook is negative. US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer Credit rating and LT Local Issuer credit rating. Outlook is also negative. US Airways Group carries Fitch's "CCC" LT Issuer default rating and "C" Senior unsecured debt rating. Outlook is also negative About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AMTRUST FINANCIAL: Emerges From Bankruptcy Protection ----------------------------------------------------- BankruptcyData.com reports that the Amended Joint Plan of Reorganization of AmTrust Financial (nka AmFin Financial Corporation) became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Plan on Nov. 3, 2011. According to documents filed with the Court, "The AmFin Plan incorporates a proposed compromise and settlement regarding the holders of the Senior Notes Claims. Specifically, the holders of the Senior Notes Claims have agreed (a) that each holder will be treated as the holder of a single Unsecured Claim against the consolidated Debtors, (b) to have any liens, security interests, mortgages or guaranties granted pursuant to the Senior Notes Agreement be disregarded for all purposes under the AmFin Plan, (c) to the substantive consolidation of the Debtors' estates pursuant to the AmFin Plan, and (d) to the designation of directors of Reorganized AFC in the manner set forth in the AmFin Plan. "In addition to the foregoing, the holders of Senior Notes Claims have also agreed that the Noteholder Settlement Amount of $2.0 million will not be distributed to holders of Senior Notes Claims but will be instead be distributed to or reserved for other holders of Class 6 and Class 8 Claims (other than the Subordinated Notes Claims) on a pro rata basis. In consideration for such agreements by the holders of the Senior Notes Claims, the Debtors have agreed that the Senior Notes shall have Allowed Unsecured Claims in an agreed aggregate amount of $100,763,414.93 and that the Subordinated Notes shall have an Allowed Unsecured Claims in an agreed aggregate amount of $53,628,210.13. "In addition, the Debtors have agreed (a) that any claim for recovery of the approximately $11.8 million paid by the Debtors to holders of Senior Notes Claims in October 2009 will be settled in full by the redistribution of the Noteholder Settlement Amount, (b) not to object to any claims filed by the holders of the Senior Notes, or their professionals or by the Bank of New York Mellon, as collateral agent for the Senior Notes, or its professionals, for substantial contribution under section 503(b) of the Bankruptcy Code up to an aggregate amount of $950,000, (c) to the designation of the Board of Directors of Reorganized AFC as set forth in the AmFin Plan, and (f) to the releases of the holders of Senior Notes Claims and their respective present or former directors, officers, employees, attorneys, accountants, underwriters, investment bankers, financial advisors, representatives and agents, as set forth in the AmFin Plan." 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 debts 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. ARIN ENTERPRISES: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Arin Enterprises, Inc. dba Days Inn & Suites 1312 Edgewater Beach Dr. Lakeland, FL 33805 Bankruptcy Case No.: 11-22137 Chapter 11 Petition Date: December 1, 2011 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: Catherine Peek McEwen Debtor's Counsel: Scott A. Stichter, Esq. STICHTER, RIEDEL, BLAIN & PROSSER 110 E. Madison Street, Suite 200 Tampa, FL 33602-4700 Tel: (813) 229-0144 Fax: (813) 229-1811 E-mail: sstichter.ecf@srbp.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Sujoy Daskundu, president. ASHRIA ENTERPRISES: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Ashria Enterprises, Inc. dba Relax Inn 1312 Edgewater Beach Dr. Lakeland, FL 33805 Bankruptcy Case No.: 11-22142 Chapter 11 Petition Date: December 1, 2011 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: Catherine Peek McEwen Debtor's Counsel: Scott A. Stichter, Esq. STICHTER, RIEDEL, BLAIN & PROSSER 110 E. Madison Street, Suite 200 Tampa, FL 33602-4700 Tel: (813) 229-0144 Fax: (813) 229-1811 E-mail: sstichter.ecf@srbp.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Sujoy Daskundu, president. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Arin Enterprises, Inc. 11-22137 12/01/11 ATLANTIC & PACIFIC: Union Members Accept Wage, Benefits Cuts ------------------------------------------------------------ Amanda Bransford at Bankruptcy Law360 reports that United Food and Commercial Workers members employed by Great Atlantic & Pacific Tea Co. Inc. grocery stores have voted to accept concessions reducing workers' wages and benefits, allowing the grocery company to move forward with its reorganization plan in New York bankruptcy court. Law360 relates that the union said all 13 local union branches with A&P employee members voted to accept the proposed changes. About Great Atlantic Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific is a supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid-Atlantic and Northeastern United States. Before filing for bankruptcy in 2010, A&P operated 429 stores in 8 states and the District of Columbia under the following trade names: A&P, Waldbaum's, Pathmark, Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees prior to the bankruptcy filing. A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Case No. 10-24549) on Dec. 12, 2010, in White Plains, New York. In its petition, A&P reported total assets of $2.5 billion and liabilities of $3.2 billion as of Sept. 11, 2010. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. Lazard Freres & Co. LLC is the financial advisor. Huron Consulting Group is the management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent the Official Committee of Unsecured Creditors. A&P obtained court approval for a new contract with C&S Wholesale Grocers Inc., its principal supplier. The contract is designed to save A&P $50 million a year when the supermarket operator emerges from Chapter 11 reorganization. A&P sold 12 Super-Fresh stores in the Baltimore-Washington area for $37.83 million, plus the value of inventory. Thirteen other locations didn't attract buyers at auction and were closed mid- July 2011. A&P filed a proposed Chapter 11 plan founded upon a $490 million debt and equity financing announced this month. The proposed financing, tentatively approved by the bankruptcy judge, allows A&P to accept a better offer if one appears. New investors sponsoring the plan include Yucaipa Cos., Goldman Sachs Group Inc. and Mount Kellett Capital Management LP. Atlantic & Pacific has filed a Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. Pursuant to the Plan, investors are providing a total New Money Commitment of $490 million in the form of (i) $210 million3 face amount of privately placed New Second Lien Notes, (ii) $210 million face amount of privately placed New Convertible Third Lien Notes, and (iii) an $80 million New Equity Investment. The proceeds of the New Money Commitment will allow the Debtors to make distributions pursuant to the Plan, including paying certain secured creditors in full in cash, and will provide a cash pool of $40 million, less the amount distributed pursuant to a Substantive Consolidation Settlement Cash Pool, for distributions to General Unsecured Creditors. The Plan provides for a settlement and compromise of the intercreditor issues relating to whether the liabilities and assets of the Debtors should be substantively consolidated for purposes of distributions under the Plan. The Court scheduled a Dec. 15, 2011, hearing to consider the Disclosure Statement. BELLISIO FOODS: Moody's Rates Proposed Credit Facilities at 'B1' ---------------------------------------------------------------- Moody's Investors Service has assigned a B1 rating to Bellisio Foods, Inc.'s (Bellisio) proposed senior secured credit facility consisting of a $30 million revolver and a $170 million term loan. In addition, Moody's assigned a B2 corporate family rating and a probability of default rating. The rating outlook is stable. Proceeds from the proposed refinancing are expected to be used to fund the acquisition of Bellisio by Centre Partners Management, LLC (Centre Partners) and affiliates and to repay existing debt. The ratings are subject to change if the terms of the refinancing or legal structure are altered prior to close of the transaction. These ratings have been assigned subject to Moody's review of final documentation: B1 (LGD3, 42%) to the proposed $170 million first lien term loan due 2017; and B1 (LGD3, 42%) to the proposed $30 million first lien revolving credit facility due 2016. B2 Corporate Family Rating; and B2 Probability of Default Rating. Moody's will withdraw the ratings of predecessor Bellisio upon completion of the proposed acquisition by Centre Partners and the repayment of currently existing debt. RATINGS RATIONALE The B2 corporate family rating reflects Bellisio's small scale, high leverage, narrow product focus, exposure to commodity input prices, and its meaningful dependence on its primary manufacturing location. The rating benefits from the company's stable cash flow generation and established market position in the value segment of the frozen single-serve entr�e market. The rating also incorporates Bellisio's opportunities for modest organic growth from new co-packing and private label agreements and continued penetration in dollar, drug and convenience channels. The ratings are supported by Bellisio's good liquidity profile, and Moody's expectation for modest free cash flow in the next 12 to 18 months. The B1 ratings on the proposed $170 million term loan and the proposed $30 million revolving credit facility reflect their first priority lien on substantially all assets of the company and upstream guarantees by all existing and future subsidiaries. The ratings also benefit from the expected loss absorption to be provided by the $52 million mezzanine notes due 2018 (unrated). Moody's expects Bellisio to have full availability on its $30 million revolver at close of the proposed acquisition. The stable outlook reflects Moody's expectation that financial leverage will improve primarily through loan repayments following the completion of the debt financed acquisition by Centre Partners. While operating margins are exposed to increases in commodity prices, Moody's anticipates that Bellisio will continue to focus on cost management efforts and organic growth initiatives to partially offset these cost pressures. The ratings could be downgraded if the company's profitability materially declines, resulting in a Debt-to-EBITDA ratio consistently above 5.0x, or if the liquidity profile deteriorates. Potential causes include the tightening of margins as a result of its inability to pass through large commodity cost increases or significant missteps in implementing new product initiatives. Upward ratings momentum is currently viewed as unlikely prior to a sustained reduction in leverage to 3.0x, given Moody's view that the company's rating is limited by its scale and product diversification relative to other packaged food companies as well as its private equity ownership. The principal methodology used in rating Bellisio Foods, Inc. was the Global Packaged Goods Industry Methodology published in July 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Bellisio Foods, Inc. produces more than 200 frozen entrees and snacks in the value segment under the Michelina's brand, including Authentico, Traditional, Lean Gourmet and Zap'Ems Gourmet. In addition, the company generates roughly 20% of its revenues from producing co-packed and private label frozen foods. Revenues for the twelve months ending October 9, 2011 were approximately $313 million. The company is being acquired by private equity firm Centre Partners, LLC. BERNARD L. MADOFF: Trustee Has Expedited Appeal on JPMorgan Suit ---------------------------------------------------------------- The trustee chasing down cash for Bernard Madoff's swindled investors has won the right to quickly appeal a ruling that slashed much of nearly $20 billion in claims against J.P. Morgan Chase & Co. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that because U.S. District Judge Colleen McMahon didn't dismiss the entire complaint, trustee Irving Picard wasn't entitled to appeal immediately. Mr. Picard wanted an appeal because another district judge dismissed the same type of claims against HSBC Holdings Plc. Mr. Rochelle relates that to gain entitlement for an appeal now without awaiting conclusion of the remainder of the case, JPMorgan and Mr. Picard petitioned for the entry of final judgment on the dismissed claims. Judge McMahon obliged, having the clerk enter judgment from which an appeal can be taken. In her own handwriting, Judge McMahon wrote on the court record that both parties will seek an expedited appeal to the circuit court. The remainder of the suit in bankruptcy court will be put on hold until the appeal is decided. The JPMorgan lawsuit in district court is Picard v. JPMorgan Chase & Co., 11-00913, in the same court. The JPMorgan lawsuit in bankruptcy court was Picard v. JPMorgan Chase & Co., 10-04932, U.S. Bankruptcy Court, Southern District of New York (Manhattan). About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of July 15, 2011, a total of US$6.88 billion in claims by investors has been allowed, with US$794.9 million to be paid by the Securities Investor Protection Corp. Investors are expected to receive additional distributions from money recovered by Mr. Picard from lawsuits or settlements. Mr. Picard has filed 1,000 lawsuits seeking $100 billion from banks such as HSBC Holdings Plc and JPMorgan Chase & Co. The trustee has seen more than $28 billion of his claims tossed by district judges. BORDERS GROUP: Jefferies Entitled to $250T Liquidation Fee ---------------------------------------------------------- Bankruptcy Judge Martin Glenn said Jefferies & Company, Inc., is entitled to a $250,000 liquidation fee for its services as investment banker and financial advisor to Borders Group Inc. Judge Glenn approved Jefferies' final application for allowance of fees and expenses rendered from Feb. 16, 2011 through Aug. 31, 2011, subject to adjustment as agreed upon with the United States Trustee. Jefferies sought final allowance of $2,291,889.88 in fees, plus reimbursement of $26,669.69 in actual and necessary expenses. Upon the U.S. Trustee's objection, Jefferies agreed to forgo its $200,000 monthly fee for August 2011 and reduce its request for a liquidation fee by $250,000. Based upon the $450,000 aggregate reduction in fees sought, the U.S. Trustee did not object to Jefferies' Final Fee Application. The Debtors support approval of the Final Fee Application, as modified by the U.S. Trustee deal. The Official Committee of Unsecured Creditors objected to Jefferies' monthly fee statement for the period July 1 through 31, 2011. The crux of the Committee's argument is that Jefferies is not entitled to any amount as a liquidation fee provided by the Jefferies Engagement Letter and the order approving Jefferies' employment because Jefferies did not materially contribute to, run or market a sale of the Debtors' assets. Additionally, the Committee asserts that the Jefferies Retention Order is unclear and does not reflect the intent of the Committee as negotiated. However, Judge Glenn held that the terms of the Jefferies Retention Order are clear and unambiguous, and, therefore, the Committee cannot support its argument with the parole evidence it has submitted in support of its Objection. Counsel for the Committee and Jefferies agreed at the Hearing that Jefferies "ran a sale process" with respect to the Debtors' assets; unfortunately, it did not culminate in a going-concern sale. But, under the terms of the Jefferies Retention Order and Engagement Letter, Jefferies is entitled to allowance of the Liquidation Fee, subject to the reductions agreed upon with the U.S. Trustee, Judge Glenn said. A copy of Judge Glenn's Dec. 5, 2011 Memorandum Opinion is available at http://is.gd/Fujafhfrom Leagle.com. Thomas A. Labuda, Jr., Esq. -- thomas.labuda@snrdenton.com -- at SNR DENTON, represents Jefferies & Company, Inc. About Borders Group Borders Group operated book, music and movie superstores and mall based bookstores under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States. At Jan. 29, 2011, the Company operated 639 stores in the United States and 3 in Puerto Rico. The Company also operated a proprietary e-commerce Web site -- http://www.Borders.com/-- launched in May 2008, which included both in-store and online e-commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and roughly 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. Lowenstein Sandler represents the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders is completing going-out-of-business sales that began at all of its remaining locations in July. The creditors? committee said before the liquidation began that Borders expected to generate $252 million to $284 million in cash from the sales. Borders is selling store leases separately. Borders selected proposals by Hilco and Gordon Brothers to conduct going out of business sales for all stores after no going concern offers of higher value were submitted by the deadline. The Court will convene a hearing to consider confirmation of the Liquidating Plan on Dec. 20, 2011. Bankruptcy Creditors' Service, Inc., publishes BORDERS BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Borders Group Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) BOZEL S.A.: U.S. Trustee Appoints 3-Member Creditors' Panel ----------------------------------------------------------- Tracy Hope Davis, the United States Trustee for Region 2, pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Bozel S.A. The Creditors Committee members are: 1. 1553283 Ontario Inc. 331 Robinson Street Oakville, Ontario Canada L6JHI Tel: (416) 817-0580 ATTN.: Benjamin W. Penman, President 2. Benjamin Alon Shaw 156 Barnstable Road Thorpe Bay Southend Essex SS1 3PP United Kingdom Tel: 011-44-17025-86851 3. Eastveld Realties Canada Corp. 2 Westmount Square, Suite 207 Westmount, Quebec Canada H3Z2S4 E-mail: ercc@eastveld.com Attn.: Christopher A. Eastveld About Bozel S.A. Bozel S.A. is a company limited by shares (a 'societe anonyme"or ('s.A.") organized under the Grand Duchy of Luxembourg, and registered with the Luxembourg Trade and Companies Register under the number B107769. Bozel is a holding company which, at the time of its Chapter 11 filing, owned substantially all of the stock in Bozel Mineracao, S.A. (organized in Brazil) ("Bozel Brazil") and Bozel Europe S.A.S. (organized in France) ("Bozel Europe"), and continues to own Bozel, LLC (organized in the state of Florida). Prior to the sale of Bozel Brazil and Bozel Europe to Japan Metals & Chemicals, Co., Ltd. ("JMC"), Bozel S.A., through its three operating subsidiaries on three continents, was a worldwide leader in the sale of calcium silicon ("CaSi"). Immediately preceding its filing for bankruptcy protection, Bozel S.A. sold over 40% of the world's CaSi powder output. Bozel Brazil produces primarily CaSi and cored wire, which is an industry-preferred ingredient in the production of high quality steel and steel alloys. Bozel Europe produces primarily cored wire. Bozel, LLC, formerly marketed and distributed in the United States the products produced by Bozel Brazil. Bozel S.A. is the sole member and manager of Bozel, LLC. Bozel sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-11802) on April 6, 2010. In its amended schedules, Bozel disclosed US$41,134,010 in assets and US$47,365,036 in liabilities. Bozel, LLC, filed a separate petition for Chapter 11 (Bankr. S.D.N.Y. Case No. 11-10033) on Jan. 10, 2011. Allen G. Kadish, Esq., and Kaitlin R. Walsh, Esq., at Greenberg Traurig, LLP, in New York, and Mark D. Bloom Esq., at Greenberg Traurig, LLP, in Miami, represent the Debtors as counsel. The two cases are jointly administered under Case No. 10-11802. BOZEL S.A: Committee Retains Pick & Zabicki as Counsel ------------------------------------------------------ The Official Unsecured Creditors Committee of Bozel, SA, asks the U.S. Bankruptcy Court for the Southern District of New York for permission to retain Pick & Zabicki, LLP as counsel. Upon retention, the firm will, among other things: a. advise the Committee with respect to its rights, duties, and powers in the Chapter 11 case; b. assist and advise the Committee in its consultations with Debtor relative to the administration of the case; and c. assist the Committee in analyzing the claims of the Debtor's creditors and in negotiating with such creditors. Douglas J. Pick, a lawyer of Pick & Zabick, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm's rates are: Personnel Rates --------- ----- Partners $300-$425 Associates $250 Paraprofessionals $125 About Bozel S.A. Bozel S.A. is a company limited by shares (a 'societe anonyme"or ('s.A.") organized under the Grand Duchy of Luxembourg, and registered with the Luxembourg Trade and Companies Register under the number B107769. Bozel is a holding company which, at the time of its Chapter 11 filing, owned substantially all of the stock in Bozel Mineracao, S.A. (organized in Brazil) ("Bozel Brazil") and Bozel Europe S.A.S. (organized in France) ("Bozel Europe"), and continues to own Bozel, LLC (organized in the state of Florida). Prior to the sale of Bozel Brazil and Bozel Europe to Japan Metals & Chemicals, Co., Ltd. ("JMC"), Bozel S.A., through its three operating subsidiaries on three continents, was a worldwide leader in the sale of calcium silicon ("CaSi"). Immediately preceding its filing for bankruptcy protection, Bozel S.A. sold over 40% of the world's CaSi powder output. Bozel Brazil produces primarily CaSi and cored wire, which is an industry-preferred ingredient in the production of high quality steel and steel alloys. Bozel Europe produces primarily cored wire. Bozel, LLC, formerly marketed and distributed in the United States the products produced by Bozel Brazil. Bozel S.A. is the sole member and manager of Bozel, LLC. Bozel sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-11802) on April 6, 2010. In its amended schedules, Bozel disclosed US$41,134,010 in assets and US$47,365,036 in liabilities. Bozel, LLC, filed a separate petition for Chapter 11 (Bankr. S.D.N.Y. Case No. 11-10033) on Jan. 10, 2011. Allen G. Kadish, Esq., and Kaitlin R. Walsh, Esq., at Greenberg Traurig, LLP, in New York, and Mark D. Bloom Esq., at Greenberg Traurig, LLP, in Miami, represent the Debtors as counsel. The two cases are jointly administered under Case No. 10-11802. CAPMARK FINANCIAL: Goldman Alleges Forum-Shopping in $147M Suit --------------------------------------------------------------- Amanda Bransford at Bankruptcy Law360 reports that Goldman Sachs Group Inc. told a New York federal judge on Wednesday that Capmark Financial Group Inc.'s lawsuit seeking $147 million from it over alleged preferential transfers belongs in Delaware bankruptcy court, where the claims have already met with little enthusiasm. According to Law360, Goldman argued in a filing to the judge that Capmark inappropriately brought the suit in federal district court in a "naked attempt to forum-shop, client-swap and obtain a second bite at the apple." About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- provided financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On Oct. 25, 2009, Capmark Financial and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Lead Case No. 09-13684). Capmark disclosed assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Capmark's financial advisors are Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A., serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. The Official Committee of Unsecured Creditors in Capmark Financial Group Inc.'s cases tapped Kramer Levin Naftalis & Frankel LLP as its counsel and JR Myriad LLC as its commercial real estate business advisors. The Committee also retained Cutler Pickering Hale and Dorr LLP as its attorneys for the special purpose of providing legal services in connection with Federal Deposit Insurance Corporation matters. Protech Holdings C LLC, an affiliate of Capmark, filed for Chapter 11 protection on July 29, 2010 (Bankr. D. Del. Case No. 10-12387). Protech estimated assets and debts in excess of $1 billion as of the filing date. Since filing for Chapter 11, Capmark completed three sales to generate more than $1 billion in cash. Berkshire Hathaway Inc. and Leucadia National Corp. bought most of the business for $468 million. In April 2011, Greenline Ventures LLC completed the acquisition of the New Markets Tax Credit division of Capmark Financial Group Inc. Since inception of the NMTC program, Capmark's NMTC division has closed over $1.1 billion of NMTC investment funds and financed over $2.5 billion of projects and businesses in low income communities nationwide. CARBON RESOURCES: Can Sell Substantially All Assets to Delta Coal ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Mexico authorized Carbon Resources, LLC, to sell substantially all of its assets to Delta Coal Fund PTY LTD ACN 149 580 085 or its assignee, under the terms of that certain Asset Purchase Agreement, dated Sept. 12, 2011. As reported in the Troubled Company Reporter on Oct. 17, 2011, the Debtor's Plan provides for the sale of its coal mine for $25 million and to pay the creditors in full. The sales price will be paid in three payments over the next three years. The sale will also include certain assets of its non-debtor affiliate Western Reserve Coal Company Incorporated, a Nevada corporation, that will be transferred to the Debtor at or prior to closing. The Debtor related that no other person or entity or group of persons or entities has offered to purchase the assets for an amount that would give equal or greater economic value to the Debtor, WRCC or their respective estates than the value being provided by the purchaser. The Debtor, WRCC and the purchaser agreed that the net proceeds attributable to the sale of Carbon Resources' collateral to purchaser is and will at all times remain substantially in excess of the amount of PCM Venture II, LLC's allowed secured claim, including the additional attorneys' fees. PCM has an allowed secured claim in the amount of: 1) $3,000,000 in original principal, plus accrued and capitalized interest; 2) $115,972 in postpetition attorneys' fees and costs to PCM's lead counsel, Snell & Wilmer, as of Oct. 31, 2011; plus 3) $13,296 in postpetition attorneys' fees and costs to PCM's local counsel, Rodey, Dickason, Sloan, Akin & Robb, as of Oct. 31, 2011; and plus 4) All reasonable attorneys' fees and costs incurred by PCM's lead counsel, Snell & Wilmer, and incurred by PCM's local counsel, Rodey, Dickason, Sloan, Akin & Robb, from and after Nov. 1, 2011, both to the date of receipt by PCM of full payment of PCM's Allowed Secured Claim; minus 5) All postpetition adequate protection payments received by PCM, which will be applied against the claim in accordance with the loan documents. The Debtor noted that PCM's objections to the sale were resolved and PCM's allowed secured claim will be paid in full at, and as a condition of, closing of the sale to purchaser authorized by this sale order, as: (i) except for the additional attorneys' fees, PCM's allowed secured claim (or discounted claim if payment is received by PCM on or before Dec. 1, 2011) will be paid in full at and from closing by wire transfer to PCM; and (ii) the Debtor and WRCC will escrow 300% of PCM's good faith estimate of the additional attorneys' fees in a separate escrow account, and PCM's valid and perfected first priority liens in the Carbon Resources collateral will attach to the escrow pending a stipulation or determination of the actual amount of the additional attorneys' fees. PCM's lien in the Membership Interest Collateral will be deemed unconditionally released, discharged and terminated upon payment of PCM's allowed secured claim. Upon payment in full of PCM's allowed secured claim, PCM's lien in the proceeds of the sale of the Carbon Resources Collateral being sold pursuant to the sale order and the purchase agreement and on all of PCM's other collateral under the loan documents will be deemed unconditionally released, discharged and terminated. A full-text copy of the agreed order is available for free at: http://bankrupt.com/misc/CARBONRESOURCES_saleorder.pdf About Carbon Resources LLC Sandia Park, New Mexico-based Carbon Resources LLC, a Nevada limited liability company, owns a leasehold interest in an approximately 5,060 acre coal lease near Scofield, Utah. The Company filed for Chapter 11 bankruptcy protection (Bankr. N.M. Case No. 10-16104) on Dec. 10, 2010. M.J. Keefe, Esq., at Gilpin & Keefe, PC, and the law firm of James M. LaGanke P.L.L.C., serve as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $22,210,696 in assets and $5,416,004 in liabilities as of the Petition Date. CHRISTIAN BROTHERS: Panel Taps Paul Richler as Insurance Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in the bankruptcy cases of The Christian Brothers' Institute, et al., asked the U.S. Bankruptcy Court for the Southern District of New York for permission to retain Law Offices of Paul A. Richler as special insurance counsel. Richler will advise the Committee regarding these matters, among other things: a. insurance issues relating to any proposed plan of reorganization, mediation, or settlement discussion; b. negotiations with insurance companies having potential liability for the Debtors' tortious acts; and c. a broad range of insurance issues, including, but not limited to, triggers for insurance coverage for sex abuse, limits of coverage, calculation of the number of occurrences of sex abuse, expected or intended defenses, and other insurance defenses. Mr. Richler's standard hourly rate for representations related to abuse survivors is $650. The firm periodically adjusts its rates to reflect economic and other conditions, however, the firm does plan on increasing its rates in the bankruptcy cases until January 2013. To the best of the Debtor's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Committee set a Dec. 8, 2011, hearing at 12:00 p.m. to consider its retention of special insurance counsel. Objections, if any, are due Dec. 7, at 12:00 p.m. About The Christian Brothers' Institute The Christian Brothers' Institute and The Christian Brothers of Ireland filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 11-22820 and 11-22821) on April 28, 2011. In its schedules, The Christian Brothers' Institute disclosed assets of $63,418,267 and liabilities of $8,484,853 as of the Petition Date. In its schedules, CBOI discloses assets of $1,091,084 and liabilities of $3,622,500 as of the Petition Date. Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, in New York, serves as the Debtors' bankruptcy counsel. The Debtors tapped McInnes Cooper as their special Canadian litigation counsel; Re/Max "10" as its real estate broker; Omni Management Group as (i) claims, noticing and balloting agent, and (ii) administrative agent. On May 11, 2011, the U.S. Trustee appointed an Official Committee of Unsecured Creditors. The Committee retained Pachulski Stang Ziehl & Jones LLP as counsel. No trustee has been appointed. CITIZENS CORP: Wants Lenders Punished Over FiData Control --------------------------------------------------------- Citizens Corporation is asking the Bankruptcy Court to hold lenders Tennessee Commerce Bank and Legends Bank in contempt and award the Debtor sanctions for the lenders' violation of the automatic stay under 11 U.S.C. Sec. 362(a). The Debtor accuses TCB of improper attempts to exercise control over property of the estate in the guise of voting the Debtor's shares in Financial Data Technology Corporation. FiData is a subsidiary of Citizens in the business of providing information technology and other back-office services to a large number of banks in middle Tennessee. As part of a $22.5 million loan agreement between Citizens and TCB, Citizens pledged its shares in FiData as collateral to secure the obligation. After alleging a default by Citizens, TCB asserted its purported right under a Pledge and Security Agreement between the parties to exercise voting rights over the FiData stock. TCB used these voting rights to remove the existing board and instead appoint and install its own hand-picked director of FiData. Since that appointment, TCB has improperly directed the operations of FiData for the sole benefit of TCB and to the detriment of FiData, FiData's customers, Citizens, and other related entities. The Debtor argued that, as a direct result of TCB's self- interested actions, the value of FiData is being damaged and the Debtor's only possible economic engine to pay creditors is being crippled. The Debtor also alleged TCB has indicated its intention to continue leeching funds from FiData, Citizens' most important asset, notwithstanding the filing of the bankruptcy case. If this continues, the Debtor said FiData will be out of business, Citizens' reorganization efforts will be hindered, and the operations of a number of banks in Middle Tennessee will be disrupted. The Debtor also said that with the bankruptcy filing, Citizens asked TCB to cease and desist exercising control over Citizen's property (the stock of FiData). In a letter dated Nov. 29, 2011, TCB refused, and advised Citizens for the first time that Legends Bank is now the lead bank. Citizens then asked Legends Bank to confirm that it is now the lead bank and similarly to cease and desist, but Legends Bank has not responded. Franklin, Tennessee-based Citizens Corp. operates a mortgage brokerage business. Citizens Corp. filed for Chapter 11 bankruptcy (Bankr. M.D. Tenn. Case No. 11-11792) on Nov. 28, 2011. Judge George C. Paine, II presides over the case. Robert J. Mendes, Esq., at MGLAW, PLLC, serves as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. Marion Ed Lowery, a former owner of Peoples State Bank of Commerce of Nolensville and various other entities, serves as chairman of the company. He signed the Chapter 11 petition. Lenders Tennessee Commerce Bank is represented by David W. Houston, IV, Esq. -- dhouston@burr.com -- at Burr & Forman LLP. Counsel to Legends Bank may be reached at dsmall@nashvillelaw.net CITIZENS CORP: Initial Conference Scheduled for Dec. 8 ------------------------------------------------------ The Bankruptcy Court will hold an initial conference in Citizens Corp.'s bankruptcy case on Dec. 8, 2011, at 2:30 p.m. Franklin, Tennessee-based Citizens Corp. operates a mortgage brokerage business. Citizens Corp. filed for Chapter 11 bankruptcy (Bankr. M.D. Tenn. Case No. 11-11792) on Nov. 28, 2011. Judge George C. Paine, II presides over the case. Robert J. Mendes, Esq., at MGLAW, PLLC, serves as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. Marion Ed Lowery, a former owner of Peoples State Bank of Commerce of Nolensville and various other entities, serves as chairman of the company. He signed the Chapter 11 petition. Lenders Tennessee Commerce Bank is represented by David W. Houston, IV, Esq. -- dhouston@burr.com -- at Burr & Forman LLP. Counsel to Legends Bank may be reached at dsmall@nashvillelaw.net CITIZENS CORP: Sec. 341 Creditors' Meeting Set for Jan. 5 --------------------------------------------------------- The United States Trustee will convene a meeting of creditors in the bankruptcy case of Citizens Corporation on Jan. 5, 2012, at 1:00 p.m. at Customs House, 701 Broadway, Room 100, in Nashville, Tennessee. The last day to file complaint to determine dischargeability of certain debts is March 5, 2012. Franklin, Tennessee-based Citizens Corp. operates a mortgage brokerage business. Citizens Corp. filed for Chapter 11 bankruptcy (Bankr. M.D. Tenn. Case No. 11-11792) on Nov. 28, 2011. Judge George C. Paine, II presides over the case. Robert J. Mendes, Esq. -- rjm@mglaw.net -- at MGLAW, PLLC, serves as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. Marion Ed Lowery, a former owner of Peoples State Bank of Commerce of Nolensville and various other entities, serves as chairman of the company. He signed the Chapter 11 petition. Lenders Tennessee Commerce Bank is represented by David W. Houston, IV, Esq. -- dhouston@burr.com -- at Burr & Forman LLP. Counsel to Legends Bank may be reached at dsmall@nashvillelaw.net CIVIC PARTNERS: Must Respond to Bank's Document Request ------------------------------------------------------- Chief Bankruptcy Judge Thad J. Collins granted a request by First National Bank to compel Civic Partners Sioux City, LLC, to answer to interrogatories and respond to request for production of documents. The Court, however, denied the Bank's request for attorney fees and legal expenses incurred in filing the motion. Pre-bankruptcy, First National Bank brought a foreclosure action against the Debtor in the Iowa District Court for Woodbury County. The Debtor asserted a counterclaim, alleging the Bank tortiously interfered with the Debtor's right to collect rent from Main Street Theatres, a current occupant of the Debtor's property. A copy of the Court's Dec. 2, 2011 Order is available at http://is.gd/A4eVMSfrom Leagle.com. Civic Partners Sioux City, LLC, based in Huntington Beach, California, filed for Chapter 11 bankruptcy (Bankr. N.D. Iowa Case No. 11-00829) on April 14, 2011. A. Frank Baron, Esq. -- afbaron@baronsar.com -- at Baron, Sar, Goodwin, Gill & Lohr, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and debts. The petition was signed by Steven P. Semingson, managing member. CLEARWIRE CORP: Amends 4G MVNO Agreement with Sprint Spectrum ------------------------------------------------------------- Clearwire Communications LLC, and Sprint Spectrum L.P., entered into an amendment of the 4G MVNO Agreement, dated Nov. 28, 2008, by and among Clearwire Communications, Comcast MVNO II, LLC, TWC Wireless, LLC, BHN Spectrum Investments, LLC and Sprint Spectrum L.P. d/b/a Sprint, as amended on April 18, 2011. Pursuant to the November 2011 Amendment, certain provisions of the 4G MVNO Agreement were amended, including among other things: * Sprint Spectrum agreeing to pay $925,875,000 for unlimited WiMAX service usage in calendar years 2012 and 2013 for resale to Sprint Spectrum's retail customers. That payment can be reduced or eliminated by any one or more of the following (1) critical service outages; (2) termination of the 4G MVNO Agreement or (3) a sale or reduction in size of a market. * Sprint Spectrum agreeing to a prepayment of up to $350,000,000 for LTE service, payable in installments, portions of which prepayment is conditioned upon and triggered by another reseller making a either a prepayment commitment or a "take-or-pay" commitment to Clearwire Communications for LTE service or Clearwire Communications achieving certain specified LTE deployment targets and network specifications. The amount and nature of the prepayment is subject to reduction in certain circumstances, including in the event that Clearwire Communications fails to meet initial LTE deployment build targets by June 30, 2013, or if Clearwire fails to meet certain network specifications. Clearwire Communications is required to refund upon Sprint Spectrum's request any unused portion of the prepayment if it does not complete certain specified build targets by Dec. 31, 2014. * Clearwire Communications offering separate tiered pricing for WiMAX service and LTE service, with new per gigabyte usage rates for each service, and the elimination of device minimum fees after calendar year 2011. -- Commitment Agreement On Nov. 30, 2011, Clearwire Corporation and Clearwire Communications, a subsidiary of the Company, entered into a commitment agreement with Sprint Nextel Corporation and Sprint HoldCo, LLC. Pursuant to the Commitment Agreement, should the Company and Clearwire Communications consummate an equity offering which generates gross proceeds of at least $400,000,000, Sprint HoldCo, LLC, agrees to exercise its preemptive rights under the Equityholders' Agreement, dated as of Nov. 28, 2008, by and among the Company and the Equityholders, as amended, and to commit to purchase securities representing Sprint HoldCo, LLC's preemptive- rights pro rata share of the securities issued in such an offering. Should the Company and Clearwire Communications consummate an equity offering which generates gross proceeds above $700,000,000, Sprint HoldCo, LLC, agrees to exercise its preemptive rights and to commit to purchase its preemptive-rights pro rata share of the securities issued in such an offering with respect to the first $700,000,000 of securities issued, and, with respect to any amount of securities issued in excess of $700,000,000, Sprint HoldCo, LLC, may exercise all or any part of its preemptive rights to purchase its pro rata share of such securities. The terms of the Commitment Agreement provide that Sprint HoldCo, LLC, will receive at least the same rights received by any other participant in any such equity offering. The Commitment Agreement can be terminated under a number of circumstances, including: (i) upon the mutual written agreement of the parties thereto, (ii) if the equity offering resulting in gross proceeds of at least $400,000,000 has not been consummated by Sept. 30, 2012, or (iii) upon written notice of either Sprint or Sprint HoldCo, LLC, on the one hand, or the Company or Clearwire Communications, on the other hand, following a material breach of the Commitment Agreement or 4G MVNO Agreement by the other party. -- Letter Agreement On Nov. 30, 2011, the Company and Clearwire Communications entered into a letter agreement with Sprint and Sprint HoldCo, LLC, pursuant to which Sprint and Sprint HoldCo, LLC, agreed that upon the exercise of their preemptive rights as contemplated by the Commitment Agreement, Sprint and Sprint HoldCo, LLC, will purchase only shares of Class B Common Stock of the Company and a corresponding number of Class B Units in Clearwire Communications LLC and will not take any action, or exercise any right, to cause such shares to be converted into shares of Class A Common Stock of the Company, unless and until the Charter Amendment, as described above, becomes effective. In addition, the Company and Clearwire Communications agree that they will use commercially reasonable best efforts to cause the Charter Amendment to become effective as soon as reasonably practicable. -- Promissory Note Under the terms of the Commitment Agreement, Sprint has agreed to loan to Clearwire Communications an aggregate principal amount of $150,000,000 on Jan. 3, 2012, pursuant to a promissory note to be issued by Clearwire Communications. The Promissory Note will bear interest of 11.50% per annum. An aggregate principal amount of $75,000,000 of the Promissory Note matures on Jan. 2, 2013, and the remaining $75,000,000 principal amount matures on Jan. 2, 2014. In the case of an event of default, the Promissory Note will bear additional interest of 11.50% per annum. If not previously paid, Sprint may offset the amounts payable by Clearwire Communications under the Promissory Note against payments then due by Sprint to Clearwire Communications under the 4G MVNO Agreement. -- Sprint/Clearwire Release On Nov. 30, 2011, the Company and Clearwire Communications entered into a Settlement and Release Agreement with Sprint, Sprint Spectrum L.P. and Sprint HoldCo, LLC. In consideration for the modifications to the 4G MVNO Agreement contained in the November 2011 Amendment, and in consideration for entering into the Commitment Agreement, the parties to the Sprint/Clearwire Release agree to fully settle and resolve certain actual and potential claims and disputes, including, but not limited to, disputes and potential claims arising out of or relating to the Equityholders' Agreement and the 4G MVNO Agreement, and otherwise in connection with alleged duties and obligations to the Company, Clearwire Communications and their respective members and equityholders. A full-text copy of the Commitment Agreement is available at: http://is.gd/UnGexf A full-text copy of the Letter Agreement is available at: http://is.gd/N66bfy A full-text copy of the Form 8-K is available for free at: http://is.gd/Cv3hbU About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a leading provider of wireless broadband services. Clearwire's 4G mobile broadband network serves 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company reported a net loss of $2.30 billion on $556.82 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $1.25 billion on $274.46 million of revenue during the prior year. The Company also reported a net loss attributable to Clearwire Corporation of $480.48 million on $891.59 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss attributable to Clearwire Corporation of $359.42 million on $359.95 million of revenue for the same period a year ago.' The Company's balance sheet at Sept. 30, 2011, showed $8.76 billion in total assets, $5.15 billion in total liabilities and $3.61 billion in total stockholders' equity. * * * As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured first- lien issue-level ratings on Bellevue, Wash.-based wireless provider Clearwire Corp. to 'CCC' from 'CCC+'. "The downgrade reflects our concerns that the company may choose to skip its $237 million of interest payments due on Dec. 1, 2011," explained Standard & Poor's credit analyst Allyn Arden. "With about $698 million of cash on the balance sheet, Clearwire has sufficient funds to pay the remaining interest expense due in 2011, although Standard & Poor's believes that it would still have to raise significant capital to maintain operations in 2012 despite the cost-reduction measures it has already achieved. If Clearwire elected to make the interest payment, we believe that it would exit 2011 with around $350 million to $400 million in cash, which assumes less than $100 million of capital expenditures and EBITDA losses. We do not believe that this cash balance will be sufficient to cover free operating cash flow (FOCF) losses and a Long-Term Evolution (LTE) wireless network overlay in 2012 and that the company will require additional funding during the year." CLEARWIRE CORP: Intends to Offer $300 Million of Class A Shares --------------------------------------------------------------- Clearwire Corporation plans to offer $300.0 million of its Class A Common Stock in a registered public offering. Clearwire also expects to grant the underwriters a 30-day option to purchase up to an additional $45.0 million of its Class A Common Stock. Sprint Nextel Corporation has agreed to exercise its pro rata preemptive rights with respect to the offering and that upon such exercise, Sprint will purchase, in a separate, private transaction, only shares of the Company's Class B Common Stock and a corresponding number of Class B Common Interests in Clearwire's wholly-owned subsidiary, Clearwire Communications, LLC. The company plans to use the net proceeds for general corporate and working capital purposes, including the deployment of mobile 4G LTE technology alongside the mobile 4G WiMAX technology currently on its network and for the operation and maintenance of its networks. J.P. Morgan, BofA Merrill Lynch and Jefferies & Company are acting as joint book-running managers for the proposed offering. The offering is being made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission. The offering will be made only by means of the written prospectus and prospectus supplement that form a part of the registration statement. A copy of the prospectus and prospectus supplement related to the offering may be obtained by contacting: J.P. Morgan, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, or by calling toll- free at 1-866-803-9204, or BofA Merrill Lynch, 4 World Financial Center, New York, New York, 10080, Attn: Prospectus Department or by email at dg.prospectus_requests@baml.com, or Jefferies & Company, Equity Syndicate Prospectus Department, at 520 Madison Avenue, 12th Floor, New York, NY 10022, at 877-547-6340 and at Prospectus_Department@Jefferies.com. This press release will not constitute an offer to sell, or the solicitation of an offer to buy, nor will there be any sale of the securities in any jurisdiction in which that offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a leading provider of wireless broadband services. Clearwire's 4G mobile broadband network serves 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company reported a net loss of $2.30 billion on $556.82 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $1.25 billion on $274.46 million of revenue during the prior year. The Company also reported a net loss attributable to Clearwire Corporation of $480.48 million on $891.59 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss attributable to Clearwire Corporation of $359.42 million on $359.95 million of revenue for the same period a year ago.' The Company's balance sheet at Sept. 30, 2011, showed $8.76 billion in total assets, $5.15 billion in total liabilities and $3.61 billion in total stockholders' equity. * * * As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured first- lien issue-level ratings on Bellevue, Wash.-based wireless provider Clearwire Corp. to 'CCC' from 'CCC+'. "The downgrade reflects our concerns that the company may choose to skip its $237 million of interest payments due on Dec. 1, 2011," explained Standard & Poor's credit analyst Allyn Arden. "With about $698 million of cash on the balance sheet, Clearwire has sufficient funds to pay the remaining interest expense due in 2011, although Standard & Poor's believes that it would still have to raise significant capital to maintain operations in 2012 despite the cost-reduction measures it has already achieved. If Clearwire elected to make the interest payment, we believe that it would exit 2011 with around $350 million to $400 million in cash, which assumes less than $100 million of capital expenditures and EBITDA losses. We do not believe that this cash balance will be sufficient to cover free operating cash flow (FOCF) losses and a Long-Term Evolution (LTE) wireless network overlay in 2012 and that the company will require additional funding during the year." CREDITRON FINANCIAL: Sold to Y&B for $600T; Closing Date on Jan. 3 ------------------------------------------------------------------ Ed Palatella at Erie Times-News reports that Y & B Holdings LLC successfully tendered a purchase price of $600,000 for Telatron Marketing Group Inc. at auction in U.S. Bankruptcy Court in Erie on Nov. 10, 2011. According the report, Y & B, the sole bidder for Telatron, is scheduled to close on the sale on Jan. 3, 2012. The purchase agreement, which Chief U.S. Bankruptcy Judge Thomas P. Agresti approved Nov. 10, 2011, set the initial closing date for Dec. 1, 2011, with an alternate date of Jan. 3, 2012. The report says, in opting for the later date, Y & B must pay half on any losses Telatron experiences in December 2011. The report adds that proceeds from the sale will go to Telatron's creditors, none of which will be made whole. Based in Erie, Pennsylvania, Creditron Financial Corporation dba Teletron Marketing Group Inc. filed for Chapter 11 bankruptcy protection (Bankr. W.D. Penn. Case No.: 08-11289) on July 3, 2010. Stephen H. Hutzelman, Esq., Plate Shapira Hutzelman Berlin May, et al., represents the Debtor. The Debtor's financial condition as of July 3, 2008, showed $3 million in total assets, and $4.8 million in total debts. CROATAN SURF: Hires Village Realty as Real Estate Broker -------------------------------------------------------- Croatan Surf Club, LLC, asks the U.S. Bankruptcy Court for the Eastern District of North Carolina to employ Robert O. Oakes, Jr. of Village Realty & Management Services, Inc., as real estate broker. The Debtor owns 35 residential units. Upon retention, the broker will, among other things: a. advertise the said property at the broker's expense, b. show property to interested parties, and c. represent the estate as seller in connection with the sale of the property. Mr. Oakes, Jr., will be paid a sum not to exceed the 5.5% of the gross sales price. Village Realty & Management Services attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. 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. D&B SWINE: Stern Limits Court's Role in Contract Dispute -------------------------------------------------------- Bankruptcy Judge J. Rich Leonard is limiting his involvement in the lawsuit, D&B SWINE FARMS, INC., v. MURPHY-BROWN, L.L.C., and SMITHFIELD FOODS, INC., Adv. Proc. No. Case No. 09-00160 (Bankr. E.D.N.C.), in view of the Supreme Court's decision in Stern v. Marshall, 564 U.S. ___, 131 S.Ct. 2594 (2011). In a Dec. 2, 2011 Order available at http://is.gd/MhvKrJfrom Leagle.com, Judge Leonard said the Bankruptcy Court has the authority to hear all of D&B's claims, but only to enter proposed findings of fact and conclusions of law. Judge Leonard sent the claims for breach of the parties' Nursery Agreement and Sow Agreement to arbitration. All further proceedings in the lawsuit are stayed pending the conclusion of arbitration. The Court previously held that the claims for post-petition breach of the Nursery Agreement and a Finishing Agreement were core claims. D&B argues that the "narrow" holding of Stern does not impact the Court's capacity to hear and issue final judgment on its claims against Murphy-Brown, and therefore, there is no reason to deviate from the Court's conclusion set forth in a Jan. 22, 2010 order. Murphy-Brown contends that after Stern, the Court no longer has the authority to enter final judgment with respect to any claims in the action, including the claims that the Court previously found to be core, but instead, the Court will be required to submit proposed findings of fact and conclusions of law to the district court for consideration. D & B Swine Farms, Inc. -- a farrow-to-finish swine farm operation with an animal population of approximately 1,200 sows that did not itself own the animals it raised, but instead provided nursery, growing, and finishing services for other businesses -- sought bankruptcy protection (Bankr. E.D.N.C. Case No. 09-0283) under chapter 12 of the U.S. Bankruptcy Code on Apr. 6, 2009. The case subsequently was converted to a case under chapter 11. The Debtor sued (Bankr. E.D.N.C. Adv. Pro. No. 09-00160) Murphy-Brown, L.L.C., and Smithfield Foods, Inc., after a dispute arose under the terms of a postpetition depopulation plan under which the animals were removed from the Debtor's premises. The Debtor is represented by David J. Haidt, Esq., at Ayers, Haidt & Trabucco, P.A., in New Bern, N.C. The Defendants in the Adversary Proceeding are represented by Robert A. Cox, Jr., Esq. -- rcox@mcguirewoods.com -- at McGuire Woods, LLP, in Charlotte, N.C. DALE MARTIN: Court Rejects Bid to Dismiss Lee-Taylor Suit --------------------------------------------------------- Bankruptcy Judge Mary Ann Whipple denied the defendant's request to dismiss the lawsuit, Ella M. Lee-Taylor, v. Dale A. Martin, Jr., Adv. Proc No. 11-3210 (Bankr. N.D. Ohio). The Plaintiff filed the Complaint to Determine the Dischargeability of Debt on Oct. 13, 2011. The genesis of the parties' dispute is a home improvement project that the Plaintiff hired the Defendant to perform in 2005 and that she asserts was never completed notwithstanding payments she made to the Defendant. The Plaintiff is representing herself in the adversary proceeding. The documents she filed as her Complaint consisted of some handwritten pages and a number of other loose pages and documents, all of which the Court is treating as the Complaint. The Defendant filed a motion to dismiss the Complaint, arguing that the Plaintiff filed her own Chapter 7 bankruptcy case on Sept. 10, 2005, but did not list any cause of action against the Defendant in her bankruptcy filing papers. Therefore, the Defendant argues, not having disclosed a cause of action against the Defendant in her own bankruptcy case, she is judicially estopped from filing the dischargeability Complaint against the Defendant in his bankruptcy case. In her Dec. 5, 2011 Order available at http://is.gd/OYcC5Nfrom Leagle.com, Judge Whipple denied the motion to dismiss without prejudice to asserting the judicial estoppel defense again in a different procedural context. Dale A. Martin, Jr., filed for Chapter 11 bankruptcy (Bankr. N.D. Ohio Case No. 11-33622). DEBUT BROADCASTING: Incurs $252,000 Net Loss in Third Quarter ------------------------------------------------------------- Debut Broadcasting Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $252,477 on $154,244 of net revenue for the three months ended Sept. 30, 2011, compared with net income of $100,326 on $566,743 of net revenue for the same period during the prior year. The Company reported a net loss of $29,359 on $4.76 million of gross revenues for the year ended Dec. 31, 2010, compared with a net loss of $419,593 on $4.34 million of gross revenues during the prior year. The Company also reported a net loss of $411,205 on $848,284 of net revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $98,535 on $1.50 million of net revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $3.78 million in total assets, $3.61 million in total liabilities, and $174,796 in total stockholders' equity. A full-text copy of the Form 10-Q is available for free at: http://is.gd/nbtp8A About Debut Broadcasting Debut Broadcasting Corporation, Inc. (OTC BB: DBTB) -- http://www.debutbroadcasting.com/-- is a radio broadcasting and syndication company that produces and distributes syndicated radio programming to radio stations in the United States and Canada. The company maintains radio syndication in Nashville, Tenn., and produces and distributes 15 radio programs, which are broadcasted over approximately 1,400 radio station affiliates. It owns and operates five broadcast radio stations, which include WIQQ FM 102.3 MHz in Leland, WBAQ FM 97.9 MHz and WNIX AM 1330 kHz in Greenville, and WNLA FM 105.5 MHz and WNLA AM 1380 kHz in Indianola, Miss. The company is based in Nashville, Tenn. As reported by the TCR on April 6, 2011, Silberstein Ungar, PLLC, in Bingham Farms, Michigan, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred losses from operations, has a working capital deficit, and is in need of additional capital to grow its operations so that it can become profitable. DELTA AIR: Reports $765-Mil. Profit in Third Quarter ---------------------------------------------------- Delta Air Lines reported on October 25, 2011, financial results for the September 2011 quarter. Key points include: * Delta's net income for the September 2011 quarter was $765 million, or $0.91 per diluted share, excluding special items. * Delta's GAAP net income was $549 million, or $0.65 per diluted share, for the September 2011 quarter. * Strong top line revenue growth of 10% year over year helped offset the $1 billion impact of higher fuel prices. * Results include $167 million in profit sharing expense, in recognition of Delta employees' achievements toward meeting the company's financial targets, bringing total profit sharing expense for the year to date to $175 million. * The company ended the September 2011 quarter with $5.1 billion in unrestricted liquidity. "We are successfully adapting Delta to the challenging economic environment by producing a solidly profitable quarter in the face of $1 billion of fuel price pressure," said Richard Anderson, Delta's chief executive officer. "Delta people worldwide are committed to building a leading global airline. We are pleased to recognize their contributions with $167 million this quarter for our profit sharing program and we appreciate their hard work." Revenue Environment Delta's operating revenue grew $866 million, or 10%, in the September 2011 quarter compared to the September 2010 quarter. Load factor increased to 86.1%, with traffic flat on a 1% decrease in capacity. * Passenger revenue increased 10%, or $793 million, compared to the prior year period. Passenger unit revenue (PRASM) increased 11%, driven by an 11% improvement in yield. * Cargo revenue increased 13%, or $30 million, on higher cargo yields. * Other revenue increased 5%, or $43 million, from higher third-party maintenance revenue. Comparisons of revenue-related statistics are as follows: Increase(Decrease) 3Q11 versus 3Q10 ------------------------------- Change Unit Passenger Revenue 2Q11 ($M) YOY Revenue Yield Capacity ----------------------------------------- Domestic $3,536 10% 12% 10% (2%) Atlantic 1,796 6% 10% 10% (4%) Pacific 1,073 22% 7% 12% 14% Latin America 452 14% 13% 12% 1% ------- Total mainline 6,857 11% 11% 11% 0% Regional 1,711 9% 12% 10% (3%) ------- Consolidated 8,568 10% 11% 11% (1%) "Our September quarter passenger unit revenue increase of 11% from prior year, a revenue premium to the industry, demonstrates that our plan is working," said Ed Bastian, Delta's president. "Corporate travel demand remains strong. With continued capacity discipline, coupled with improvements we are making in our product and service, we are well positioned to deal with the impact of today's high fuel prices and an uncertain economy." Cost Performance In the September 2011 quarter, Delta's total operating expense increased $1 billion year over year. Higher fuel prices increased fuel expense by $1 billion, which was partially offset by $97 million of settled fuel hedge gains. The remaining year- over-year cost increase includes $65 million of higher revenue- related expenses and $40 million of foreign exchange impact. Excluding mark to market adjustments, Delta's average fuel price(2) was $3.09 per gallon for the September quarter, an 80 cent, or 35%, increase over the prior year. The September quarter 2011 price included 9 cents per gallon in settled gains from its fuel hedging program. Consolidated unit cost (CASM), excluding fuel expense, profit sharing and special items, was 3.3% higher in the September 2011 quarter on a year-over-year basis. Non-operating expense includes a $31 million loss on foreign exchange translations. On a GAAP basis, the company's fuel price (including non-cash mark to market adjustments) was $3.29 per gallon and its consolidated CASM increased 13.5%. "We are beginning to gain traction with our cost reduction initiatives, slowing September quarter non-fuel cost growth to 3% on a 1% decline in capacity," said Hank Halter, Delta's chief financial officer. "With the initiatives we have in place, we remain on track to bring our non-fuel unit costs modestly above 2010 levels in the fourth quarter despite a significant reduction in capacity." Liquidity Position As of September 30, 2011, Delta had $5.1 billion in unrestricted liquidity, including $3.3 billion in cash and short-term investments and $1.8 billion in undrawn revolving credit facilities. Cash used in operations during the September 2011 quarter was $100 million, as the normal seasonal decline in advance ticket sales was partially offset by the company's profitability. Capital expenditures during the quarter were $220 million, including $195 million in aircraft, parts and modifications. At September 30, 2011, Delta's adjusted net debt was $14.0 billion. The company remains on track to achieve its $10 billion adjusted net debt target in 2013. Company Highlights Delta has a strong commitment to its employees, customers and the communities it serves. Key accomplishments since July include: * Earning the top ranking in Business Travel News Annual Airline Survey, including the highest ratings from corporate travel buyers in five of 10 categories, and the award for "Best Airline - Business" from Recommend Magazine, a leading travel agent publication; * Achieving top-tier operational performance in baggage service, on-time arrivals and completion factor, which helped drive a 40% reduction in U.S. Department of Transportation customer complaints. Based on their exceptional operational and service performance, Delta employees have earned $33 million in Shared Rewards this year; * Placing an order for 100 Boeing 737-900ER aircraft for delivery between 2013 and 2018. These aircraft will allow Delta to replace older technology aircraft, improving the company's profitability while providing customers with an industry-leading, on-board experience; * Continuing efforts to be the airline of choice in New York with improved products, services and facilities. The company was recently granted final DOT approval for its planned acquisition of 132 slot pairs at New York-La Guardia, which will allow it to increase service out of New York. In addition, the company continues construction on a state of the art international facility at New York-JFK's Terminal 4, which is slated to open in the spring of 2013; * Announcing plans to enter into a long-term, exclusive commercial alliance with Aeromexico, linking Delta's network with Mexico's flagship carrier. As part of the agreement, Delta will invest $65 million in Aeromexico; * Supporting the Breast Cancer Research Foundation through Delta's signature pink plane, a Boeing 767-400 featuring the BCRF's pink ribbon logo. During its support of the program, Delta has raised over $3.5 million for BCRF. Special Items Delta recorded special items totaling a $216 million charge in the September 2011 quarter, primarily related to mark to market adjustments for open fuel hedges settling in future periods. These open hedges will continue to fluctuate in value and Delta will record future changes in market value until the hedges settle. Delta recorded $566 million in special items in the September 2010 quarter, including a $360 million charge for loss on extinguishment of debt; $153 million in costs related to the Comair fleet reduction; and $53 million in merger-related expenses. December 2011 Quarter Guidance Delta's projections for the December 2011 quarter are: 4Q 2011 Forecast ---------------- Fuel price, including taxes and hedges $2.98 Operating margin 5 - 7% Capital expenditures $350 million Total liquidity at end of period $5.0 billion 4Q 2011 Forecast (compared to 4Q 2010) --------------------- Consolidated unit costs - excluding fuel expense Flat to Up 2 % System capacity Down 4 - 5% Domestic Down 3 - 5% International Down 4 - 6% Other Matters Included with Delta's press release are unaudited Consolidated Statements of Operations for the three and nine months ended Sept. 30, 2011 and 2010; a statistical summary for those periods; selected balance sheet data as of Sept. 30, 2011 and Dec. 31, 2010; and a reconciliation of certain non-GAAP financial measures. Delta filed with the U.S. Securities and Exchange Commission its Form 10-Q dated October 25, 2011, detailing its financial disclosures for the third quarter ended September 30, 2011. A copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?7756 DELTA AIR LINES, INC. Unaudited Consolidated Balance Sheet As of September 30, 2011 ASSETS Current Assets: Cash and cash equivalents $2,307,000,000 Short-term investments 958,000,000 Restricted cash, cash equivalents & short-term investments 405,000,000 Accounts receivable, net 1,816,000,000 Expendable parts & supplies inventories, net 380,000,000 Deferred income taxes, net 396,000,000 Prepaid expenses and other 1,067,000,000 ----------------- Total Current Assets 7,329,000,000 Property and Equipment, Net 20,256,000,000 Other Assets Goodwill 9,794,000,000 Identifiable intangibles, net 4,697,000,000 Other noncurrent assets 960,000,000 ----------------- Total Other Assets 15,451,000,000 ----------------- Total Assets $43,036,000,000 ================= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current maturities of long-term debt $1,937,000,000 Air traffic liability 4,072,000,000 Accounts payable 1,641,000,000 Frequent flyer deferred revenue 1,701,000,000 Accrued salaries and related benefits 1,203,000,000 Taxes payable 597,000,000 Other accrued liabilities 861,000,000 ----------------- Total Current Liabilities 12,012,000,000 Noncurrent Liabilities: Long-term debt and capital leases 12,557,000,000 Pension, postretirement & related benefits 11,250,000,000 Frequent flyer deferred revenue 2,604,000,000 Deferred income taxes, net 1,967,000,000 Other noncurrent liabilities 1,424,000,000 ----------------- Total noncurrent liabilities 29,802,000,000 Commitments and Contingencies Stockholders' Equity: Common stock: Common stock at $0.00001 par value, 1,500,000,000 shares authorized, 801,701,956 shares issued June 30, 2010 - Additional paid-in capital 13,983,000,000 Accumulated deficit (8,823,000,000) Accumulated other comprehensive loss (3,724,000,000) Treasury stock, at cost, 12,852,539 shares at June 30, 2010 (214,000,000) ----------------- Total Stockholders' Equity 1,222,000,000 ----------------- Total Liabilities and Stockholders' Equity $43,036,000,000 ================= DELTA AIR LINES, INC. Unaudited Consolidated Statement of Operations Three Months Ended September 30, 2011 Operating Revenue: Passenger: Mainline $6,857,000,000 Regional carriers 1,711,000,000 ----------------- Total passenger revenue 8,568,000,000 Cargo 257,000,000 Other, net 991,000,000 ----------------- Total operating revenue 9,816,000,000 Operating Expense: Aircraft fuel and related taxes 2,881,000,000 Salaries and related costs 1,717,000,000 Contract carrier arrangements 1,432,000,000 Aircraft maintenance mat./outside repairs 428,000,000 Contracted services 480,000,000 Passenger commissions/other selling expenses 419,000,000 Depreciation and amortization 384,000,000 Landing fees and other rents 342,000,000 Passenger service 207,000,000 Aircraft rent 72,000,000 Profit sharing 167,000,000 Restructuring and other items 3,000,000 Other 424,000,000 ----------------- Total operating expense 8,956,000,000 ----------------- Operating Income (Loss) 860,000,000 Other (Expense) Income: Interest expense (229,000,000) Amortization of debt discount, net (48,000,000) Loss on extinguishment of debt (5,000,000) Miscellaneous, net (31,000,000) ----------------- Total other expense, net (313,000,000) ----------------- Income (Loss) Before Income Taxes 547,000,000 Income Tax (Provision) Benefit 2,000,000 ----------------- Net Income (Loss) $549,000,000 ================= DELTA AIR LINES, INC. Unaudited Consolidated Statement of Cash Flow Six Months Ended September 30, 2010 Net Cash Provided by Operating Activities $1,676,000,000 Cash Flows from Investing Activities: Property and equipment additions: Flight equipment (676,000,000) Ground property and equipment (210,000,000) Purchase of short-term investments (719,000,000) Redemption of short-term investments 503,000,000 Other investments - Other, net 16,000,000 ----------------- Net Cash used in Investing Activities (1,086,000,000) Cash Flows from Financing Activities: Payments on long-term debt (3,426,000,000) Proceeds from long-term obligations 2,380,000,000 Debt issuance costs (62,000,000) Restricted cash and cash equivalents (84,000,000) Other, net 17,000,000 ----------------- Net Cash used in Financing Activities (1,175,000,000) Net Increase (Decrease) in Cash & Equivalents (585,000,000) Cash & cash equivalents at beginning of period 2,892,000,000 ----------------- Cash & cash equivalents at end of period $2,307,000,000 ================= About Delta Air Lines Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- provides scheduled air transportation for passengers and cargo throughout the United States, and around the world. The Company's route network is centered on the hub system it operate at airports in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York-JFK, Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo- Narita. The hub operations include flights, which gather and distribute traffic from markets in the geographic region surrounding the hub to domestic and international cities and to other hubs. The network is supported by a fleet of aircraft, which is varied in terms of size and capabilities. On Dec. 31, 2009, the Company's wholly owned subsidiary Northwest Airlines, Inc., merged with and into Delta. The wholly owned subsidiary of the Company is Northwest Airlines Corporation. Northwest and 12 affiliates filed for Chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). * * * Delta Air Lines and Northwest Airlines carry a 'B/Stable/--' corporate ratings from Standard & Poor's. They also continue to carry 'B2' corporate family ratings from Moody's and "B-" LT Issuer Default rating from Fitch. "The affirmation of our corporate credit rating on Delta is based on our expectation that the company will continue to generate satisfactory earnings and cash flow, despite weakening economic growth in the U.S. and abroad," said Standard & Poor's credit analyst Phil Baggaley. The ratings also reflect an enhanced competitive position and synergies from Delta's 2008 merger with Northwest Airlines Corp. (parent of Northwest Airlines Inc.)," S&P said in November 2011. This concludes the Troubled Company Reporter's coverage of Delta Air Lines until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. DIAMOND RANCH: Delays Filing of Form 10-Q for Sept. 30 Qtr. ----------------------------------------------------------- Diamond Ranch Foods, Ltd., notified the U.S. Securities and Exchange Commission that it will be late in filing its Quarterly Report on Form 10-Q for the period ended Sept. 30, 2011. The Company did not provide its auditors with all of the information necessary for the auditors to complete the review of the financial statements prior to the date on which the Form 10-Q was required to be filed. About Diamond Ranch Diamond Ranch Foods, Ltd. -- http://www.diamondranchfoods.com/-- is a meat processing and distribution company now located in the Hunts Point Coop Market, Bronx, New York. The Company's operations consist of packing, processing, labeling, and distributing products to a customer base, including, but not limited to; in-home food service businesses, retailers, hotels, restaurants, and institutions, deli and catering operators, and industry suppliers. The Company's balance sheet at March 31, 2011, showed $942,000 in total assets, $6.00 million in total liabilities, and a $5.05 million total stockholders' deficit. Gruber & Company, LLC, in Lake Saint Louis, Missouri, noted that the Company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. DELUXE ENTERTAINMENT: Moody's Rates Proposed Term Loan at 'B1' -------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the proposed $500 million secured term loan due June 2017 of Deluxe Entertainment Services Group, Inc. ("Deluxe"). Moody's also affirmed its B1 Corporate Family Rating (CFR) and B1 Probability of Default Rating (PDR), and the outlook remains negative. Moody's expects Deluxe to use the proceeds primarily to refinance its existing first lien term loan ($355 million outstanding) and second lien term loan ($110 million outstanding). A proposed $100 million asset based lending (ABL) facility (unrated) is also part of the transaction. Deluxe Entertainment Services Group, Inc. -- Senior Secured Term Loan, Assigned B1, LGD4, 53% -- Affirmed B1 Corporate Family Rating -- Affirmed B1 Probability of Default Rating Outlook, Negative RATINGS RATIONALE The transaction favorably extends maturities, (existing revolver matures January 2013, first lien term loan May 2013, and second lien term loan November 2013), and Moody's does not anticipate a meaningful change in annual interest expense. Furthermore, the proposed deal requires $50 million of annual required amortization, similar to the existing deal ($60 million required annual amortization). This continued forced reduction in lender exposure is critical to the affirmation of the B1 CFR, given expectations for continued decline in Deluxe's physical film processing business, which comprises about 40% of total revenue and EBITDA. Deluxe's creative services business resumed growth on an organic basis in 2011, its acquisitions are performing well, and Moody's projects continued solid growth for this segment. However, the cash costs (severance, facility consolidation) to achieve synergies for its acquisitions and to manage the decline in the film processing business exceeded expectations, pressuring the credit profile. Also, the decline in the film business has continually outpaced management's projections. Moody's anticipates that actions related to both the integration of acquisitions and wind down of the film business will continue to consume cash, creating some execution risk, both that costs will again exceed expectations and that the actions could distract management and the sales force. These factors drive the maintenance of the negative outlook. We consider the proposed term loan junior to the proposed ABL facility, which has a first lien on liquid assets including accounts receivable. However, the term loan constitutes the bulk of the debt capital structure, and Moody's therefore rates it B1, on par with the corporate family rating. Deluxe maintains a leading position in the eroding physical film processing business, and the risks related to its ability to harvest the cash flow from this business to expand its creative services business drive the B1 corporate family rating. Moody's considers the mid 3 times debt-to-EBITDA leverage high relative to the risk of transforming the operations. However, the required amortization in the proposed term loan ($50 million annually) obligates a reduction in lender exposure, which supports the B1 corporate family rating, along with a track record of positive free cash flow generation, which is expected to continue. Deluxe's creative services operations provide good growth prospects, boosted by the December 2010 acquisition of Ascent Media at a low cost relative to cash flow potential, but this business also has greater cyclicality, more technology risk, and more competition than the film processing business. The potential for incremental acquisitions that increase leverage and lead to integration costs and challenges also constrains the rating. Finally, over the longer term, the private equity ownership (MacAndrews & Forbes Holdings Inc.) creates event risk. The negative outlook incorporates concerns that continued high restructuring costs and the decline in the physical film distribution business will pressure the company's credit profile. Moody's would consider a stable outlook with expectations for sustained positive free cash flow (after all restructuring costs) around 10% of debt. A stable outlook would also require evidence that growth in the creative services business will offset decline in the film business such that the company achieves consolidated EBITDA growth on an organic basis. Expectations for free cash flow below 5% of debt, whether due to higher than expected cash restructuring or weaker performance, could result in a downgrade. Erosion of the liquidity profile, expectations for a capital structure not conservative enough to manage debt-financed acquisitions or the risks inherent in the business model, or cash distributions to equity holders could also pressure the rating down. Deluxe Entertainment Services Group Inc. 's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Deluxe Entertainment Services Group Inc. 's core industry and believes Deluxe Entertainment Services Group Inc. 's ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Los Angeles, CA, Deluxe Entertainment Services Group Inc. provides services including production, post production, development and distribution (across multiple platforms) and marketing and fulfillment to producers and distributors of motion pictures and television programs worldwide through its creative services business (approximately 60% of revenue). Deluxe also supplies worldwide film processing services to studios (about 40% of revenue). Deluxe is an indirect wholly- owned subsidiary of MacAndrews & Forbes Holdings Inc. and its annual revenue is approximately $1.3 billion. DESERT GARDENS: U.S. Bank Wants Cash Collateral Access Denied ------------------------------------------------------------- U.S. Bank National Association, asks the U.S. Bankruptcy Court for the District of Arizona to deny Desert Gardens IV, LLC's motion to use the cash collateral. U.S. Bank National Association serves as trustee, successor in interest to Bank of America, National Association, as Trustee, successor by merger to LaSalle Bank National Association, as trustee, for the registered holders of 10 Bear Stearns Commercial Mortgage Securities Inc., Commercial Mortgage Pass-Through Certificates, 11 Series 2007-PWR15. As of the Petition Date, U.S. Bank alleges that the balance owing under the Note is $26.3 million. U.S. Bank noticed a trustee's sale which was scheduled for Nov. 14, 2011, but is now stayed. The bank also brought a receivership action in state court on Nov. 1, 2011, which is also stayed. The receivership hearing was set for Nov. 10, 2011. As reported in the Troubled Company Reporter on Nov. 29, 2011, the Debtor asked the Court to authorize the use of use of cash collateral to pay necessary and essential postpetition operating expenses and (b) deem the interest of U.S. Bank, the Debtor's secured lender, in the cash collateral adequately protected. The Debtor expected to have cash needs of $247,200 for operating and other business expenses per month for the first 90-days of the case. The Debtor expected monthly revenues will be $321,950 during this time period. The Debtor proposed to pay U.S. Bank $60,000 in monthly adequate protection payments. After monthly operating expenses and adequate protection payments, the Debtor anticipates a positive cash flow. According to US Bank, the Debtor's use of cash collateral must be denied because: -- promised, among other things, to pay to US Bank monthly installments of principal and interest in the amount of $160,845, beginning Feb. 1, 2007, up to and including Dec. 1, 2016; -- US Bank has not consented to the use of cash collateral. -- the application is deficient, since it failed to disclose whether, or to what extent, any of the proposed payments are to be made to insiders, including without limitation property management, referrals, advertising, salaries, maintenance, or any other categories; -- the Debtor be required to provide to US Bank, no less frequently than monthly, detailed financial reports, including bank statements, check registers, general ledgers, aged receivable and payable reports, and copies of all written receipts for cash payments. US Bank is represented by: Richard M. Lorenzen, Esq. PERKINS COIE LLP 2901 N. Central Avenue, Suite 2000 Phoenix, AZ 85012-2788 Tel: (602) 351-8000 Fax: (602) 648-7000 E-mail: RLorenzen@perkinscoie.com About Desert Gardens IV Desert Gardens IV LLC, owner of a 532-unit Desert Gardens apartments in Glendale, Arizona, filed for Chapter 11 protection to halt foreclosure that was set for Nov. 14. The project has two 31-story towers, one built in 1983 and the other in 2003. U.S. Bank, the secured lender, is owed $26.3 million. The property is estimated to be worth $16 million. Desert Gardens IV filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 11-31061) on Nov. 4, 2011, in Phoenix. Jennings, Strouss & Salmon, P.L.C., serves as the Debtor's counsel. Sierra Consulting Group, LLC, is the financial advisor. The Debtor disclosed $16,138,707 in assets and $27,141,725 in liabilities in its schedules. DIRECT BUY: Cut by Moody's to 'Caa3' as Debt Restructuring Mulled ----------------------------------------------------------------- Moody's Investors Service downgraded to Caa3 from Caa2 the Corporate Family and Probability of Default ratings of Direct Buy Holdings, Inc., and assigned a negative outlook. This concludes the review for possible downgrade that commenced on November 10, 2011. Ratings downgraded: Corporate Family Rating to Caa3 from Caa2 Probability of Default Rating to Caa3 from Caa2 $335 million Senior Secured Second Lien Notes to Caa3 (LGD 4, 50%) from Caa2 (LGD 4, 50%). RATING RATIONALE: The downgrade of Direct Buy's Corporate Family Rating to Caa3 along with the negative rating outlook consider that the company: (1) is in default of a financial covenant related to its revolving credit facility (not rated by Moody's); (2) received a going concern opinion from its auditors; and (3) retained a financial advisor in connection with a debt restructuring. Moody's believes that these events increase the likelihood of a distressed exchange or other recapitalization that would impair creditors. On November 28, 2011, Direct Buy released its fiscal year-end July 31, 2011 financial statements. That document disclosed that the company was in default of a financial covenant related to its revolving credit facility. This technical default under the loan agreement gives the senior secured lenders the right to accelerate payment, which would trigger an event of default under its bond indenture. The document also included a going concern opinion by its auditors as a result of the default, and a statement that the company has hired a financial advisor in connection with a debt restructuring. Ratings could be downgraded if: (1) Direct Buy is unable to reach agreement with its bank lenders regarding the covenant issues impacting the revolving credit facility; (2) the company proceeds with a potential restructuring that Moody's believes would impair creditors; or (3) the company is either unable or unwilling to make its next scheduled debt service payment; the approximately $10 million February 1, 2012 scheduled interest payment on its second lien notes. Direct Buy's ratings and/or outlook could improve if the company is able to obtain a waiver from its bank's governing the revolver, makes its February 1, 2012 interest payment, improve its operating performance such that a debt restructuring ultimately proves to be unnecessary, or if a potential debt restructuring does not impair existing creditors. The principal methodology used in rating Direct Buy Holdings, Inc. was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Direct Buy, Inc., headquartered in Merrillville, Indiana, is a membership buying club that operates under a franchise business model. DREIER LLP: Court Okays Accord With Hedge Fund, Founder's Ex-Wife ----------------------------------------------------------------- Hilary Russ at Bankruptcy Law360 reports that the Chapter 11 trustee for Dreier LLP, which was felled by founder Marc Dreier's Ponzi scheme, won a New York bankruptcy judge's approval Wednesday for separate settlements that end disputes with hedge fund Elliott Associates LP and Mr. Dreier's ex-wife. About Marc Dreier and Dreier LLP Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On Dec. 8, 2008, the U.S. Securities and Exchange Commission filed a suit, alleging that Mr. Dreier made fraudulent offers and sales of securities in several cities, selling fake promissory notes to hedge and other private investment funds. The SEC asserted that Mr. Dreier also distributed phony financial statements and audit opinions, and recruited accomplices in connection with that scheme. Mr. Dreier, currently in prison, was charged by the U.S. government for conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No. 09-cr-00085). Dreier LLP sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, was tapped as counsel. The Debtor estimated assets of $100 million to $500 million, and debts between $10 million and $50 million in its Chapter 11 petition. Sheila M. Gowan, a partner with Diamond McCarthy, was appointed Chapter 11 trustee for the Dreier law firm. Ms. Gowan is represented by Jason Porter, Esq., at Diamond McCarthy LLP. Wachovia Bank National Association, the Dreier LLP Chapter 11 trustee, and Steven J. Reisman as post-confirmation representative of the bankruptcy estate of 360networks (USA) Inc. signed a petition that put Mr. Dreier into bankruptcy under Chapter 7 on Jan. 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier, 60, pleaded guilty to fraud and other charges in May 2009. The scheme to sell $700 million in fake notes unraveled in late 2008. Mr. Dreier is serving a 20-year sentence in a federal prison in Minneapolis. DUMBARTON HOME: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Dumbarton Home Properties LLC 8000 Capps Ferry Road Douglasville, GA 30135 Bankruptcy Case No.: 11-84007 Chapter 11 Petition Date: December 1, 2011 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Michael Rothenberg, Esq. MICHAEL ROTHENBERG PLLC Suite B345 2526 Mt. Vernon Road Dunwoody, GA 30338 Tel: (404) 954-0902 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb11-84007.pdf The petition was signed by Hugh Nowell, manager. DYNEGY INC: Debtors File Reorganization Plan -------------------------------------------- Dynegy Inc. and Dynegy Holdings, LLC, delivered to the U.S. Bankruptcy Court for the Southern District of New York, Poughkeepsie Division, a Chapter 11 plan of reorganization and an accompanying disclosure statement for Dynegy Holdings. The Plan addresses claims against and interests in Dynegy Holdings only and does not address claims against and interests in the other Debtors -- Dynegy Northeast Generation, Inc., Hudson Power, L.L.C., Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C. The DH Plan provides for the treatment and satisfaction of all claims against Dynegy Holdings, including its senior and subordinated notes and its guaranties of its Roseton and Danskammer lease obligations. Under the Plan, claims are classified into five classes: * Class 1 - Priority Claims: consist of all Priority Claims, other than Priority Tax Claims, against DH; * Class 2 - Secured Claims: consist of all Secured Claims against DH; * Class 3 - General Unsecured Claims: consist of all General Unsecured Claims against DH; * Class 4 - Convenience Claims: consist of all Convenience Claims against DH; and * Class 5 - Equity Interests: consist of all Equity Interests in DH. In a press release, Dynegy says that if confirmed by the Court, the proposed DH Plan will settle all pending and potential causes of action related to Dynegy's out-of-court restructuring efforts and will materially reduce the debt on its consolidated balance sheet. "The filing of the proposed Plan of Reorganization represents an important milestone in DH's Chapter 11 case and maintains momentum toward DH's expeditious emergence from bankruptcy in 2012," Robert C. Flexon, President and Chief Executive Officer of both Dynegy and DH, said. "We continue to work with our stakeholders and appreciate the support of significant creditors as we work toward lessening Dynegy's overall debt load." Under the terms of the proposed DH Plan and consistent with a restructuring support agreement, all creditors holding unsecured obligations of Dynegy Holdings, including $3.4 billion of senior notes, $200 million of subordinated notes, approximately $130 million of accrued interest, and the guaranty obligations associated with the Roseton and Danskammer leases, will receive: * a $400 million cash payment, subject to adjustment as set forth in the Plan; * $1.0 billion, subject to adjustment as set forth in the Plan, of new 11% senior secured notes due 2018 to be issued by Dynegy and secured by the equity and assets of certain entities owning the Company's separate coal and gas-fueled generating businesses (or an equivalent cash payment, if the Company obtains the financing elsewhere on no less favorable terms); and * $2.1 billion of Dynegy's new convertible preferred stock. The convertible preferred stock will not be convertible at the option of the holders but will mandatorily convert into common stock comprising 97% of Dynegy's fully diluted common stock on December 31, 2015, if not earlier redeemed. Dynegy will have the right to redeem the convertible preferred stock, subject to certain restrictions, at varying discounts through the end of 2013. The DH Plan was filed with a Disclosure Statement that contains a historical profile of Dynegy Holdings, a description of proposed distributions to creditors, and an analysis of the DH Plan's feasibility, as well as many of the technical matters required for Dynegy Holdings to emerge from Chapter 11. The DH Plan and Disclosure Statement have not been approved by the Bankruptcy Court and are subject to further negotiations with stakeholders. Once the Disclosure Statement is approved, DH will begin soliciting its creditors for approval of its Plan. Dynegy and Dynegy Holdings say that they can make no assurance as to when, or ultimately if, the DH Plan will become effective. Effectiveness of the DH Plan is subject to a number of conditions, including the approval of the requisite numbers of Dynegy Holdings creditors and the entry of certain orders by the Bankruptcy Court. Dynegy Holdings is represented in the Chapter 11 proceedings by Sidley Austin LLP as reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP. Dynegy is advised by Lazard Freres & Co. LLC and Dynegy Holdings' financial advisor is FTI Consulting. Treatment of Claims Each holder of an allowed claim in Classes 1, 2, 4, and 5 will be left unimpaired under the Plan, and, pursuant to Section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which the Claim entitles the holder in respect of the Claim will be left unaltered, and except to the extent that a holder of an Allowed Priority Claim and the Plan Proponents agree on less favorable treatment for the holder, the Claims against Dynegy Holdings will be paid in full. Holders of claims in Class 3 will receive on the effective date of the Plan its pro rata share of (i) the Plan Cash Payment, (ii) the Plan Preferred Stock, and (iii) at the sole option of Dynegy, in its capacity as a Plan Proponent, either (a) the Plan Secured Notes or (b) the Plan Secured Notes Alternative Payment except to the extent that a holder of an Allowed General Unsecured Claim and the Plan Proponents agree on less favorable treatment for the holder. Only claims in Class 3 are impaired under the Plan. Accordingly, only holders of Class 3 Claims are entitled to vote on the Plan and only the votes of holders of Class 3 will be solicited by the Debtors in connection with the Plan and the Disclosure Statement. The other Classes are deemed to have accepted the Plan and their votes will not be solicited by the Plan Proponents in connection with the Plan and the Disclosure Statement. Means for Implementation of the Plan During the period from the Confirmation Date through and until the Effective Date, Dynegy Holdings will continue to operate its businesses as a Debtor-in-Possession, subject to the oversight of the Court as provided in the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and all orders of the Bankruptcy Court that are then in full force and effect. To implement the settlement and compromise in the most efficient manner, these intercompany transactions will occur on or before the Effective Date: a. Re-Vesting of Assets -- Without further order of the Bankruptcy Court, upon the occurrence of the Effective Date, except as otherwise expressly provided in the Plan or the Confirmation Order, title to all of the Assets of DH and its Estate will vest in DH free and clear of all liens, mortgages, Claims, Causes of Action, interests, security interests and other encumbrances. b. Cancellation of DH Note -- Dynegy and Dynegy Holdings will cause Dynegy Gas Investments LLC to cancel the DH Note and deem the DH Note fully satisfied and extinguished. DH issued the DH Note on September 1, 2011 for $1.25 billion to DGIN in exchange for the transfer by DGIN to DH of DGIN's rights to receive the payment stream from Dynegy pursuant to an undertaking agreement. The DH Note bears annual interest at a rate of 4.24%, payable upon the maturity date, September 1, 2027. c. Formation of New DH and Legacy DH -- Dynegy will form a wholly-owned direct subsidiary, New DH, as a Delaware corporation, and New DH shall then form a wholly-owned direct subsidiary, Legacy DH, as a Delaware limited liability company. d. DH Merger with Legacy DH -- Dynegy will contribute 100% of the Equity Interests in DH to New DH and immediately thereafter DH shall be merged into Legacy DH under Delaware law, with Legacy DH as the surviving entity. e. Cancellation of Undertaking Agreement -- Immediately following the formation of New DH and Legacy DH and the merger of DH into Legacy DH, Legacy DH, as successor to DH, and Dynegy will cancel the Undertaking Agreement and the obligations of Dynegy under such Undertaking Agreement will be deemed to be fully satisfied and extinguished. f. Elimination of Certain Intercompany Indebtedness -- Any intercompany indebtedness owed by (or to) Legacy DH or one of the remaining Debtors to (or by) Dynegy or any of its direct or indirect subsidiaries (other than Legacy DH or the remaining Debtors) will be identified. The intercompany indebtedness will be either contributed down or distributed up, as the case may be, by Dynegy and its direct or indirect subsidiaries (other than Legacy DH or a subsidiary that is one of the remaining Debtors) to Legacy DH. All the intercompany indebtedness will be netted by Legacy DH, and if the net amount results in (A) a receivable of Legacy DH, such net receivable will be contributed to DNE by Legacy DH, or (B) a payable by Legacy DH, such net payable will be cancelled. g. Transfer of Legacy DH Assets to New DH -- Except for (i) Cash necessary to pay the reasonable costs and expenses associated with the administration of the Plan Trust, which amount will be (A) determined by the Plan Proponents subject to the consent of the Requisite Consenting Noteholders, which consent will not be unreasonably withheld or delayed, and (B) identified in a Plan Document to be filed with the Bankruptcy Court not less than 10 days prior to the Plan Objection Deadline, and (ii) Legacy DH's equity interests in DNE, Legacy DH will, after the cancellation of the Undertaking Agreement, promptly transfer substantially all of its assets to New DH. The assets transferred by Legacy DH to New DH as set forth in the preceding sentence shall include, without limitation, 100% of the equity interests in DGIN. h. Transfer of Legacy DH to the Plan Trust -- After consummation of the transfers (i) Dynegy will cause New DH to transfer 100% of the equity interests in Legacy DH to the Plan Trust and (ii) Legacy DH and its subsidiaries will change their legal names, where applicable to exclude the word "Dynegy" therefrom. Further, immediately upon the transfer of the equity interests in Legacy DH to the Plan Trust, Legacy DH and the remaining Debtors will adopt new constituent documents that will appoint a Plan Trust Administrator as the sole director or manager thereof, as applicable. After these transactions are complete, Dynegy Holdings' current subsidiaries DNE, Hudson Power, Dynegy Danskammer and Dynegy Roseton, all Debtors in the Chapter 11 Cases, will be managed by the Plan Trust Administrator. The Plan Trust Administrator will thereafter, be responsible for taking all actions necessary or appropriate to dissolve Legacy DH. Copies of the Plan & Disclosure Statement are available for free at: http://bankrupt.com/misc/DynegyCh11Pln.pdf http://bankrupt.com/misc/DynegyDiscStm.pdf Disclosure Statement Hearing Dynegy Holdings LLC asks Judge Cecelia G. Morris of the U.S. Bankruptcy Court for the Southern District in New York to approve the disclosure statement related to the Chapter 11 Plan of Reorganization it proposed with Dynegy Inc. on December 1, 2011, as containing adequate information. The Debtors also ask the Court to approve procedures for the solicitation of votes to accept or reject its Chapter 11 Plan of Reorganization. Dynegy Holdings said it will work with the Court to set a hearing on the approval of the Disclosure Statement for a date that is no earlier than January 25, 2012. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) on Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) DYNEGY INC: U.S. Trustee Drops Oaktree as Committee Member ---------------------------------------------------------- Tracy Hope Davis, United States Trustee for Region 2, has revised the composition of the Official Committee of Unsecured Creditors by replacing Oaktree Capital Management, L.P., with Central Hudson Gas & Electric Corporation. As of November 29, 2011, the Committee is composed of: 1. U.S. Bank National Association 60 Livingston Avenue, EP-MN-WSID St. Paul, MN 55107-2292 Phone: (651) 495-3961 Fax: (651) 495-8100 Attn: Pamela J. Wieder 2. Roseton OL, LLC The Nemours Building 1007 Orange St, Suite 1469 Wilmington, DE 19801 Phone: (302) 472-7412 Fax: (302) 472-7216 Attn: Scott Jennings 3. Wilmington Trust, National Association 1100 N. Market Street Wilmington, DE 19890 Phone: (302) 651-8681 Fax: (302) 651-8882 Attn: Steven Cimalore 4. Wells Fargo Bank, N.A 45 Broadway, 12th Floor New York, NY 10006 Phone: (212) 515-5258 Fax: (866) 524-4681 Attn: James R. Lewis 5. Central Hudson Gas & Electric Corporation 284 South Avenue Poughkeepsie, New York 12601 Phone: (845) 486-5831 Fax: (845) 486-5782 Attn: Paul A. Colbert Central Hudson is a utility service provider that supplies gas and electric services to the Debtors. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) on Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) DYNEGY INC: Dynegy Holdings Cuts Assets to $7.56 Billion -------------------------------------------------------- Dynegy Holdings LLC, on Dec. 1, submitted an amended Exhibit A to its voluntary petition under Chapter 11. Exhibit A lists the Debtors' consolidated assets and liabilities as well as information regarding Dynegy Holdings, LLC's securities. The Amended Exhibit A disclosed that, as of Sept. 30, 2011, Dynegy Holdings has $7.561 billion in total assets and $6.738 billion in total debts. The Exhibit A filed on the Petition Date disclosed that, as of Sept. 30, 2011, Dynegy Holdings has $13.765 billion in total assets and $6.181 billion in total debts. A copy of Amended Exhibit A is available for free at: http://bankrupt.com/misc/DynegyPetExA.pdf The Debtors reserve their right to further amend or supplement Exhibit A to the voluntary petition of Dynegy Holdings, LLC as they deem necessary or appropriate. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) on Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) DYNEGY INC: Terminates Stockholder Protection Rights Agreement -------------------------------------------------------------- The Board of Directors of Dynegy Inc. unanimously voted to terminate the Stockholder Protection Rights Agreement, dated November 22, 2010, as amended by Amendment No. 1, dated December 15, 2010, and Amendment No. 2, dated February 21, 2011, by and between Dynegy and Mellon Investor Services LLC, as the Rights Agent, according to a Form 8-K filed with the U.S. Securities and Exchange Commission on November 17, 2011. The Rights Plan provided for a dividend of one right for each outstanding share of common stock, par value $0.01 per share, of Dynegy held of record at the close of business on December 2, 2010, or issued thereafter. Each Right entitled its registered holder to purchase from Dynegy, under the circumstances defined in the Rights Plan, one one-hundredth of a share of Participating Preferred Stock, par value $0.01 per share, for an exercise price as determined under the Rights Plan. Pursuant to the Rights Plan, immediately upon the action of the Board to elect to terminate the Rights, without any further action and without any notice, the right to exercise the Rights terminated, each Right is null and void and the Rights Plan expired. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7 to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) E-DEBIT GLOBAL: Incurs $241,000 Net Loss in Third Quarter --------------------------------------------------------- E-Debit Global Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $241,465 on $915,504 of total revenue for the three months ended Sept. 30, 2011, compared with a net loss of $445,896 on $1.03 million of total revenue for the same period a year ago. The Company reported a net loss of $1.15 million on $3.97 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of $1.28 million on $3.64 million of revenue during the prior year. The Company also reported a net loss of $754,892 on $2.58 million of total revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $778,092 on $2.99 million of total revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $1.51 million in total assets, $2.51 million in total liabilities and a $1 million total stockholders' deficit. As reported by the TCR on April 15, 2011, Cordovano and Honeck LLP, in Englewood, Colorado, 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, has a working capital deficit at Dec. 31, 2010, and has an accumulated deficit of $4,457,079 as of Dec. 31, 2010. A full-text copy of the Form 10-Q is available for free at: http://is.gd/RXYCsB About E-Debit Global Corporation E-Debit Global Corporation (WSHE) is a financial holding company in Canada at the forefront of debit, credit and online computer banking. Currently, the Company has established a strong presence in the privately owned Canadian banking sector including Automated Banking Machines (ABM), Point of Sale Machines (POS), Online Computer Banking (OCB) and E-Commerce Transaction security and payment. E-Debit maintains and services a national ABM network across Canada and is a full participating member of the Canadian INTERAC Banking System. EAT AT JOE'S: Incurs $199,600 Net Loss in Third Quarter ------------------------------------------------------- Eat at Joe's Ltd. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $199,679 on $400,967 of revenue for the three months ended Sept. 30, 2011, compared with a net loss of $4,521 on $354,472 of revenue for the same period a year ago. The Company also reported a net loss of $187,750 on $735,940 of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $369,000 on $927,123 of revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $1.76 million in total assets, $5.21 million in total liabilities, and a $3.45 million total stockholders' deficit. As reported by the TCR on April 6, 2011, Robison, Hill & Co., in Salt Lake City, Utah, after auditing the Company's financial statements for the year ended Dec. 31, 2010, noted that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: http://is.gd/Y4QVkL About Eat at Joe's Scarsdale, N.Y.-based Eat at Joe's, Ltd., presently owns and operates one theme restaurant located in Philadelphia, Pennsylvania. EFD LTD: Court Reschedules Hearing on Valuation Until Jan. 6 ------------------------------------------------------------ The Hon. Craig A. Gargotta the U.S. Bankruptcy Court for the Western District of Texas has rescheduled to Jan. 6, 2012, at 9:00 a.m., the hearing to consider the motion for valuation filed by EFD, Ltd., and Capital Farm Credit. Austin, Texas-based EFD, Ltd., dba Blanco San Miguel, fdba Blanco San Miguel, Ltd., filed for Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 11-10846) on April 5, 2011. Eric J. Taube, Esq., at Hohmann Taube & Summers, LLP, in Austin, Texas, serves as the Debtor's bankruptcy counsel. The Company disclosed $128,207,835 in assets and $30,395,205 in liabilities as of the Chapter 11 filing. The U.S. Trustee has not yet appointed an official committee of unsecured creditors. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. EGPI FIRECREEK: Delays Filing of Form 10-Q for Sept. 30 Quarter --------------------------------------------------------------- EGPI Firecreek, Inc., notified the U.S. Securities and Exchange Commission that it is delayed in filing its quarterly report on Form 10-Q for the quarter ended Sept. 30, 2011, in order to enable its independent registered public accounting firm to complete its review of the Company's financial statements to be contained in the Report and for XBRL processing requirements. About EGPI Firecreek Scottsdale, Ariz.-based EGPI Firecreek, Inc. (OTC BB: EFIR) was formerly known as Energy Producers, Inc., an oil and gas production company focusing on the recovery and development of oil and natural gas. The Company has been focused on oil and gas activities for development of interests held that were acquired in Texas and Wyoming for the production of oil and natural gas through Dec. 2, 2008. Historically in its 2005 fiscal year, the Company initiated a program to review domestic oil and gas prospects and targets. As a result, EGPI acquired non-operating oil and gas interests in a project titled Ten Mile Draw located in Sweetwater County, Wyoming for the development and production of natural gas. In July 2007, the Company acquired and began production of oil at the 2,000 plus acre Fant Ranch Unit in Knox County, Texas. This was followed by the acquisition and commencement in March 2008 of oil and gas production at the J.B. Tubb Leasehold Estate located in the Amoco Crawar Field in Ward County, Texas. The Company's balance sheet at June 30, 2011, showed $5.14 million in total assets, $5.00 million in total liabilities, all current, $3.73 million in Series D preferred stock, and a $3.59 million total shareholders' deficit. M&K CPAS, PLLC, in Houston, expressed substantial doubt about EGPI Firecreek's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has suffered recurring losses and negative cash flows from operations. ELITE PHARMACEUTICALS: Posts $13.9MM Net Income in Sept. 30 Qtr. ---------------------------------------------------------------- Elite Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting net income attributable to common shareholders of $13.92 million on $274,132 of total revenues for the three months ended Sept. 30, 2011, compared with net income attributable to common shareholders of $1.86 million on $994,646 of total revenues for the same period during the prior year. The Company also reported a net loss attributable to common shareholders of $16.81 million on $1.26 million of total revenues for the six months ended Sept. 30, 2011, compared with a net loss attributable to common shareholders of $2.90 million on $1.82 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $10.83 million in total assets, $34.52 million in total liabilities, and a $23.68 million total stockholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/BAbqOf About Elite Pharmaceuticals Northvale, New Jersey-based Elite Pharmaceuticals, Inc., is a specialty pharmaceutical company principally engaged in the development and manufacture of oral, controlled-release products, using proprietary technology and the development and manufacture of generic pharmaceuticals. The Company has one product, Phentermine 37.5mg tablets, currently being sold commercially. Demetrius & Company, L.L.C., in Wayne, New Jersey, expressed substantial doubt about Elite Pharmaceuticals' ability to continue as a going concern. The independent auditors noted that the Company has experienced significant losses resulting in a working capital deficiency and shareholders' deficit. The Company reported a net loss of $13.6 million on $4.3 million of revenues for the fiscal year ended March 31, 2011, compared with a net loss of $8.1 million on $3.3 million of revenues for the fiscal year ended March 31, 2010. EMMIS COMMUNICATIONS: Alden Global Owns 0 Class A Shares -------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Alden Global Capital Limited and its affiliates disclosed that, as of Nov. 28, 2011, they do not beneficially own shares of Class A common stock of Emmis Communications Corporation. On Nov. 28, 2011, Alden sold 1,035,925 shares of Preferred Stock back to the Company pursuant to a securities purchase agreement. Pursuant to the terms of the Purchase Agreement, the Company purchased the Shares from Alden at a price of $15.75 per share of Preferred Stock. The transaction will settle pursuant to the terms of a total return swap, the terms of which provide that until final settlement of the Swap Transaction, Alden has pledged the Shares to the Company and has agreed not to sell any of the Shares or enter into any other transactions relating to the Shares. A full-text copy of the amended Schedule 13D is available at: http://is.gd/45WHW9 About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. The Company reported a consolidated net loss of $11.54 million on $251.31 million of net revenues for the year ended Feb. 28, 2011, compared with a consolidated net loss of $118.49 million on $242.56 million of net revenues during the prior year. The Company also reported a net loss attributable to common shareholders of $13.14 million on $125.76 million of net revenues for the six months ended Aug. 31, 2011, compared with a net loss attributable to common shareholders of $6.24 million on $126.91 million of net revenues for the same period a year ago. The Company's balance sheet at Aug. 31, 2011, showed $471.19 million in total assets, $479.49 million in total liabilities, $140.45 million in Series A cumulative convertible preferred stock, and a $148.75 million total deficit. * * * In November 2010, Moody's Investors Service affirmed the 'Caa2' Corporate Family Rating and 'Caa3' Probability of Default rating for Emmis Communications Corporation, as well as its SGL-4 speculative grade liquidity rating. Operating performance improved with the economic recovery, but absent debt reduction with proceeds from an asset sale or equity infusion Emmis will likely breach its leverage covenant when the covenant suspension period ends for the quarter ending November 30, 2011, in Moody's opinion. Emmis' CFR and PDR incorporate expectations for a covenant breach in November 2011. Moody's considers the Company's capital structure unsustainable, and its operations in the cyclical advertising business magnify this challenge. Furthermore, Emmis relies on two markets, Los Angeles and New York, for approximately 50% of its revenue, although its ownership of stations in top markets including Chicago as well as NY and LA, support the rating. The negative outlook incorporates Moody's expectations that Emmis will not comply with its maximum leverage covenant when effective for the quarter ending Nov. 30, 2011. ENERTECK CORP: Incurs $946,000 Net Loss in Third Quarter -------------------------------------------------------- Enerteck Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $946,046 on $31,164 of revenue for the three months ended Sept. 30, 2011, compared with a net loss of $475,805 on $33,307 of revenue for the same period during the prior year. The Company also reported a net loss of $2.07 million on $77,943 of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $1.42 million on $225,415 of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $853,833 in total assets, $2.96 million in total liabilities, and a $2.10 million total stockholders' deficit. At the quarter ended Sept. 30, 2011, and year ended Dec. 31, 2010, the Company has an accumulated deficit of $26,296,000 and $24,217,000, respectively. These conditions raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: http://is.gd/1BROhv About Enerteck Corporation EnerTeck Corporation (OTC BB: ETCK.OB) -- http://www.enerteck.net/ -- was incorporated in 1935 and is based in Stafford, Texas. The Company develops, acquires and manufactures combustion enhancement, emission reduction and other performance improvement technologies for the heavy duty transportation industry. EnerTeck's flagship product, EnerBurn(TM), is a diesel fuel specific combustion catalyst, delivered to the engine via the diesel fuel, to improve the combustion rate of the fuel. ESCO-VINA LLC: Involuntary Chapter 11 Case Summary -------------------------------------------------- Alleged Debtor: ESCO-VINA, LLC fka Vina Texas Metal Trading, LLC 689 Wakefield Cameron, LA 70631 Case Number: 11-21212 Involuntary Chapter 11 Petition Date: December 1, 2011 Court: Western District of Louisiana (Lake Charles) Judge: Robert Summerhays Petitioner's Counsel: Omer F. Kuebel, III, Esq. LOCKE LORD BISSELL & LIDDELL LLP 601 Poydras St., Suite 2660 New Orleans, LA 70130 Tel: (504) 558-5218 Fax: (504) 681-5218 E-mail: nobankecf@lockelord.com ESCO-VINA, LLC's petitioner: Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Austin Vina, LLC undersecured note $3,500,518 2277 Fernspring Drive Round Rock, TX 78665 Scrap and Steel unsec credit $10,654 Terminals balance 5373 W. Alabama Houston, TX 77056 Sara Nguyen unsec note $50,000 2277 Fernspring Drive Round Rock, TX 78665 IEI Services, LLC unsec trade $3,180 PO Box 549 claim Pierre Part, LA 70339 EVERGREEN ENERGY: Iroquois Discloses 1% Equity Stake ---------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Iroquois Capital Management L.L.C. and its affiliates disclosed that, as of Nov. 23, 2011, they beneficially hold warrants to purchase up to 326,087 shares of Common Stock of Evergreen Energy Inc. representing 1% of the shares outstanding calculated (1) based on 27,694,820 shares of Common Stock issued and outstanding as of Nov. 17, 2011, as reported in the Company's Quarterly Report on Form 10-Q for the quarterly period ended Sept. 30, 2011, filed on Nov. 21, 2011, (2) taking into account shares of Common Stock issued by the Company pursuant to the terms of the Senior Convertible Notes and (3) assuming the exercise of the reported Warrants. A full-text copy of the Schedule 13G is available for free at http://is.gd/F0JEa7 About Evergreen Energy Evergreen Energy Inc. has developed two, proprietary, patented, and green technologies: the GreenCert(TM) suite of software and services and K-Fuel(R). GreenCert, which is owned exclusively by Evergreen, is a science-based, scalable family of environmental intelligence solutions that quantify process efficiency and greenhouse gas emissions from energy, industrial and agricultural sources and may be used to create verifiable emission reduction credits. K-Fuel technology significantly improves the performance of low-rank coals, yielding higher efficiency and lowering emissions. The Company reported a net loss of $21.02 million on $403,000 of total operating revenue for the year ended Dec. 31, 2010, compared with a net loss of $58.53 million on $423,000 of total operating revenue during the prior year. The Company also reported a net loss of $6.83 million on $325,000 of total operating revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $18 million on $303,000 of total operating revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $20.25 million in total assets, $18.86 million in total liabilities, and $1.38 million in total stockholders' equity. Hein & Associates LLP, in Denver, Colo., expressed substantial doubt about Evergreen Energy's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has had recurring cash used in operations. EXTENDED STAY: Blackstone, et al., Seek Dismissal of $8-Bil. Suits ------------------------------------------------------------------ Blackstone Group LP and its co-defendants asked the U.S. Bankruptcy Court for the Southern District of New York in court papers dated November 1, 2011, to dismiss three lawsuits filed by the administrator of Extended Stay's litigation trust. Hobart Truesdell, who administers the litigation trust created for Extended Stay creditors, sued Blackstone for allegedly siphoning more than $2 billion from the sale of Extended Stay without regard as to how the hotel chain would operate after the deal. The lawsuits have been assigned case numbers 11-02254, 11-02255 and 11-02398. Blackstone sold the hotel chain in 2007 to an investment consortium led by David Lichtenstein, chairman of Lightstone Group LLC, through a $7.4 billion loan from Bear Stearns Commercial Mortgage Inc. and two U.S. banks. Blackstone's lawyer, Daniel Donovan, Esq., at Kirkland & Ellis LLP, in Washington, D.C., said the litigation trustee's claims against the Blackstone defendants "should be dismissed as a matter of law." Citing Section 546(e) of the Bankruptcy Code, the lawyer argued that the provision precludes the litigation trustee's so-called "avoidance claims." "[Section 546(e)] expressly prohibits the trustee from avoiding either a settlement payment made by or to a financial institution or a transfer made by or to a financial institution in connection with a securities contract," Mr. Donovan said, adding that the transfers to the Blackstone entities in connection with the 2007 sale fall into both categories. With respect to Mr. Truesdell's claims for breach of fiduciary duty, the lawyer asserted that the litigation trustee failed to allege either a fiduciary duty owed by the Blackstone defendants or a breach of any such duty. Mr. Donovan also called for the dismissal of the litigation trustee's securities law claim and his fraudulent conveyance claim based on the Federal Debt Collection Procedures Act. The lawyer argued that neither Extended Stay's Chapter 11 plan of reorganization nor the litigation trust agreement authorizes Mr. Truesdell to bring a securities claim. With respect to the fraudulent conveyance claim, Mr. Donovan said that only the U.S. government can bring a claim under the Federal Debt Collection Procedures Act. Bank of America N.A. and 30 other defendants also filed motions to dismiss the claims brought against them in the lawsuits. The defendants argued that the lawsuits failed to state a claim for breach of fiduciary duty, and the allegations are vague and conclusory, among other things. Earlier, Mr. Truesdell dismissed his complaint against Ebury Finance Limited pursuant to Rule 7041(a)(1)(A) of the Federal Rules of Bankruptcy Procedure. The dismissal, he said, is appropriate since Ebury has not filed an answer or a motion for summary judgment as to the claims in the complaint. Judge James Peck will hold a hearing on February 29, 2012, to consider the proposed dismissal of the lawsuits. The deadline for filing objections is December 23, 2011. In a related development, Line Trust Corporation Limited, Deuce Properties Limited, Square Mile Capital Management LLC, and Starwood Capital Group Global LP sought for the dismissal of two other lawsuits that were also filed by the litigation trustee in connection with the 2007 sale. The lawsuits have been assigned case numbers 11-02256 and 11-02259. Line Trust, et al., argued, among other things, that the litigation trustee failed to provide any legal theory to support a determination of their liability, and that the Bankruptcy Court does not have jurisdiction over the "causes of action" in the complaints. District Court Denies Motions to Withdraw Reference The U.S. District Court for the Southern District of New York denied the litigation trustee's motions to withdraw the reference of his lawsuits from the Bankruptcy Court to the District Court. The motions are based largely on the Supreme Court's June 2011 decision in Stern v. Marshall, the controversial case involving the estates of Anna Nicole Smith. The Stern v. Marshall case is said to have limited bankruptcy courts' constitutional authority to enter final judgment against third-parties on pre-bankruptcy state law claims under certain circumstances. In a 41-page decision, Judge Shira Scheindlin said the decision in the Stern case does not mandate withdrawal under Section 157(d) in the five lawsuits because the question of whether the Bankruptcy Court has authority to enter a final judgment does not implicate the regulation of organizations or activities affecting interstate commerce. Judge Scheindlin also said that questions concerning the propriety of the bankruptcy court's retention of jurisdiction post-confirmation are also inadequate to mandate withdrawal under Section 157(d). "Although plaintiffs question whether the bankruptcy court's retention of jurisdiction in these actions is constitutionally appropriate, the Bankruptcy Court has jurisdiction to determine its own jurisdiction," the district judge said. According to Judge Scheindlin, the Stern case is not a decision concerning "subject matter jurisdiction." She pointed out that the litigation trustee's argument that Extended Stay's Chapter 11 plan and the confirmation order do not permit post-confirmation jurisdiction or retain jurisdiction in the Bankruptcy Court unconstitutionally is insufficient to support mandatory withdrawal. Judge Scheindlin further said that the Bankruptcy Court has been administering Extended Stay's bankruptcy for over two years, pointing out that judicial economy would be promoted by allowing the bankruptcy court, which is already familiar with the extensive record in the case, to initially adjudicate the lawsuits. "Although it is doubtful that the Bankruptcy Court will offer a swift resolution of 125 claims asserted in five separate complaints, allowing the matters to proceed initially in the Bankruptcy Court is the more efficient course," she said. A full-text copy of the District Court's order is available for free at http://bankrupt.com/misc/ESI_OrderWithdrawReference.pdf About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors tapped Gilbert Backenroth, Esq., Mark T. Power, Esq., and Mark S. Indelicato, Esq., at Hahn & Hessen LLP, in New York, as counsel. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. has purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July 2010. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: Fixes Mezzanine Facilities Claims for $3 Billion --------------------------------------------------------------- Bank of America N.A. and 22 other creditors of Extended Stay Inc. inked an agreement to reconcile the allowed Class 4B mezzanine facilities claims in accordance with the confirmed Chapter 11 plan of reorganization. The creditors, which include Wachovia Bank N.A., JPMorgan Chase Bank N.A., Key Bank N.A., Goldman Sachs Mortgage Co., and Deuce Properties Ltd., are holders of Extended Stay's mezzanine debt. The move comes after Hobart Truesdell, who administers the litigation trust created for Extended Stay creditors, asked for additional time to reconcile the $9.8 billion in claims filed by the mezzanine debt holders with the allowed claims totaling $3.3 billion granted to them under the restructuring plan. Under the deal, the creditors agreed that the allowed Class 4B mezzanine facilities claims are allowed claims in an aggregate amount of at least $3.3 billion as provided for in the restructuring plan. The creditors and the litigation trustee are not required to file further pleadings to reflect the reduction and allowance in the allowed Class 4B mezzanine facilities claims, according to the agreement. A full-text copy of the agreement is available without charge at: http://bankrupt.com/misc/ESI_StipMezzanineDebtHolders.pdf Bank of America, N.A., is represented by: Benjamin S. Kaminetzky, Esq. DAVIS POLK & WARDWELL LLP 450 Lexington Avenue New York, New York 10017 Tel: (212) 450-4259 Fax: (212) 701-5259 Ben.kaminetzky@davispolk.com Deuce Properties Ltd./Line Trust is represented by: Deborah Devan, Esq. NEUBERGER, QUINN, GIELEN, RUBIN & GIBBER, P.A. One South Street 27th Floor Baltimore, Maryland 21202 Tel: (410) 332-8522 Fax: (410) 332-8505 dhd@nqgrg.com Goldman Sachs Mortgage Co. is represented by: Archon Group, LP, as servicing agent c/o Judith Elkin HAYNES AND BOONE, LLP 30 Rockefeller Plaza New York, New York 10112 Tel: (212) 659-4968 Fax: (212) 884-8228 Judith.elkin@haynesboone.com JPMorgan Chase Bank, N.A., is represented by: Benjamin S. Kaminetzky, Esq. DAVIS, POLK & WARDWELL LLP 450 Lexington Avenue New York, New York 10017 Tel: (212) 450-4000 Fax: (212) 701-5259 Ben.kaminetzky@davispolk.com Key Bank, N.A., is represented by: Kristi A. Davidson, Esq. BUCHANAN INGERSOLL & ROONEY, PC 1290 Avenue of the Americas 30th Floor New York, New York 10104 Tel: (212) 440-4562 Fax: (212) 440-4401 Kristi.davidson@bipc.com U.S. Bank National Association, solely in its capacity as trustee for the Maiden Lane Commercial Mortgage-Backed Securities Trust 2008-1, is represented by: Howard S. Zelbo, Esq. CLEARY GOTTLIEB STEEN & HAMILTON LLP One Liberty Plaza New York, New York 10006 Tel: (212) 225-2000 Fax: (212) 225-3999 hzelbo@cgsh.com Wachovia Bank, N.A., is represented by: Brett H. Miller, Esq. MORRISON & FOERSTER LLP 1290 Avenue of the Americas New York, New York 10104 Tel: (212) 468-8000 Fax: (212) 468-7900 bmiller@mofo.com About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors tapped Gilbert Backenroth, Esq., Mark T. Power, Esq., and Mark S. Indelicato, Esq., at Hahn & Hessen LLP, in New York, as counsel. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. has purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July 2010. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). FRIEDMAN'S INC: Postpetition Payments Don't Affect Preference ------------------------------------------------------------- Bankruptcy Judge Christopher S. Sontchi said the filing of bankruptcy "fixes" the preference analysis as of the petition date. Neither the post-petition provision of new value by the creditor nor the post-petition payment of unpaid, pre-petition new value affects the preference calculation. Prior to the Petition Date, Roth Staffing Companies, L.P. provided staffing services for Friedman's. During the preference period, Friedman's Inc. paid $81,997.57 to Roth. Subsequently, but prior to the bankruptcy, Roth provided $100,660.88 of services to Friedman's for which Roth was not paid. On the Petition Date, Friedman's sought authorization to pay Roth's pre-petition unsecured claim. Friedman's asserted that its employees, including Roth's staffers, needed to be paid immediately or else Friedman's would face an "epidemic of Employee departures" or suffer from a "significant deterioration in morale." The Court approved the Wage Motion, and Friedman's paid $72,412.71 to Roth. In February 2009, Friedman's filed a complaint against Roth seeking to recover $81,997.57 as a preference. Friedman's has filed a motion seeking the entry of partial summary judgment on its behalf, arguing that the post-petition payment of $72,412.71 to Roth under the Wage Motion reduced the amount of subsequent new value available as an affirmative defense under 11 U.S.C. section 547(c)(4). Friedman's argues that the post?petition payment relates back to the preference period and reduces the amount of Roth's subsequent new value defense from $100,660.88 to $28,248.17, leaving a preference claim of $53,749.40.5 Counsel for Friedman's Inc. are Stevens & Lee, P.C., John D. Demmy, Esq. -- jdd@stevenslee.com -- in Wilmington, Delaware; and Nicholas F. Kajon, Esq. -- nfk@stevenslee.com -- in New York. Cooch and Taylor, P.A.'s Susan E. Kaufman, Esq. -- skaufman@coochtaylor.com -- in Wilmington, Delaware; and Bradley D. Blakeley, Esq. -- bblakeley@blakeleyllp.com -- at Blakeley & Blakeley LLP, in Newport Beach, California, argue for Roth Staffing Companies. The case is FRIEDMAN'S INC., Debtor in Possession, v. ROTH STAFFING COMPANIES, L.P., Adv. Proc. No. 09-50364 (Bankr. D. Del.). A copy of Judge Sontchi's Nov. 30, 2011 opinion is available at http://is.gd/NEed4Dfrom Leagle.com. About Friedman's Inc. Addison, Texas-based Friedman's Inc. -- http://www.friedmans.com/ and http://www.crescentonline.com/-- comprised a leading specialty jewelry retail company. Friedman's operated 388 stores in 20 states with over 2,890 employees while Crescent Jewelers operated 85 stores in 3 states with over 600 employees. On Jan. 22, 2008, an involuntary Chapter 7 case was commenced against Friedman's Inc. On Jan. 28, 2008, the involuntary chapter 7 case was converted to a voluntary chapter 11 case. Friedman's and Crescent Jewelers filed the voluntary petition (Bankr. D. Del. Case Nos. 08-10161 and 08-10179). David M. Green, Esq., Jocelyn Keynes, Esq., and Nicholas F. Kajon, Esq., at Stevens & Lee, P.C., in New York; and John D. Demmy, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, served as counsel to the Debtors. The Debtors' professionals also include Rothschild, Inc., as investment banker and financial advisor; Retail Consulting Services, Inc. as real estate and lease consultants; ASK Financial as special counsel to review, analyze, and prosecute preference claims; Grant Thornton LLP as Tax Advisors; and KZC Services, LLC's Salvatore LoBiondo, Jr., as Chief Restructuring Officer, and Charles Carnaval as Director of Restructuring. The Official Committee of Unsecured Creditors appointed in the Debtors' cases was represented by Christopher J. Caruso, Esq., Alan Kolod, Esq., Lawrence L. Ginsburg, Esq., at Moses & Singer LLP in New York; and Charlene D. Davis, Esq., at Bayard, P.A., in Wilmington, Delaware. The Committee also retained Consensus Advisors as its financial advisors. On April 10, 2008, the Court approved the sale to Whitehall Jewelers, Inc., and a joint venture led by Great American Group LLC to sell to Whitehall the inventory and related property at 78 of the Debtors' stores, and to assume and assign to Whitehall the leases with respect to those 78 stores. On June 30, 2008, the liquidation of the balance of the Debtors' assets through store closing sales were concluded. At a hearing conducted on April 20, 2009, Friedman's and Crescent Jewelers attained confirmation of their liquidating plan. GATEWAY METRO: Can Obtain $350,000 DIP Loan from Flying Tigers -------------------------------------------------------------- The Hon. Barry Russell the U.S. Bankruptcy Court for the Central District of California authorized Gateway Metro Center, LLC, to a) obtain postpetition financing of up to $350,000 from Flying Tigers LLC, a California limited liability company, pursuant to a Debtor In Possession Financing Agreement; and b) granting superpriority administrative expense status and granting a secured interest in certain property of the Debtor's estate. The proceeds of the DIP Loan will be used, if necessary, by the Debtor for reasonable and necessary (1) costs incurred during the pendency of the case in accordance with any budget; and (2) fees and expenses of the Debtor's professionals during the pendency of the bankruptcy case and as allowed and approved by the Bankruptcy Court. The Debtor will repay to lender the then unpaid principal amount of the DIP Loan, on the date that is the earliest of (i) the effective date of a plan of reorganization in the Debtor's Chapter 11 case confirmed by an order of the Bankruptcy Court, (ii) Dec. 31, 2012, or (iii) the occurrence of an Event of Default. All obligations of the Debtor under the DIP Agreement will be secured by (1) a junior secured lien on Gateway Metro Center and (2) a junior secured lien on the land, and a superpriority administrative expense claim status. About Gateway Metro Center Gateway Metro Center LLC, is a California limited liability company whose primary assets include (1) an approximately 121,462 square foot - 11 story office building and land located in the City of Pasadena, California ("Gateway Metro Center" formerly known as Gateway Tower) including rights to further develop the land on which the Gateway Metro Center is located, and (2) an approximately 8,000 square feet parcel of land immediately abutting the office buildingO. The Company filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 11-47919) on Sept. 6, 2011. Judge Barry Russell presides over the case. Howard J. Weg, Esq., and Lorie A. Ball, Esq. -- hweg@pwkllp.com and lball@pwkllp.com -- at Peitzman, Weg & Kempinsky LLP, in Los Angeles, California, represent the Debtors. Skeehan & Company serves as accountant to the Debtor. FTI Consulting, Inc., is the financial advisor to the Debtor. Colliers International, Inc. acts as leasing broker. In its schedules, the Debtor disclosed $32,570,485 in assets and $22,338,135 in debts. The petition was signed by John F. Pipia, its president. GATEWAY METRO: Wants to Pay Property Tax Using Impounded Funds -------------------------------------------------------------- Gateway Metro Center, LLC, asks the U.S. Bankruptcy Court for the Central District of California for authorization to apply its impounded tax funds toward the payment of its current property tax bill due Dec. 10, 2011, in accordance with the final cash collateral order. The Debtor asks the Court to compel lenders -- Allstate Life Insurance Company and Road Bay Investment, LLC -- to comply with the Oct. 3 cash collateral order; and turn over escrowed tax funds that the Debtor impounded prepetition. The Debtor related that pursuant to the terms of the loan, it was required to impound a pro rata monthly portion of its estimated annual real estate property taxes. As of the Petition Date, the Debtor had deposited $27,135 with Newmark Realty Capital, Inc., Allstate's loan servicer. The Debtor was unable to complete the negotiations of a consensual cash collateral order with Allstate prior to filing its voluntary chapter 11 petition. On the Petition Date, the Debtor moved for an order authorizing the Debtor to use cash collateral. About Gateway Metro Center Gateway Metro Center LLC, is a California limited liability company whose primary assets include (1) an approximately 121,462 square foot - 11 story office building and land located in the City of Pasadena, California ("Gateway Metro Center" formerly known as Gateway Tower) including rights to further develop the land on which the Gateway Metro Center is located, and (2) an approximately 8,000 square feet parcel of land immediately abutting the office buildingO. The Company filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 11-47919) on Sept. 6, 2011. Judge Barry Russell presides over the case. Howard J. Weg, Esq., and Lorie A. Ball, Esq. -- hweg@pwkllp.com and lball@pwkllp.com -- at Peitzman, Weg & Kempinsky LLP, in Los Angeles, California, represent the Debtors. Skeehan & Company serves as accountant to the Debtor. FTI Consulting, Inc., is the financial advisor to the Debtor. Colliers International, Inc. acts as leasing broker. In its schedules, the Debtor disclosed $32,570,485 in assets and $22,338,135 in debts. The petition was signed by John F. Pipia, its president. GAY NINETIES: First Creditors' Meeting Set for Dec. 29 ------------------------------------------------------ Stephanie Gleason, writing for The Wall Street Journal's Metropolis section, reports that the first meeting of creditors of Bill's Gay Nineties is scheduled for Dec. 29. Bill?s Gay Nineties blamed the bankruptcy to its change in fortunes on the economy and problems with its lease agreement. Bill?s Gay Nineties claimed debts and assets each between $100,000 and $500,000 in its bankruptcy petition. The largest debt disclosed in its filing was for $40,000 to landlord Tynker 9 and 12 LLC, according to property records. WSJ relates lawyers representing Tynker 9 and 12 didn?t respond to request for comment. The restaurant said in court documents that it "plans to either negotiate a lease extension or move its operation to a nearby location." WSJ relates the owner of Bill's Gay Nineties and the lawyer representing the restaurant didn't return request for comment Monday, but a restaurant employee did confirm that Bill?s was operating as usual. Bill's Gay Nineties is a restaurant located in a five-story townhouse at 57 E. 54th St. in New York. The corporate entity, Gay Nineties Realty Corp., filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 11-15454) on Nov. 27, 2011, and is represented by Lawrence F. Morrison, Esq. -- morrlaw@aol.com A copy of the petition is available at no extra charge at http://bankrupt.com/misc/nysb11-15454.pdf GERDAU AMERISTEEL: Moody's Withdraws 'Ba1' Corp. Family Rating -------------------------------------------------------------- Moody's Investors Service upgraded to Baa3 from Ba1 the ratings of Gerdau Ameristeel's 5.3% Industrial Revenue Bonds due May 2037, issued by Jacksonville Economic Development Commission, which bonds are guaranteed by Gerdau S.A. (Gerdau). At the same time, Moody's assigned a Baa3 Issuer Rating to Gerdau and withdrew Gerdau's corporate family rating of Ba1 on the global scale. The rating outlook is stable. This concludes the rating review which began on March 22, 2011. RATINGS RATIONALE The upgrade reflects the improved financial condition of the company following its successful equity issuance in April 2011 through which Gerdau raised approximately BRL 3.6 bn, and the resulting improved liquidity position and declining leverage. As of September 30, 2011 total cash position was BRL 4.3 bn and leverage, expressed by Net Adjusted Debt to LTM Adjusted EBITDA (considering a minimum cash position of US$1.5 bn) was at 2.9x, a level which Moody's believes will be sustained even as the company continues to execute its large investment program and faces margin pressure coming from higher costs and weaker pricing in Brazil. From a strategic perspective, the ongoing investments for greater self-sufficiency of key inputs (namely iron ore) should improve margins and the overall competitiveness of Gerdau over the near to medium term. Potential monetization of iron ore assets may benefit the company's liquidity. Gerdau's scale, business profile, and good diversification, together with its low cost minimill operating structure with a high proportion of variable costs, are also supportive of the rating. Gerdau's Baa3 rating is supported by its historically solid cash generation, which reflects its strong market position in the several markets where it operates, its good operational and geographic diversity, and cost-driven management. While Gerdau's variable cost structure, high integration level and large scale provide good operating flexibility, reducing downside risk and translating into historically solid EBITDA margins through the industry's cycles, structural changes in the Brazilian steel industry leading to increased imports should keep margins under pressure over the near term (but still comparing positively to most international peers). Moody's would expect margins to somewhat recover once ongoing investments in product mix improvement and cost reduction are completed within the next couple of years. Gerdau's liquidity position remains healthy based on robust available cash position and availability under sizable committed credit facilities, adequate debt maturity profile, and access to export-related and BNDES loans. Gerdau's exposure to the cyclicality of the steel industry, which is subject to global and regional supply-demand imbalances, trade flows and sharp price changes, and product mix that includes a high proportion of long steel, giving the group a relatively high exposure to the construction industry, are constraining factors for its rating. The stable outlook reflects Moody's expectation that structural changes in the Brazilian steel sector will result in lower (but still comfortable) margins going forward, helped by its good operational flexibility and efficient cost management. As a result, leverage as measured by Net Adjusted Debt to Adjusted EBITDA (considering a minimum cash position of US$1.5 bn) is expected to remain below 3.0x in the coming quarters. In the medium term, margins should benefit from the ongoing investments in product mix improvement and cost reduction. The stable outlook also considers that capex and liquidity will continue to be prudently managed, and that Gerdau will focus on debt reduction. Upward pressure on Gerdau's ratings or outlook could be considered if Net Adjusted Debt to EBITDA (considering a minimum cash position of US$1.5 bn) decreases further and stays below 2.0x during the execution of its capex program, with the maintenance of strong liquidity levels. An upgrade would also be considered if Free Cash Flow to Adjusted Net Debt stays in the mid-teens on a sustained basis. Though not anticipated in the near term, negative pressure on the rating or outlook could result from weaker liquidity or from persistently high leverage,with Net Adjusted Debt to Adjusted Ebitda above 3x for an extended time period or in case of a sharp deterioration in the group's liquidity position or financial performance. Upgrades: Issuer: Jacksonville Economic Development Comm., FL -- Senior Unsecured Revenue Bonds, Upgraded to Baa3 from Ba1, guaranteed by Gerdau S.A. Outlook Actions: -- Issuer: Gerdau S.A. -- Outlook, Changed To Stable From Rating Under Review Withdrawals: Issuer: Gerdau S.A. -- Corporate Family Rating, Withdrawn, previously rated Ba1 Issuer: Jacksonville Economic Development Comm., FL -- Senior Unsecured Revenue Bonds, Withdrawn, previously rated LGD4, 63% The principal methodology used in rating Gerdau S.A. was the Global Steel Industry Methodology published in 2009. Gerdau S.A. is the largest long steel producer in the Americas and the second largest globally, and also a leading player in the specialty steel industry worldwide, with total capacity of about 26 million tons per year of crude steel and 23 million tons per year of rolled products. Gerdau North America is the second largest long steel producer in North America. In the last twelve months ended September 30, 2011, Gerdau reported net revenues of about US$20.7 billion. The group has operations in 14 countries, including Brazil, USA, Canada, Chile, Peru, Uruguay, Argentina, Mexico, Venezuela, Colombia, Spain, India, Guatemala and the Dominican Republic. The Local Market analyst for this rating is Barbara Mattos, 5511- 3043-7357 GETTY PETROLEUM: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Getty Petroleum Marketing Inc. 1500 Hempstead Turnpike East Meadow, NY 11554 Bankruptcy Case No.: 11-15606 Chapter 11 Petition Date: December 5, 2011 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Shelley C. Chapman Debtor's Counsel: John H. Bae, Esq. GREENBERG TRAURIG, LLP Met Life Building 200 Park Avenue New York, NY 10166 Tel: (212) 801-9200 Fax: (212) 801-6400 E-mail: baej@gtlaw.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $50,000,001 to $100,000,000 The petition was signed by Bjorn Q. Aaserod, chief executive officer and chairman of the board. Affiliates that simultaneously sought Chapter 11 protection: Debtor Case No. ------ -------- Gasway Inc. 11-15607 Getty Terminals Corp. 11-15608 PT Petro Corp. 11-15609 Getty Petroleum's List of Its 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bionol Clearfield LLC Arbitration Award $230,000,000 250 Technology Drive Clearfield, PA 16830 LUKOIL North America LLC Contract $42,000,000 505 Fifth Avenue New York, NY 10017 Getty Properties Corp. Lease Dispute $13,907,848 125 Jericho Turnpike, Suite 103 Jericho, NY 11753 Akin Gump Strauss Hauer & Feld LLP Professional Fees $1,904,479 1333 New Hampshire Avenue NW Washington, DC 20036 Cooley Manion Jones LLP Professional Fees $825,630 Counselors At Law 21 Custom House Street Boston, MA 12110-3536 Tyree Service Corp. Maintenance Fees $513,239 Dept Ch 19179, Palatine, IL 60055-9179 Citibank, N.A. Bank Fees $277,581 3800 Citibank Center Building B, 3rd Floor Tampa, FL 33610 Tyree Environmental Corp. Consulting Fees $291,861 Dept Ch 19179 Palatine, IL 60055-9179 Thompson Hine LLP Professional Fees $201,784 McCarter & English LLP Professional Fees $186,758 South Jersey Fuel Trade Debt $182,461 Anderson Kill & Olick, P.C. Professional Fees $154,770 Bleakley Platt & Schmidt, LLP Professional Fees $100,035 Sunoco, Inc. Trade Debt $95,692 Posternak Blankstein & Lund Professional Fees $65,616 Citgo Petroleum Corp. Trade Debt $63,954 Arfa Enterprises, Inc. Trade Debt $62,448 Fox Rothschild LLP Professional Fees $53,763 Brach Eichler LLC Professional Fees $49,754 Friedman Gaythwaite Professional Fees $48,321 Ruskin, Moscou, Evans, & Professional Fees $43,203 Faltischek, P.C. Junell Corporation Trade Debt $39,226 Archery Paint & Plaster, Inc. Trade Debt $25,350 E.S.& H. Compliance Consultant Fees $23,056 Lexpath Technologies Holdings Trade Debt $14,799 Kilpatrick Stockton, LLP Professional Fees $14,765 Camin Cargo Control, Inc. Trade Debt $13,701 Metro Terminals Corp. Trade Debt $11,401 Groundwater & Environmental Consultant Fees $9,522 Services, Inc. Atlantic Product Services, Inc. Trade Debt $8,632 GOLD AMERICAS: Fitch Affirms Issuer Default Rating at 'B+' ---------------------------------------------------------- Fitch Ratings has affirmed Golden Americas Ltd's (GA) foreign currency Issuer Default Rating (IDR) at 'B+' and its US$14.4 million note issuance due 2018 at 'B+/RR4'. The Rating Outlook is Stable. GA's ratings reflect the company's minority shareholder position in Termobarranquila (TEBSA), as well as the structural subordination of its debt to that of LEASECO. Positively, the ratings factor in TEBSA's relatively stable and predictable cash flow, which is used to service interest payments, as well as GA's moderate debt levels. Structural Subordination Limits GA's Rating GA is a vehicle created to raise funds to finance the acquisition of TEBSA. As a result, it is in a highly subordinated position relative to the cash flow of its operating subsidiary, TEBSA. Through a structured agreement, TEBSA makes lease payments to LEASECO, which are used to serve about USD13.3 million of secured debt obligations. LEASECO then forwards the remaining proceeds, if any, to an intermediate holding company called Golden Gate (GG), in which GA has a 26.3% stake. This structure diminishes GA's ability to control the flow of dividends used to service its US14.4 million of financial debt. Although GA does not control GG, the company does benefit from a shareholders' agreement that allows the company to appoint two of the five members of GG's board of directors. GA is mandated by its debt covenants to vote against allowing GG to enter into any indebtedness if proceeds from such borrowing are not associated with an increase in capacity or the refinancing of existing debt. Should the intermediate holding company (GG) issue any debt, it will further increase GA's structural subordination to its cash flow, therefore negatively affecting GA's credit quality. Stable and Predictable Cash Flow Generation TEBSA's cash flow is considered to be stable and predictable, reflecting a well-structured power purchase agreement (PPA) between TEBSA and state-owned utility GECELCA (Fitch National Scale Rating of 'AA-(COL)', with a Positive Outlook). This 20- year PPA, which is based on fixed capacity payments and compensation for start-ups, has been in existence since 1996 and accounts for the bulk of TEBSA's revenues. These payments are estimated to amount to approximately USD50 million per year through 2015. TEBSA, in turn, uses the proceeds from the PPA to cover fixed costs of about USD12 million per year and used to service its lease agreement with LEASECO. As a result of this structure and while the PPA continues, the credit quality of GA and GECELCA are essentially linked. TEBSA's standalone credit quality is supported by its competitive position as the largest thermoelectric generation plant in Colombia with 21% of the thermoelectric installed capacity. TEBSA's capacity represents half of the total capacity for the Atlantic coastal area and its facilities are critical to the region's energy stability. Consequently, TEBSA enjoys a competitive advantage over comparable local thermal generators as reflected in the actual dispatch of the facility. Its credit quality also benefits from its relationship with its off-taker, GECELCA. TEBSA's 918 megawatts (MW) of installed thermoelectric capacity is primarily located on Colombia's Atlantic Coast. TEBSA receives its fuel needs from GECELCA under terms also outlined in the PPA, which mitigates the company's exposure to fuel cost risk and adds to cash flow stability and predictability. As of Dec. 2010, TEBSA reported a negative EBITDA of US$18,6 million and total subordinated debt of US$61 million. TEBSA's weak EBITDA reflects both the onerous lease payments to LEASECO which are accounted for as operating cost and the declining PPA payments from GECELCA, which have bottomed at US$50 million in accordance with the preset capacity payment schedule. Conservative Debt Level and Credit Metrics GA's credit protection metrics are considered adequate for the assigned rating and are expected to remain relatively stable going forward as a result of LEASECO's stable cash flow. GA's cash flow generation is expected to range between approximately US$1.9 million and US$4 million per year over the next six years, which compares favorably with its debt service, composed entirely of interest expense, of US$1.4 million. As of September 2011, GA's cash from operations has evolved in line with the base scenario considered by Fitch, registering close to USD 1 million and an interest payment of USD 790,000 dollars. Next interest payment is planned for December 17. GA is a holding company that indirectly owns 15% of TEBSA, the largest thermoelectric generating company in Colombia. It also has a 26.3% indirect ownership stake in a leasing company, LEASECO, which in turn owns the majority of TEBSA's operating assets and maintenance agreement. GRAFTECH INT'L: Moody's Upgrades Corp. Family Rating to 'Ba1' ------------------------------------------------------------- Moody's Investors Service upgraded GrafTech International Ltd's (GrafTech) Corporate Family Rating (CFR) to Ba1 and rated its $570 million senior secured revolving credit facility Baa3 (LGD3, 35%). Moody's also changed GrafTech's Probability of Default Rating (PDR) to Ba1 from Ba3, and downgraded its speculative grade liquidity rating to SGL-2 from SGL-1. The ratings outlook was moved to stable from positive. The new facility matures on the earlier of October 7, 2016 (five years), or on August 30, 2015 (almost four years), if GrafTech's $200 million senior subordinated debt is still outstanding and the company does not meet certain minimum liquidity requirements. It replaces the company's previous $260 million facility that would have matured in April 2013. The following summarizes the ratings: GrafTech International Ltd. Ratings upgraded: Corporate Family Rating -- Ba1 from Ba2 Probability of default rating -- Ba1 from Ba3 Ratings downgraded: Speculative Grade Liquidity rating -- SGL-2 from SGL-1 GrafTech Finance Inc. Rating assigned: Gtd Sr Sec revolving credit facility due 2016 -- Baa3 (LGD3, 35%) Ratings withdrawn: Gtd Sr Sec revolving credit facility due 2013 -- Ba1 (LGD2, 24%) Outlook: Stable RATING RATIONALE GrafTech's Ba1 Corporate Family Rating (CFR) is supported by its low leverage, attractive EBITDA margins, leading market positions in graphite electrode sales, as well as geographic and operational diversity with relatively low cost manufacturing facilities located on four continents. The rating also assumes that GrafTech will continue to expand its Engineered Solutions business through new applications and acquisitions to provide greater product and end market diversity. However, the rating is constrained by the company's relatively narrow product line as graphic electrodes still account for the vast majority of earnings and cash flow. Additionally, the company is exposed to cyclical end markets (the steel industry) and volatile raw materials costs (needle coke accounts for approximately 45% of the manufacturing cost of graphite electrodes) and energy costs, which are not correlated with the price of steel. Moody's also believes that supplier and customer concentration can create greater variability in margins over the business cycle. The acquisition of needle coke producer SeaDrift Coke has improved the company's ability to hedge changes in raw material costs. GrafTech remains under levered for its rating category, despite the acquisition of SeaDrift Coke LP and C/G Electrodes LLC in November 2010. The rating incorporates Moody's expectation that the company will continue to grow through bolt-on acquisitions, but will maintain relatively conservative financial policies supportive of the Ba1 CFR. Moody's noted that GrafTech has used equity to partially finance past acquisitions and the Ba1 rating anticipates that it will use equity to partially fund any acquisition larger than $250 million. Furthermore, ongoing elevated capital expenditures and potential acquisitions will result in higher leverage in 2012. Additionally, given the state of the steel markets, Moody's expects the graphite electrode business to be relatively flat in 2012. The speculative grade liquidity rating was moved to SGL-2 (from SGL-1) based on Moody's expectation that the company will continue to have negative free cash flow in early 2012 as it continues capital expenditures above historical average levels to grow its business. Its liquidity is supported by modest cash balances and approximately $370 million of availability under committed facilities (assuming the new revolving credit facility was in place on June 30, 2011). The principal methodology used in rating GrafTech International was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. GrafTech International Ltd., headquartered in Parma, Ohio, is a leading global manufacturer of graphite electrodes, and other graphite products. Revenues were $1.3 billion for the twelve months ended September 30, 2011. GREEN EARTH: Incurs $2.2 Million Net Loss in Sept. 30 Quarter ------------------------------------------------------------- Green Earth Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $2.26 million on $1.84 million of net sales for the three months ended Sept. 30, 2011, compared with a net loss of $2.60 million on $460,000 of net sales for the same period a year ago. The Company reported a net loss of $12.20 million on $7.50 million of net sales for the year ended June 30, 2011, compared with a net loss of $12.88 million on $2.43 million of net sales during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $3.49 million in total assets, $6.02 million in total liabilities, all current, and a $2.53 million total stockholders' deficit. Friedman LLP, in East Hanover, New Jersey, noted that the Company's losses, negative cash flows from operations, working capital deficit and its ability to pay its outstanding liabilities through fiscal 2012 raise substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: http://is.gd/2lKYl8 About Green Earth Technologies White Plains, N.Y.-based Green Earth Technologies, Inc. (OTC QB: GETG) -- http://www.getg.com/-- markets, sells and distributes bio-degradable performance and cleaning products. The Company's product line crosses multiple industries including the automotive aftermarket, marine and outdoor power equipment markets. GUIDED THERAPEUTICS: Incurs $2.6 Million Net Loss in 3rd Quarter ---------------------------------------------------------------- Guided Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $2.66 million on $1.02 million of service revenue for the three months ended Sept. 30, 2011, compared with a net loss of $635,000 on $676,000 of service revenue for the same period during the prior year. The Company reported a net loss of $2.84 million on $3.36 million of contract and grant revenue for the year ended Dec. 31, 2010, compared with a net loss of $6.21 million on $1.55 million of contract and grant revenue during the prior year. The Company also reported a net loss of $3.88 million on $2.70 million of service revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $2.56 million on $2.30 million of service revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $2.84 million in total assets, $5 million in total liabilities, and a $2.16 million total stockholders' deficit. As reported by the TCR on April 4, 2011, UHY LLP, in Atlanta, Georgia, noted that the Company's recurring losses from operations, accumulated deficit and lack of working capital raise substantial doubt about its ability to continue as a going concern. About Guided Therapeutics Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP) -- http://www.guidedinc.com/-- is developing a rapid and painless test for the early detection of disease that leads to cervical cancer. The technology is designed to provide an objective result at the point of care, thereby improving the management of cervical disease. Unlike Pap and HPV tests, the device does not require a painful tissue sample and results are known immediately. GT has also entered into a partnership with Konica Minolta Opto to develop a non-invasive test for Barrett's Esophagus using the LightTouch technology platform. GUIDED THERAPEUTICS: Amends 2.6 Million Common Shares Offering -------------------------------------------------------------- Guided Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission amendment no. 2 to Form S-1 registration statement relating to 2,600,000 shares of the Company's common stock issued or issuable upon the exercise of warrants at an exercise price of $0.01 per share. The shares offered by this prospectus may be sold from time to time by the selling stockholders at prevailing market prices or prices negotiated at the time of sale. The Company will not receive any cash proceeds from the sale of shares by the selling stockholders, but to the extent that the warrants are exercised in whole or in part, the Company will receive payment for the exercise price. The Company will pay the expenses of registering these shares. The Company's common stock is dually listed on the OTC Bulletin Board and the OTCQB quotation systems under the symbol "GTHP." The last reported sale price of the Company's common stock on the OTCBB on Nov. 30, 2011, was $0.98 per share. The selling shareholders will sell at a prevailing market price per share as quoted on the OTC Bulletin Board. A full-text copy of the amended prospectus is available at: http://is.gd/09DzYj About Guided Therapeutics Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP) -- http://www.guidedinc.com/-- is developing a rapid and painless test for the early detection of disease that leads to cervical cancer. The technology is designed to provide an objective result at the point of care, thereby improving the management of cervical disease. Unlike Pap and HPV tests, the device does not require a painful tissue sample and results are known immediately. GT has also entered into a partnership with Konica Minolta Opto to develop a non-invasive test for Barrett's Esophagus using the LightTouch technology platform. The Company's balance sheet at June 30, 2011, showed $3.31 million in total assets, $2.91 million in total liabilities, and $410,000 in stockholders' equity. The Company reported a net loss of $2.84 million on $3.36 million of contract and grant revenue for the year ended Dec. 31, 2010, compared with a net loss of $6.21 million on $1.55 million of contract and grant revenue during the prior year. As reported by the TCR on April 4, 2011, UHY LLP, in Atlanta, Georgia, noted that the Company's recurring losses from operations, accumulated deficit and lack of working capital raise substantial doubt about its ability to continue as a going concern. HALO COMPANIES: Incurs $558,000 Net Loss in Third Quarter --------------------------------------------------------- Halo Companies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $558,780 on $1.45 million of revenue for the three months ended Sept. 30, 2011, compared with a net loss of $1.06 million on $1.67 million of revenue for the same period during the prior year. The Company reported a net loss of $3.6 million on $6.9 million of revenue for 2010, compared with a net loss of $1.9 million on $9.1 million of revenue for 2009. The Company also reported a net loss of $2.96 million on $3.11 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $2.55 million on $5.76 million of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.47 million in total assets, $4.56 million in total liabilities, and a $3.08 million total shareholders' deficit. As reported by the TCR on April 8, 2011, Montgomery Coscia Greilich LLP, in Plano, Texas, expressed substantial doubt about Halo Companies' ability to continue as a going concern. The independent auditors noted that the Company has incurred losses since its inception and has not yet established profitable operations. A full-text copy of the Form 10-Q is available for free at: http://is.gd/Ga1fXk About Halo Companies Allen, Texas-based Halo Companies, Inc., is a nationwide real estate investment, asset management and financial services company that provides technology and asset management solutions to asset owners as well as real estate and financial services to financially distressed consumers which can be applied individually or utilized as a comprehensive workout strategy. HARMAN INT'L: Moody's Raises Corporate Family Rating to 'Ba1' ------------------------------------------------------------- Moody's Investors Service raised the ratings of Harman International Industries, Incorporated (Harman) - Corporate Family and Probability of Default Ratings to Ba1 from Ba2. The rating outlook is changed to positive from stable. The Speculative Grade Liquidity Rating also was raised to SGL-1 from SGL-2. Ratings raised: Corporate Family Rating, to Ba1 from Ba2; Probability of Default Rating, to Ba1 from Ba2; Speculative Grade Liquidity Rating, to SGL-1 from SGL-2 Ratings affirmed: $550 million senior secured multi-currency revolving credit due December 2015, Baa2 (LGD2, 16%) RATING RATIONALE The raising of Harman's Corporate Family Rating to Ba1 reflects the company's much improved credit metrics and strong free cash flow generation. Harman's improved cost structure follows the attainment of the company's STEP Change program's targeted $400 million in sustainable cost-savings on an annualized basis over the fiscal year 2008 baseline. These savings are expected to be further leveraged through the continued recovery of global automotive production levels that began in late 2009. Profit margin improvement is expected to continue over the intermediate term with Harman's announced backlog of $11.4 billion in its infotainment business and $3.1 billion in its premium audio segment. Improved profit margins imbedded in the company's infotainment backlog and ongoing cost improvement actions are expected support profit margin growth over the intermediate-term even with continued pressure from raw material prices, and customer price downs, as the business backlog expands into mid- level platforms. About 56% of the company's revenues are generated out its infotainment segment. Harman's LTM EBIT/Interest (including Moody's standard adjustments) as of September 30, 2011 was approximately 4.1x, and debt/EBITDA approximated 2.1x. Moody's expects the global automotive industry to continue its recovery from the industry troughs of 2009. Yet, regional recoveries will vary with automotive retail unit sales in the U.S. expected to grow about 16% in 2012 and European passenger car registrations remaining flat at best. Harman's automotive business largely supports luxury and premium-end passenger cars which are heavily exported to the U.S. and Asian markets where retail unit growth is expected to continue, albeit and lower than recent trends. Harman's lifestyle segment (which incorporates consumer and automotive premium audio) and professional audio markets may be challenged by volatile consumer confidence and discretionary spending levels. The affirmation of the Baa2 rating of Harman's senior secured multi-currency revolving credit considers Moody's expectation of the repayment of the $400 million convertible note in October 2012. The repayment of this debt eliminates the company's unsecured debt and improves the recovery prospects of the all bank debt capital structure under the LGD methodology. However, Moody's expects the assets securing the bank debt to be released in any positive rating action supported by the assigned positive outlook, resulting in a bank facility rating matching the company's unsecured debt rating. As such, the current bank facility rating not increased to reduce further rating volatility. The positive rating outlook incorporates Moody's expectation of the retirement of the company's convertible notes, effectively eliminating all funded debt, and the maintenance of a very good liquidity profile over the near-term. As such, Harman's operating performance should continue to support stronger credit metrics even with the potential impact of stalled European consumer automotive demand driven by regional economic uncertainty. Harman's SGL-1 Speculative Grade Liquidity Rating indicates Moody's expectation of a very good liquidity profile over the near-term supported by substantial cash balances and expected free cash flow generation. As of September 30, 2011, the company maintained approximately $689 million of cash, cash equivalents and short-term investments. Harman's trend of generating positive annual free cash flow since the industry downturn of 2009 is expected to continue over the near-term even with higher working capital needs. Moody's expects this free cash flow generation and cash on hand to be more than sufficient to address the maturity of $400 million in convertible notes due in October 2012, and continue to support a very good liquidity profile. As of September 30, 2011, the company's $550 million multi-currency revolving credit facility was undrawn with about $7.3 million of letters of credit outstanding. This facility matures in December 2015. Harman is expected to operate with ample headroom under the revolver's financial covenants over the near-term. Harman's capacity for additional borrowings outside of the multi-currency revolving credit facility is limited by lien limitations under this facility and a debt incurrence test under its convertible notes. Factors that could lead to a higher rating include: i) continued growth in the company's global automotive and consumer markets, ii) maintenance of its strong brand names and competitive market positions; ii) further expansion in the profit margins to the high single-digits and free cash flow generation; iii) a demonstrated commitment to maintaining shareholder return policies and acquisitions strategies which preserve the company's very good liquidity profile, iv) and demonstrated conservative financial policies. Consideration for a higher rating could also result from EBIT/Interest sustained above 6.0x and Debt/EBITDA approaching 2x. A lower outlook or rating over the intermediate term is unlikely provided that Harman continues to successfully implement new program launches and maintains its very good liquidity profile. With the planned retirement of the company's convertible notes, the Company's credit metrics are expected to continue to support the assigned rating and outlook even if there were to be a modest stall in the growth of global automotive sales. The principal methodology used in rating Harman was the Global Automotive Supplier Industry Methodology published in January 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Harman International Industries, Incorporated, headquartered in Stamford, Conn., is a leading manufacturer of high quality, high fidelity audio products and electronic systems for the consumer, automotive, and professional markets. Revenues for fiscal year 2011 were approximately $3.8 billion. HARRIBURG,PA: Residents File Suit Over State Takeover ----------------------------------------------------- The Associated Press reports that the state takeover of Pennsylvania's financially troubled capital city received a fresh challenge on Dec. 1, 2011, as three Harrisburg residents filed a federal lawsuit calling it an unconstitutional violation of their rights and asking for it to be stopped. According to the report, the suit names Gov. Tom Corbett, who signed a law on Oct. 20, 2011, enabling an unprecedented takeover of Harrisburg, and his appointee who, if confirmed, would have broad authority to force the city to pay down a massive debt tied to its trash incinerator. The report says the lawsuit was filed by a former mayoral candidate, a firefighters' union president and a religious leader. It alleges that the law and the state's takeover violate the plaintiffs' constitutional rights to due process and equal protection. The report adds that the suit is the latest twist in a battle over who will end up footing the $300 million incinerator debt that dwarfs the city's annual operating budget. The first attempt to stop the takeover failed when a federal bankruptcy judge threw out a petition by a divided City Council to get federal bankruptcy protection for Harrisburg. The judge said the city had been legally barred by a separate state law -- signed June 30, 2011 by Gov. Corbett -- from seeking bankruptcy protection and, in any case, had no authority to go over the mayor's head to file it. The Republican governor and Democratic Mayor Linda Thompson had opposed the filing. Supporters of the bankruptcy petition viewed it as the best way to force creditors, such as Dauphin County and bond insurer Assured Guaranty Municipal Corp., to assume part of the incinerator debt, the report relates. The report says a state judge last week heard arguments in Gov. Corbett's case to appoint longtime municipal finance lawyer David Unkovic as Harrisburg's receiver. 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. Two days after the Chapter 9 filing on Oct. 11, the state of Pennsylvania filed a motion to dismiss the case as being unauthorized. Later, the state adopted a new law allowing the governor to appoint a receiver who may join those seeking dismissal. 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. The governor of Pennsylvania selected an individual to serve as receiver and take over the city. HARRISBURG, PA: Judge Explains Decision to Dismiss Chapter 9 Case ----------------------------------------------------------------- Chief Bankruptcy Judge Mary France issued an opinion dated Dec. 5, 2011, explaining her decision to dismiss the Chapter 9 bankruptcy petition filed by the city of Harrisburg. The Court determined that the case should be dismissed because (1) the Harrisburg City Council did not have the authority under the Optional Third Class City Charter Law and the Third Class City Code to commence a bankruptcy case on behalf of Harrisburg and (2) the City was not specifically authorized under state law to be a debtor under Chapter 9 as required by 11 U.S.C. Sec. 109(c)(2). The Commonwealth of Pennsylvania, the County of Dauphin, and Harrisburg city mayor Linda D. Thompson and other creditors and interested parties objected to the petition. A copy of Judge France's decision is available at http://is.gd/pCMQmEfrom Leagle.com. 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. Two days after the Chapter 9 filing on Oct. 11, the state of Pennsylvania filed a motion to dismiss the case as being unauthorized. Later, the state adopted a new law allowing the governor to appoint a receiver who may join those seeking dismissal. 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. The governor of Pennsylvania selected an individual to serve as receiver and take over the city. HARRISBURG, PA: Judge Approves David Unkovic as Receiver -------------------------------------------------------- Richard Vanderford at Bankruptcy Law360 reports that a Pennsylvania judge on Friday appointed a governor-nominated receiver to handle the budget of the state capital Harrisburg, giving him 30 days to come up with a plan to fix the city's finances. According to Law360, state court Judge James R. Kelley said David Unkovic, a former Cozen O'Connor attorney with 30 years of experience as a bond counsel, must implement an emergency reorganization plan developed by the secretary for Pennsylvania's Department of Community and Economic Development, Commonwealth. 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. Two days after the Chapter 9 filing on Oct. 11, the state of Pennsylvania filed a motion to dismiss the case as being unauthorized. Later, the state adopted a new law allowing the governor to appoint a receiver who may join those seeking dismissal. 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. The governor of Pennsylvania has selected an individual to serve as receiver and presumably take over the city following a hearing in state court on Nov. 28. HELEN KELLER: Moody's Affirms 'Ba1' Rating on Fixed Rate Bonds -------------------------------------------------------------- Moody's Investors Service has affirmed the Ba1 rating assigned to Helen Keller Hospital's (Helen Keller) Series 2003 fixed rate bonds issued by the Colbert County-Northwest Alabama Healthcare Authority AL. The outlook is stable. SUMMARY RATINGS RATIONALE The affirmation of the Ba1 rating and stable outlook is attributable to Helen Keller's generally stable operating performance over the past year and Moody's expectation that the organization will maintain or improve current levels of performance. Helen Keller Hospital has additional outstanding debt secured under the master indenture but not rated by Moody's, including approximately $19 million of Series 2006 bonds, $5 million of Series 2008 bonds, and $3 million of Series 2010 bonds. The Series 2006, 2008, and 2010 fixed rate bonds are privately placed with banks. The Colbert County-Northwest Alabama Healthcare Authority (Authority) owns 159 staffed bed Helen Keller Hospital and 25 staffed bed Red Bay Hospital, as well as other assets. STRENGTHS *New Chief Executive Officer (CEO) installed effective June 2011, who has committed to improving financial performance *Affiliation with Huntsville Hospital has resulted in supply cost savings and operational improvements *Proven ability to operate with low levels of liquidity CHALLENGES *Continued decline in surgeries, which are down 7.4% following similar declines in FY 2010 *Commercial insurance market dominated by Blue Cross, limiting ability of small providers to negotiate meaningful rate increases *Competition from for-profit Regional Care Partners which operates two hospitals in the service area, one of which, Shoals Hospital, is located less than a mile from Helen Keller and is a source of material competition Outlook The stable outlook reflects Moody's expectation that Helen Keller will maintain or improve current levels of financial performance. WHAT COULD MAKE THE RATING GO UP Sustained improvement in operating performance; stabilization and growth of patient volumes; growth in liquidity WHAT COULD MAKE THE RATING GO DOWN Further operating losses; continued patient volume volatility; change in competitive landscape; additional debt PRINCIPAL METHODOLOGY USED The principal methodology used in this rating was Not-for-Profit Hospitals and Health Systems published in January 2008. HIGH LINER: Moody's Assigns 'B1' Corporate Family Rating -------------------------------------------------------- Moody's Investors Service has assigned a B1 corporate family rating (CFR) to High Liner Foods, Inc. (High Liner). Concurrently, Moody's has assigned a B2 rating to the company's proposed $250 million senior secured term loan due 2017. The rating outlook is stable. On November 17, 2011, High Liner Foods announced that it has reached an agreement to acquire the U.S. subsidiary (Icelandic USA) and Asian procurement operations of Icelandic Group h.f., for $230.6 million. Proceeds from the proposed term loan and borrowings on the amended and upsized $180 revolver are expected to fund the acquisition and repay existing debt. These ratings have been assigned subject to the review of final documentation: B1 Corporate Family Rating; B1 Probability of Default Rating; B2 (LGD4, 65%) to the proposed $250 million senior secured term loan due 2017; and Speculative grade liquidity rating of SGL-3. RATINGS RATIONALE The B1 corporate family rating reflects High Liner's narrow focus in the North American frozen seafood market, exposure to volatile seafood prices, and integration risks upon completion of the Icelandic USA acquisition. The rating incorporates High Liner's high post acquisition leverage and Moody's expectation that leverage will gradually improve as acquisition synergies are realized. Further, the rating is supported by High Liner's historically conservative financial policies and adequate liquidity. High Liner is reported to have a strong position in the North American frozen value-added seafood segment, including a leading share in the Canadian food service and retail markets, and a top four position in the US retail market. The company expects that the Icelandic USA acquisition will significantly bolster its presence in the US food service market, as well as reduce costs through increased scale and supply chain efficiencies. Icelandic USA is expected to increase High Liner's EBITDA by approximately 50% excluding synergies. High Liner's pro-forma adjusted debt-to-EBITDA is expected to be roughly 4.6x at close, which is a significant increase above historical levels and publicly stated targets of below 3.0x, on a reported basis. Moody's views proforma credit metrics will modestly improve in the near term. Moody's expects that moderate revenue growth and gradual realization of cost synergies will result in earnings growth in the 2012-2013 period, absent significant seafood cost increases or unforeseen issues integrating Icelandic USA into High Liner's operations. While the Icelandic USA acquisition is sizeable, High Liner's track record of integrating the 2007 FPI acquisition (which approximately doubled the company's earnings) is indicative of its potential to execute on Icelandic USA. The rating incorporates High Liner's exposure to commodity prices, including highly volatile seafood raw material costs. Ingredient costs represent over 70% of total expenses, and seafood raw materials represent over 50% of total expenses. Moody's believes High Liner's value-added seafood brands and pricing power would partially protect the company's margins from potential swings in ingredient costs. The stable outlook reflects Moody's expectation that leverage and liquidity metrics will moderately improve over the next 2 years as a result of earnings growth. The B2 rating on the proposed $250 million senior secured term loan due 2017 reflects its first-priority interest in substantially all assets and a second-priority interest in the assets subject to the amended and upsized $180 million ABL Revolving Credit Facility maturing 2016 (unrated). The term loan is expected to contain total leverage, interest coverage and capital expenditure covenants initially set with adequate cushion. The SGL-3 speculative grade liquidity rating reflects Moody's expectation that High Liner will maintain an adequate liquidity profile over the next twelve months. Moody's expects peak ABL borrowings at close given plans to fund a portion of the acquisition through the ABL, seasonal fourth quarter inventory needs ahead of the Lenten season and a temporary working capital build-up due to the integration of operations. Borrowings are not expected to exceed $115 million in 2012. Free cash flow generation in fiscal year 2012 should be positive but will likely fluctuate on a quarterly basis due to seasonal inventory builds. The ratings could be downgraded if profitability materially declines, resulting in a debt-to-EBITDA sustained above 5.0x for several quarters, or free cash flow generation is weaker than anticipated. Inability to pass through large cost increases or successfully integrate Icelandic USA are potential sources of rating pressure. The ratings could be upgraded if High Liner reduces adjusted debt- to-EBITDA below 3.5x and meaningfully increases its average revolver availability. The principal methodology used in rating High Liner Foods, Inc. was the Global Packaged Goods Industry Methodology published in July 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. High Liner Foods, Inc. (TSX: HLF, HLF-A) is a leading North American processor and marketer of prepared, value added-frozen seafood serving the retail and foodservice markets. The company's brands include High Liner (R), Mirabel (R), Fisher Boy (R), Sea Cuisine (R), Viking TM, FPI (R) and Royal Sea (R). Additionally, the company produces private label processed seafood. Revenues for the twelve months ending October 1, 2011 were approximately $642 million. HOOD PROPERTIES: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Hood Properties, LLC 4900 Clover Ranch Lane Loomis, CA 95650 Bankruptcy Case No.: 11-48064 Chapter 11 Petition Date: December 1, 2011 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Robert S. Bardwil Debtor's Counsel: Brandon Scott Johnston, Esq. COGGINS JOHNSTON, LLP 6510 Lonetree Blvd, Suite 101 Rocklin, CA 95677 Tel: (916) 797-1397 Scheduled Assets: $150,000 Scheduled Debts: $324,844 A list of the Company's three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/caeb11-48064.pdf The petition was signed by Dave Hood, member. HORIZON LINES: To Offer Common Shares, Warrants and Notes --------------------------------------------------------- Horizon Lines, Inc., filed with the U.S. Securities and Exchange Commission a Form S-1 registration statement relating to the resale or other disposition of up to: * 3,660,824 shares of the Company's common stock; * 8,975,691 warrants to purchase shares of the Company's common stock; * $54,589,636 in aggregate principal amount of new 6.00% Series A Convertible Senior Secured Notes due 2017 issued by the Company and guaranteed on a senior basis by all current and future domestic subsidiaries of the Company; and * $30,327,576 in aggregate principal amount of new 6.00% Series B Mandatorily Convertible Senior Secured Notes issued by the Company and guaranteed on a senior basis by the Guarantors. The securities offered by this prospectus are to be sold for the account of the selling securityholders. The securities were issued in exchange for $327,766,000 in aggregate principal amount of our 4.25% Convertible Senior Notes due 2012, originally issued on Oct. 5, 2011, to certain holders of old notes in an exchange offer pursuant to a final prospectus filed pursuant to Rule 424(b)(3) under the Securities Act of 1933 with the Securities and Exchange Commission on Oct. 3, 2011. The registration of these securities does not necessarily mean that the selling securityholders will offer, sell or otherwise dispose of all or any of these securities. The new notes were issued on Oct. 5, 2011, and bear interest at a rate of 6.00% per annum, payable semi?annually. The Series A Notes mature on April 15, 2017, and are convertible, at the option of the holders, and at the Company's option under certain circumstances beginning on the one-year anniversary of the issuance of the Series A Notes, into shares of our common stock or warrants, as the case may be. The Series B Notes are mandatorily convertible into shares of the Company's common stock or warrants, as the case may be, in two equal installments of $49.7 million each on the three-month and nine-month anniversaries of the consummation of the exchange offer, subject to certain conditions. The Company's filing of the registration statement, of which this prospectus is a part, is intended to satisfy the Company's obligations to certain securityholders to register the securities issued to them pursuant to a Registration Rights Agreement, dated Oct. 5, 2011. The Company's common stock is quoted on the OTCQB Marketplace under the symbol "HRZL." The new notes and warrants are not listed on a national or regional securities exchange. The Company intends to seek to list the warrants for trading on a national securities exchange at such time as the Company can meet the listing requirements applicable to those warrants. A full-text copy of the Form S-1 is available for free at: http://is.gd/OMQ0np About Horizon Lines Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the nation's leading domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. The Company provides express trans-Pacific service between the U.S. West Coast and the ports of Ningbo and Shanghai in China, manages a domestic and overseas service partner network and provides integrated, reliable and cost competitive logistics solutions. The Company's balance sheet at Sept. 25, 2011, showed $677.4 million in total assets, $801.7 million in total liabilities, and a stockholders' deficit of $124.3 million. Ernst & Young LLP, in Charlotte, North Carolina, expressed substantial doubt Horizon Lines' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 26, 2010. The independent auditors noted that there is uncertainty that Horizon Lines will remain in compliance with certain debt covenants throughout 2011 and will be able to cure the acceleration clause contained in the convertible notes. "The Company believes the Oct. 5, 2011 refinancing transactions more fully described in Note 18 to these financial statements have resolved the concern as to compliance with debt covenants throughout the remainder of 2011," the Company said in the filing. "In addition, the Company believes it will be in compliance with its debt covenants through 2012." Refinancing The Company was not in compliance with the maximum senior secured leverage ratio and the minimum interest coverage ratio under its Senior Credit Facility at the close of its third fiscal quarter ended Sept. 25, 2011. Non-compliance with these financial covenants constituted an event of default, which could have resulted in acceleration of the maturity. None of the indebtedness under the Senior Credit Facility or Notes was accelerated prior to the completion of a comprehensive refinancing on Oct. 5, 2011. The Senior Credit Facility and 99.3% of the 4.25% Convertible Senior Notes were repaid as part of the refinancing. In addition, as a result of the completion of the refinancing, the short-term obligations under the Senior Credit Facility, the Notes and the Bridge Loan have been classified as long-term debt. As a result of the efforts to refinance the Company's debt and the 2011 amendments to the Senior Credit Facility, the Company paid $17.3 million in financing costs and recorded a loss on modification of debt of $0.6 million during 2011. * * * As reported by the TCR on Aug. 26, 2011, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Horizon Lines Inc. to 'SD' from 'CCC'. The rating action on Horizon Lines follow the company's decision to defer the interest payment on its $330 million senior convertible notes due August 2012, exercising the 30-day grace period. "Under our criteria, we view failure to make an interest payment within five business days after the due date for payment a default, regardless of the length of the grace period contained in an indenture," said Standard & Poor's credit analyst Funmi Afonja. HOTEL AIRPORT: Gets 10-Day Plan Exclusivity Extension ----------------------------------------------------- The Hon. Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court for the District of Puerto Rico granted Hotel Airport Inc.'s request for a 10-day extension in its exclusive period to file plan and disclosure statement. The Court approved a 10-day extension from the Nov. 30, 2011, deadline to file its Plan. The Debtor related that it has its plan and disclosure statement almost completed, but needed 10 additional days to incorporate the results of certain negotiations with the PR Ports Authority regarding the terms for the assumption of the lease agreement between the. The Debtor discussed an agreed assumption with counsel for Ports, and sent a draft thereof. The Port's counsel has requested some time to evaluate the proposal with his client. About Hotel Airport Hotel Airport Inc., in San Juan, Puerto Rico, filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 11-06620) on Aug. 5, 2011. Judge Enrique S. Lamoutte Inclan oversees the case. Edgardo Munoz, PSC, serves as bankruptcy counsel. Francisco J. Garrido Molina serves as its accountant, and RS& Associates as external auditors to perform auditing services. The Debtor disclosed US$8,547,993 in assets and US$171,169,392 in liabilities as of the Chapter 11 filing. The petition was signed by David Tirri, its president. INTERVAL ACQUISITION: Moody's Affirms 'Ba3' Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service revised Interval Acquisition Corp.'s rating outlook to positive from stable. At the same time, Moody's affirmed the company's Ba3 Corporate Family and Probability of Default ratings, its Baa3 senior secured bank debt rating and its B1 senior unsecured guaranteed note rating. Interval's Speculative Grade Liquidity rating of SGL-1 was also affirmed. Ratings affirmed: Corporate Family Rating at Ba3 Probability of Default Rating at Ba3 $50 million senior secured revolver expiring in July 2013 at Baa3 (LGD 1, 7%) $61 million senior secured term loan due July 2013 at Baa3 (LGD 1, 7%) $300 million senior unsecured guaranteed notes due September 2016 at B1 (LGD 4, 61%) Speculative Grade Liquidity rating at SGL-1 RATINGS RATIONALE The change in the rating outlook to positive reflects Moody's expectation that the company will continue to utilize a portion of its free cash flow to repay debt resulting in a modest improvement in debt/EBITDA. Since becoming a public company in 2008, Interval has shown the ability and willingness to prepay debt; in the last twelve months ended September 30, 2011, Interval paid down its senior secured term loan by approximately $25 million. Moody's anticipates that Interval's earnings will grow very modestly (2%- 3%) over the next 12 to 18 months as limited availability of credit to the timeshare industry continues to hamper both developers' ability to provide financing to consumers and finance new development. This environment constrains new membership growth for Interval. Additionally, Moody's expects Interval will continue to pursue shareholder-friendly activities, such as share repurchases, and will pursue tuck-in acquisitions. The affirmation of Interval's Ba3 Corporate Family Rating reflects the company's stable revenue and cash flow characteristics and very good liquidity profile. The rating continues to reflect Interval's small scale, concentrated business profile, and event risk associated with potential acquisitions and shareholder activities. The ratings also consider that the anemic economic environment will continue to weigh on timeshare demand thereby slowing the growth of new members for Interval's exchange business. Additionally, limited availability of credit to the timeshare industry continues to hamper both developers' ability to finance new development and to provide financing to consumers. As a result, Moody's expects future earnings growth will be slow and could pressure the company to find other growth alternatives. Ratings could be upgraded if Interval were to achieve and sustain debt to EBITDA at or below about 2.5 times, and EBITDA minus capex to interest expense at about 3.25 times. An upgrade would also require that the company maintain its very good liquidity and its conservative financial policy. The rating outlook could revert to stable if debt to EBITDA were to remain above 2.5 times and EBITDA minus capex to interest expense was below 3.25 times. Ratings could be pressured if the company's liquidity were to deteriorate for any reason or if the company's financial policy becomes aggressive. The principal methodology used in rating Interval Acquisition Corp. was the Business and Consumer Service Rating Methodology published in October 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. Interval Acquisition Corp. headquartered in Miami, Florida, is a provider of membership and leisure services to the vacation industry. It operates under two segments: Membership and Exchange and Management and Rental. The company generates annual net revenues of about $425 million. J.C. EVANS: Plans to Lay Off About 300 Employees ------------------------------------------------ J.C. Evans Construction Co. Inc. has advised state employment officials of plans to lay off about 300 workers. According to the report, a lawyer for the company said the layoffs are expected after J.C. Evans on Aug. 1 filed for Chapter 11 bankruptcy reorganization. The layoffs will affect workers throughout the company. About J.C. Evans Construction With roots stretching back over 55 years, J.C. Evans is a heavy equipment construction company based in Leander, Texas. Through J.C. Evans Construction Co., L.P., a Texas limited partnership d/b/a/ American Aggregates, the Company owns and operates a construction company specializing in heavy site preparation on commercial, pipeline, utility and highway projects, including excavating, trenching, site preparation and construction. Through Adkins Land Development, L.P., a Texas limited partnership, the Company owns a 700-acre quarry, which produces aggregate for use in road construction. J.C. Evans Construction Holdings is the holding company that owns directly or indirectly each of the other entities. In turn, Holdings is owned by a trust for the benefit of the current and former employees of J.C. Evans through an Employee Stock Ownership Plan. Six affiliated companies filed for Chapter 11 (Bankr. W.D. Tex. Case Nos. 11-11926 to 11-11931) on Aug. 1, 2011. These are JCE Delaware Inc., J.C. Evans Construction Holdings, J.C. Evans Nevada, LLC, EQUUS Development Inc., J.C. Evans Construction and Adkins Land Development. The cases are jointly administered before Judge Craig A. Gargotta. George H. Tarpley, Esq., and Mark E. Andrews, Esq., at Cox Smith Matthews Incorporated, serve as bankruptcy counsel. Tittle Advisory Group, Inc., provides financial advisory services. Butler Burgher Group LLC provides real estate appraisal services with regard to the valuation of the Debtors' headquarters and warehouse properties, consisting of 28 acres near Leander, Texas. In its petition, JC Evans disclosed $51,543,030 in assets and $74,203,554 in liabilities as of the Chapter 11 filing. A creditors' committee has been appointed by the U.S. Trustee. The Committee has hired Gardere Wynne Sewell LLP as counsel. JULIA HOOK: Dist. Court Says Plan Default Warrants Case Dismissal ----------------------------------------------------------------- Mary Julia Hook lost an appeal from a Feb. 14, 2011 Bankruptcy Order dismissing her Chapter 11 case. In her Dec. 5, 2011 Order available at http://is.gd/ca0luofrom Leagle.com, District Judge R. Brooke Jackson held that Ms. Hook failed to make payments on the Colorado Department of Revenue secured allowed debt as required under her confirmed plan of reorganization. The default constitutes "cause" for the bankruptcy court to either convert the case to a Chapter 7 or dismiss it. The bankruptcy court confirmed the proposed plan, as amended, on Dec. 3, 2008. The Plan was declared effective that day. The Colorado Department of Revenue filed a proof of claim for state income taxes comprised of a secured claim of $86,802.21; an unsecured priority claim of $168.13; and an unsecured non-priority claim of $19,192.11. On April 3, 2008 the United States Internal Revenue Service filed a proof of claim for federal taxes comprised of a secured claim of $461,957.89; unsecured priority claims in the amount of $633,568.31; and general unsecured claims of $176,606.60. Ms. Hook did not object to those claims. Rather, on Sept. 17, 2008 Ms. Hook filed a proposed Fourth Amended Combined Plan of Reorganization and Disclosure Statement under which she would pay those claims and others. The District Court case is MARY JULIA HOOK, Appellant, v. INTERNAL REVENUE SERVICE and COLORADO DEPARTMENT OF REVENUE, Appellees, Civil Action No. 11-cv-00714 (D. Colo.). Mary Julia Hook -- aka M. Julia Hook or Julia Hook -- owned various real property in Denver, Colorado. She filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 08-11271) on Feb. 5, 2008. Judge Sidney B. Brooks presides over the case. Jeffrey S. Brinen, Esq., served as the Debtor's counsel. In her petition, Ms. Hook estimated $1 million to $10 million in assets and $500,001 to $1 million in debts. KEVEN A MCKENNA: Former Paralegal Entitled to $2T Claim ------------------------------------------------------- Sumner D. Stone, a former paralegal at the law firm Keven A. McKenna, P.C., will be entitled to a $2,000 claim for unpaid wages, pursuant to a Dec. 2, 2011 decision penned by Bankruptcy Judge Arthur N. Votolato, available at http://is.gd/4gBd74from Leagle.com. Mr. Stone's other claims are disallowed. According to Judge Votolato, except for Mr. Stone's wage claim, there is no evidence that he holds a valid claim against either the corporate or individual bankruptcy estate, and his testimony was merely a long ipse dixit, proving nothing except "how much these men dislike one another." Mr. Stone was hired in late 2008 as an "at- will employee" to perform paralegal services. The bankruptcy trustees appointed in both the corporate and individual cases disputed the claims. The case is KEVEN A. McKENNA, P.C. and KEVEN A. McKENNA, v. SUMNER D. STONE, Consolidated A.P. No. 10-1069 (Bankr. D. R.I.). Mr. Stone appeared pro se. About Keven A. McKenna Keven A. McKenna P.C. filed a Chapter 11 bankruptcy petition for his law firm (Bankr. D. R.I. Case No. 10-10256) on Jan. 25, 2010, and for himself (Bankr. D. R.I. Case No. 10-10274) the next day. Mr. McKenna disclosed $751,000 in assets and $45,700 in liabilities in his bankruptcy petition. His firm estimated debts between $100,000 and $500,000. At the behest of the Official Committee of Unsecured Creditors, the Bankruptcy Court on Nov. 18, 2010, appointed Providence bankruptcy lawyer Thomas P. Quinn as Chapter 11 trustee of McKenna PC to take over management of the law firm. Chief District Judge Mary M. Lisi affirmed the Chapter 11 trustee appointment order in a May 31, 2011 Memorandum and Order. On May 4, 2011, the U.S. Trustee's Motion to Convert the individual case to Chapter 7 was granted, for cause, on the ground that Mr. McKenna failed to meet the requirements of 11 U.S.C. Sections 1121(e) and 1129(e), i.e., filing a confirmable reorganization plan within the applicable time limits. Lisa A. Geremia, Esq., was appointed Chapter 7 Trustee. The Chapter 11 trustee is represented by: Thomas P. Quinn, Esq. Stefanie D. Howell, Esq. McLAUGHLIN & QUINN, LLC 148 West River Street, Suite 1E Providence, RI 02904 Tel: 401-421-5115 E-mail: tquinn@mclaughlinquinn.com showell@mclaughlinquinn.com KEVIN KENERLY: Files for Chapter 11 Bankruptcy Protection --------------------------------------------------------- Andria Simmons at The Atlanta Journal-Constitution reports that former Gwinnett County (Ga.) Commissioner Kevin Kenerly sought Chapter 11 bankruptcy protection on Dec. 5, 2011, in the U.S. Bankruptcy Court for the Northern District of Georgia. According to the report, the filing came 14 months after Mr. Kenerly was indicted on charges related to bribery and influencing votes on re-zonings while he was a commissioner. Until he stepped down Nov. 16, 2010, Mr. Kenerly was the county's longest-serving commissioner, having held his seat for 16 years. The report relates that Mr. Kenerly was slapped with criminal charges at the culmination of a 10-month-long investigation conducted by the special purpose grand jury impaneled to look into the county's suspicious park land purchases. The investigation also resulted in the resignation of Commission Chairman Charles Bannister. The report adds that the special grand jury found that Gwinnett County commissioners overpaid millions of dollars for some parcels of land in deals that used taxpayer money to benefit the commissioners' allies. The report says Mr. Kenerly reported assets of less than $50,000 and debts of about $3.5 million. The debts listed on his bankruptcy filing include $1.6 million on a Chateau Elan mansion in Braselton and $5,722 for unpaid condo association dues at a Myrtle Beach vacation home, the report notes. The report relates that Mr. Kenerly's house in Chateau Elan is currently listed for sale for $2.8 million. The house is nestled on the sixth hole of the Legends Championship Golf Course in a gated resort community. The report also says Mr. Kenerly has outstanding balances on three vehicles all purchased in 2009: $8,292 for an Acura RDX, $35,414 for a GMC Yukon, $23,811 for a Ford F-150. L.A. DODGERS: Magic Johnson Joins Group to Bid on Firm ------------------------------------------------------ Dow Jones' Daily Bankruptcy Review reports that former NBA great Magic Johnson is joining forces with banker Mark Walter and longtime sports executive Stan Kasten to bid for the Los Angeles Dodgers, which are in bankruptcy. 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. LEHMAN BROTHERS: Now A Step Closer to Emerging From Bankruptcy -------------------------------------------------------------- Lehman Brothers Holdings Inc. is now a step closer to emerging from bankruptcy after getting support for its proposed Chapter 11 plan from creditors holding about $400 billion in claims. In documents filed on November 29 with the U.S. Bankruptcy Court for the Southern District of New York, the company reported that 71,553 creditors holding about $400 billion in claims voted in favor of the plan. This represents 95% in number and 98.68% in amount of voting creditors. Of the 134 classes of creditors eligible to vote, 93 voted "yes." No votes were submitted in the remaining 41 classes, which are deemed to have accepted the plan. At LBHI, 91.82% of $291.2 million in secured claims voted in favor of the plan. Meanwhile, 97.65% of $64 billion in unsecured claims, and 93.94% of $2.65 billion also voted "yes." At Lehman Brothers Special Financing Inc., the plan was accepted by 96.66% of $18.8 billion in general unsecured claims. At Lehman Commercial Paper Inc., 99.68% of $1.78 billion in general unsecured claims were in favor of the plan. The documents also showed that every single class of creditors voted to accept the plan. Full-text copies of the documents detailing the voting results are available without charge at: http://bankrupt.com/misc/LBHI_VotingResults.pdf "The overwhelming support the plan has received demonstrates that, while reaching a mutual agreement among these disparate parties was complex and challenging, it was worth the effort and was clearly the right path to take," Bryan Marsal, LBHI's chief executive officer, said in a November 29 statement. Lehman lawyer, Lori Fife, Esq., at Weil Gotshal & Manges LLP, in New York, said: "To approach confirmation with virtually unanimous support of creditors who asserted claims in the amount of $450 billion is unprecedented." "The global settlements should avoid contentious litigation and allow for accelerated distributions to creditors," Ms. Fife said in the statement. Lehman also filed on November 29 a revision of the plan and a document containing the latest amendment to the plan supplements. The revised plan contains technical changes and resolves objections by some creditors to the confirmation but the changes are "non-material," according to the company. Copies of the revised plan documents are available without charge at: http://bankrupt.com/misc/LBHI_3rdRevisedPlan.pdf http://bankrupt.com/misc/LBHI_3rdRevisedPlanBlackline.pdf http://bankrupt.com/misc/LBHI_PlanSuppAmendment112911.pdf http://bankrupt.com/misc/LBHI_PlanSuppAmendment120211.pdf Lehman Asks Court to Confirm Plan Lehman asked Judge James Peck to confirm the plan, saying it "fully" complies with bankruptcy law. In court papers, Ms. Fife said the plan satisfies all the subsections of Section 1129 of the Bankruptcy Code. She pointed out that Lehman complied with the provisions governing the classification of claims, disclosure, solicitation of votes, payment of cash to creditors holding priority claims, among other things. Lehman also sought court approval of what it calls "global settlement" and "bilateral settlement" it reached with creditors. The global settlement is an integrated negotiated resolution, which implements a series of concessions and compromises by all classes of Lehman creditors. The bilateral settlement refers to the 13 other settlement agreements Lehman reached with the administrators of its foreign affiliates and other creditors. The Official Committee of Unsecured Creditors, the administrators of Lehman's U.K.-based affiliates, the ad hoc group of Lehman Brothers creditors and several other creditors have also filed court papers expressing their support for confirmation of the plan. Earlier, Lehman settled its disputes with 11 creditors opposing the confirmation of its plan including Deutsche Bank AG, Bank of Montreal, Shinsei Bank Limited and Credit Agricole Corporate and Investment Bank. Deutsche Bank previously demanded Lehman to upgrade its $2.4 billion in claims, saying the claims were not properly classified under the plan. Credit Agricole, on the other hand, questioned a provision in the plan which entitles Lehman to a discharge. Judge Peck will consider confirmation of the plan at the hearing on December 6. A copy of the proposed order confirming the plan is available for free at http://bankrupt.com/misc/LBHI_ConfirmationOrder.pdf Disputes Remain Lehman, while getting overwhelming support from creditors for the plan, continues to face opposition from the U.S. Trustee and eight other parties. The U.S. Trustee, a Justice Department agency overseeing bankruptcy cases, and the Texas Comptroller of Public Accounts questioned a provision in the plan, which entitles Lehman to a discharge. The company, they said, is not entitled to a discharge since the plan calls for liquidation. A discharge wipes out pre-bankruptcy debt and stops creditors from suing the restructured company after it emerges from bankruptcy protection. In reaction to those objections, Ms. Fife said a discharge is warranted to protect the assets, which will be retained and will continue to be managed by the Lehman units through an administrator while they liquidate after the effective date of the plan. The Creditors' Committee agrees with the proposed discharge and asked the bankruptcy court to overrule the objections. Lehman also drew flak for trying to rewrite the Bankruptcy Code by proposing to expand the scope of tax exemptions, according to court papers filed lately by the Texas Comptroller and the Illinois Department of Revenue. The company is confident that some objections to the confirmation will be resolved prior to or at the December 6 hearing. Lehman also has to resolve its disputes with creditors who criticize the company on how it handles their contracts. Objections from these creditors will be considered at another hearing scheduled for February 14, 2012. Earlier, the company filed with the bankruptcy court a list of contracts that are no longer scheduled for assumption and another list identifying additional contracts that it seeks to assume as part of the proposed plan. Lists of these contracts are available at http://bankrupt.com/misc/LBHI_ContractLists3.pdf Lehman Strikes Deal With Fannie Mae, et al. In a related development, Lehman struck a deal concerning nearly $4 billion in priority claims from mortgage giants Fannie Mae and Freddie Mac, which were seized by the U.S. government shortly before Lehman's collapse, Dow Jones Daily Bankruptcy Review reported. The company said it would set aside $1.2 billion for Freddie Mac's priority claim and an as-yet-to-be-determined amount for Fannie Mae's $2.7 billion priority claim, according to the report. Lehman also reached an agreement to settle the objection of a group of insurance firms led by Fidelity National Title Insurance Company. 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: Wins Nod to Form Director Selection Committee -------------------------------------------------------------- Lehman Brothers Holdings Inc. obtained a court order approving the formation of a committee that would decide on the composition of the reorganized company's board of directors. The formation of the so-called director selection committee is required under the proposed Chapter 11 plan and is part of the settlement LBHI entered into with creditors. The order dated December 2, 2011, authorized the company to retain Korn/Ferry International as the committee's executive search adviser. The court order also authorized the appointment of the initial members of the committee including Lehman Brothers Bankhaus AG's administrator Dr. Michael Frege, and LBHI's president John Suckow. They will serve in the committee until the effective date of the proposed plan. 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: Committee Backs Natural Gas Dispute Deal --------------------------------------------------------- The Official Committee of Unsecured Creditors in Lehman Brothers Holdings' cases expressed support for the approval of a deal to settle two $751 million claims filed against Lehman Brothers Holdings Inc. and Lehman Brothers Commodity Services Inc. In court papers, the Creditors' Committee said the settlement is "fair and equitable and falls well within the range of reasonableness." The settlement would also allow LBHI to avoid litigation. The claims stemmed from a 2008 natural gas purchase agreement between Main Street Natural Gas Inc. and LBCS. Main Street filed two $751 million claims, one against LBCS and the other on a guarantee given by the parent company after LBCS allegedly stopped delivering gas following its bankruptcy. Bank of New York Trust Company, N.A., which served as indenture trustee in the purchase agreement, also filed $751 million claims against each of the Lehman units. Under the proposed deal, BNY Trust will have an allowed $722 million claim against each of the Lehman units under the proposed Chapter 11 plan. Meanwhile, the claims asserted by Main Street will be deemed withdrawn. BNY Trust and Main Street also agreed under the deal that they won't take any action against the confirmation of the plan. 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: Won't End Health Benefit as Part of ACESO Deal --------------------------------------------------------------- Lehman Brothers Holdings Inc. clarified that it is not proposing to terminate the payment of health and medical benefits for retirees through the motion it jointly filed with the trustee liquidating its brokerage. The company is reacting to opposition from Lehman retirees who complained that the termination of their benefits is unfair and that the voluntary employees' beneficiary association (VEBA) should be used solely for the benefit of retirees and not active employees. LBHI, along with Lehman Brothers Inc.'s trustee, filed the motion last month to permit the company to purchase Aceso Holdings Inc.'s stock from the brokerage. The deal would allow LBHI to obtain control of the health care trust owned by Aceso Holdings, which was established to qualify as VEBA. Lehman lawyer, Richard Krasnow, Esq., at Weil Gotshal & Manges LLP, in New York, said the termination of retiree benefits is not the subject of the motion, pointing out that all health benefits for retirees were terminated years ago and that each retiree was served a notice of the termination. According to Mr. Krasnow, in over two years since the notice of termination, not one retiree has contended that he had vested benefits that could not be terminated by Lehman. In reaction to the retirees' contention that the VEBA should be used solely for their benefit, the Lehman lawyer argued that one of VEBA's original purposes is the payment of medical expenses for active employees under the so-called group benefits plan. "While [Lehman] is sympathetic to the circumstances of retirees and the impact that the demise of the Lehman enterprise has had on such individuals, [Lehman] must exercise its fiduciary duties in the interests of creditors," Mr. Krasnow said in court papers. Earlier, the U. S. Department of Labor and former trustee of the VEBA also reacted to the motion. The government agency expressed concern that the actions to be taken by Lehman in connection with the deal would violate the Employee Retirement Income Security Act (ERISA). Mr. Krasnow, however, assured the agency that all future actions of the company related to the VEBA will comply with the ERISA. He also clarified that the motion is not seeking approval of the future use of the VEBA. On the other hand, the Lehman lawyer dismissed the former VEBA trustee's allegations as baseless, saying she was motivated by the "circumstances surrounding her departure" from the company. 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: RBS to Pay $215MM to Settle Swap Dispute --------------------------------------------------------- Royal Bank of Scotland Group Plc will pay Lehman Brothers Inc. $215 million to settle a dispute over swap transactions, according to a court filing, Elizabeth Amon of Bloomberg News reported. James W. Giddens, the trustee appointed to oversee LBI's liquidation, has previously asked the Court to compel RBS to pay $345 million, plus interest, for early termination of a 1998 swap agreement. RBS refused, sought to move the case to another court and said Lehman would have to sue to try to get the money. In an agreement filed Nov. 23 in court, the two sides said they reached "a fair and equitable and reasonable determination" of the closeout of the swap transactions, the report said. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 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) LINCOLN LOGS: Dist. Court Affirms Ruling on Constructive Trust -------------------------------------------------------------- Donald L. Brenner and Lisa R. Brenner appeal from an order of Chief United States Bankruptcy Judge Robert E. Littlefield, Jr. holding that the Brenners are not entitled to a constructive trust on bankruptcy estate funds in the amount of $55,000, the value of undelivered materials for which they paid Lincoln Logs Ltd. Judge Littlefield denied the Brenners' constructive trust claim and granted the motion by Justin A. Heller, Esq., the Liquidation Trustee, joined by a creditor, Farm Credit East, ACA -- formerly First Pioneer Farm Credit, ACA -- for summary judgment dismissing that claim. In a Nov. 29, 2011 Memorandum-Decision and Order available at http://is.gd/Ve7I0Hfrom Leagle.com, Chief District Judge Norman A. Mordue denied the appeal and affirmed the lower court's order. Pre-bankruptcy, the Brenners entered into a written contract with the debtor for the purchase of plans and materials for a log cabin home. The Brenners made payment in full. After delivering some of the materials, the debtor filed for bankruptcy. The case is DONALD L. BRENNER AND LISA R. BRENNER, Appellants, v. JUSTIN A HELLER, ESQ., LIQUIDATION TRUSTEE; LINCOLN LOGS LTD.; SNAKE RIVER LOG HOMES, LLC; AND FIRST PIONEER FARM CREDIT, ACA, Respondents. Donald L. Brenner and Lisa R. Brenner are represented by: OFFICE OF ROBERT J. ROCK Robert J. Rock, Esq. 60 South Swan Street Albany, NY 12210 The Liquidation Trustee may be reached at: NOLAN & HELLER, LLP Justin A. Heller, Esq. 39 North Pearl Street Albany, NY 12203 E-mail: jheller@nolanandheller.com First Pioneer Farm Credit, ACA, is represented by: Kelly C. Griffith, Esq. HARRIS BEACH PLLC 300 South State Street One Park Place Syracuse, NY 13202 E-mail: kgriffith@harrisbeach.com Chestertown, N.Y.-based custom home builder Lincoln Logs Ltd. and its debtor-affiliate, Snake River Log Homes, LLC, sought chapter 11 protection (Bankr. N.D.N.Y. Case Nos. 08-13079 and 08-13080) on Sept. 19, 2008, represented by Angela Z. Miller, Esq., at Phillips Lytle LLP in Buffalo, N.Y. At the time of the filing, the Debtors estimated their assets at less than $10 million and their debts at more than $10 million. Most of the debtors' assets were sold in early 2009 for about $3.5 million. The Debtors filed a Chapter 11 Joint Plan of Liquidation on Mar. 5, 2009 and an Amended Chapter 11 Joint Plan of Liquidation on May 4, 2009. By order dated July 20, 2009, the Amended Chapter 11 Joint Plan of Liquidation was confirmed, and a liquidating trust was formed with Justin A. Heller, Esq., appointed as the Liquidation Trustee. The Plan provides for an absolute priority distribution to holders of claims against the Debtors. LOS ANGELES DODGERS: Magic Johnson Joins Bid to Buy LA Dodgers -------------------------------------------------------------- Carolina Bolado at Bankruptcy Law360 reports that Magic Johnson, former star player of the Los Angeles Lakers basketball club, said Friday he has partnered with the CEO of financial services firm Guggenheim Partners LLC to place a bid on Los Angeles Dodgers. According to Law360, Mr. Johnson, Guggenheim CEO Mark Walter and former Washington Nationals team President Stan Kasten are joining forces under Mr. Walter's Guggenheim Baseball Management in the hopes of buying the baseball team, valued at $800 million by Forbes earlier this year but currently parked in Delaware bankruptcy court. 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. 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. LOVELAND ESSENTIAL: Case Summary & 7 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Loveland Essential Group, LLC fka Loveland RV Resort fka Loveland RV Park dba Rocky Mountain RV Essential Group, LC 4421 East US Hwy 34 Loveland, CO 80537-8950 Bankruptcy Case No.: 11-38054 Chapter 11 Petition Date: December 1, 2011 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: John C. Smiley, Esq. LINDQUIST & VENNUM P.L.L.P. 600 17th St., Ste. 1800-S Denver, CO 80202 Tel: (303) 573-5900 E-mail: jsmiley@lindquist.com Scheduled Assets: $3,621,652 Scheduled Debts: $4,078,626 A list of the Company's seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cob11-38054.pdf The petition was signed by Michael Andrzejek, for Essential Group, LLC, manager of Debtor. M&M STONE: Univest Bank Wants Cash Collateral Access Denied ----------------------------------------------------------- Univest Bank and Trust Co., in its second objection, asks the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to deny M&M Stone Co.'s motion for (a) use of cash collateral; (b) provide adequate protection. Univest is a creditor of M&M $16,780,512 plus accrued interest, late charges, attorney's fees and other costs incurred by Univest. In the Debtor's cash collateral motion, it acknowledged its liability to Univest in the sum of $2,186,560. In fact M&M's liability to Univest is in the principal amount of $16,780,512. The indebtedness is secured by, inter alia, (a) a security interest in certain property of M&M, and (b) mortgages liens on real property owned by M&M. Univest states that the motion is deficient in that it fails, among other things, to: a. provide an adequate explanation of M&M's current operations and its ability to generate operating income; b. provide an explanation of the collectability of its pre- bankruptcy accounts receivable; c. acknowledge the total indebtedness owing by M&M to Univest. About M&M Stone Co. Telford, Pennsylvania-based M&M Stone Co. owns a quarry with a recycling center. The Company filed for Chapter 11 protection (Bankr. E.D. Pa. Case No. 11-17266) on Sept. 18, 2011. Judge Eric L. Frank presides over the case. 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. As of Nov. 11, 2011, the Debtor has not yet obtained a bankruptcy counsel. Affiliate Drum Construction Company, Inc. (Bankr. E.D. Pa. Case No. 11-14857) filed for Chapter 11 on June 17, 2011. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed four unsecured creditors to serve on the Official Committee of Unsecured Creditors of M&M Stone Co. MAKENA GREAT: Case Summary & XX Largest Unsecured Creditors ---------------------------------------------------------- Debtor: The Makena Great American Anza Company, LLC 8350 West Sahara Avenue Las Vegas, NV 89117 Bankruptcy Case No.: 11-48549 Chapter 11 Petition Date: December 1, 2011 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Debtor's Counsel: Gordon E. Gouveia, Esq. SHAW, GUSSIS, FISHMAN, GLANTZ, ET AL 321 N. Clark Street, Suite 800 Chicago, IL 60654 Tel: (312) 541-0151 Ext. 102 Fax: (312) 980-3888 E-mail: ggouveia@shawgussis.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Noam Schwartz, treasurer of EBM Mgmt. Services, Inc., manager of Debtor. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- GAC Storage Copley Place, LLC 11-40953 10/07/11 GAC Storage EI Monte, LLC 11-42638 10/20/11 GAC Storage Lansing, LLC 11-40944 10/07/11 The Makena Great American Anza Company's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Fenigstein & Kaufman Attorney $128,379 1900 Avenue of the Stars #2300 Los Angeles, CA 90067 OC Pole Fitness Security deposit $25,000 Collette Kakuk 24541 Los Serranos Laguna Niguel, CA 92677 FTICO, Inc. Subcontractor $10,848 23422 Peralta Dr.#B Laguna Hills, CA 92653 Rafy Almany Subcontractor $5,646 Mike Shill Painting Subcontractor $3,420 PWP Wireless Retailers, Security deposit $2,666 Inc. Beach Glass & Mirror Subcontractor $2,271 Inc. DEX One Service $2,062 Liberty Tax Services Security deposit $1,466 OJ Insulation Subcontractor $1,400 Smoke Shop Security deposit $1,162 Hassan & Samer El Hatem Jon Scott's Service $660 Landscape Deputy 1 Inspection Service $630 Services, Inc. Staples Legal Dept. Supplier $310 Suncoast Fire Protection Services $303 Chateau Products, Inc. Supplier $268 Yellow Book Service $165 Dewey Pest Control Service $152 Secure Systems Service $125 Integration Daily Journal Corp. Service $117 MARONDA HOMES: Can Continue Using Cash Collateral Until Jan. 10 --------------------------------------------------------------- In a third amended order dated Nov. 3, 2011, Judge Judith K. Fitzgerald of the U.S. Bankruptcy Court for the Western District of Pennsylvania granted Maronda Homes, Inc., et al., permission to continue using cash through Jan. 10, 2012, in the form of the net proceeds received upon closings of the sale of residential homes built by the Debtors, pursuant to a budget for the period through January 2012. If the Debtors' Joint Plan of Reorganization dated Aug. 12, 2011, is confirmed and the Exit Facility contemplated under the Plan is consummated such that the Effective Date occurs, the Termination Date will be that Effective Date. If, as of the Termination Date, the amount of cash collateral collected from closings that occur between April 18 and the Termination Date exceeds the actual or accrued expenditures of the Debtors as authorized by this Order through the Termination Date, the amount of that excess may be applied by the Lenders to the principal loan balance then outstanding under the credit agreement, provide that the Debtors and Lenders will agree on the amount of the excess on or before 15 days after the Termination Date and if the amount of the excess is disputed, then no amount will be applied until the dispute is submitted to and resolved by the Court. A final hearing on the motion to use cash collateral will be held on Dec. 14, 2011, at 12:30 p.m. The Lenders are: Bank of America, N.A., Wells Fargo Bank, N.A., (including former Wachovia Bank, National Association), PNC Bank, National Association, KeyBank National Association, Huntington National Bank, Fifth Third Bank, Regions Bank, SunTrust Bank, N.A., Compass Bank (as successor to Guaranty Bank), Compass Bank, Comerica Bank, Midtown Acquisitions, L.P., and Grace Bay Holdings II, LLC. A copy of the Second Amended Order is available for free at: http://bankrupt.com/misc/marondahomes.dkt191.pdf About Maronda Homes Maronda Homes Inc., based in Clinton, Pennsylvania, near Pittsburgh, builds homes in Florida, Pennsylvania, Georgia and Kentucky. It filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 11-22418) on April 18, 2011. Joseph F. McDonough, Esq., and James G. McLean, Esq., at Manion Mcdonough & Lucas, P.C., serve as the Debtor's bankruptcy counsel. In its schedule, Maronda Homes disclosed $83,784,549 in assets and $91,773,703 in liabilities. Affiliates Maronda Homes Inc. of Ohio (Bankr. W.D. Pa. Case No. 11-22422) and Maronda Homes of Cincinnati LLC (Bankr. W.D. Pa. Case No. 11-22424) also filed separate Chapter 11 petitions. MCCORMICK & SCHMICK: Moody's Says Landry Buyout Won't Have Impact ----------------------------------------------------------------- Moody's Investors Service stated that the B2 Corporate Family Rating and negative rating outlook for Landry's Holdings, Inc. (Landry's Holdings) and the ratings for Landry's, Inc. (Landry's) are not affected by the company's announcement that it will acquire all of the outstanding shares of McCormick & Schmick's Seafood Restaurants, Inc. for $8.75 per share. Moody's last rating action for Landry's occurred on December 6, 2010, when Moody's confirmed all the ratings of Landry's Holdings, Inc. and Landry's, Inc. -- B2 Corporate Family and Probability of Default ratings -- and assigned a negative outlook. The principal methodology used in rating Landry's was Moody's Global Restaurant Industry rating methodology, published in June 2011. Landry's Holdings, Inc. (Landry's Holdings) is a holding company which owns the Fertitta Group -- the legal entity which owns Landry's, Inc. (Landry's). Landry's owns and operates mostly full service restaurants under the trade names Landry's Seafood House, Chart House, Saltgrass Steak House, Rainforest Caf�, The Oceanaire, and Bubba Gump Shrimp Company. The company also owns and operates the Golden Nugget hotel and casino in Las Vegas, Nevada, which is an unrestricted subsidiary of Landry's. Annual revenue is approximately $1.1 billion. MEGA-C POWER: 9th Cir. Affirms Ruling on Battery Ownership Dispute ------------------------------------------------------------------ The U.S. Court of Appeals for the Ninth Circuit in San Francisco upheld a decision by the Ninth Circuit Bankruptcy Appellate Panel affirming the Bankruptcy Court's summary judgment dismissal of the Taylor Family Group's claims in an adversary proceeding concerning ownership of the rights to a lead-acid-carbon battery device, filed by Axion Power International, Inc., et al. in the involuntary bankruptcy action of Mega-C Power Corp. The Taylor Family Group -- consisting of Lewis Chip Taylor, Chip Taylor In Trust, Jared Taylor, Elgin Investments, Inc., Sharon Taylor, Nicole Taylor Pignatelli, Paul Pignatelli, Colin Taylor, Louise Taylor, 1407580 Ontario Limited, 1248136 Ontario Limited, Mega C Tech., Ltd. -- took an appeal to the Ninth Circuit. Axion cross- appealed the BAP's affirmance of the Bankruptcy Court's denial of sanctions and contempt. The Ninth Circuit panel consists of Circuit Judges Michael Daly Hawkins, M. Margaret McKeown, and Milan D. Smith Jr. A copy of the Ninth Circuit's Dec. 5, 2011 Memorandum is available at http://is.gd/31mPHZfrom Leagle.com. The appellate case is LEWIS CHIP TAYLOR; CHIP TAYLOR, In Trust; JARED TAYLOR; ELGIN INVESTMENTS, INC.; SHARON TAYLOR; NICOLE TAYLOR PIGNATELLI; PAUL PIGNATELLI; COLIN TAYLOR; LOUISE TAYLOR; 1407580 ONTARIO LIMITED; 1248136 ONTARIO LIMITED; MEGA C. TECH., LTD., Appellants, v. AXION POWER INTERNATIONAL, INC.; AXION POWER CORPORATION; ROBERT AVERILL; GLENN PATTERSON; HAP INVESTMENTS, LLC; IGOR FILIPENKO; THOMAS GRANVILLE, Appellees; and GLENN PATTERSON; HAP INVESTMENTS, LLC; IGOR FILIPENKO; THOMAS GRANVILLE; AXION POWER CORPORATION; ROBERT AVERILL; AXION POWER INTERNATIONAL, INC., Appellants, v. LEWIS CHIP TAYLOR; CHIP TAYLOR, In Trust; JARED TAYLOR; ELGIN INVESTMENTS, INC.; SHARON TAYLOR; NICOLE TAYLOR PIGNATELLI; PAUL PIGNATELLI; COLIN TAYLOR; LOUISE TAYLOR; 1407580 ONTARIO LIMITED; 1248136 ONTARIO LIMITED; MEGA C. TECH., LTD, Appellees, Nos. 10-60036, 10-60037 (9th Cir.). About Mega-C Mega-C Power Corporation is in the business of commercializing a hybrid capacitor/battery technology out of its premises in Vaughan, Ontario. In March 2003, the Ontario Securities Commission commenced an investigation into the activities of Mega-C Power Corporation and its promoters. The commencement of this investigation, with hindsight, was a key precursor to the demise of Mega-C Power's business activities and resale activities of its promoters. Axion Power Corporation initiated an involuntary chapter 11 proceeding against Mega-C on Apr. 6, 2004 (Bankr. D. Nev. Case No. 04-50962). Cecilia L. Rosenauer, Esq., in Reno, Nevada, represented Axion. The Court appointed William Noall, as a chapter 11 trustee, and Mr. Noall was represented by Matthew C. Zirzow, Esq., and Talitha B. Gray, Esq., at Gordon & Silver, Ltd. The Chapter 11 plan of reorganization for Mega-C proposed by the Chapter 11 trustee, Axion and others became effective Nov. 21, 2006. MESA AIR: Files Post-Confirmation Report for 3rd Quarter -------------------------------------------------------- As of Nov. 18, 2011, Mesa Air Group, Inc., and its reorganization debtor affiliates have resolved approximately 96% of the general unsecured claims filed in their Chapter 11 cases and all but a handful of all non-tax related Administrative Claims, Secured Claims and Priority Claims. Plan Distributions On March 17, 2011, holders of Allowed De Minimis Convenience Claims received a cash distribution of approximately $119,000, representing approximately 85% of those claims. On July 6, 2011, holders of Allowed General Unsecured Claims received the initial distribution on account of those claims, comprised of New Common Stock, New Warrants, and New 8% Notes (Series B). Specifically, the Debtors distributed 2,592,506 shares of New Common Stock, 5,773,033 New Warrants, and $42,348,118 of New 8% Notes (Series B), satisfying approximately $2.5 billion in Allowed General Unsecured Claims. Furthermore, on July 6, 2011, the Post-Effective Date Debtors made these initial distributions: (i) Holders of 2012 Noteholder Claims received $19,400,000 of New 8% Notes (Series A); (ii) U.S. Airways, Inc. received the US Airways Note ($6.8 million on the same terms as the New 8% Notes); and (iii) Members of the Post-Effective Date Debtors' management received $4.5 million of Management Notes. The Post-Effective Date Debtors have reached and filed with the Court seven agreements related to Secured Tax Claims and Priority Tax Claims pursuant to which payments are being made to applicable taxing authorities. In addition, the Post-Effective Date Debtors have made full payment on 40 other Priority Tax Claims or Secured Tax Claims, for a total of approximately $224,000. Redemption of New Notes Pursuant to the Plan, the Reorganized Debtors were required to issue in aggregate principal amount $19.4 million of New 8% Notes (Series A), $43.2 million of New 8% Notes (Series B), $6.5 million of US Airways Notes, and $5.5 million of Management Notes. Under the Plan, the relevant part of the definition of "Spirit Liquidity Event" is the "sale of common stock of or payment on notes of Spirit Airlines . . . ." Upon a Spirit Liquidity Event, the terms of the Plan requires the Reorganized Debtors to redeem the New Notes in accordance with the terms of the New Notes. On September 14, 2011, the Reorganized Debtors gave notice to US Bank that a Spirit Liquidity Event had occurred and caused a redemption notice to be served on all holders of New Notes. In accordance with the Plan, on October 15, 2011, the Reorganized Debtors caused the redemption of the New Notes. Holders of claims yet to be reconciled and allowed will receive a cash payment in satisfaction of their allowed claim in lieu of any New Notes they would have otherwise received had the Spirit Liquidity Event not occurred. Mesa Air Group, Inc., et al. Condensed Consolidated Balance Sheet As of Sept. 30, 2011 ASSETS Current Assets: Cash and cash equivalents $26,266,000 Short-term investments 3,000 Restricted investments 4,779,000 Receivables, net of allowance 28,030,000 Inventories, net of allowance 22,381,000 Prepaid expenses and other assets 563,367,000 --------------- Total current assets 724,826,000 Property and equipment, net 407,348,000 Security and other deposits 5,226,000 Intangibles 143,960,000 Other assets 55,966,000 --------------- Total assets $1,337,326,000 =============== LIABILITIES & SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $37,752,000 Accounts payable 8,026,000 Air traffic liability 4,571,000 Other accrued expenses 82,186,000 Income tax payable 1,099,000 Deferred revenue & other current liabilities 1,592,000 --------------- Total current liabilities 135,226,000 Deferred credits and other liabilities 120,501,000 Long-term deferred income tax 564,076,000 Long-term debt 369,567,000 --------------- Total liabilities $1,189,370,000 Stockholders' equity: Preferred stock - Common stock (1,098,029,000) Deferred Stock Compensation 1,236,842,000 --------------- Total MAG stockholders' equity 138,813,000 --------------- Non-controlling interest (9,143,000) --------------- Total stockholders' equity 147,956,000 --------------- Total liabilities & stockholders' equity $1,337,326,000 =============== Mesa Air Group, Inc., et al. Schedule of Cash Receipts and Disbursements For the three months ended Sept. 30, 2011 Beginning Cash Balance $24,079,645 All receipts by the debtor: Cash Sales 0 Collection of Accounts Receivable: Mesa Air Group, Inc. 0 Mesa Airlines, Inc. 129,924,740 Freedom Airlines, Inc. 0 --------------- Total collection of accounts receivable 129,924,740 Sale of debtor assets 0 --------------- Total cash received 129,924,740 --------------- Total cash receivable $154,004,385 =============== All disbursements made by the debtor: Disbursements made under the Plan 246,124 Disbursements made for admin. Claims 2,005,772 All other disbursements: Mesa Air Group, Inc. 6,096,624 Freedom Airlines, Inc. 0 Mesa Airlines, Inc. 101,233,647 MPD, Inc. 299,086 Regional Aircraft Services, Inc. 2,609 Air Midwest, Inc. 0 Mesa Air Group Airline Inventory Management, LLC 17,854,368 --------------- Total Disbursements (Operating & Plan) 127,738,230 --------------- Ending Cash Balance $26,266,155 =============== About Mesa Air Mesa Air currently operates 76 aircraft with approximately 450 daily system departures to 94 cities, 38 states, the District of Columbia, and Mexico. Mesa operates as US Airways Express and United Express under contractual agreements with US Airways and United Airlines, respectively, and independently as go! Mokulele. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company was founded by Larry and Janie Risley in New Mexico in 1982. Mesa Air Group Inc. and its units filed their Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 10-10018) on Jan. 5, 2010, in New York, listing assets of $976 million against debt totaling $869 million as of Sept. 30, 2009. Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the Debtors. Imperial Capital LLC is the investment banker. Epiq Bankruptcy Solutions is claims and notice agent. Brett Miller, Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison & Foerster LLP, serve as counsel to the Official Committee of Unsecured Creditors. Judge Martin Glenn entered a final order confirming the Third Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and its debtor affiliates on Jan. 20, 2011. Under the plan, the reorganized company will issue new notes, common stock and warrants to creditors. Unsecured creditors that are U.S. citizens will receive a combination of new notes and new common stock, while unsecured creditors that are Non-U.S. citizens will receive a combination of new notes and new warrants. An agreement with US Airways paved way for the filing of the plan. Mesa Air's Plan of Reorganization became effective March 1, 2011. The Company's restructuring accomplishments included elimination of 100 excess aircraft and associated leases and debt which contributed to the deleveraging of Mesa's balance sheet in the approximate amount of $700 million in capitalized leases and $50 million in debt, and extending the term of the code-share agreement with US Airways through September 2015. Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Mesa Air Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000). MESA AIR: Reaches Settlement With SBCC and Rolls-Royce ------------------------------------------------------ Reorganized Mesa Air Group, Inc., its affiliated Reorganized Debtors, and its affiliated Liquidating Debtors, and (i) SBCC LLC and (ii) Rolls-Royce Corporation have entered into post-effective date settlements resolving certain claims. Before the Petition Date, Mesa Airlines, Inc., leased certain non-residential real property located at 3410 East University Dr., Suite 200, in Phoenix, Arizona. SBCC is the successor landlord to Corporate Center ATM, LLC. The Lease was rejected, effective Aug. 3, 2010. The SBCC settlement provides that: * Claim No. 1409 will be deemed fully and finally allowed as a General Unsecured Claim in Class 3(e) under the Third Amended Joint Plan of Reorganization, amounting to $483,273, against Mesa Airlines. The Reorganized Debtors waive any right to reconsider Claim No. 1409 under Section 502(j) of the Bankruptcy Code; * SBCC is in possession of a $49,221 security deposit. The Reorganized Debtors acknowledge and agree that they have irrevocably abandoned the Security Deposit to SBCC, which SBCC will retain as its sole and exclusive property; and * SBCC is permitted to sell Claim No. 1409 to any buyer, provided that the buyer holds in total less than 360,000 shares of New Stock or New Warrants of Reorganized Mesa Air Group, Inc., or claims in the aggregate against the Debtors that would be convertible into 360,000 shares of New Stock or New Warrants. Before the Petition Date, Rolls-Royce performed various engine maintenance and repair services for Mesa Air Group, as part of the Debtor's ordinary course of business. The Rolls-Royce settlement provides that: * Claim No. 1221 will be deemed allowed as a General Unsecured Claim in Class 3(a) under the Plan, amounting to $2,200,000, against Mesa Air Group. The Allowed Claim No. 1221 will satisfy all obligations of the Debtors arising under certain invoices or related documents, and Rolls- Royce waives any other claim that it may have arising under the Invoices or related documents; * This stipulation will not affect any other Rolls-Royce claims that have been previously allowed against the Debtors; * The Debtors waive and release any right to assert any objection, defense, claim, counterclaims, or right of set- off or recoupment with respect to the Allowed Claim No. 1221, or any and all avoidance and recovery actions under applicable sections of the Bankruptcy Code against Rolls- Royce with respect to the Allowed Claim, or otherwise to seek any reduction to the Claim. No other parties-in- interest may object to the allowance of Claim No. 1221; and * Rolls-Royce is permitted to sell the Allowed Claim No. 1221 to any buyer, provided that the buyer holds an aggregate of less than 360,000 shares of New Stock or New Warrants of Reorganized Mesa Air Group, or claims in the aggregate against the Debtors that would be convertible into 360,000 shares of New Stock or New Warrants. About Mesa Air Mesa Air currently operates 76 aircraft with approximately 450 daily system departures to 94 cities, 38 states, the District of Columbia, and Mexico. Mesa operates as US Airways Express and United Express under contractual agreements with US Airways and United Airlines, respectively, and independently as go! Mokulele. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company was founded by Larry and Janie Risley in New Mexico in 1982. Mesa Air Group Inc. and its units filed their Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 10-10018) on Jan. 5, 2010, in New York, listing assets of $976 million against debt totaling $869 million as of Sept. 30, 2009. Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the Debtors. Imperial Capital LLC is the investment banker. Epiq Bankruptcy Solutions is claims and notice agent. Brett Miller, Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison & Foerster LLP, serve as counsel to the Official Committee of Unsecured Creditors. Judge Martin Glenn entered a final order confirming the Third Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and its debtor affiliates on Jan. 20, 2011. Under the plan, the reorganized company will issue new notes, common stock and warrants to creditors. Unsecured creditors that are U.S. citizens will receive a combination of new notes and new common stock, while unsecured creditors that are Non-U.S. citizens will receive a combination of new notes and new warrants. An agreement with US Airways paved way for the filing of the plan. Mesa Air's Plan of Reorganization became effective March 1, 2011. The Company's restructuring accomplishments included elimination of 100 excess aircraft and associated leases and debt which contributed to the deleveraging of Mesa's balance sheet in the approximate amount of $700 million in capitalized leases and $50 million in debt, and extending the term of the code-share agreement with US Airways through September 2015. Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Mesa Air Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000). MF GLOBAL: Corzine Disregarded Former Chief Risk Officer's Warning ------------------------------------------------------------------ The Wall Street Journal's Aaron Lucchetti and Dow Jones Newswires' Julie Steinberg report that people familiar with the matter said MF Global Holdings Ltd.'s chief risk officer, Michael Roseman, raised serious concerns several times last year to directors at the securities firm about the growing bet on European bonds by MF Global's then Chairman and CEO Jon S. Corzine. People familiar with the situation said Mr. Roseman also expressed concerns directly to Mr. Corzine in meetings of just the two men and with other people present. Mr. Roseman contended MF Global didn't have enough spare cash to withstand the risks of its position in bonds of Italy, Spain, Portugal, Ireland and Belgium. He also presented gloomy hypothetical scenarios of what could happen if MF Global's credit rating was downgraded because of the exposure. People familiar with the matter said Mr. Corzine responded to Mr. Roseman's concerns that some of the scenarios were too extreme and likely impossible, and that the likely profit was worth the risks. The sources said the board allowed the company's exposure to troubled European sovereign debt to swell from about $1.5 billion in late 2010 to $6.3 billion shortly before MF Global tumbled into bankruptcy Oct. 31. Mr. Roseman resigned in March. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: American Farmers Unlikely Victims of Demise ------------------------------------------------------ American farmers are unlikely victims of the recent collapse of brokerage house, MF Global, Paul Napoli, Esq., an attorney at Napoli Bern Ripka Shkolnik LLP, in New York, wrote on Nov. 26. According to Mr. Napoli, farmers use futures contracts to avoid market volatility by locking in a price for their crop or livestock in advance. Both parties in a futures contract put up a deposit or performance bond held in an account until settlement of the contract, he said. Thousands of farmers and grain elevators across the United States used the commodities and derivatives brokerage firm MF Global Inc., the broker/dealer unit of parent company MF Global Holdings, according to Mr. Napoli. Millions of their capital is in accounts with the failed firm, or should be, he noted. Mr. Napoli may be reached at: Paul Napoli, Esq. NAPOLI BERN RIPKA SHKOLNIK LLP 350 5th Avenue Suite 7413 New York, New York 10118 Tel: (866) 735-1102 Ext 300 About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: Kim Eng Decides Not to Buy Asian Business ---------------------------------------------------- Kim Eng Holdings Ltd. considered buying the Asian operations of MF Global but decided not to proceed with a deal as the numbers did not stack up, the firm's chief executive said, according to Reuters. "We've had a look at the entire platform throughout the region and the numbers did not stack up," Ronald Ooi, Kim Eng chairman and chief executive officer was quoted in the report as saying. The CEO disclosed that Kim Eng has around $4 million tied up with MF Global but said they made provisions for this and that all client accounts are secure, Reuters added. Meanwhile, KPMG LLP, the provisional liquidator of MF Global Singapore Pte, disclosed that it has taken control of more than $180 million of customer funds, Alan Soughley and Chanya Chanjaroen of Bloomberg News reported in another article. Bob Yap, head of transactions and restructuring at KPMG in Singapore, related in an e-mailed statement that his firm is confident of making "significant progress in getting the remainder of the total $309 million maintained in financial institutions, according to Bloomberg. Out of the $309 million, about $160 million was held with financial institutions in Singapore, and about $149 million with various institutions in Malaysia, Hong Kong, the United Kingdom, Dubai, Indonesia and Taiwan, according to KPMG's statement. KPMG further noted an additional $177.9 million has been identified as being maintained with third-party brokers and clearing members. KPMG hopes to return the funds back to customers once the verification and reconciliation processes are completed, Bloomberg added. In Australia, administrators of MF Global were forced to shut down the futures trading firm on Nov. 19 after failing to find any buyers, a separate report by Andrew Main of The Australian disclosed. About 100 employees were let go with a few number remaining to assist with the administration, according to The Australian. For now, the bigger unresolved issue is that while the administrators expect to get back most of the $80 million owed by counterparties in Australia, there is a further $87 million owed by overseas counterparties all but one of which are affiliates of MF Global, The Australian relayed. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: Trustee to Receive $1.3 Billion From Harris Bank ----------------------------------------------------------- James W. Giddens, trustee for the liquidation of the business of MF Global Inc., will receive $1.3 billion from Chicago-based Harris Bank, which will be the last significant flow of cash into the brokerage unit's estate Tiffany Kary of Bloomberg News reported. The disclosure was made by the SIPA Trustee's spokesperson at a recent Court hearing, according to the report. The SIPA Trustee earlier said he expected to receive funds from a bank he did not previously identify, the report added. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: Wind-Down Fees May Reach $100 Million In A Year ---------------------------------------------------------- Fees for liquidating MF Global Inc. could reach $100 million in a year based on lawyers' estimates and costs to wind down two other brokerages, Lehman Brothers Inc. and Bernard Madoff's firm, Linda Sandler of Bloomberg News reported. James Giddens, the trustee overseeing the liquidation of MFGI, and his law firm are supervising 100 Deloitte LLP consultants, 60 Ernst & Young LLP forensic accountants and consultants, and 190 former MF Global employees, the report relayed, citing a Nov. 20 statement. They are also working with the U.S. Department of Justice, securities and commodities regulators, exchanges and clearing houses to transfer accounts and investigate missing customer money, the report added. "For MF Global, $100 million is a good number, unless the missing funds become very complex," Chip Bowles, Esq., at Greenebaum Doll & McDonald PLLC, in Louisville, Kentucky -- crb@gdm.com -- told Bloomberg. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MSR RESORT: Sues Hilton Over Undisclosed Tenant-Lender Agreements ----------------------------------------------------------------- Hilary Russ at Bankruptcy Law360 reports that MSR Resort Golf Course LLC, itself owned by Paulson & Co., sued Waldorf Astoria Management LLC, a unit of Hilton Worldwide Inc., on Thursday for trying to enforce tenant-lender agreements that it allegedly failed to previously disclose for three luxury hotels that were part of a $2.5 billion acquisition. 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. The resorts have agreement with lenders allowing the companies to remain in Chapter 11 at least until September 2012. Donald Trump has a contract to buy the Doral Golf Resort and Spa in Miami for $170 million. There will be an auction to learn if there is a better bid. The resorts have said that Trump's offer price implies a value for all the properties "significantly" exceeding the $1.5 billion in debt. NALCO CO: Moody's Lifts Senior Unsecured Debt Rating From 'Ba2' --------------------------------------------------------------- Moody's Investors Service downgraded Ecolab, Inc.'s (Ecolab) senior unsecured debt rating to Baa1 from A2 and the short term rating to Prime-2 from Prime-1, concluding a review for downgrade initiated on July 20, 2011. Concurrently, Moody's upgraded Nalco Company's (Nalco) senior unsecured debt ratings to Baa2 from Ba2 and withdrew Nalco Finance Holdings LLC's (Nalco Finance) Corporate Family Rating. These actions conclude a review for upgrade initiated on July 20, 2011 (see ratings actions below). The rating outlook for both Ecolab and Nalco is stable. Ecolab completed the acquisition of Nalco on December 1, 2011 in a transaction valued at $8.1 billion (including $2.7 billion of Nalco's net debt). All of Nalco's rated secured debt was refinanced at closing and the ratings for such debt have been withdrawn. Nalco's unsecured notes were not refinanced or guaranteed by Ecolab upon the closing of the acquisition; however, Moody's expects Ecolab to issue debt securities to refinance the Nalco debt. In addition, Moody's expects Ecolab will issue debt to refinance $3 billion of commercial paper or credit facility borrowings and facilitate the completion of all or a portion of a $1 billion share purchase. Moody's took these rating actions: Ecolab, Inc. Downgraded $250 million of senior unsecured notes to Baa1 from A2 Commercial paper, to Prime-2 from Prime-1 Nalco Company Upgraded guaranteed senior unsecured notes due 2019, to Baa2 from Ba2 Upgraded guaranteed senior unsecured notes due 2017, to Baa2 from Ba2 Withdrew senior secured revolver due 2014, Ba1 Withdrew senior secured term loan C due 2016, Ba1 Withdrew senior secured term loan C1 due 2016, Ba1 Withdrew senior secured term loan B due 2017, Ba1 Nalco Finance Holdings LLC Withdrew Corporate Family Rating, Ba2 Withdrew Probability of Default Rating, Ba2 RATINGS RATIONALE The downgrade of Ecolab's senior unsecured and short term ratings reflect the significant deterioration in credit metrics because of the debt financing for the acquisition and associated share purchase and integration risks. Pro forma for the transaction at September 30, 2011, Ecolab's adjusted debt to EBITDA will rise to about 4 times (assuming the full $1 billion share repurchase immediately upon closing of the acquisition) from 1.6 times. "Although these metrics will initially position the company weakly in the Baa1 rating category, Moody's expects the company to significantly reduce leverage in 2012 and 2013 through a combination of profitability growth and debt repayments," stated Vice President William Reed. Given the scale of the acquisition (Nalco will represent about 40% of consolidated sales), management and integration challenges are possible. Both companies operate in competitive markets and will need to continue to develop new products and innovate in order to maintain their competitive advantages. Strengths in Ecolab's new profile includes its scale (as measured by pro forma revenue), leading market positions in the commercial cleaning, sanitation and water treatment markets, solid geographic, customer and end market diversity, and favorable long term growth prospects. Ecolab has an adequate liquidity profile upon the closing of the acquisition with approximately $3.0 billion of commercial paper borrowings and $3.5 billion of committed backup facilities. The backup facilities are comprised of a $1.5 billion 5-year revolving credit facility (unrated) and $2.0 billion 364-day revolving credit facility (unrated). The 364-day facility contains a one year term-out provision at Ecolab's option. After the close of the acquisition, Ecolab expects to issue debt securities to refinance the majority of the commercial paper borrowings. The upgrade of Nalco's unsecured notes to Baa2 reflects its standalone credit profile of [Baa3] following the repayment of Nalco's secured debt and implied support from Ecolab that provides one notch of uplift. Moody's assessment of implied support from Ecolab reflects management's public statements of their interest in refinancing Nalco's remaining debt, the materiality and strategic importance of the Nalco business to Ecolab, and the likely financial and reputational risks to Ecolab of not supporting Nalco. Moody's anticipates that if Nalco's unsecured notes are not refinanced such notes will likely be guaranteed by Ecolab. If the notes are guaranteed by Ecolab, Moody's anticipates upgrading Nalco's senior unsecured rating to Baa1. Ecolab's Baa1 senior unsecured rating reflects Moody's expectation that if the Nalco debt is not refinanced by Ecolab in the short term after closing, Nalco and its major operating subsidiaries will guarantee Ecolab's unsecured indebtedness. The stable outlook reflects Moody's expectation of moderate revenue and profitability over the next 12 to 18 months. Through a combination of debt repayments and profitability growth, debt to EBITDA (reflecting Moody's adjustments) should approach 3 times by the end of 2012. The outlook could move to negative if refinancing efforts are not completed within the next six months. Assuming a successful refinancing, Ecolab's ratings could be downgraded if the company fails to materially reduce financial leverage over the next 12 to 18 months. This failure could be driven by more aggressive financial policies than expected, integration difficulties or weaker than expected operating performance. Given the significant weakening of credit metrics in connection with the Nalco acquisition and an expected $1 billion share purchase, an upgrade is unlikely over the near term. Over the intermediate term, the ratings could be upgraded if the company substantially improves credit metrics, sustains strong top and bottom line growth and demonstrates a commitment to conservative financial policies. The principal methodology used in rating Ecolab and Nalco was the Global Chemical Industry Methodology published December 2009. Ecolab, headquartered in St. Paul, Minnesota, is a leading global provider of cleaning, sanitizing, food safety and infection prevention products and services. Pro forma for the Nalco acquisition, revenues for the twelve months ended September 30, 2011 were approximately $10.8 billion. NATIONAL CENTURY: Ex-VP's Sentence Cut to 4 Years in Fraud Case --------------------------------------------------------------- A district judge lowered the sentence of a former executive of National Century Financial Enterprises Inc. from five to four years in a $1.9 billion corporate fraud case, according to a November 30, 2011 report by The Associated Press. U.S. District Judge Algenon Marbley in Columbus, Ohio, handed down the new sentence Wednesday for James Dierker, former vice- president of client development at NCFE. Earlier this year, a federal appeals court overturned Mr. Dierker's money laundering convictions and ordered him re- sentenced on a remaining conviction of conspiracy to commit securities and wire fraud, the report said. Mr. Dierker's attorneys asked for a shorter term while government prosecutors wanted the five-year sentence upheld, according to the report. About National Century Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- was the largest issuer of medical accounts receivable asset backed securities in the United States before it collapsed in bankruptcy in November 2002 amid allegations of widespread fraud and misappropriation of assets. To date, 10 senior executives of the company have been convicted or pled guilty to federal charges of conspiracy, securities fraud, wire fraud, and money laundering arising out of the NCFE securitization program. NCFE -- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust -- is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. Bankruptcy Creditors' Service, Inc., publishes NATIONAL CENTURY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by National Century Financial Enterprises Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) NATIONAL CENTURY: Poulsen Wants Settlement Agreements Unsealed -------------------------------------------------------------- Lance Poulsen, former chief executive officer of National Century Financial Enterprises Inc., filed a motion to access all settlement agreements that were filed under seal in the multi- district litigation. The move comes following reports indicating that J.P. Morgan Chase may have paid over $500 million to settle claims by bondholders. It is part of Mr. Poulsen's effort to pursue his lawsuit against Bank One N.A., which merged with J.P. Morgan in 2004, for its role in the collapse of NCFE and its "plot" to implicate him in the fraud scheme that pushed the company to bankruptcy. In court papers, Mr. Poulsen alleged that Bank One failed to discharge its duty as trustee of the securitization portfolio known as NPF XII by withholding certain information to bondholders because of their merger with J.P. Morgan. "Bank One withheld this information because of their impending merger with [J.P. Morgan] and the possible negative effects it might have," Mr. Poulsen said. The former NCFE chief executive also recounted how he was prohibited from telling the jury the "true range of [J.P. Morgan's involvement in the lawful operations of NCFE" during the trial of the fraud case. He said that the jury merely relied on the "false testimony of one embittered NCFE employee and the false statements by the government prosecutor." Mr. Poulsen also said that Bank One knew during the trial that he did not own or control the health care providers contrary to the government's allegations but the bank did not testify in his favor. The motion drew flak from PricewaterhouseCoopers LLP, Deloitte & Touche LLP, Metropolitan Life Insurance Company, Lloyds TSB Bank plc, Credit Suisse, J.P. Morgan, the Unencumbered Asset Trust and a group of Arizona bondholders. They argued that Mr. Poulsen did not provide any basis that he is entitled to access any private or confidential settlement agreements, and fact discovery in the lawsuit has long since closed, among other reasons. About National Century Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- was the largest issuer of medical accounts receivable asset backed securities in the United States before it collapsed in bankruptcy in November 2002 amid allegations of widespread fraud and misappropriation of assets. To date, 10 senior executives of the company have been convicted or pled guilty to federal charges of conspiracy, securities fraud, wire fraud, and money laundering arising out of the NCFE securitization program. NCFE -- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust -- is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. Bankruptcy Creditors' Service, Inc., publishes NATIONAL CENTURY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by National Century Financial Enterprises Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) NATIONAL CENTURY: Claims vs. Credit Suisse Entities Dismissed ------------------------------------------------------------- Erwin I. Katz Ltd. and FTI Consulting Inc. entered into an agreement, which calls for the dismissal of claims asserted against the Credit Suisse entities in the lawsuit, styled Unencumbered Asset Trust, et al. v. Credit Suisse First Boston, LLC, et al. Erwin I. Katz and FTI Consulting administer The Unencumbered Assets Trust and the VI/XII Collateral Trust, respectively. In a related development, the Credit Suisse entities withdrew a portion of their claims identified as the "indemnity/contribution claims," "cost and expenses claim," and "breach of duty claims. The move is intended only to withdraw the unliquidated portions of Credit Suisse's proofs of claim in the Chapter 11 case of National Century Financial Enterprises Inc. It neither increases nor decreases the amount of Credit Suisse's proportionate beneficial interest in the UAT, the VJ/XII Trust, the CSFB Claims Trust or NCFE' estates; or Credit Suisse's claim to past or future amounts, distributions or other proceeds. About National Century Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- was the largest issuer of medical accounts receivable asset backed securities in the United States before it collapsed in bankruptcy in November 2002 amid allegations of widespread fraud and misappropriation of assets. To date, 10 senior executives of the company have been convicted or pled guilty to federal charges of conspiracy, securities fraud, wire fraud, and money laundering arising out of the NCFE securitization program. NCFE -- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust -- is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. Bankruptcy Creditors' Service, Inc., publishes NATIONAL CENTURY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by National Century Financial Enterprises Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) NCI BUILDING: Moody's Revises Outlook on 'B3' to Negative --------------------------------------------------------- Moody's Investors Service revised the outlook for NCI Building Systems, Inc. ("NCI") to negative from stable and affirmed all of the company's existing ratings, including the B3 corporate family and probability of default ratings and the Caa1 rating for the company's senior secured term loan due in 2014. The following rating actions were taken: - B3 Corporate Family Rating affirmed - B3 Probability of Default Rating affirmed - Caa1 (LGD4, 66%) rating on $131.1 million senior secured term loan due 2014 affirmed RATINGS RATIONALE The change in rating outlook to negative from stable reflects NCI's continued inability to restore operating profitability on an annual basis and Moody's expectation that its credit metrics will remain weak for the next 12 to 18 months. Despite a year-over-year improvement in volumes, total revenue remains at close to 50% of pre-recession levels. In addition, the company's efforts to reduce costs have thus far not been sufficient to offset the effects of lower sales and rising steel prices on its operating margins. NCI is expected to make only small, voluntary prepayments on its term loan going forward, making a substantial decrease in debt leverage over the next 12 to 18 months less likely given that Moody's does not expect substantial improvement in EBITDA over this time period. (NCI has relatively low balance sheet debt consisting of only its $131 million senior secured term loan. However, to adjust for the company's operating leases and underfunded pension plan, Moody's increases debt by $67 million. In addition, to account for the debt-like attributes of the company's $268 million of preferred shares, Moody's assigns approximately $134 million of that amount -- 50% of the outstanding amount -- to balance sheet debt, bringing total adjusted debt to $331 million.) Free cash flow generation will remain weak until the company can consistently generate operating profits. This will be difficult to achieve, considering the uncertain prospects for a sustainable recovery in non-residential construction and the anticipated impact of spreading Eurozone contagion on the US economy. NCI's B3 corporate family rating reflects the company's weak operating performance and cash flow generation, as well as the prolonged weakness in non-residential construction. The rating also reflects the company's exposure to steel price volatility and the negative impact of rising steel prices on operating margins. The rating is supported by the company's reasonably strong unrestricted cash balance and undrawn revolver, as well as the absence of near-term debt maturities. The rating also considers NCI's strong market position, its product and end-use diversification, and the lack of significant regional customer concentrations within the US. A stabilization of the rating outlook could occur if NCI is able to return to operating profitability and maintain a low-single digit adjusted EBITA margin, resume generating positive free cash flow on a sustainable basis, and continue voluntary prepayments on the term loan to achieve leverage trending toward a 6x Moody's- adjusted debt to EBITDA. The ratings could come under pressure if the company continues to generate operating losses, maintains a Moody's-adjusted debt leverage in excess of 7.5x, fails to achieve sustained positive adjusted free cash flow to debt, engages in debt-financed acquisitions, or if conditions in non-residential construction sectors continue to deteriorate. The principal methodology used in rating NCI was the Global Manufacturing Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. NCI Building Systems, Inc. is one of North America's largest integrated manufacturers of metal products for the nonresidential building industry. In the trailing 12 months ended July 31, 2011, the company generated revenues and Moody's-adjusted EBITDA of $919 million and $34 million, respectively. NEW CLINTON: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: New Clinton Auto Service, Inc. dba New Clinton Auto Wash dba AAA Muffler Shocks & Springs dba New Clinton Auto Sales dba Auto Lab #137 366 North Gratiot Ave. Clinton Township, MI 48036 Bankruptcy Case No.: 11-70804 Chapter 11 Petition Date: December 1, 2011 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Walter Shapero Debtor's Counsel: Michael A. Greiner, Esq. FINANCIAL LAW GROUP, P.C. 29405 Hoover Warren, MI 48093 Tel: (586) 693-2000 Fax: (586) 693-2000 E-mail: mike@financiallawgroup.com Scheduled Assets: $79,500 Scheduled Debts: $1,040,232 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Valerian Fernandes, president. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- S&V Investment LLC 10-74968 11/18/11 NEWPAGE CORP: Creditors Seek to Probe Cerberus's Dealings --------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that NewPage Corp.'s unsecured creditors are seeking court permission to launch a probe of the distressed company's ties to Cerberus Capital Management LP, the private equity firm that owns it. About NewPage Corp. Headquartered in Miamisburg, Ohio, NewPage Corporation is the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended December 31, 2010. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers. These papers are used for corporate collateral, commercial printing, magazines, catalogs, books, coupons, inserts, newspapers, packaging applications and direct mail advertising. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a total annual production capacity of approximately 4.1 million tons of paper, including approximately 2.9 million tons of coated paper, approximately 1.0 million tons of uncoated paper and approximately 200,000 tons of specialty paper. NewPage, along with affiliates, filed Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12804) on Sept. 7, 2011. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., Dewey & Leboeuf LLP, in New York, serve as counsel. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, the Debtors disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. At an organizational meeting of creditors held on Sept. 21, 2011, the Committee selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. NewPage prevailed over most objections from the official creditors' committee and won agreement from the bankruptcy judge on final approval of $600 million in secured financing. Moody's Investors Service assigned a Ba2 rating to the $350 million first-out revolving debtor-in-possession credit facility and a B2 rating to the $250 million second-out debtor-in- possession term loan for NewPage. O&G LEASING: Deal on Automatic Stay OK'd, to Pay $4MM WSB's Claim ----------------------------------------------------------------- The Hon. Edward Ellington of the the U.S. Bankruptcy Court for the Southern District of Mississippi approved a stipulation between O&G Leasing, LLC, et al., and Washington State Bank resolving the issues raised and treatment of WSB's claim in the Debtors' Plan of Reorganization. Pursuant to the stipulation: 1. WSB will have an allowed secured claim of $4,504,177 for the purposes of distribution as to the Debtors' Plan; 2. The Debtor will pay WSB its allowed secured claim, $4,504,177, with interest at the rate of NY prime +2% with a floor of 6% and a ceiling of 8%. Beginning with collections received in September 2011, the Debtors will pay WSB the higher of (a) a fixed monthly payment of $35,000, or (b) a "Calculated Upper End Payment." 3. The WSB allowed secured claim will mature and balloon and be due and payable in full on Sept. 1, 2015. 4. The Debtor will place $140,000 on deposit with WSB to be held by WSB in a restricted reserve account and to be applied to the Debtors' monthly payment obligations in the event that the Debtors are unable to pay WSB the required $35,000 minimum monthly payment. 5. All amounts recovered by the Debtors in the pending civil action styled Zenergy, Inc. v. Peformance Drilling Company, LLC, net attorneys' fees and other costs of prosecution, will be paid to WSB to reduce the principal amount owed on the WSB allowed secured claim. 6. The Debtors will maintain insurance coverage of all WSB collateral and, as and when requested, provided written proof thereof to WSB. 7. Any Plan by the Debtors will not have any effect on the guaranty WSB holds from Ben Turnage. The order is not and will not be construed as a release of the guaranty or a waiver of any rights under the guaranty. 8. In the event of default by the debtors on their payments or performance obligations to WSB, WSB will provide written notice to the Debtors and Douglas C. Noble, bankruptcy counsel of the default. 9. The automatic stay of Section 362 of the Bankruptcy Code is modified to permit the Debtors to commence payment of the WSB allowed secured claim. 10. For as long as the Debtors are in compliance with the terms of the order, WSB consents to the Debtors' use of cash collateral. 11. The terms of the order and he agreements will be incorporated at the appropriate time into the Debtors' Plan and any subsequently filed or amended proposed by the Debtors and that the terms of the Plan will be modified, as necessary, to implement the same. WSB will support the Debtors' Plan and any subsequent plan. In this relation, the Court also approved the stipulation entered with First Security Bank, as Indenture Trustee, and WSB, respectively. The stipulations provides for: -- the withdrawal of the First Security's objection, provided however, that neither the withdrawal of the FSB objection nor the entry by the Court of the agreed order will bind FSB or prejudice FSB's rights with regard to any other issues that may arise in these cases, including but not limited to issues relating to confirmation of any plan; and -- the dismissal of these WSB's pleadings: 1. WSB's Motion to Prohibit Use of Cash Collateral; 2. WSB's Objection to Fee Applications; 3. WSB's Motion to Convert Case to Chapter 7; 4. WSB's Supplement to Objection to Fee Applications; 5. Debtors' Motion to Enforce Settlement; 6. WSB's Joinder; 7. Debtors' Motion to Strike the Joinder; 8. WSB's Response to Motion to Strike; 9. WSB's Response to Motion to Enforce Settlement; 10. FSB's Joinder in Objection to Professional Fees; 11. Debtors' Objection to Motion to Convert Case to Chapter 7; 12. Debtors' Objection to Motion to Prohibit Use of Cash Collateral; 13. Debtors' Response to Objection to Fee Applications; and 14. FSB's Limited Joinder in Motion. About O&G Leasing Jackson, Mississippi-based O&G Leasing, LLC, was formed in 2006 to acquire and construct land drilling rigs that it would lease to its wholly-owned subsidiary, Performance Drilling Company, LLC. Performance was formed to provide contract drilling services for ArkLaTex (Arkansas, Louisiana and Eastern Texas) region, as well as Alabama, Florida, Mississippi and Oklahoma. The Company filed for Chapter 11 bankruptcy protection (Bankr. S.D. Miss. Case No. 10-01851) on May 21, 2010. Douglas C. Noble, Esq., at McCraney Montagnet & Quin, PLLC, assists the Company in its restructuring effort. The Company estimated $10 million to $50 million in assets and $50 million to $100 million in liabilities. On the same day, Performance Drilling Company, LLC, filed for Chapter 11 bankruptcy protection. Performance Drilling estimated assets and debts of between $1 million to $10 million each. The Debtors' cases have been jointly administered under Case No. 10-01851 OFFICEMAX INC: Moody's Affirms 'B1' Corporate; Outlook Stable ------------------------------------------------------------- Moody's Investors Service changed the outlook of OfficeMax, Inc. ("OMX") to stable from negative, upgraded the speculative grade liquidity rating to SGL-1 from SGL-2, and affirmed the B1 corporate family and probability of default ratings. This rating was upgraded: OfficeMax, Inc. Speculative Grade Liquidity rating to SGL-1 from SGL-2 Ratings affirmed and LGD point estimates adjusted include: OfficeMax, Inc. Corporate family rating affirmed at B1; Probability of default rating affirmed at B1; Senior unsecured notes, debentures, and industrial revenue bonds to B2 (LGD5, 75%) from B2 (LGD5, 70%). American Foreign Power, Inc. Senior unsecured debentures to B2 (LGD5, 75%) from B2 (LGD5, 70%). RATINGS RATIONALE The change in outlook to stable reflects Moody's belief that the company's operating performance, driven by management's new strategic plan, is likely to improve, though the short-term positive impact on credit metrics is likely to be modest. "Moody's believes that OfficeMax's worst days are likely behind it, and while key credit metrics such as debt/EBITDA at 5.7 times and EBITA/interest of 1.5 times for the LTM ended September 24, 2011 are relatively weak for the B1 rating category, the company's improved liquidity provides additional comfort", stated Moody's Senior Analyst Charlie O'Shea. "This change in outlook also recognizes Moody's belief that absent a "double-dip" macroeconomic scenario OfficeMax will be able to solidify its B1 positioning in due course". The upgrade to SGL-1, representing very good liquidity, recognizes OMX's significant cash balances, with $485 million at September 24, 2011, and ample availability on its $650 million unrated asset-based revolving credit facility, as well as minimal near- term debt maturities. The upgrade also considers the recent successful re-financing of the company's asset-based revolving credit facility, which is now scheduled to mature in October 2016. The continued suspension of the company's approximately $45 million in annual dividends enhances this very good liquidity profile. The upgrade to SGL-1 also reflects Moody's belief that OMX will be able to fund its working capital, maintenance capital expenditure and mandatory debt amortization cash flow needs over the next twelve to eighteen months from a combination of internally generated cash and existing cash balances, with only minimal draws necessary under the credit facility. Ratings could be upgraded if operating performance improves sufficient to result in sustained debt/EBITDA of less than 5 times and EBITA/interest sustained well above 1.5 times. Ratings could be downgraded if the company is unable to continue to improve its quantitative credit profile, or if liquidity weakens due to either operating performance or financial policy issues. The principal methodology used in rating OfficeMax, Incorporated was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. OfficeMax, Incorporated (OMX) is the third-largest dedicated retailer of office supplies in the U.S., with annual revenues of around $7 billion. It operates about 983 stores throughout the U.S. and Mexico, and also maintains a substantial contract business which caters to commercial customers. ONCURE HOLDINGS: Moody's Lowers CFR to 'Caa1'; Outlook Negative --------------------------------------------------------------- Moody's Investors Service lowered the corporate family and probability of default ratings of OnCure Holdings, Inc., to Caa1. Concurrently, the rating on the $210 million senior secured notes was lowered to Caa1 from B3. The outlook is negative. These rating actions were taken: Corporate family rating, lowered to Caa1 from B3; Probability of default rating, lowered to Caa1 from B3; $210 million 11.75% senior secured notes, due 2017, lowered to Caa1 (LGD4, 56%) from B3 (LGD4, 54%). RATING RATIONALE The downgrade of the corporate family rating to Caa1 from B3 considers the difficult market environment including reimbursement pressures and volume softness which have fed into the company's weak operating and financial performance as well as projected weak liquidity position. Furthermore, reflecting the rating change is the uncertainty surrounding the Integrated Community Oncology Network, LLC ("ICON") management service agreement (MSA) negotiations. ICON notified OnCure in July of 2011 that it sought to terminate the MSA. Given OnCure's already limited interest coverage combined with negative free cash flow generation and modest cash balance, the loss of the ICON MSA would have a material impact on the company's financial position as the physician group represents approximately 14% of OnCure's total revenues. Moody's notes that OnCure and ICON currently operate under a Standstill Agreement under which both parties continue to perform their respective obligations under the MSA. The negative outlook reflects the company's weak liquidity profile at a time when it could lose a meaningful revenue source. In addition, the outlook considers industry conditions including a challenging reimbursement environment. The ratings could be downgraded if OnCure is unable to reach a favorable solution with the ICON MSA and/or its liquidity profile were to deteriorate including continued negative free cash flow generation and restricted access to the revolving credit facility. Furthermore, additional weakening in the company's financial and operating performance could pressure the rating. Also, debt financed acquisitions and escalations in legal proceedings could weigh on the ratings. The outlook could be changed back to stable if the company is able to maintain the current revenue base after resolving the ICON matter and/or improves its liquidity profile. In addition, for the outlook to be changed back to stable, same center revenue and EBITDA would have to show improvement. Stable outlook or ratings upgrade would have to be supported by a balanced reimbursement environment and steady or improving volumes. A ratings upgrade could occur if the company improves its interest coverage (EBITDA- CAPEX)-to-Interest Expense to 2 times, generates positive cash flow, and is able to maintain debt leverage below 6 times. OnCure's ratings were assigned by evaluating factors Moody's believes are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record of tolerance for risk. These attributes were compared against other issuers both within and outside of OnCure's core industry and the company's ratings are believed to be comparable to those other issuers of similar credit risk. The principal methodology used in this rating was Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. OnCure Holdings, Inc. is a provider of capital equipment and business management services to radiation oncology physician groups that treat patients at the company's cancer centers. At September 30, 2011, the company operated 38 facilities and generated $104 million and -$8 million in revenues and net income, respectively. OnCure is owned by Genstar Capital. OPPENHEIMER PARTNERS: Case Summary & 16 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Oppenheimer Partners Properties LLP 1502 E. Osborn Road Phoenix, AZ 85014 Bankruptcy Case No.: 11-33139 Chapter 11 Petition Date: December 2, 2011 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Robert C. Warnicke, Esq. GORDON SILVER 1 East Washington, Suite 400 Phoenix, AZ 85004 Tel: (602) 256-0400 Fax: (602) 256-0345 E-mail: phxbknotices@gordonsilver.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Eric Hamburger, managing partner. Debtor's List of 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ MidFirst Bank 1502 East Osborn $12,400,000 P.O. Box 76149 Road Oklahoma City, OK Phoenix, AZ 85014 73147-2149 Bank of America Line of Credit $76,462 P.O. Box 26078 Greensboro, NC 27420 Maricopa County Recorder Property Taxes due $33,526 P.O. Box 78574 due 03/12 Phoenix, AZ 85062 BCS Demolition Contractor $29,600 Whitfills Nursery Landscaping $16,500 PDP Electric Contractor $6,511 End 2 End Technologies Contractor $4,750 Home Depot Credit Credit Card $3,867 Services Details Landscaping Landscaping $2,652 Maintenance Cox Communications Cable Services $2,249 Apartment Search Cort Contractor $339 HD Facilities Credit Account $278 Maintenance Ferguson Electric Contractor $131 Century Link Telephone Service $42 Eric Hamburger Management Fees Unknown Kal Haytcher Management Fees Unknown OXLEY DEVELOPMENT: U.S. Trustee Unable to Form Committee -------------------------------------------------------- The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Oxley Development Company, LLC because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. Oxley Development Company, LLC, based in Kingsland, Georgia, filed for Chapter 11 bankruptcy (Bankr. S.D. Ga. Case No. 11-21338) on Oct. 31, 2011. In its petition, the Debtor scheduled assets of $125,700,000 and debts of $61,289,500. The petition was signed by Carl M. Drury, III, managing member. William S. Orange, III, Attorney at Law, is the Debtor's Chapter 11 counsel. PAETEC HOLDING: Moody's Raises Corp. Family Rating to 'Ba3' ----------------------------------------------------------- Moody's Investors Service upgraded the corporate family rating of Paetec Holding Corp. to Ba3 with a stable outlook from B2 following completion of the acquisition of Paetec by Windstream ("Windstream", Ba2/ Stable) on December 1, 2011. The ratings upgrade reflects Moody's view that the acquisition of Paetec by Windstream materially enhances Paetec's standalone credit profile, as Windstream has assumed or refinanced PAETEC's net debt of approximately $1.4 billion upon closing. The magnitude of the rating's lift has been capped at two notches based on Moody's published methodology to rating non-guaranteed subsidiaries. Moody's has taken these ratings actions: Upgrades: Issuer: Paetec Holding Corp -- Corporate Family Rating, to Ba3 from B2 -- Probability of Default Rating, to Ba3 from B2 -- Sr Secured Notes, to Ba1 (LGD3-35%) from Ba3 (LGD2-24%) -- Sr Unsecured Notes, to Ba2 (LGD3-41%) to Caa1 (LGD5-79%) Withdrawn: Issuer: Paetec Holding Corp -- Corporate Family Rating -- Probability of Default Rating -- Sr Sec Bank Credit Facility Ratings -- Speculative Grade Liquidity Ratings The outlook on Paetec debt is stable. RATINGS RATIONALE Moody's has withdrawn Paetec's senior secured credit facility ratings as these obligations were repaid at closing. Further, Moody's will withdraw Paetec's remaining ratings pursuant to Moody's guidelines for the withdrawal of ratings, as insufficient information will be available to Moody's to assess their standalone creditworthiness, as Paetec's debts are not unconditionally and irrevocably guaranteed by Windstream. Moody's does not view the recently issued guarantee by Windstream as effective credit substitution due to conditions in the guarantee documents which stipulate that the credit support can be revoked if Paetec ceases to be wholly owned by Windstream. This concludes the ratings review commenced when the acquisition agreement between Paetec and Windstream was announced on August 1, 2011. As part of the ratings actions, Moody's is also revising the instrument level loss given default ratings for Windstream Corporation, due to changes in the capital structure related to the Paetec debt absorption. Concurrent with this rating action, Moody's adjusted the various instrument ratings of Paetec Holding Corp, as listed above, in accordance with Moody's loss given default methodology. The principal methodology used in rating Paetec and Windstream was the Global Telecommunications Industry Methodology published in December 2008. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. PARC AT ROGERS: Withdraws Request for Authorization for Cash Use ---------------------------------------------------------------- Parc at Rogers, Limited Partnership, notifies the U.S. Bankruptcy Court for the Northern District of Texas Motion that has withdrawn its motion for authorization to use cash collateral which was filed on Nov. 8, 2011. As reported in the Troubled Company Reporter on Nov. 25, 2011, the Debtor sought permission to use cash collateral securing its obligations to Metropolitan National Bank in order to continue its business operation. The Debtor warned that it will suffer irreparable and immediate harm if the request is not granted. Metropolitan National Bank claims a first priority lien against the Debtor's property and the proceeds thereof pursuant to the loan obligations between the Debtor and MNB of $19,665,233. The TCR reported on Dec. 1, 2011, that the Debtor has asked for the dismissal of its Chapter 11 case as a result of an agreement with its largest secured creditor, Metropolitan National Bank, regarding the treatment of its claim in the bankruptcy. The Bank has agreed that the dismissal may be without prejudice to re- filing. About Parc at Rogers Parc at Rogers Limited Partnership in Dallas, Texas, owns and operates the Parc at Rogers Apartment Homes, an apartment complex in Rogers, Arkansas. It filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No. 11-37025) on Oct. 31, 2011. Judge Barbara J. Houser presides over the case. John Paul Stanford, Esq. -- jstanford@qsclpc.com -- at Quilling, Selander, Cummiskey and Lownds, serves as the Debtor's counsel. In its petition, the Debtor estimated assets and debts of $10 million to $50 million. The petition was signed by Steven A. Shelley, vice president of T. Whitman, LLC, the Debtor's general partner. PARK GREEN: Case Summary & 4 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Park Green LLC 2570 East Walnut Street Pasadena, CA 91107 Bankruptcy Case No.: 11-59258 Chapter 11 Petition Date: December 1, 2011 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Ernest M. Robles Debtor's Counsel: Lewis R Landau, Esq. 23564 Calabasas Rd., Suite 104 Calabasas, CA 91302 Tel: (888) 822-4340 Fax: (888) 822-4340 E-mail: lew@landaunet.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb11-59258.pdf The petition was signed by Steven C. Schultz, manager. PACIFIC RUBIALES: Fitch Rates Proposed $250-Mil. Debt at 'BB' ------------------------------------------------------------- Fitch Ratings expects to assign a 'BB' rating to Pacific Rubiales Energy Corp.'s (Pacific Rubiales) proposed USD250 million debt issuance due 2021. The company expects to use the proceeds from the issuance for general corporate purposes. Pacific Rubiales' ratings are supported by the company's leadership position as the largest independent oil and gas player in Colombia and its strong management with recognized expertise in heavy oil exploration and production. The ratings also reflect the company's strong liquidity and adequate leverage. Pacific Rubiales' credit quality is tempered by the company's small scale of production and relatively small reserve profile as well as its production concentration in the Rubiales-Piriri and La Creciente fields. The company also benefits somewhat from its partnerships with Ecopetrol ('BBB-' IDR by Fitch), Colombia's national oil and gas company, which supports Pacific Rubiales' investments and shares production. Small and Concentrated Production Profile: Pacific Rubiales' ratings reflect the company's production concentration and relatively small reserve base and production. Although Pacific Rubiales currently has exploration and production interest in 41 blocks in Colombia, Peru and Guatemala, this net production of approximately 88 thousand barrels of equivalent per day (boe/d) is concentrated in three fields. Rubiales-Piriri, Quifa and La Creciente produce heavy crude oil and gas and together account for almost all of current production. La Creciente, which produces natural gas, accounts for 12% of current production and Quifa, which has a longer concession than Rubiales 2016 expiration, now accounts for 22% of current production. This limited diversification exposes the company to operational as well as economical risks associated with small scale heavy oil production. In the future, diversification away from Rubiales- Piriri geographic location would be positive for the company's credit quality. Improving Operating Metrics: Pacific Rubiales' operating metrics have been improving rapidly and the company's growth strategy is considered somewhat aggressive. The company's reserve replacement ratio was 330% as of September 2011 and its current reserve life index is approximately 11 years using current production levels, net of royalties of approximately 88 thousand boe/d. During the past years, the company increased gross production to approximately 221,896 boe/d, from approximately 138,380 boe/d as of June 2010. As of September 2011, Pacific Rubiales' proved (1P); proved and probable, net of royalties, amount to approximately 273 million and 350 million respectively. The company's reserves are composed of heavy crude oil (73.4%) and natural gas (24.88%), with the balance being light and medium oil (<1%). As of Sept. 30, 2011, Pacific Rubiales had more than 14 million acres of prospective exploration blocks, which will require significant funds to develop. In the short term, the company plans to devote its efforts developing the Quifa, Sabanero and CPE-6 blocks, which surround and are near Rubiales-Piriri block. Solid Financial Profile: Pacific Rubiales' ratings reflect the company's adequate financial profile characterized by relatively low leverage and strong interest and debt service coverage. As of the last 12 months (LTM) ended Sept. 30, 2011, the company reported leverage ratios, as measured by total debt (including the unsecured subordinated convertibles of USD258 million) to EBITDA and total debt-to-total proved reserves of 0.5 times (x) and USD2.7 per barrels of oil equivalent (boe), respectively. As of Sept. 30, 2011, debt of approximately USD763.7 million was primarily composed of approximately USD450 million of senior unsecured notes with final maturity in 2016 and USD258 million of unsecured subordinated convertibles notes due in 2013, which was converted to equity during November 2011. The balance was capital lease obligations of the company. As of the LTM ended Sept. 30, 2011, Pacific Rubiales reported an EBITDA, as measured by operating income plus depreciation and stock-based compensation, of USD1.7 billion. Improving Production Profile: Pacific Rubiales' ratings reflect the company's improving production profile and reducing concentration. Historically the company's production was concentrated on the Rubiales-Piriri, which represented approximately 75% of total net production as of 2010. Nowadays this block, which concession expires in 2016, represents 63% of production, while the Quifa block, together with the adjacent Sabanero block, with near zero production in 2010 now represents 22% of production and 36% of 2P net reserves. Quifa concession expires in 2031. La Creciente, which produces natural gas, accounts for nearly 12% of current production. This increasing production diversification reduces the company's business risk. Negative Free Cash Flow Due to Large Capex: Free cash flow (cash flow from operations less capital expenditures) has been negative given the company's growth strategy. For the LTM ended Sept. 30, 2011, free cash flow was negative USD326.6 million mainly due to the significant capital expenditure of USD1.2 billion during the same period. Pacific Rubiales' significant capital expenditures plans over the next few years could continue to pressure free cash flow in the near term. Increasing production at the Rubiales-Piriri and reserves in the surrounding Quifa block are expected to account for the bulk of the company's capital expenditure, which is expected to be approximately USD2.9 billion over the next four years. Strong Liquidity Position: The company's current liquidity position is considered strong, characterized by robust cash on hand, strong cash flow generation and manageable short-term debt obligations. As of the LTM ended Sept. 30, 2011, Pacific Rubiales funds from operations (FFO) generation was USD1.3 billion and its cash on hand was USD325.5 million, while its short-term debt amounted to only USD7.9 million. The company has a USD350 million two year syndicated revolving credit facility, which as of Sept. 30, 2011, had not been used. Going forward, the company is expected to have a manageable debt amortization, although its liquidity position will be somewhat weaker due to its aggressive capital expenditure plant that will demand significant financial resources. Capital investments are expected to be funded for the most part with internal cash flow generation. PETTUS PROPERTIES: Court OKs Caudle & Spears for VFC Dispute ------------------------------------------------------------ Pettus Properties, Inc., sought and obtained permission from the U.S. Bankruptcy Court for the Western District of North Carolina to employ Caudle & Spears, PA, as special counsel. The Debtor together with a non-debtor company with substantially the same ownership as the Debtor, Sterling Properties of Carolina, LLC, are indebted to VFC Partners. Jerrod H. Pettus and the estate of Eleanor Phillips Pettus are purported guarantors of the obligation to VFC. VFC is purportedly secured with real property owned by the Debtor and Sterling. Caudle & Spears, in behalf of the Debtor, will file lawsuit against VFC Partners 8, LLC if a settlement deal with not be attained by The Debtor and VC Partners. The purpose of the suit would be to force VFC to honor its commitments to the Debtor, Sterling and the Guarantors. Harold C. Spears, partner at Caudle & Spears, PA, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Charlotte, North Carolina-based Pettus Properties, Inc., filed for Chapter 11 bankruptcy protection (Bankr. W.D.N.C. Case No. 10- 31632) on June 8, 2010. The Company estimated its assets and debts at $10,000,001 to $50,000,000. PINTAIL POINT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Pintail Point Farm, LLP dba Pintail Point, LLP dba Pintail Point Partnership 511 Pintail Point Farm Lane Queenstown, MD 21658 Bankruptcy Case No.: 11-33559 Chapter 11 Petition Date: December 1, 2011 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: Duncan W. Keir Debtor's Counsel: Marc Robert Kivitz, Esq. 201 N. Charles Street, Suite 1330 Baltimore, MD 21201 Tel: (410) 625-2300 Fax: (410) 576-0140 E-mail: mkivitz@aol.com Scheduled Assets: $9,841,122 Scheduled Debts: $13,655,346 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mdb11-33559.pdf The petition was signed by Louis M. Schaefer, Revocable Trust/Partner. PORTER HAYDEN: Subpoena Dispute Goes to Maryland Court ------------------------------------------------------ Magistrate Judge William G. Cobb of the United States District Court for the District of Nevada sent objections to the subpoena served on the Western Asbestos Settlement Trust to the United States District Court for the District of Maryland, Baltimore Division, where a insurance coverage lawsuit is pending. Before the Nevada court is a Motion to Compel Compliance with Subpoena filed by National Union Fire Insurance Company of Pittsburgh, Pa. and American Home Assurance Company. The Insurers wish to compel compliance with a subpoena issued to third party, WAST. While the parties' joint statement indicates an agreement that the Motion to Compel need not be heard, the motion was not withdrawn, and the parties further agreed that an issue with respect to the subpoena remained to be heard and determined by the Nevada court. The matter arises out of litigation currently pending in the U.S. District Court for the District of Maryland, National Union Fire Insurance Company of Pittsburgh, Pa., et al. v. Porter Hayden Company, 1:03-cv-03408-CCB, and Porter Hayden Co., et al. v. National Union Fire Ins. Co. Of Pittsburgh, Pa., 1:03-cv-03414- CCB. The Coverage Action arose out of a dispute between the Porter Hayden Company and its insurers, National Union Fire Insurance Company of Pittsburgh, Pa., and American Home Assurance Company. Porter Hayden was an industrial and commercial insulation contractor operating in the Mid-Atlantic states from the 1920s to the late 1980s. Until 1973, some of the insulation materials handled, sold or distributed by Porter Hayden contained asbestos. In 2000, the Coverage Action was filed, seeking to determine the extent of any obligation on the part of the Insurers to defend and indemnify Porter Hayden for its asbestos bodily injury liabilities. In 2003, Porter Hayden filed a petition in bankruptcy and pursued a chapter 11 reorganization with a channeling injunction issued under 11 U.S.C. Sec. 524(g). Porter Hayden's reorganization plan was confirmed in 2006, and all of its non-liquidated asbestos-related bodily injury liabilities, existing or future, were channeled to the Porter Hayden Bodily Injury Trust. In the course of discovery in the Coverage Action, the Insurers issued Federal Rule of Civil Procedure 45 subpoenas to four asbestos claims processing facilities and to WAST. WAST has objected to certain aspects of the subpoena. Asbestos claims processing facilities, and asbestos trusts administer the submission, processing and payment of claims for compensation for asbestos-related bodily injuries by individuals against a number of former tort defendants. Specifically, WAST, located in Nevada, administers claims for the MacArthur Company, Western Asbestos Company and Western MacArthur Company. The subpoenas were issued from the district courts where the claims processing facilities were located, New Jersey, Virginia, Delaware, Pennsylvania, and Nevada. The subpoenas sought documents from WAST and the claims processing facilities with respect to claimants who brought asbestos bodily injury claims against both the PHBIT and any of the other trusts for which the claims processing facilities handle claims. The Insurers have argued in the Coverage Action that if they owe any obligation to reimburse Porter Hayden for bodily injury claims that have been paid through the PHBIT, then the amounts of such settlements must have been reasonable. The Insurers wish to determine through the documents requested in the subpoenas whether claimants who filed claims for compensation with both PHBIT and one or more other trusts provided consistent information to each trust as to work, exposure and medical history. The documents, the Insurers argue, will allow them to determine the reasonableness of the claims settlements paid by the PHBIT, both as to consistency and value. Each of the claims processing facilities and WAST issued objections to the subpoenas. Through meet and confer efforts, the Insurers agreed to limit the scope of information sought, and in turn the claim processing facilities and WAST agreed to produce that limited amount of claimant information. Each of these agreements, however, was contingent upon WAST and Insurers entering into a confidentiality agreement and protective order, to be filed in the Coverage Action, to protect the claimants' confidential information and to provide a process by which the claimants could object to the production of their claim information. As to each of the claims processing facilities, except for WAST, a confidentiality agreement and protective order has been entered into, the claimants have been notified of the proposed production, and counsel on their behalf have filed objections in the Coverage Action in Maryland. Those objections, along with other discovery motions, are set for a hearing in the District of Maryland on Dec. 15, 2011. After being served with the subpoena, WAST reserved its right to serve objections to production of the materials sought pursuant to Rule 45(c)(2)(B). After unsuccessful attempts between the Insurers and WAST to resolve the scope of the subpoenas, the Insurers brought the Motion to Compel. In the interim, with respect to the subpoena issued to WAST, the Insurers agreed to limit the requested information to the claim forms submitted by the claimants, and WAST agreed to provide that information, subject to measures to protect the claimants. The parties have already taken the initial steps toward that production. The only remaining point of contention is where the claimants themselves should file any objections they may have to the document production, i.e., the District of Nevada, where the subpoena was issued; or Maryland, where the Coverage Action is pending, and where the objections from claimants in other jurisdictions are being resolved. The Nevada case is NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., AND AMERICAN HOME ASSURANCE COMPANY, v. PORTER HAYDEN COMPANY, et al., No. 3:11-cv-00014 (D. Nev.). A copy of the Court's Dec. 2, 2011 Order is available at http://is.gd/0Rei5B from Leagle.com. PREMIER TRAILER: Court Confirms Prepackaged Plan of Reorganization ------------------------------------------------------------------ On Nov. 29, 2011, the U.S. Bankruptcy Court for the District of Delaware approved and confirmed the Prepackaged Joint Chapter 11 of Reorganization of PTL Holdings, LLC, et al., as filed on Sept. 23, 2011. First Lien Credit Agreement Claims in Class 3 voted to accept the Plan by the requisite numbers and amounts, determined without including any acceptance of the Plan by an insider, thereby satisfying the requirements of Section 1129(a)(10) of the Bankruptcy Code. The Bankruptcy Court overruled all objections (to the extent not withdrawn) to the Plan and the Disclosure Statement, including the objection filed by Fifth Street Finance Corp. As reported in the TCR on Dec. 1, 2011, Fifth Street Finance Corp., asked the Bankruptcy Court to reconsider or amend its Nov. 10, 2011 opinion regarding confirmation of the prepackaged joint plan of reorganization of PTL Holdings LLC, et al., for the reason that not all of the arguments made by Fifth Street were addressed in the opinion. The Debtors objected to the motion for reconsideration, saying that each of the points raised by Fifth Street were nothing more than a re-statement of the same arguments previously advanced by Fifth Street over the course of a three-day trial. The Plan, which the Debtors filed along with their bankruptcy petitions, proposes to restructure and significantly deleverage the Debtors' capital structure. It would exchange Garrison Investment Group's first lien debt for 100% of the equity in the reorganized business (subject to dilution from proposed equity and stock options to be provided to management). It further provides that the Debtors will have access to at least $20 million of new financing for working capital purposes. This financing is the crux of the Debtors' reorganization strategy, which is predicated on the high per-unit lease rates for new trailers that the Debtors will use the new money to purchase. The Plan also contemplates that the Debtors will assume the Stoughton Leases. The Plan does not, however, provide Fifth Street with a recovery. Fifth Street holds $27 million of second lien debt of the Debtors. Garrison holds roughly $84 million of first lien debt of the Debtors. The Plan's treatment of Fifth Street's second lien debt is based on an estimate of the reorganized Debtors' total enterprise value prepared by Andrew Torgove, a managing director at Lazard Middle Market LLC. Mr. Torgove's first report, dated Aug. 12, 2011, estimated a TEV range for the reorganized Debtors of between $74 million and $99 million, with a midpoint of $86.5 million. After errors were discovered in that report, Mr. Torgove issued a "Valuation Report Supplement," dated Sept. 27, 2011, and increased the TEV range to $76 million to $102 million, with a midpoint value of $89 million. Fifth Street is entitled to a recovery only if the Court finds that the reorganized Debtors' TEV is greater than $110 million (the $26 million Stoughton Lease claim plus the $84 million Garrison first lien claim). If the Debtors' TEV surpasses that hurdle, then Fifth Street is in the money and the Plan is unconfirmable because it violates 11 U.S.C. Sec. 1129. The Court conducted a three-day confirmation hearing on the Plan on Oct. 3-5, 2011. According to Judge Shannon, the Debtors have carried their burden to demonstrate that the TEV of the Debtors' business is insufficient to provide for a recovery to the second lien secured creditor. DIP Loan Extension The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware approved on Nov. 29, 2011, a fifth stipulation entered between Premier Trailer Leasing, Inc., et al., and Garrison Loan Agency Services LLC, as administrative agent, extending the commitment termination date in the final DIP order to the earliest to occur of: (1) Dec. 5, 2011, (ii) the effective date of a plan of reorganization, or (iii) the occurrence of an event of default under the First Lien Credit Agreement. About Premier Trailer Leasing Founded in 2005, PTL Holdings LLC and Premier Trailer Leasing, Inc., provide semi-trailer rentals, specializing in road-ready semi-vans and flatbeds for the mid-market segment of the transportation industry. Headquartered in Grapevine, Texas, they operate their business out of 19 branches in 15 different states in the United States. PTL Holdings and Premier sought bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12676) on Aug. 23, 2011. Brendan Linehan Shannon presides over the case. Pachulski Stang Ziehl & Jones LLP serves as the Debtors' bankruptcy counsel. Kurtzman Carson Consultants, LLC, serves as claims and noticing agent. PTL Holdings estimated $100 million to $500 million in assets and debts. The petitions were signed by Scott J. Nelson, chief executive officer. Garrison Loan Agency Services LLC, the administrative agent under the First Lien Credit Agreement, is represented by Proskauer Rose LLP. Second lien lender Fifth Street Mezzanine Partners III, L.P., is represented by Young Conaway Stargatt & Taylor LLP and Kramer Levin Naftalis & Frankel LLP. On the Petition Date, the Debtors filed a Prepackaged Plan. The primary purpose of the Plan is to effectuate the restructuring and substantial de-leveraging of the Debtors' capital structure in order to bring it into alignment with the Debtors' present and future operating prospects and to provide the Debtors with greater liquidity. The Plan gives the First Lien Lenders, owed $84 million, 100% of the equity of reorganized Premier in exchange for the discharge of obligations owed under the First Lien Credit Agreement. Holders of Second Lien Credit Agreement Claims, worth $27,100,000, and holders of general unsecured claims, worth $550,000, will get nothing. A statutory committee of unsecured creditors has not been appointed in the Debtors' cases. PURE BEAUTY: Obtains Final OK to Use Cash Collateral Until Dec. 18 ------------------------------------------------------------------ On Nov. 22, 2011, the U.S. Bankruptcy Court for the District of Delaware entered a final order authorizing Pure Beauty Salons & Boutiques, Inc., to use cash collateral of Regis Corporation, pursuant to a budget. Actual disbursements will not exceed the amount set forth in the budget by more than 10%. The Debtors' authority to use cash collateral will automatically expire upon the earlier of Dec. 18, 2011, which is the date that is 75 days form the Petition Date; or (ii) regardless of whether the Debtors have expended the entire amount set forth in the budget, the failure by the Debtors to comply with any provision of this Final Order, which failure is not remedied within 5 days of written notice of that failure. The Debtors and Regis, after prior consultation with the Official Committee of Unsecured Creditors, may agree to extend the Initial Term without further Court authority provided that the extension is on substantially the same terms as this Final Order, or any subsequent modification hereof. The Debtors owe Regis $32.5 million, which is fully secured by substantially all of the Debtors' personal and real property and other assets. The Secured Obligation is the only secured debt in the Debtors' capital structure. As adequate protection, Regis is granted a Replacement Lien in all and property and assets of the Debtors to secure an amount of Regis's prepetition claims equal to the aggregate diminution in the value of the Prepetition Collateral resulting from the Debtor's use of the cash collateral. In addition to the Replacement Lien, subject only to the Carve-Out for (a) professional fees and expenses incurred by the Debtors and the Committee and (b) United States Trustee Fees, Regis will have a Superpriority Claim under Section 507(b) of the Bankruptcy Code. A copy of the final cash collateral order is available for free at http://bankrupt.com/misc/purebeauty.dkt202.pdf About Pure Beauty Pure Beauty Salons & Boutiques, Inc., and its affiliated company BeautyFirst Franchise Corp., operate a chain of hair care and beauty supply stores under the trade names Trade Secret, Beauty Express, BeautyFirst, PureBeauty, and Winston's Barber Shop. Pure Beauty Salons & Boutiques, Inc. operates and/or owns 436 stores and BeautyFirst Franchise Corp. has agreements with 13 franchisees that operate 22 BeautyFirst and 7 Trade Secret Stores. Pure Beauty Salons & Boutiques, Inc., is back in Chapter 11 after having been sold out of Chapter 11 last year. The prior case was dismissed after the sale was completed. The previous case was In re Trade Secret Inc., 10-12153, in the same court. 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). Joseph M. Barry, Esq., Kenneth J. Enos, Esq., and Ryan M. Bartley, Esq., at 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. In its schedules, Pure Beauty Salons disclosed $36,444,963 in assets and $55,215,590 in liabilities as of the Petition Date. In its schedules, BeautyFirst Franchise disclosed $1,716,985 in assets and $36,761,086 in liabilities as of the Petition Date. The Debtors owe $15 million to vendors and landlords. The petition was signed by Brian Luborsky, chief executive officer. Attorneys at Pachulski Stang Ziehl & Jones LLP represent the Official Committee of Unsecured Creditors. 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. PURE BEAUTY: Court Approves Bid Protocol; Jan. 13 Auction Sale Set ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approved on Nov. 23, 2011, bidding procedures for the sale of certain assets of Pure Beauty Salons & Boutiques, Inc., and BeautyFirst Franchise Corp. Qualified bids must be received no later than 4:00 p.m. on Jan. 10, 2012. If a qualified bid other than Regis Corp.'s bid is received, the auction will be held on Jan. 13, 2012, at 10:00 a.m. at the offices of Young Conaway Stargatt & Taylor, LLP, 1000 West Street, 17th Floor, in Wilmington, Delaware. Objections, if any, to the sale, including any objections to the assumption and assignment of an assumed contract, must be filed no later than 4:00 p.m. on Jan. 10, 2012. To the extent that the Purchaser is not the Successful Bidder and an alternative Successful bidder is seeking to have certain Assumed Contracts assumed and assigned as part of an alternative transaction, the non-Debtor parties to the Assumed Contracts will have until the Sale hearing to raise objections to the sale to the alternative Successful Bidder. The Sale Gearing will be held on Jan. 19, 2012, at 2:00 p.m. A copy of the bid procedures order is available for free at: http://bankrupt.com/misc/purebeauty.dkt209.pdf As reported in the TCR on Nov. 29, 2011, before the new bankruptcy, an agreement was negotiated for former owner Regis Corp. and a newly formed affiliate of Luborsky Family Trust II 2009, an insider of the Debtors, to purchase the business in exchange for $32.5 million in debt held by Regis and the assumption of about $13 million in liabilities. The two prospective buyers were involved in the prior Chapter 11 sale. About Pure Beauty Pure Beauty Salons & Boutiques, Inc., and its affiliated company BeautyFirst Franchise Corp., operate a chain of hair care and beauty supply stores under the trade names Trade Secret, Beauty Express, BeautyFirst, PureBeauty, and Winston's Barber Shop. Pure Beauty Salons & Boutiques, Inc. operates and/or owns 436 stores and BeautyFirst Franchise Corp. has agreements with 13 franchisees that operate 22 BeautyFirst and 7 Trade Secret Stores. Pure Beauty Salons & Boutiques, Inc., is back in Chapter 11 after having been sold out of Chapter 11 last year. The prior case was dismissed after the sale was completed. The previous case was In re Trade Secret Inc., 10-12153, in the same court. 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). Joseph M. Barry, Esq., Kenneth J. Enos, Esq., and Ryan M. Bartley, Esq., at 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. In its schedules, Pure Beauty Salons disclosed $36,444,963 in assets and $55,215,590 in liabilities as of the Petition Date. In its schedules, BeautyFirst Franchise disclosed $1,716,985 in assets and $36,761,086 in liabilities as of the Petition Date. The Debtors owe $15 million to vendors and landlords. The petition was signed by Brian Luborsky, chief executive officer. Attorneys at Pachulski Stang Ziehl & Jones LLP represent the Official Committee of Unsecured Creditors. 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. PURE BEAUTY: Files Schedules of Assets and Liabilities ------------------------------------------------------ Pure Beauty Salons & Boutiques, Inc., filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $36,444,963 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $36,444,017 E. Creditors Holding Unsecured Priority Claims $47,774 F. Creditors Holding Unsecured Non-priority Claims $18,723,799 ----------- ----------- TOTAL $36,444,963 $55,215,590 A copy of the Schedules is available for free at: http://bankrupt.com/misc/purebeauty.dkt167.pdf About Pure Beauty Pure Beauty Salons & Boutiques, Inc., and its affiliated company BeautyFirst Franchise Corp., operate a chain of hair care and beauty supply stores under the trade names Trade Secret, Beauty Express, BeautyFirst, PureBeauty, and Winston's Barber Shop. Pure Beauty Salons & Boutiques, Inc. operates and/or owns 436 stores and BeautyFirst Franchise Corp. has agreements with 13 franchisees that operate 22 BeautyFirst and 7 Trade Secret Stores. Pure Beauty Salons & Boutiques, Inc., is back in Chapter 11 after having been sold out of Chapter 11 last year. The prior case was dismissed after the sale was completed. The previous case was In re Trade Secret Inc., 10-12153, in the same court. 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). Joseph M. Barry, Esq., Kenneth J. Enos, Esq., and Ryan M. Bartley, Esq., at 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. In its schedules, Pure Beauty Salons disclosed $36,444,963 in assets and $55,215,590 in liabilities as of the Petition Date. In its schedules, BeautyFirst Franchise disclosed $1,716,985 in assets and $36,761,086 in liabilities as of the Petition Date. The Debtors owe $15 million to vendors and landlords. The petition was signed by Brian Luborsky, chief executive officer. Attorneys at Pachulski Stang Ziehl & Jones LLP represent the Official Committee of Unsecured Creditors. 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. PUTNAM STRUCTURED: Moody's Affirms 'C' Ratings on 2 Note Classes ---------------------------------------------------------------- Moody's has affirmed the ratings of all classes of Notes issued by Putnam Structured Product Funding 2003-1 despite an increase in Moody's Weighted Average Rating Factor (WARF) and an increase in Defaulted Securities. The affirmations are due to collateral amortization as well as principal and interest payments from Defaulted Securities which have helped to mitigate the other negative credit factors. The rating action is the result of Moody's on-going surveillance of commercial real estate collateralized debt obligation (CRE CDO and Re-REMIC) transactions. Moody's rating action is: Cl. A-1LT-a, Affirmed at B2 (sf); previously on Mar 20, 2009 Downgraded to B2 (sf) Cl. A-1LT-b, Affirmed at B2 (sf); previously on Apr 16, 2010 Assigned B2 (sf) Cl. A-1LT-c, Affirmed at B2 (sf); previously on Apr 16, 2010 Assigned B2 (sf) Cl. A-2, Affirmed at Caa3 (sf); previously on Dec 3, 2010 Downgraded to Caa3 (sf) Cl. B, Affirmed at Ca (sf); previously on Mar 20, 2009 Downgraded to Ca (sf) Cl. C, Affirmed at C (sf); previously on Mar 20, 2009 Downgraded to C (sf) Equity, Affirmed at C (sf); previously on Mar 20, 2009 Downgraded to C (sf) RATINGS RATIONALE Putnam Structured Product Funding 2003-1 Ltd. is a static cash CRE CDO transaction backed by a portfolio of residential mortagage backed securities (primarily in the form of Home Equity and Alt-A securities ) (41.8% of the pool balance), commercial mortgage backed securities (CMBS) (38.2%), CDOs (primarily in the form of CRE CDOs and ABS CDOs )(14.2%) and real estate investment trust (REIT) debt (5.9%). The collateral pool includes both cash collateral and synthetic reference obligations. As of the November 7, 2011 Trustee report, the aggregate Note balance of the transaction, including preferred shares, $417.3 million from $561.0 million at issuance, with the paydown directed to the Class A-1LT Notes, as a result of amortization of the underlying collateral and the failing of the Class A/B par value test. There are fifty-five assets with a par balance of $96.5 million (22.5% of the current pool balance) that are considered Defaulted Securities as of the November 7, 2011 Trustee report. Eighteen of these assets (55.8% of the defaulted balance) are CMBS, thirty- three assets are ABS (28.2%), and four assets are CDOs (16.0%). Defaulted Obligations that are not CMBS are defined as assets that have defaulted with respect to interest or principal payments. While there have been limited realized losses to date, Moody's does expect significant losses to occur once they are realized. Moody's has identified the following parameters as key indicators of the expected loss within CRE CDO transactions: WARF, weighted average life (WAL), weighted average recovery rate (WARR), and Moody's asset correlation (MAC). These parameters are typically modeled as actual parameters for static deals and as covenants for managed deals. WARF is a primary measure of the credit quality of a CRE CDO pool. Moody's has completed updated credit estimates for the non-Moody's rated collateral. The bottom-dollar WARF is a measure of the default probability within a collateral pool. Moody's modeled a bottom-dollar WARF of 5,138 compared to 3,915 at last review. The distribution of current ratings and credit estimates is as follows: Aaa-Aa3 (11.4% compared to 11.4% at last review), A1-A3 (7.5% compared to 10.9% at last review), Baa1-Baa3 (16.5% compared to 18.9% at last review), Ba1-Ba3 (5.4% compared to 11.0% at last review), B1-B3 (5.0% compared to 8.8% at last review), and Caa1-C (54.2% compared to 39.0% at last review). WAL acts to adjust the probability of default of the collateral in the pool for time. Moody's modeled to a WAL of 2.2 years compared to 2.9 at last review. WARR is the par-weighted average of the mean recovery values for the collateral assets in the pool. Moody's modeled a fixed WARR of 22.2% compared to 24.1% at last review. MAC is a single factor that describes the pair-wise asset correlation to the default distribution among the instruments within the collateral pool (i.e. the measure of diversity). Moody's modeled a MAC of 3.8% compared to 8.3% at last review. Moody's review incorporated CDOROM(R) v2.8, one of Moody's CDO rating models, which was released on January 24, 2011. The cash flow model, CDOEdge(R) v3.2.1.0, was used to analyze the cash flow waterfall and its effect on the capital structure of the deal. Changes in any one or combination of the key parameters may have rating implications on certain classes of rated notes. However, in many instances, a change in key parameter assumptions in certain stress scenarios may be offset by a change in one or more of the other key parameters. Rated notes are particularly sensitive to changes in recovery rate assumptions. Holding all other key parameters static, changing the recovery rate assumption down from 22% to 12% or up to 32% would result in average rating movement on the rated tranches of 0 to 2 notches downward and 0 to 2 notches upward, respectively. The performance expectations for a given variable indicate Moody's forward-looking view of the likely range of performance over the medium term. From time to time, Moody's may, if warranted, change these expectations. Performance that falls outside the given range may indicate that the collateral's credit quality is stronger or weaker than Moody's had anticipated when the related securities ratings were issued. Even so, a deviation from the expected range will not necessarily result in a rating action nor does performance within expectations preclude such actions. The decision to take (or not take) a rating action is dependent on an assessment of a range of factors including, but not exclusively, the performance metrics. Primary sources of assumption uncertainty are the extent of the slowdown in growth in the current macroeconomic environment and the commercial real estate property markets. While commercial real estate property markets are gaining momentum, a consistent upward trend will not be evident until the volume of transactions increases, distressed properties are cleared from the pipeline and job creation rebounds. The hotel and multifamily sectors are in recovery and improvements in the office sector continue, with fundamentals in Gateway cities outperforming their suburban counterparts. However, office demand is closely tied to employment, where fundamentals remain weak, so significant improvement may be delayed. Performance in the retail sector has been mixed with on-going rent deflation and leasing challenges. Across all property sectors, the availability of debt capital continues to improve with monetary policy expected to remain supportive and interest rate hikes postponed. Moody's central global macroeconomic scenario reflects an overall downward revision of forecasts since last quarter, amidst ongoing fiscal consolidation efforts, household and banking sector deleveraging, persistently high unemployment levels, and weak housing markets that will continue to constrain growth. The methodologies used in this rating were "Moody's Approach to Rating SF CDOs" published in November 2010, and "Moody's Approach to Rating Commercial Real Estate CDOs" published in July 2011. R.E. LOANS: Gets Final Approval for $20MM Wells Fargo DIP Loan -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized, on a final basis, R.E. Loans, LLC, et al., to, among other things: i) obtain postpetition loans and advances of up to the aggregate principal amount of $20 million, in addition to and exclusive of the amount of all prepetition indebtedness in the approximate amount of $68 million owed by the R.E. Loans to Wells Fargo Capital Finance, LLC, a Delaware limited liability company; and ii) ratify, extend, assume, adopt, and amend the existing loan, financing, and security agreements by and between the Debtors and the lender, filed as an Addendum to the financing motion. As of the Petition Date, R.E. Loans was indebted to the Noteholders in the amount of approximately $776 million. The Debtors would use the money to fund their working capital needs and for other general corporate purposes. As adequate protection from any diminution in value of the lenders' collateral, the Debtor will grant replacement liens upon the Debtors' property; and a superpriority administrative expense claim status, subject to certain carve out expenses. About R.E. Loans R.E. Loans LLC was, for many years, in the business of providing financing to home builders and developers of real property. R.E. Future LLC and Capital Salvage own the real property obtained following foreclosure proceedings initiated by R.E. Loans against its borrowers. R.E. Loans is the sole shareholder of Capital Salvage and the sole member of R.E. Future. B-4 Partners LLC is the sole member of R.E. Loans. As a result of the multiple defaults by R.E. Loans' borrowers, R.E. Loans has transitioned from being a lender to becoming a property management company. Lafayette, California-based R.E. Loans, R.E. Future and Capital Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge Barbara J. Houser presides over the case. Stutman, Treister & Glatt and Gardere, Wynne and Sewell, represent the Debtors as counsel. James A. Weissenborn at Mackinac serves as R.E. Loans' chief restructuring officer. The Debtors tapped Hines Smith Carder as their litigation and outside general counsel. The Debtors tapped Alixpartners, LLP as noticing agent. R.E. Loans disclosed $713,622,015 in assets and $886,002,786 in liabilities as of the Chapter 11 filing. William T. Neary, the U.S. Trustee for Region 6, appointed 12 members to the Official Committee of Noteholders of R.E. Loans LLC. R.E. LOANS: Debt Exchange OK'd to Market Interests in the Loans ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized R.E. Loans, LLC, to employ The Debt Exchange, Inc. to market its interests in the loans. The Debtor is authorized to advance to DebtX the set-up fee of $36,000 ($2,000 per loan) and the marketing fee equal to $50,000 to cover the costs of marketing the loans for sale, engaging with potential investors, and conducting the auction of the loans. The marketing fee will be credited against any success fee earned for the loans. DebtX will not be required to file fee applications in the Debtors' chapter 11 cases. The Debtors will seek approval to pay DebtX its compensation based on the formulas set forth in its employment agreement in any motion for approval of the sale of the loans. Wells Fargo Capital Finance, LLC will also be entitled to all rights, protections, benefits, and liens provided in the financing orders. To the best of the Debtor's knowledge, DebtX is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About R.E. Loans R.E. Loans LLC was, for many years, in the business of providing financing to home builders and developers of real property. R.E. Future LLC and Capital Salvage own the real property obtained following foreclosure proceedings initiated by R.E. Loans against its borrowers. R.E. Loans is the sole shareholder of Capital Salvage and the sole member of R.E. Future. B-4 Partners LLC is the sole member of R.E. Loans. As a result of the multiple defaults by R.E. Loans' borrowers, R.E. Loans has transitioned from being a lender to becoming a property management company. Lafayette, California-based R.E. Loans, R.E. Future and Capital Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge Barbara J. Houser presides over the case. Stutman, Treister & Glatt and Gardere, Wynne and Sewell, represent the Debtors as counsel. James A. Weissenborn at Mackinac serves as R.E. Loans' chief restructuring officer. The Debtors tapped Hines Smith Carder as their litigation and outside general counsel. The Debtors tapped Alixpartners, LLP as noticing agent. R.E. Loans disclosed $713,622,015 in assets and $886,002,786 in liabilities as of the Chapter 11 filing. William T. Neary, the U.S. Trustee for Region 6, appointed 12 members to the Official Committee of Noteholders of R.E. Loans LLC. R.E. LOANS: Asks Court to Reset Section 341 Meeting to Jan. 17 -------------------------------------------------------------- R.E. Loans, LLC, et al., ask the U.S. Bankruptcy Court for the Northern District of Texas to reset the 341 meeting of creditors to Jan. 17, 2011, at 1:30 p.m. and to extend the bar date for filing proofs of claims and interest to April 16, 2012, which would be 90 days after the proposed 341 meeting of creditors in accordance with L.B.R. 3003-1. The Debtors tell the Court that they have determined the the Bar Notice was not properly served in accordance with L.B.R. 2002-1 L.B.R. 2002-1 (a) (1), thus necessitating the resetting of the 341 meeting of creditors and the Bar Date. As reported in the TCR on Sept. 21, 2011, the United States Trustee for the Northern District of Texas in Dallas will convene a meeting of creditors pursuant to 11 U.S.C. Sec. 341(a) in the bankruptcy case of R.E. Loans, LLC, on Oct. 20, 2011, at 2:00 p.m. at Dallas, Room 976. Proofs of claim are due by Jan. 18, 2012. About R.E. Loans R.E. Loans, LLC, was, for many years, in the business of providing financing to home builders and developers of real property. R.E. Future LLC and Capital Salvage own the real property obtained following foreclosure proceedings initiated by R.E. Loans against its borrowers. R.E. Loans is the sole shareholder of Capital Salvage and the sole member of R.E. Future. B-4 Partners LLC is the sole member of R.E. Loans. As a result of the multiple defaults by R.E. Loans' borrowers, R.E. Loans has transitioned from being a lender to becoming a property management company. Lafayette, California-based R.E. Loans, R.E. Future and Capital Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge Barbara J. Houser presides over the case. Stutman, Treister & Glatt and Gardere, Wynne and Sewell, represent the Debtors as counsel. James A. Weissenborn at Mackinac serves as R.E. Loans' chief restructuring officer. The Debtors tapped Hines Smith Carder as their litigation and outside general counsel. R.E. Loans disclosed $713,622,015 in assets and $886,002,786 in liabilities as of the Chapter 11 filing. William T. Neary, the U.S. Trustee for Region 6, appointed 12 members to the Official Committee of Noteholders of R.E. Loans LLC. REAL MEX: Seeks Approval of Key Employee Incentive Plan ------------------------------------------------------- BankruptcyData.com reports that Real Mex Restaurants filed with the U.S. Bankruptcy Court a motion seeking approval to implement a two-tiered key employee incentive plan for nine employees. The total payout first tier would be $316,000, and payout for the second tier would be a range of $1,085,000 to $2,712,500. The Court scheduled a Dec. 19, 2011, hearing to consider the motion. About Real Mex Based in Cypress, California, Real Mex Restaurants, Inc., owns and operates restaurants, primarily through its major subsidiaries El Torito Restaurants, Inc., Chevys Restaurants, LLC, and Acapulco Restaurants, Inc. It has 178 restaurants, with 149 in California. There are also 30 franchised locations. It acquired Chevys Inc. for $90 million through confirmation of Chevy's Chapter 11 plan in 2004. Real Mex Restaurants and 16 of its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-13122 to 11-13138) on Oct. 4, 2011. Judge Brendan Linehan Shannon oversees the case. Judge Peter Walsh was initially assigned to the case. The Debtors are represented by Mark Shinderman, Esq., Fred Neufeld, Esq., and Haig M. Maghakian, Esq., at MILBANK, TWEED, HADLEY & McCLOY LLP; and Laura Davis Jones, Esq., and Curtis A. Helm, Esq., at PACHULSKI STANG ZIEHL & JONES LLP as counsel. The Debtors' financial advisors are Imperial Capital, LLC. The Debtors' claims, noticing, soliciting and balloting agent is Epiq Bankruptcy Solutions, LLC. Assets are $272.2 million while debt totals $250 million, according to the Chapter 11 petition. The petitions were signed by Richard P. Dutkiewiez, chief financial officer and executive vice president. Counsel to GE Capital Corp., the DIP Agent and the Prepetition First Lien Secured Agent, are Jeffrey G. Moran, Esq., and Peter P. Knight, Esq., at LATHAM & WATKINS LLP; and Kurt F. Gwynne, Esq., at REED SMITH LLP as counsel. Counsel to the Prepetition Secured Second Lien Trustee are Mark F. Hebbeln, Esq., and Harold L. Kaplan, Esq., at FOLEY & LARDNER LLP. Counsel to the Majority Prepetition Second Lien Secured Noteholders are Adam C. Harris, Esq., and David M. Hillman, Esq., at SCHULTE ROTH & ZABEL LLP; and Russell C. Silberglied, Esq., at RICHARDS LAYTON & FINGER. Z Capital Management LLC, which holds nearly 70% of the Opco term loan, is represented by Derek C. Abbott, Esq., and Chad A. Fights, Esq., at MORRIS NICHOLS ARSHT & TUNNELL LLP; and Lee R. Bogdanoff, Esq., and Whitman L. Holt, Esq., at KLEE TUCHIN BOGDANOFF & STERN LLP. RELIANCE GROUP: Chamber Asks High Court to Nix Claims v. Deloitte ----------------------------------------------------------------- Maria Chutchian at Bankruptcy Law360 reports that the U.S. Chamber of Commerce last week urged the U.S. Supreme Court to reverse a lower court's ruling that affirmed the Reliance Group Holdings Inc. liquidating trust's fraud claims against Deloitte & Touche LLP, arguing that the claims are precluded by federal securities law. About Reliance Group Holdings Headquartered in New York, New York, Reliance Group Holdings, Inc. -- http://www.rgh.com/-- owned 100% of the stock of Reliance Financial Services Corporation, which, in turn, owned 100% of the stock of Reliance Insurance Company. RIC generated upwards of 90% of the income of RGH, whose principal business was its ownership, through RFS, of RIC and its property and casualty insurance subsidiaries. On May 29, 2001, the Commonwealth Court of Pennsylvania placed RIC in rehabilitation, and named the Pennsylvania Insurance Commissioner as RIC's rehabilitator. RIC entered liquidation on Oct. 3, 2001, and the Commissioner was appointed liquidator. RGH and RFS filed for chapter 11 protection on June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing $12,598,054,000 in assets and $12,877,472,000 in debts. On April 22, 2005, RFS's plan of reorganization, approved by the bankruptcy court, went into effect and RFS emerged from bankruptcy as Reorganized RFS Corporation. Under RFS's bankruptcy plan, its litigation claims and those of its general unsecured creditors were assigned to RGH. The bankruptcy court confirmed RGH's First Amended Plan effective Dec. 1, 2005, which created a liquidating trust. RIO RANCHO: Court Continues Plan Outline Hearing Until Jan. 10 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California will convene a hearing on Jan. 10, 2012, at 2:00 p.m., to consider adequacy of the Disclosure Statement explaining Rio Rancho Super Mall, LLC's proposed Plan of Reorganization. Previously, the Court approved the stipulation between the Debtor and Wilshire State Bank extending until Nov. 28, the Debtor's time to file disclosure statement and plan. The Debtor related that it needed additional time to finalize negotiations with WSB concerning the terms of repayment of WSB's secured, administrative and general unsecured claims. About Rio Rancho Supermall, LLC Moreno Valley, California-based Rio Rancho Supermall, LLC, owns, manages and operates a commercial property known as the Rio Rancho Super Mall that is utilized as an indoor swap-meet and retail mall. It filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-16835) on March 2, 2011. Thomas E. Kent, Esq., at the Law Offices of Thomas E. Kent, in Burbank, Calif., serves as the Debtor's bankruptcy counsel. The Debtor disclosed $7,691,584 in assets and $12,253,866 in debts as of the Chapter 11 filing. ROCKWOOD SQUARE: Judge Converts Case to Chapter 7 Liquidation ------------------------------------------------------------- A federal judge converted on Nov. 23, 2011, the Chapter 11 case of Rockwood Square LLC to Chapter 7 liquidation proceeding at the behest of Robert C. Smith, attorney of Christopher White who is the principal of Rockwood. According to the report, a reorganization plan approved in October 2010 required Mr. White to pay back his creditors with rental income from the property. But Mr. Smith began receiving calls from creditors that they were not getting paid. The report relates that Mr. Smith said he is owed $38,000 in legal fees. Three secured creditors hold parcels of the shopping center as collateral: Virginia Commerce Bank was owed $3.55 million; First Capital Bank, $2.1 million; and Lowes Food Stores, $172,940. The report says Virginia Commerce Bank was granted relief from stay prior to the conversion and is auctioning its parcels Dec. 9, 2011, at the Chesterfield County Courthouse. The bank is selling three parcels, which include the 1980 shopping center building and most of the parking lot. The other creditors hold a portion of the parking lot, a wooded area behind the center and a separate property occupied by a day care. Those are still subject to the bankruptcy case and are subject to liquidation, Mr. Smith said. Based in Mobile, Alabama, Rockwood Square LLC filed for Chapter 11 protection (Bank. E.D. Va. Case No. 09-32078) on April 1, 2009. Judge Douglas O. Tice, Jr., presides over the case. Robert Coleman Smith, Esq., at Richard Knapp & Associates, represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. ROSELAND VILLAGE: VCB Wants to Foreclose Share on Project --------------------------------------------------------- Michael Schwartz at Richmond BizSense reports that Virginia Commonwealth Bank has asked the federal bankruptcy court to force the developers of Roseland Village to either pay the bank interest while its Chapter 11 reorganization plan is worked out or allow the bank to foreclose on its share of the project's 1,300 acres. According to the report, the Petersburg, Va.-based bank loaned Roseland $1.7 million in 2008. The loan is secured by 103 acres. The report says VCB filed on Nov. 15, 2011, a motion arguing that Roseland's recently filed reorganization plan doesn't properly protect it as a creditor. That plan promised to pay all of Roseland's lenders in full, plus interest, and eventually get the development out of the ground. But it would take years for the plan to come to fruition. Specifically, VCB is calling into question the true value of its collateral and the effects that the plan would have on that land's value over time. The report relates the fair market value of the land as claimed by Roseland is $4.2 million, according to VCB's court filing. The report notes bankruptcy filings list an appraised value of about $2 million. According to the report, if the reorganization doesn't go as planned, the land is listed as having a liquidation value of $1.5 million -- assuming it was sold separately from the rest of the 1,300 acres. In the meantime, interest, taxes and late payments continue to pile on. The report says VCB is also worried that it would lose its lien position if Roseland seeks funds from another lender to pay for the infrastructure on the 103 acres, as would be allowed for in the plan. The report says, in addition to VCB, Roseland owes Franklin Federal Savings Bank about $20 million; Central Virginia Bank, about $6.2 million; Essex Bank, almost $6 million; BB Hunt LLC, an entity tied to developer HHHunt, $5.5 million; and Paragon Bank, $2 million. About GBS Holding Based in Midlothian, Virginia, G.B.S. Holding, Ltd., filed for Chapter 11 (Bankr. E.D. Va. Case No. 11-33708) on June 3, 2011. Chief Judge Douglas O. Tice Jr. presides over the case. DurretteCrump PLC serves as the Debtor's bankruptcy counsel. In its petition, the Debtor estimated assets of $50 million to $100 million and debts $10 million to $50 million. The petition was signed by George B. Sowers, Jr., president, who serves as the Debtor's designee pursuant to a court order. Affiliate Roseland Village, LLC, filed for Chapter 11 (Bankr. E.D. Va. Case No. 11-30223) on Jan. 13, 2011. G.B.S. Holding, Ltd., owns 50% of Roseland Village, LLC. DurretteCrump also represents Roseland Village. Roseland Village and GBS jointly own 1,288+/- acres adjoining each other that are jointly part of a larger assemblage of land, known as Roseland, which has been given approval from Chesterfield County as a Master Planned Development consisting of more than 1.5 million square feet of commercial space and more than 5,600 housing units. Roseland consists of 29 separate parcels that were acquired over a nine-year period. The property is located south of Route 288 at its intersection with Woolridge Road. Development of the assembled parcel will take place in some cases without regard to the property lines of the original 29 parcels that comprise the land titled to GBS and Roseland Village. ROTHSTEIN ROSENFELDT: 2 More Ex-Employees Charged in Ponzi Scheme ----------------------------------------------------------------- Dow Jones' DBR Small Cap reports that two more former employees have been charged criminally in former Florida lawyer Scott Rothstein's Ponzi scheme. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. ROUND TABLE: Creditors Seek Post-Confirmation Committee -------------------------------------------------------- Dow Jones' DBR Small Cap reports that the unsecured creditors committee in Round Table Pizza Inc.'s Chapter 11 case is asking the bankruptcy court to allow it to remain after the pizza chain receives confirmation of its bankruptcy-exit plan, despite that plan's stipulation that the committee be dissolved. About Round Table Based in Concord, California, Round Table Pizza, Inc. -- http://www.roundtablepizza.com/-- is a private, 100% employee- owned company with corporate offices based in Concord, California. Round Table is largely owned by an Employee Stock Ownership Plan, with 3,190 participants. The ESOP is designed and intended to provide a source of retirement income to Round Table's loyal, long-term employees. Round Table is a major West Coast pizza chain. There are currently approximately 348 franchised stores, operated by approximately 150 franchisees. Prior to the petition date, Round Table operated 128 company-owned stores. Round Table filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 11-41431) on Feb. 9, 2011. Judge Roger L. Efremsky presides over the case. Scott H. McNutt, Esq., at McNutt Law Group serves as the Debtor's bankruptcy counsel. The Debtors also tapped Frank, Rimerman & Co. as an auditor and accountant. Round Table disclosed $1,066,524 in assets and $35,625,649 in liabilities as of the Chapter 11 filing. The case is jointly administered with affiliates -- The Round Table Franchise Corporation, Round Table Development Company, and Round Table Pizza Nevada LLC. The official committee of unsecured creditors has tapped Brownstein Hyatt Farber Schreck, LLP as counsel. The Debtor also tapped First Bankers Trust Services, Inc. as discretionary, independent, and institutional ESOP Trustee, and Johanson Berenson LLP as an ESOP counsel. First Bankers Trust Services, Inc., was appointed as institutional trustee of the Round Table Restated Employee Stock Ownership Plan and Trust (ESOP). Johanson Berenson LLP serves as an ESOP counsel. RUDEN MCCLOSKY: Law Firm Sold to Greenspoon Marder -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Ruden McClosky PA was authorized on Nov. 30 by the bankruptcy judge in Fort Lauderdale to sell the firm to Greenspoon Marder PA, a six-office Florida firm. According to the report, Greenspoon is paying $5.6 million cash plus the assumption of $2 million in debt. To the extent the $2 million is not spent, the difference will be paid in cash. The price is sufficient to cover the $4.93 million owing to the secured lender Wells Fargo Bank NA. Shareholders of the firm, often called partners at other firms, guaranteed the debt. From future collections of accounts receivable, Greenspoon is also paying a portion of collections, estimated in a court filing before the sale-approval hearing to total $1.7 million. The report relates that a court filing said it was "anticipated" that many of the firm's "employees" would join Greenspoon. Shrunken in size, the Ruden firm had 67 attorneys and 148 total employees on entering Chapter 11, court papers said. There was no auction because there were no bids to compete with Greenspoon's. Dow Jones' Daily Bankruptcy Review reports that the sale of South Ruden McClosky is the first known sale of a still-operating law firm under Chapter 11. About Ruden McClosky Founded in 1959, Ruden McClosky P.A., fdba Ruden, McClosky, Smith, Schuster & Russell, P.A. -- http://www.ruden.com/-- was a full- service law firm serving the legal needs of clients throughout Florida, the U.S., and internationally. It had eight offices in Florida. In August 2011, the firm was reportedly in merger talks with Cleveland, Ohio-based Benesch firm. In September 2011, founder Donald McClosky died after a long battle with cancer. Ruden McClosky filed for Chapter 11 protection (Bankr. S.D. Fla. Case No. 11-40603) on Nov. 1, 2011, in its hometown of Fort Lauderdale, with a plan to sell a substantial portion of its assets for $7.6 million to Fort Lauderdale-based Greenspoon Marder, subject to higher and better offers at an auction. Judge Raymond B. Ray oversees the case. Leslie Gern Cloyd, Esq., and Paul Steven Singerman, Esq. -- lcloyd@bergersingerman.com and singerman@bergersingerman.com -- at Berger Singerman, P.A., serve as the Debtor's counsel. Development Specialists, Inc., serves as the Debtor's restructuring advisors. The petition was signed by DSI's Joseph J. Luzinski, who serves as chief restructuring officer. Kurtzman Carson Consultants LLC serves as the Debtor's claims and noticing agent. In its petition, the Debtor estimated $10 million to $50 million in both assets and debts. An official committee of unsecured creditors has been appointed in the case, and is represented by Segall Gordich, P.A. Counsel to the Debtor's lender, Wells Fargo Bank, N.A., is Jonathan Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Counsel to Greenspoon Marder, the proposed purchaser, is R. Scott Shuker, Esq., at Latham, Shuker, Eden & Beaudine, LLP. SHUANEY IRREVOCABLE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Shuaney Irrevocable Trust Suite 201, 4 Laguna Street Fort Walton Beach, FL 32548 Bankruptcy Case No.: 11-31887 Chapter 11 Petition Date: December 1, 2011 Court: United States Bankruptcy Court Northern District of Florida (Pensacola) Debtor's Counsel: Mark Freund, Esq. LAW OFFICE OF MARK FREUND P.O. Box 10171 Tallahassee, FL 32302 Tel: (850) 591-8010 E-mail: loomf@comcast.net Scheduled Assets: $20,996,723 Scheduled Debts: $19,625,890 The petition was signed by Michael P. Spellman, Trustee. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Beach Community Bank Sales of "Asets" $3,000,000 Attention: Credit to Debtor at Inflated Administration Excessive Prices 17 S.E. Eglin Parkway Fort Walton Beach, FL 32548 Independent Bankers Bank Final Judgment $2,500,000 of Florida entered in 6-2011 Attention: Credit Administration Suite 400 615 Crescent Executive Center Lake Mary, FL 32746-2123 Southern Family Markets, Guaranty of Debt $2,000,000 LLC Administrative Agent 7 Corporate Drive Keene, NH 03431 623 Partners, LLC Contract Dispute $1,500,000 c/o Robert J. Elder, III, Esq. P. O. Drawer 24 Stuart, FL 34997 Beach Community Bank Schweizer & $1,000,000 Attention: Credit Schweizer Green Reef Administration Units 1 and 13 17 S.E. Eglin Parkway Fort Walton Beach, FL 32548 Beach Community Bank Note and Mortgage $900,000 Attention: Credit Receivable Administration 17 S.E. Eglin Parkway Fort Walton Beach, FL 32548 Steven P. Del Gallo Deferred Interest $887,000 Suite 201 Payable to Creditor 4 Laguna Street from B Bonds Fort Walton Beach, FL 32548 Beach Community Bank $400,000 Attention: Credit Administration 17 S.E. Eglin Parkway Fort Walton Beach, FL 32548 623 Partners, LLC Final Judgment $350,000 c/o Robert J. Elder, against Executive III, Esq. Ventures P. O. Drawer 24 Stuart, FL 34997 Beach Community Bank $300,000 Attention: Credit Administration 17 S.E. Eglin Parkway Fort Walton Beach, FL 32548 Beach Community Bank $261,000 Attention: Credit Administration 17 S.E. Eglin Parkway Fort Walton Beach, FL 32548 Beach Community Bank $181,000 Internal Revenue Service Ferderal Income $130,000 Special Procedures Taxes Function Beach Community Bank $100,000 Beach Community Bank $100,000 Beach Community Bank $100,000 Michael P. Spellman Trustee Fees & $73,626 Travel Expenses Beach Community Bank $50,000 Beach Community Bank $50,000 Keefe, Anchors, Gordon & Legal Services $47,394 Moye, PA SOLYNDRA LLC: Judicial Watch Sues DOE, White House for Docs ----------------------------------------------------------- Sindhu Sundar at Bankruptcy Law360 reports that public interest group Judicial Watch Inc. on Thursday filed two separate suits in Washington to compel the U.S. Department of Energy and the White House Office of Management and Budget to provide communication records over Solyndra LLC. The complaints by Judicial Watch claimed that neither of the agencies had provided adequate responses to separate Freedom of Information Act requests the group had sent out on Sept. 6 to obtain information, according to Law360. About Solyndra LLC Founded in 2005, Solyndra LLC is a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. In the Chapter 11 cases, the Debtors are pursuing a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors are unable to identify any such potential buyers, an orderly liquidation of the Debtors' assets for the benefit of their creditors. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Solyndra LLC. The Committee has tapped Blank Rome LLP as counsel. Solyndra is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are Evergreen Solar and start-up Spectrawatt Inc., both of which filed in August, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. SIXTH AVENUE: Alco Capital Liquidates Assets -------------------------------------------- In its capacity as Assignee for the Benefit of Creditors, Alco Capital Group, Inc. is overseeing the disposition of assets of Sixth Avenue Electronics, Inc. through a going-out-of-business sale now under way at the company's single remaining retail location on Route 22 West in Springfield. According to Alan Cohen, president of Alco Capital, all remaining merchandise is being sold to the public at "substantial" discounts. Fixtures, furniture and equipment are also being sold. Sixth Avenue Electronics opened its first store in New York City in 1984 and, at its peak, operated 19 stores in New York, New Jersey, Pennsylvania and Delaware. The company sold LCD TVs, DVD players, camcorders, digital cameras, GPS navigators, car audio and video components, and furniture for living rooms and entertainment systems. The company was ordered to close its three remaining stores in October under a temporary restraining order issued by a U.S. District Court in Newark in response to litigation brought by creditor GE Commercial Distribution Finance Corp. Alco Capital was confirmed as Assignee by the Superior Court of New Jersey-Union County on October 27, 2011. Under an assignment for the benefit of creditors ("ABC"), the insolvent entity (the "Assignor") transfers legal and equitable title, as well as custody and control of its property, to a third party (the "Assignee") in trust. Proceeds of the asset dispositions are released by the Assignee to the Assignor?s creditors in accord with priorities established by law. "In this case, the creditors and debtor decided that an ABC might be a quicker and less expensive option than a traditional bankruptcy," said Mr. Cohen. The Sixth Avenue Electronics Union store is open for this final sale Monday-Friday: 10:00 a.m.-9:30 p.m.; Saturday: 9:00 a.m.- 9:00 p.m.; and Sunday: 10:00 a.m.-7:00 p.m. Cash and bankcards will be accepted for payment. SOTERA DEFENSE: Moody's Affirms 'B3' CFR, Outlook Negative ---------------------------------------------------------- Moody's Investors Service has affirmed the B3 corporate family rating of Sotera Defense Solutions, Inc. and revised the outlook to negative from stable. Concurrently, a B3 rating has been assigned to the company's planned $35 million first-lien incremental term loan. Proceeds of the additional term loan along with some subordinated convertible debt (unrated) will fund the pending acquisition of Potomoc Fusion, Inc.("PFI"). The negative rating outlook reflects greater financial leverage than Moody's anticipated will result from Sotera's efforts to build its services segment. The ratings are: Corporate family, affirmed at B3 Probability of default, affirmed at B3 $28 million first lien revolver due, affirmed at B3 LGD3, to 44% from 46% $180 million first lien term loan due, affirmed at B3 LGD3, to 44% from 46% $35 million incremental first lien term loan due, assigned at B3 LGD3, 44% Outlook, Negative RATINGS RATIONALE The pace of acquisitions, price multiple, and the incremental acquisition debt level drives the outlook change to negative. The September acquisition of Software Process Technologies, Inc. and the planned acquisition of Potomoc Fusion, Inc. will have together added a high amount of debt, though trailing revenues and earnings from the targets are relatively low. Moody's expects that Sotera's 2011 financial statements will show significantly more financial leverage than was anticipated when the CFR was assigned in March 2011. SPT and PFI should further Sotera's brand re-position effort, adding skills and credentials to position Sotera to pursue more substantial prime services contracts. Unseating incumbents, however, can be challenging and assumed cost synergies remain to be proven? achievement on these fronts has now become increasingly critical to maintaining the rating. Headwinds from U.S. fiscal pressures could complicate Sotera's growth aims as the U.S. defense contracting environment has become more competitively intense with larger, more diverse and better capitalized players cutting overhead and price. The corporate family rating of B3 has been affirmed. Revenue potential is supported by a growing bid pipeline, a recent win on a multiple-prime ID/IQ services contract and some services segment backlog growth over the first nine months of 2011. Contractors focused on intelligence, surveillance and reconnaissance systems (Sotera's services segment is) appear reasonably well protected against threats from U.S. defense outlay declines. The company's growing specialization in battlefield and other secure data systems could prove fortuitous if the focus attracts a meaningful level of task orders, boosting the company's reputation and bidding stature. Further, near-term cash flow potential is helped by low capital intensity while a portion of the near-term interest burden will be paid-in-kind. The B3 rating would be pressured with slowing backlog growth, or if Moody's expects debt to EBITDA to be above 7x at the end of 2012, or if free cash flow generation appears to be minimal. A weaker liquidity profile could also cause a downgrade. The rating would likely be stabilized if Moody's were to expect debt to EBITDA to be minimally sustained in the mid-6x range by the end of 2012. Expectation of a continued adequate liquidity profile would also accompany outlook stabilization. (All foregoing metrics are on a Moody's adjusted basis, which will include the planned 12% convertible notes of Sotera Holdings, Inc.) The principal methodology used in rating Sotera Defense Solutions, Inc was the Global Aerospace and Defense Industry Methodology published in June 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. Sotera Defense Solutions, Inc. ("Sotera"), headquartered in McLean, Virginia, provides mission-critical technology-based systems, solutions and services for national security agencies and programs of the U.S. government. The annual revenue base is estimated to be approximately $400 million. The company is majority-owned by an affiliate of Ares Management LLC. SP NEWSPRINT: Schedules Filing Deadline Extended to Jan. 16 ----------------------------------------------------------- The Hon. Christopher Sontchi of the U.S. Bankruptcy Court for the District of Delaware has granted the motion of SP Newsprint Holdings LLC to extend the time within which they must file the schedules of assets and liabilities and statement of financials, for a total of 60 days from the Petition Date, through and including Jan. 16, 2012. As reported in the Troubled Company Reporter on Nov. 23, 2011, the Debtors must gather information from various documents and locations and complete the closing of their books and records as of the Petition Date or other dates, as appropriate, and then the Debtors -- and their counsel and other advisors -- must review that information and prepare and verify the Schedules. About SP Newsprint Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers, Southeastern Paper Recycling and SP Newsprint Merger LLC -- and three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011. SP Newsprint Holdings LLC is a newsprint company controlled by polo-playing mogul Peter Brant. It is one of the largest producers of newsprint in North America. SP Recycling Corporation, a Georgia corporation and the Debtors' other operating company, was established in 1980 as a means for SP to secure a ready supply of recycled fiber, a key raw material for its newsprint. SP Newsprint is the second Brant-owned newsprint company to tumble into bankruptcy proceedings in recent years. Current and former affiliated entities are Bear Island Paper Company, L.L.C., Brant Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint, Inc., White Birch Paper Company. Judge Christopher S. Sontchi presides over the case. Joel H. Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr., Esq., at Cahill Gordon & Reindel LLP serve as the Debtors' lead counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtors' Delaware counsel. AlixPartners LLP serves as the Debtors' financial advisors and The Garden City Group Inc. serves as the Debtors' claims and noticing agent. In its petition, SP Newsprint Holdings estimated $100 million to $500 million in assets and debts. The petitions were signed by Edward D. Sherrick, executive vice president and chief financial officer. Counsel for GECC as Pre-Petition Agent are Richard A. Levy, Esq., and David Hammerman, Esq., at Latham & Watkins LLP; and Kurt F. Gwynne, Esq., at Reed Smith LLP. Counsel to Avenue Investments LP are John Bessonette, Esq., and Douglas Mannal, Esq., at Kramer Levin Naftalis & Frankel LLP. SP NEWSPRINT: Can Use Cash Collateral on an Interim Basis --------------------------------------------------------- The Hon. Christopher Sontchi of the U.S. Bankruptcy Court for the District of Delaware has granted, on an interim basis, the motion of SP Newsprint Holdings LLC, SP Newsprint Co. LLC, SP Recycling Corporation and SEP Technologies L.L.C. to use cash collateral, while they continue to attempt to negotiate with General Electric Capital Corp., the lenders, and other parties on a longer financing arrangement, and grant adequate protection to their prepetition lenders. As reported in the Troubled Company Reporter on Dec. 2, 2011, as of the Petition Date, the Debtors had roughly $5.2 million of cash on hand, which arguably constitutes cash collateral. In addition, the Debtors currently forecast receipt of more than $30 million of additional potential Cash Collateral over the next three weeks from operations, resulting in projected cash on hand at the end of the period covered by the Budget of $6.4 million. The Debtors said they need access to Cash Collateral during the cases to operate their business and work toward a potential DIP financing arrangement and, hopefully, a global restructuring or other exit strategy. The Debtors were unable to obtain a formal agreement for financing with the Lenders or any other party prior to the Petition Date, but they hope to continue negotiations with GECC and other parties regarding the use of Cash Collateral, as well as a potential satisfactory DIP financing arrangement. The Debtors said if they are not permitted to use such potential Cash Collateral, the Debtors could be forced to convert the cases to Chapter 7 cases. The Debtors have prepared a three-week budget ending Dec. 2, 2011. The Debtors expect cash receipts of $18,532,000 and disbursements to total $16,265,000 through the period. The Debtors are borrowers under a credit agreement GECC as administrative agent, collateral agent, and lender, and certain other parties. The Credit Agreement provides for a revolving line of credit of $50 million and a $225 million term loan. As of the Petition Date, $41 million was outstanding under the Revolving Facility, and $213 million, including capitalized unpaid interest, was outstanding under the Term Loan Facility. The Revolving Facility and the Term Loan Facility both mature on March 31, 2012. For several months, the Debtors have engaged in restructuring discussions with GECC and entered into a forbearance agreement with GECC and the Lenders, which expired on or about Sept. 12, 2011. On Oct. 12, 2011, GECC took actions that resulted in the Debtors' bank accounts being frozen and permitted only limited funding thereafter. Since that time, the Debtors have attempted to negotiate the terms of a consensual DIP financing arrangement and a global financial restructuring. Although such negotiations have not yet been completed, in connection with any agreement, it is anticipated that the Lenders will require the Debtors to conduct a going- concern sale process, and the Lenders have expressed a willingness to serve as a "stalking horse" bidder in such sale process. About SP Newsprint Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers, Southeastern Paper Recycling and SP Newsprint Merger LLC -- and three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011. SP Newsprint Holdings LLC is a newsprint company controlled by polo-playing mogul Peter Brant. It is one of the largest producers of newsprint in North America. SP Recycling Corporation, a Georgia corporation and the Debtors' other operating company, was established in 1980 as a means for SP to secure a ready supply of recycled fiber, a key raw material for its newsprint. SP Newsprint is the second Brant-owned newsprint company to tumble into bankruptcy proceedings in recent years. Current and former affiliated entities are Bear Island Paper Company, L.L.C., Brant Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint, Inc., White Birch Paper Company. Judge Christopher S. Sontchi presides over the case. Joel H. Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr., Esq. -- jlevitin@cahill.com , mpeleg@cahill.com and rstieglitz@cahill.com -- at Cahill Gordon & Reindel LLP serve as the Debtors' lead counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq. -- kaufman@rlf.com and collins@RLF.com -- at Richards, Layton & Finger, P.A., serve as the Debtors' Delaware counsel. AlixPartners LLP serves as the Debtors' financial advisors and The Garden City Group Inc. serves as the Debtors' claims and noticing agent. In its petition, SP Newsprint Holdings estimated $100 million to $500 million in assets and debts. The petitions were signed by Edward D. Sherrick, executive vice president and chief financial officer. Counsel for GECC as Pre-Petition Agent are: Richard A. Levy, Esq. LATHAM & WATKINS LLP 233 South Wacker Drive, Suite 5800 Chicago, IL 60606 E-mail: richard.levy@lw.com - and - David Hammerman, Esq. LATHAM & WATKINS LLP 885 Third Avenue New York, NY 10022 E-mail: david.hammerman@lw.com - and - Kurt F. Gwynne, Esq. REED SMITH LLP 1201 Market Street, Suite 1500 Wilmington, DE 19801 E-mail: kgwynne@reedsmith.com Counsel to Avenue Investments LP are: John Bessonette, Esq. Douglas Mannal, Esq. KRAMER LEVIN NAFTALIS & FRANKEL LLP 1177 Avenue of the Americas New York, NY 10036 E-mail: jbessonette@kramerlevin.com dmannal@kramerlevin.com SP NEWSPRINT: Section 341(a) Meeting Scheduled for Jan. 9 --------------------------------------------------------- The U.S. Trustee for Region 3 will convene a meeting of creditors of SP Newsprint Holdings LLC on Jan. 9, 2012, at 3:00 p.m. The meeting will be held at J. Caleb Boggs Federal Building, 2nd Floor, Room 5209. 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 SP Newsprint Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers, Southeastern Paper Recycling and SP Newsprint Merger LLC -- and three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011. SP Newsprint Holdings LLC is a newsprint company controlled by polo-playing mogul Peter Brant. It is one of the largest producers of newsprint in North America. SP Recycling Corporation, a Georgia corporation and the Debtors' other operating company, was established in 1980 as a means for SP to secure a ready supply of recycled fiber, a key raw material for its newsprint. SP Newsprint is the second Brant-owned newsprint company to tumble into bankruptcy proceedings in recent years. Current and former affiliated entities are Bear Island Paper Company, L.L.C., Brant Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint, Inc., White Birch Paper Company. Judge Christopher S. Sontchi presides over the case. Joel H. Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr., Esq. -- jlevitin@cahill.com , mpeleg@cahill.com and rstieglitz@cahill.com -- at Cahill Gordon & Reindel LLP serve as the Debtors' lead counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq. -- kaufman@rlf.com and collins@RLF.com -- at Richards, Layton & Finger, P.A., serve as the Debtors' Delaware counsel. AlixPartners LLP serves as the Debtors' financial advisors and The Garden City Group Inc. serves as the Debtors' claims and noticing agent. In its petition, SP Newsprint Holdings estimated $100 million to $500 million in assets and debts. The petitions were signed by Edward D. Sherrick, executive vice president and chief financial officer. STARWOOD HOTELS: Fitch Says Share Repurchase No Impact on IDR -------------------------------------------------------------- Starwood Hotels & Resorts Worldwide Inc.'s (Starwood) 'BB+' Issuer Default Rating (IDR) and Positive Outlook are unaffected by the board's approval of a $250 million share repurchase authorization, which was announced on Dec. 1. Fitch anticipated there was a good likelihood that Starwood would restart a share repurchase program after meeting the maturity of its 7.875% notes (May 2012 maturity date), assuming there was no disruption to the lodging recovery. In November, the company announced plans to exercise the redemption option on the 2012 notes, which have $605 million of principal outstanding. The redemption will occur on Dec. 15 of this year. Thus, Fitch views the debt repayment and share repurchase authorization as an acceleration of events that were expected to occur in 2012. The Positive Outlook continues to indicate that there is a good likelihood Starwood's IDR will be upgraded to investment grade in 2012. Lodging demand trends continue on a solid recovery trajectory despite heightened global macro-economic risk stemming from European sovereign debt concerns and a China slowdown. However, the tenuous global economic outlook remains a primary concern for the highly cyclical lodging industry. In line with Fitch's expectations, Starwood has outperformed the broader lodging market, due in part to Starwood's greater exposure to luxury, upper upscale, and urban market segments and international markets. U.S. RevPAR growth in 2011 of 8.0% year-to-date (YTD) through November 26th has been better than Fitch's original 2011 outlook of 5 - 7%. Starwood posted RevPAR gains of 14.4% worldwide and 8.0% in North America YTD through Q3. For 2012, Fitch's current industrywide outlook in the U.S. incorporates further RevPAR growth in the 4-5% range with RevPAR in international markets growing slightly faster. Absent a deterioration of Fitch's current macro outlook, Fitch expects Starwood to outperform the industry again in 2012, given its market exposure and the current stage of the cycle. Starwood has provided company-specific worldwide RevPAR guidance of 4% to 8%. The attractive lodging supply outlook provides cushion to downside scenarios. U.S. supply growth will be well less than 1% through at least 2012-2013. This contrasts the situation during the recent recession when supply growth was peaking at more than 3% in 2008- 2009. As of Q3 2011, Starwood's consolidated lease-adjusted leverage was 3.6x and its core lease-adjusted leverage (excluding profit and debt from its consumer financing business) was 3.4x. Pro-forma for the redemption activity and the timeshare receivables securitization completed in November, Fitch calculates consolidated lease-adjusted leverage of 3.2x and core lease- adjusted leverage of 2.8x. Fitch's base case incorporates EBITDA growth, which could provide another one-quarter to one-half turn of deleveraging over the next 12 - 18 months. Starwood's solid liquidity profile provides flexibility for the share repurchase authorization. The company had roughly $1 billion of unrestricted cash at the end of Q3 2011 and approximately $1.3 billion of availability under its $1.5 billion credit facility due 2013. Fitch calculates Starwood's proforma Q3 unrestricted cash balance of roughly $500 million, adjusting for: (1) $200 million of proceeds from the receivables securization in November, (2) the $605 million bond redemption expected to be completed in December, and (3) $95 million in dividends to be paid in December. Fitch has maintained modest expectations with respect to proceeds from Bal Harbour residential unit sales. Therefore, successful closings from the Bal Harbour project will provide additional liquidity support relative to Fitch's expectations. Additionally, the completion of the project bolsters the company's forward free cash flow profile. Starwood's LTM free cash flow was roughly $370 million as of Sept. 30, 2011. The company's maturity profile is manageable. Starwood has $500 million of notes that come due in 2013, which it should be able to pay down in cash, re-finance fully with debt, or a combination of both. Fitch's ratings/Outlook incorporated expectations that Starwood's 2012 notes would be paid fully with cash, but there is more flexibility with respect to the 2013 notes. Starwood has delevered meaningfully toward targeted investment grade levels and Fitch expects further EBIDTA growth next year. The company also has maturities of $500 million and $450 million in 2014 and 2015, respectively, so it is likely the company will access the capital markets opportunistically. Starwood maintained strong capital market access through the recession with sizable bond issuances in 2008 (May) and 2009 (Feb. and Nov.), which Fitch views positively with respect to refinancing risk in downside scenarios. Fitch currently rates Starwood as follows: -- IDR 'BB+'; -- Senior unsecured credit facility 'BB+'; -- Senior unsecured notes 'BB+'. SUFFOLK OTB: Court Dismisses Chapter 9 Case ------------------------------------------- Churchill Downs Incorporated has succeeded in obtaining a dismissal of the Chapter 9 bankruptcy of Suffolk Regional Off- Track Betting Corporation. Churchill Downs maintains that Suffolk OTB did not obtain the requisite authorization to commence the Chapter 9 case under 11 U.S.C. Sec. 109(c)(2). Suffolk OTB challenges Churchill Downs's standing to object to entry of an order for relief, and argues that, in any event, the requirements of Sec. 109 were satisfied. Bankruptcy Judge Carla E. Craig sided with Churchill Downs in her Dec. 2, 2011 decision, available at http://is.gd/WuIUBgfrom Leagle.com, saying Suffolk OTB is ineligible to be a debtor under Chapter 9. Churchill Downs, a Kentucky corporation, owns various racetracks, including Churchill Downs Racetrack, Calder Race Course, Fair Grounds Race Course, and Arlington Park, directly or through wholly owned subsidiaries. Suffolk OTB accepts wagers on races held at the Churchill Tracks and displays simulcast broadcasts of these races at various of its locations. Suffolk OTB listed "Churchill Downs Inc./Churchill Downs Simulcast Network" in its List of Creditors Holding 30 Largest Unsecured Claims on account of a $36,440.18 pre-petition claim arising from "[h]ost track settlements, including commissions payable on racing wagers." Suffolk OTB said in its bankruptcy petition that it qualified under Chapter 9 and that its board of directors authorized its officers to seek the necessary legislative authorization. Churchill Downs filed its objection to the petition, arguing that the Suffolk County Legislature did not have authority to authorize Suffolk OTB's bankruptcy filing. About Suffolk Regional Off-Track Betting Hauppauge, New York-based Suffolk Regional Off-Track Betting Corporation -- a public benefit corporation created by Article V of the New York State Racing, Pari-Mutuel Wagering and Breeding Law -- is one of five separately governed regional off-track betting corporations in the State of New York. Suffolk OTB offers pari-mutuel wagering on thoroughbred and harness horse races held at racetracks located within and without the State of New York. Suffolk OTB filed for Chapter 9 bankruptcy protection (Bankr. E.D. N.Y. Case No. 11-42250) on March 18, 2011. Christopher F. Graham, Esq., at McKenna Long & Aldridge LLP, serves as the Debtor's bankruptcy counsel. The Garden City Group serves as the notice, claims, and solicitation agent, nunc pro tunc to the Petition Date. It scheduled $14,654,257 in assets and $16,470,349 in liabilities. Attorneys for creditor Churchill Downs Inc. are: Robert J. Brown, Esq. Daniel I. Waxman, Esq. WYATT, TARRANT & COMBS, LLP Lexington Financial Center 250 West Main Street, Suite 1600 Lexington, KY 40507-1746 Tel: 859-288-7624 E-mail: rbrown@wyattfirm.com dwaxman@wyattfirm.com - and - Frank F. Chuppe, Esq. WYATT, TARRANT & COMBS, LLP PNC Plaza 500 West Jefferson Street, Suite 2800 Louisville, KY 40202-2898 Tel: 502-562-7336 E-mail: fchuppe@wyattfirm.com SUMMER VIEW: Plan Outline Hearing Scheduled for Jan. 11 ------------------------------------------------------- Summer View Sherman Oaks LLC, filed on Nov. 15, 2011, a Plan of Reorganization and Disclosure Statement. The Debtor will seek approval of the Disclosure Statement as a hearing scheduled for Jan. 11, 2012, at 10:00 a.m. The Debtor intends to continue to lease its real estate while concurrently contemplating and preparing for the sale of the Property as a part of reorganization plan. The goal is to sell the Property prior to July 2012 to September 2012 (the Maturity Date of the U.S. Bank loan is July 11, 2014). The Debtor intends to start making payments to the creditors on the Effective date and pay off thelLoan and all the creditors from the proceeds of sale. The Debtor is in the process of filing its application to employ and to enter into an exclusive listing agreement with Marcus and Millichap as the real estate broker for the Debtor. The proposed listing price is $21,000,000, with the proposed broker's commission at 2%. Marcus and Millichap anticipate to find a qualify buyer for the Property within four months after approval of their employment and to close escrow by Sept. 1, 2012. Commencing with the effective date, general unsecured creditors will be receive $24,339 (100% of their claims) in 8 equal quarterly payments. Listed below are the sources of money earmarked to pay creditors and interest-holders: a. Proceeds from the sale of the Property; b. Debtor's cash on hand as of the Effective Date of the Plan; c. Payment reserve held by the Lender; and d. Post-confirmation income. The classification and treatment of claims under the Plan are: Class 1 ? Allowed Secured Claims of U.S. Bank, owed $18,118,041, will receive monthly payments of $78,584 until the property is sold. According to loan documents, the loan must be paid off on July 11, 2014, with a balloon payment. Class 2 ? Allowed Secured Claim of E. Rojas Landscape Inc., secured with a mechanic's lien ($12,078), will be paid in 12 quarterly installments of $1,007 (without interest), or from the proceeds of the sale if the property is sold before the creditor is paid in full. Class 3 ? Priority claims tenant security deposits that are not currently due ($76,314) will be paid when due. This Class is unimpaired. Class 4 ? Priority claims for tenant security deposits that became due prepetition ($590) will be paid in one payment before the effective date. This Class in unimpaired. Class 5 ? Allowed Unsecured Claims, excluding Insiders, owed $24,340, will be paid in 8 quarterly payments of $3,042 (without interest), or from the proceeds of the sale, if sale occurred before the creditor is paid in full. Class 6 Interests will receive the balance of the proceeds after payments to all creditors. A copy of the Plan of Reorganization and the Disclosure Statement is available for free at: http://bankrupt.com/misc/summerview.dkt137.pdf About Summer View Sherman The West Hollywood, California-based 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 sole member of the Debtor is the Efim Sobol Family Trust Dated November 18, 1995. Dr. Efim Sobol's mother, Sonia Sobol, 88 years old, is the sole trustee and beneficiary of the Efim Sobol Trust. The Company filed for bankruptcy under Chapter 11 (Bankr. C.D. Calif. Case No. 11-19800) on Aug. 15, 2011. Judge Alan M. Ahart presides over the case. The Debtor disclosed $23,228,304 in assets and $16,535,378 in liabilities as of the Chapter 11 filing. The petition was signed by Sonia Sobol, member. Terry D. Shaylin, Esq., and Alik Segal, Esq., at Karasik Law Group, LLP, in Los Angeles, Calif., represent the Debtor as counsel. TALISMAN ENERGY: Fitch Assigns 'BB+' Preferred Stock Rating ----------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to Talisman Energy Inc.'s (TLM) upcoming issues of preferred stock. The Rating Outlook is Stable. TLM plans to issue up to C$400 million in stated value of perpetual preferred stocks in the Canadian market. The two series of preferred stocks will pay dividends that reset either every 90 days or five years depending upon the series of preferred stock purchased. Dividend rates will be tied to the approximate yields of coterminous securities issued by the Government of Canada. The preferred stocks will have no stipulated maturity or mandatory redemption dates and will rank subordinate to all debts of TLM and senior to all other junior preferred and common stocks issued by the corporation. TLM will ultimately use the proceeds from the sale of the preferreds for general corporate purposes and to reduce debt. In accordance with its policies regarding hybrid securities, Fitch will allow an equity credit for the preferred stocks equal to one half of their aggregate stated value in the calculation of leverage metrics. On a pro forma basis and assuming C$300 million in net issue proceeds are used to repay debt, TLM's debt/LTM EBITDA at the close of the third quarter would have been approximately 0.76 times (x). For reference, debt/LTM EBITDA at the close of the third quarter without adjustment is 0.79x. Fitch rates TLM's long-term senior unsecured debt and long-term Issuer Default Rating 'BBB'. Total proved developed and undeveloped reserves at the end of 2010 totaled 1,149 million barrels of oil equivalent. Total debt including asset retirement obligations was C$8.32 per barrel of oil equivalent of net proved developed reserves at last year-end. TLM's ratings reflect the company's modest leverage, its discipline in spending capital, the company's record in reserve replacement, and the size of its reserve base. TAPATIO SPRINGS: Court Dismisses Chapter 11 Case ------------------------------------------------ On Nov. 7, 2011, the U.S. Bankruptcy Court for the Western District of Texas dismissed the Chapter 11 case of Tapatio Springs Real Estate Holdings, L.P. The Bankruptcy Court ordered the Debtor to pay within 10 days of the entry of its Order to the United States Trustee the appropriate quarterly fees which are due and payable pursuant to 28 U.S.C. Section 1930(a)(6). As reported in the TCR on June 28, 2011, Judy A. Robbins, the United States Trustee for Region 7, asked U.S. Chief Bankruptcy Judge Ronald B. King to dismiss the Debtor's Chapter 11 case. According to the U.S. Trustee, the Debtor has not filed a plan and disclosure statement in this case. The U.S. Trustee alleged upon information and belief that, on June 7, 2011, the Debtor's lender foreclosed on the Debtor's primary assets as per an agreed order lifting the automatic stay. Consequently, it does not appear that Debtor will be able to confirm a plan of reorganization. The Debtor's continuing losses and inability to timely effectuate a plan is cause for dismissal of the case. The U.S. Trustee added that the Debtor has failed to file its monthly operating report for the month of April 2011. Failure to file current accurate monthly operating reports is cause for dismissal of a case. About Tapatio Springs Boerne, Texas-based Tapatio Springs Real Estate Holdings, L.P., filed for Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 11-51263) on April 5, 2011. The Debtor disclosed $20,677,999 in assets and $4,004,286 in liabilities as of the Chapter 11 filing. Dean W. Greer, Esq., at the Law Offices of Dean W. Greer, in San Antonio, Texas, serves as counsel. Boerne, Texas-based Tapatio Springs Development Company, Inc., filed for Chapter 11 bankruptcy protection on (Bankr. W.D. Tex. Case No. 11-51264) on April 5, 2011. This the second bankruptcy filing for both Debtors. Debtors Tapatio Springs Development Company, Inc., and Tapatio Springs Real Estate Holdings, L.P., voluntarily filed for Chapter 11 bankruptcy relief (Cases Nos. 11-50050 and 11-50054) on Jan. 3, 2011. The Debtors filed the first bankruptcies the day before secured creditors Clyde B. Smith and Peggy Smith were set to foreclose on the Debtors' property. On Feb. 17, 2011, the Court dismissed the first bankruptcies on the Smiths' motion and without opposition from the Debtors. Once dismissed, the Smiths re-posted the real estate for non-judicial foreclosure on April 5, 2011. The Debtors filed the instant second voluntary Chapter 11 petitions merely minutes prior to the announced starting time of the posted foreclosure proceedings. The foreclosure proceeded at 10:00 a.m. as announced and concluded with no party bidding more than the Smiths' credit bid. The United States Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Tapatio Springs Real Estate Holdings, L.P., have expressed interest in serving on a committee. TAYLOR BEAN: Trustee Sues AIG, Others Over Fraudulent Transfers --------------------------------------------------------------- Amanda Bransford at Bankruptcy Law360 reports that a trustee overseeing Taylor Bean & Whitaker Mortgage Corp.'s estate sued American International Group, Inc., Mutual of Omaha Insurance Co., CitiMortgage Inc. and 15 others in Florida court Thursday seeking to recover payments made before the troubled lender filed for bankruptcy following executives' arrest for fraud. Law360 relates that trustee Neil F. Luria said Taylor Bean transferred $131,696 to AIG, knowing it lacked these funds and intending to defraud creditors, constituting fraudulent transfer and unfair preference toward AIG. About Taylor Bean Taylor, Bean & Whitaker Mortgage Corp. grew from a small Ocala- based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009. Taylor Bean filed the Chapter 11 petition three weeks after federal investigators searched its offices. The day following the search, the Federal Housing Administration, Ginnie Mae and Freddie Mac prohibited the company from issuing new mortgages and terminated servicing rights. Taylor Bean estimated more than $1 billion in both assets and liabilities in its bankruptcy petition Lee Farkas, the former chairman, was sentenced in June to 30 years in federal prison after being convicted on 14 counts of conspiracy and bank, wire and securities fraud in what prosecutors said was a $3 billion scheme involving fake mortgage assets. Jeffrey W. Kelly, Esq., and J. David Dantzler, Jr., Esq., at Troutman Sanders LLP, in Atlanta, Ga., and Russel M. Blain, Esq., and Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Fla., represent the Debtors. Paul Steven Singerman, Esq., and Arthur J. Spector, Esq., at Berger Singerman PA, in Miami, Fla., represent the Committee. BMC Group, Inc., serves as the claims and noticing agent. TEE INVESTMENT: Receiver Wants to Use Cash Collateral to Pay Costs ------------------------------------------------------------------ The Hon. Bruce T. Beesley of the U.S. Bankruptcy Court for the District of Nevada has authorized Terrence S. Daly, in his capacity as court-appointed receiver for Tee Investment Company, Limited Partnership, to use $150,000 in cash collateral to replace roofs, make repairs, and handle deferred maintenance on apartment buildings and maintain a contingency fund for maintenance expenses. Prior to December 2010, there were only minor issues with the roofs. Beginning in December, major leaks sprung in many the roofs of the 18 buildings comprising the Apartment Buildings. Roofs could not be replaced that time of year, as gravel on the roofs freezes and the roofs cannot then be removed. Due to the cold's preventing roof replacement, last winter, the Receiver employed professionals to tarp the roofs and patch leaks as and when they occurred, but the Apartment Buildings suffered damage to interior ceilings that had to be replaced in certain instances. The Receiver contemplated in April 2011 making various repairs and replacements roofs, but decided that the significant expenditures could be postponed until the fall when the Receiver would bring in a professional to further explore alternatives. In August 2011, the Receiver was informed of, and explored, a cheaper alternative employing foam sealant to repair and protect the roofs for several years, but then learned from his consultant, Kelleher Boyd & Associates that this was not a practical solution for the Apartment Buildings. Kelleher Boyd then explored alternatives. Despite best efforts, Kelleher Boyd experienced several delays in bringing roofers and others into the Apartment Buildings and generating a Roof Inspection & Condition Survey dated Sept. 15, 2011. Following receipt of the Kelleher Report, in carrying out his duties under the Receiver Orders, from mid-September until mid- October, the Receiver contacted various roofing companies about replacing the roofs, and handling deferred maintenance and repairs as suggested in the Kelleher Report. The Receiver's efforts culminated in his receipt of a proposed Roofing Services Contract with PRS of Nevada Ltd. The Contract incorporates replacement of 3 of the 7 roofs recommended by Kelleher Boyd and other repairs and deferred maintenance to make it through the winter without major leaks and other problems. Louis M. Bubala III, Esq., at Armstrong Teasdale LLP, tells the Court that if the Contract is not executed and work on the replacements, repairs and maintenance not begun prior to the first major snow storm, then roof replacements will not be possible this winter and roof leaks will simply have to be patched as they occur. However, further damage to ceiling interiors will occur, inhabitants of many of the apartments will be displaced or greatly inconvenienced and will abate their rent and the significant amounts spent on patching leaks and battling with tenants will have been lost as the roofs will still need to be replaced. Replacing the roofs now will avoid thousands of dollars of patching costs and suits with tenants concerning rent abatement. The Receiver is represented by: Louis M. Bubala III, Esq. ARMSTRONG TEASDALE LLP 50 W. Liberty Street, Suite 950 Reno, Nevada 89501 Tel: (775) 322-7400 Fax: (775) 322-9049 E-mail: lbubala@armstrongteasdale.com About Tee Investment Reno, Nevada-based Tee Investment Company, Limited Partnership, dba Lakeridge Apartments, filed for Chapter 11 bankruptcy protection on March 1, 2011 (Bankr. D. Nev. Case No. 11-50615). The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates Lakeridge Centre Office Complex, LP (Bankr. D. Nev. 10- 53612), West Shore Resort Properties III, LLC (Bankr. D. Nev. 10- 51101), and West Shore Resort Properties, LLC, and (Bankr. D. Nev. 10-50506) filed separate Chapter 11 petitions. THINKFILM INC: Judge Gives Trustee Control of Pangea Media ---------------------------------------------------------- According to Alex Ben Block at the Hollywood Reporter, federal Judge Barry Russell granted trustee Ronald Durkin's motion to take control of Pangea Media Group, a company that David Bergstein ran until it shut its doors earlier this year. According to the report, Mr. Durkin is the trustee in the involuntary bankruptcy case involving Capitol, ThinkFilm and three other companies that were run by Mr. Bergstein. The report says this is the first big victory for the trustee after several setbacks. The judge had earlier this year refused to allow Mr. Durkin to consolidate a number of the subsidiaries related to the bankrupt companies, which frustrated the trustee's efforts to exercise control over them. The judge had said the trustee could return and re-ask for control, but he had to do it one entity at a time. The report says Mr. Durkin can immediately run Pangea, which he has said he will put into bankruptcy. The judge left it up to Mr. Durkin to decide if it would be put into voluntary bankruptcy and whether that would be a Chapter 11 reorganization or a Chapter 7 filing, which would put it out of business completely. About Thinkfilm, et al. CapCo Group LLC and four other companies controlled by David Bergstein are part of a wider network of entities that distribute and finance films. Among the approximately 1,300 films they have the rights to are "Boondock Saints" and "The Wedding Planner." Several creditors filed for involuntary Chapter 11 bankruptcy against the companies on March 17, 2010 -- CT-1 Holdings LLC (Bankr. C.D. Calif. Case No. 10-19927); CapCo Group, LLC (Bankr. C.D. Calif. Case No. 10-19929); Capitol Films Development LLC (Bankr. C.D. Calif. Case No. 10-19938); R2D2, LLC (Bankr. C.D. Calif. Case No. 10-19924); and ThinkFilm LLC (Bankr. C.D. Calif. Case No. 10-19912). Judge Barry Russell presides over the cases. The Petitioners are represented by David L. Neale, Esq., at Levene Neale Bender Rankin & Brill LLP. Judge Barry Russell formally declared David Bergstein's ThinkFilm LLC and Capitol Films Development bankrupt on Oct. 5, 2010. Mr. Bergstein is being sued for tens of millions of dollars by nearly 30 creditors -- including advertisers, publicists and the Writers Guild West. Five Bergstein controlled companies have been named in the suit. TMP DIRECTIONAL: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: TMP Directional Marketing, LLC aka TMP Worldwide Direct Marketing, LLC TMP Ltd. (Canada) 15miles TMP DM, LLC Interface Realty, Inc. (New York) TMP Directional Marketing, LLC Monster Worldwide, Inc. TMP Worldwide Co. Ltd. (Japan) TMP Worldwide Ltd. (Canada) TMP Intellectual Property Holdings, LLC TMP DM, Inc. Moving.com, Inc. 500 West Silver Spring Drive, Suite K-200 Glendale, WI 53217 Bankruptcy Case No.: 11-13835 Chapter 11 Petition Date: December 5, 2011 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Debtor's Counsel: Domenic E. Pacitti, Esq. KLEHR HARRISON HARVEY BRANZBURG LLP 919 Market Street, Suite 1000 Wilmington, DE 19801 Tel: (302) 552-5511 Fax: (302) 426-9193 E-mail: dpacitti@klehr.com Debtor?s Co-Counsel: KIRKLAND & ELLIS LLP Debtor?s Restructuring Officer: CRG PARTNERS GROUP, LLC Debtor?s Claims/Noticing Agent: EPIQ BANKRUPTCY SOLUTIONS Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $100,000,001 to $500,000,000 The petition was signed by Timothy P. Nugent, vice president, assistant secretary, and assistant treasurer. Affiliates that simultaneously sought Chapter 11 protection: Debtor Case No. ------ -------- TMP DM, Inc. 11-13836 TMP DM, LLC 11-13837 TMP Directional Marketing's List of Its 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Supermedia LLC Trade Debt $21,841,256 4500 Fuller Drive, 2nd Floor Irving, TX 75038 Southwestern Bell/SBC YP Trade Debt $13,112,716 1 AT&T Way Bedminster, NJ 07921 Dex Media West LLC Trade Debt $10,909,202 3190 S. Vaughn Way, 5-South Aurora, CO 80014 Bellsouth Trade Debt $10,482,028 1 AT&T Way Bedminster, NJ 07921 R.H. Donnelley Publishing Trade Debt $9,985,925 1615 Bluff City Highway Bristol, TN 37620 Dex Media West LLC Trade Debt $9,036,020 3190 S. Vaughn Way, 5-South Aurora, CO 80014 Yellow Book Co. Inc. Trade Debt $7,760,673 2201 Renaissance Boulevard King of Prussia, PA 19406 AT&T Advertising and Publishing Trade Debt $6,762,963 1 AT&T Way Bedminster, NJ 07921 Pacific Bell Directory Publishing Trade Debt $6,631,663 1 AT&T Way Bedminster, NJ 07921 Yellowpages.com, LLC Trade Debt $5,220,284 611 N. Brand Boulevard, 5th Floor Glendale, CA 91203 Ernst & Young Professional Fees $3,435,566 Ernst & Young Tower 222 Bay Street P.O. Box 251 Toronto, ON M5K IJ7 Canada The Berry Company Trade Debt $1,934,210 100 Executive Parkway Hudson, OH 44236 Yellow Pages Group Trade Debt $1,439,373 653-16 Place Du Commerce, 6th Floor Ile-Des-Soeurs, QC H3E 2A5 Canada Cincinati Bell Telephone Co. Trade Debt $1,023,772 312 Plum Street, Suite 600 Cincinnati, OH 45202 Local Insight Regatta Holdings, Trade Debt $1,009,391 Inc. 100 Executive Parkway Hudson, OH 44236 Southern New England Trade Debt $775,462 Telephone/SBC YP 1 AT&T Way Bedminster, NJ 07921 White Directory Publishers Inc. Trade Debt $624,433 1945 Sheridan Drive Buffalo, NY 14223 American Board of Medical Trade Debt $588,213 Specialties 222 North LaSalle Street, Suite 1500 Chicago, IL 60601 Directory Marketing, Inc. Trade Debt $468,217 1305 West Main Greenwood, MO 64034 Valley Yellow Pages Trade Debt $366,702 1850 N. Gateway Boulevard, Suite 132 Fresno, CA 93727 Amacai Information Corporation Trade Debt $354,378 8010 Towers Crescent Drive, 5th Floor Vienna, VA 22182 Pinnacle Publishing LLC Trade Debt $306,433 4030 Technology Drive NW Bemidji, MN 56601-5612 Monster Worldwide, Inc. Trade Debt $273,938 622 Third Avenue, 39th Floor New York, NY 10017 Yahoo Inc. Trade Debt $273,271 3333 Empire Avenue Burbank, CA 91504 CDW Direct LLC Trade Debt $269,160 200 N. Milwaukee Avenue Vernon Hills, IL 60061 Directory Publishing Solutions Trade Debt $238,822 Citygrid Media, LLC Trade Debt $227,242 Hawaiian Telecom Yellow Pages Trade Debt $218,593 Facebook, Inc. Trade Debt $210,392 Phone Directories CDPS Trade Debt $204,187 TOWN CENTER: Seeks Emergency Hearing on DIP Financing, Plan Deal ---------------------------------------------------------------- Town Center at Doral, LLC, et al., request an emergency hearing to approve a plan support agreement term sheet with Terra Landmark, LLC, the reimbursement of expenses incurred by Terra Landmark in furtherance of the Debtors' reorganization efforts, and to authorize up to $150,000 on an interim basis and up to $750,000 on a final basis in unsecured debtor in possession financing. The Debtors intend to pursue confirmation of a plan or plans of reorganization with Terra Landmark as the plan sponsor. Pursuant to plan support agreement term sheet, dated Nov. 15, 2011, Terra Investments will (i) provide post-petition financing to the Debtors in order to fund certain specified costs of the administration of the Bankruptcy Case, (ii) acquire 100% of the equity interests of the Debtors, or alternatively direct ownership in and to all of the Property, under the Plan, and (iii) provide a Capital Contribution to the Debtors to fund the consummation of the Plan. Material Terms of DIP Loan The summary of the material terms of the DIP Loan are: DIP Lender : Terra Landmark, LLC. Borrower : Town Center at Doral, LLC, et al., jointly and severally. Purpose : To fund the operations of the Debtors prior to the confirmation of the Plan, including the amount of retainers paid to any Court-approved professionals of the Debtors. Interest Rate : 14% per annum payable at Maturity. Term : The earlier of (i) April 1, 2012; (ii) the Effective Date of the Plan; (iii) entry of an order converting the Debtors' cases, dismissing the Debtors' cases, or appointing a trustee or examiner for the Debtors. Events of Default : Failure to meet any Milestone. Liens : None. Loan Amount : Up to $150,000 on an interim basis and up to $750,000 on a final basis. Collateral : None. Superpriority : The Obligations of the Debtors to Terra Administrative Expense Landmark will be allowed administrative Status expense claims of the estate, with priority over any and all other claims of any creditor or party in interest (including any subsequently appointed trustee), pursuant to Section 364(c) of the Bankruptcy Code. Milestones On or before Nov. 15, 2011, the Debtors will file and serve via CM/ECF (and by Nov. 16, 2011 via U.S. mail or by express means) the Emergency Motion seeking approval of, inter alia, this Term Sheet; b. On or before Nov. 22, 2011, the Court will have entered an interim order, in form and substance acceptable to Terra Landmark, granting the Emergency Motion and authorizing the Debtors to obtain secured post-petition financing; c. On or before Dec. 2, 2011, the Court will have entered a final order, in form and substance acceptable to Terra Landmark, granting the Emergency Motion and authorizing the Debtors to obtain secured post-petition financing; d. On or before Dec. 2, 2011, the Debtors will file a motion to value the Property so as to determine the allowed amount of secured claims asserted against the Property; e. On or before Dec. 19, 2011, the Debtors will file the Plan and Disclosure Statement; f. On or before Jan. 27, 2012, the Bankruptcy Court will have entered an order approving the Disclosure Statement and setting a hearing to consider confirmation of the Plan; g. On or before Fe. 29, 2012, the Bankruptcy Court will have entered an order confirming the Plan; and h. The Effective Date of the Plan will occur on or before March 16, 2012. The Debtors' Prepetition Obligations As of the Petition Date, the Debtors' obligations include (i) ad valorem tax certificates claims in various amounts, each of which is secured by a statutory lien on the Property, (ii) claims held by Landmark at Doral Community Development District in the aggregate amount of approximately $71,500,000 (exclusive of interest, fees and costs), which claims are secured by statutory liens on the Property; (iii) claims held by AMT CADC Venture, LLC, in the aggregate amount of approximately $103,870,058 (exclusive of interest, fees and costs), which claims are secured by liens on the Property; and (iv) claims held by unsecured creditors in the aggregate amount of approximately $17,536,201. About Town Center Town Center at Doral LLC, Landmark at Doral East LLC, Landmark at Doral South LLC, Landmark Club at Doral LLC and Landmark at Doral Developers LLC, companies associated with the aborted Landmark at Doral development, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case Nos. 11-35884 to 11-35888) on Sept. 19, 2011, almost three years after AmTrust Bank sought to foreclose on the project. Town Center at Doral LLC posted assets of $29,297,300 and liabilities of $166,133,171. Isaac Kodsi signed the petitions as vice president. The Property consists of 16 individual tracts of land that remain undeveloped with the exception of an unfinished 4-level parking garage. Prior to the Petition Date, the Debtors had sought and obtained approvals for the development of residential units (townhomes and condominiums), retail/office/mixed use, and flex office at the Property. Mindy A. Mora, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP in Miami, serves as counsel to the Debtors. Glenn Moses, Esq., at Genovese Joblove & Battista, represents the official committee of unsecured creditors. Cleveland, Ohio-based AmTrust filed for foreclosure in October 2008 based on the $124.4 million in mortgages that were granted the developer in 2005. Several projects started by EB Developers fell into foreclosure after owner and CEO Elie Berdugo died in February 2008. TRADE UNION: Plan Effective Date Occurred on October 31 ------------------------------------------------------- As reported in the TCR on Sept. 29, 2011, the Bankruptcy Court confirmed Trade Union International, Inc., and Duck House, Inc.'s Modified First Amended Chapter 11 Reorganization Plan. On Nov. 1, 2011, the Debtors served notice that the Effective Date of the Plan occurred on Oct. 31, 2011. About Trade Union Montclair, California-based Trade Union International Inc. supplies aftermarket aluminum alloy wheels and wheel and truck accessories. It filed for Chapter 11 bankruptcy protection on January 31, 2011 (Bankr. C.D. Calif. Case No. 11-13071). In its schedules, the Debtor disclosed $11,350,971 in assets and $19,826,869 in liabilities. Affiliate Duck House, Inc., a California corporation, filed a separate Chapter 11 petition (Bankr. C.D. Calif. Case No. 11-13072)on Jan. 27, 2011. Duck House, Inc., specializes in designing products for sports enthusiasts. Trade Union and Duck House are each owned one-half by Wen Pin Chang and one-half by Mei Lien Chang. The Debtors sought bankruptcy protection after the bank cut off access to the bank account and said sought appointment of a receiver. James C. Bastian, Jr., Esq. -- jbastian@shbllp.com -- at Shulman Hodges & Bastian LLP, in Irvine, Calif., serves as the Debtor's bankruptcy counsel. Robert E. Opera, Esq., and Richard H. Golubow, Esq. -- ropera@winthropcouchot.com and rgolubow@winthropcouchot.com -- at Winthrop Couchot PC, in Newport Beach, Calif., serve as the general insolvency counsel of the Official Committee of Unsecured Creditors. As reported in the TCR on Sept. 29, 2011, Trade Union International Inc. won confirmation of a reorganization plan where the owners maintain control in return for a contribution of about $500,000. The secured bank debt of some $11.5 million was rolled over into a new secured obligation. Unaffiliated unsecured creditors with claims of about $900,000 will be paid $750,000 in installments through 2016. The owners in effect subordinated unsecured claims of some $9 million. TRIUS THERAPEUTICS: Michael Powell Discloses 12.8% Equity Stake --------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Dr. Michael F. Powell and his affiliates disclosed that, as of Nov. 29, 2011, they beneficially own 3,648,874 shares of common stock of Trius Therapeutics, Inc., representing 12.8% of the shares outstanding. The percentage was calculated based upon 28,555,800 shares of Common Stock outstanding as of Nov. 4, 2011, as reported by the Company. A full-text copy of the amended Schedule 13D is available for free at http://is.gd/PhjpgV About Trius Therapeutics San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) -- http://www.triusrx.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of innovative antibiotics for serious, life-threatening infections. The Company's first product candidate, torezolid phosphate, is an IV and orally administered second generation oxazolidinone being developed for the treatment of serious gram-positive infections, including those caused by MRSA. In addition to the company's torezolid phosphate clinical program, it is currently conducting two preclinical programs using its proprietary discovery platform to develop antibiotics to treat infections caused by gram-negative bacteria. The Company has incurred losses since its inception and it anticipates that it will continue to incur losses for at least the next several years. The Company does not anticipate that its existing working capital, including the funds received on Aug. 6, 2010, from its IPO, alone will be sufficient to fund its operations through the successful development and commercialization of torezolid phosphate or any other products it develops. As a result, the Company says it will need to raise additional capital to fund its operations and continue to conduct clinical trials to support potential regulatory approval of torezolid phosphate and any other product candidates. The Company reported a net loss of $23.86 million on $8.03 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $22.68 million on $5.01 million of total revenues during the prior year. The Company also reported a net loss of $5.73 million on $36 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $15.11 million on $5.51 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $77.02 million in total assets, $15.64 million in total liabilities and $61.38 million in total stockholders' equity. "We are pleased to report our consistent achievement of objectives since our IPO in August 2010," said Jeffrey Stein, Ph.D., president and chief executive officer of Trius. "We look forward to continuing our track record of solid execution in our clinical trials and company development." UNITED CONTINENTAL: Airlines May Lose Fight over CO2 Caps --------------------------------------------------------- International airlines could lose a challenge to the European Union's planned expansion of its carbon cap-and-trade system beyond the bloc's borders, according to an adviser to the region's top court, Stephanie Bodoni of Bloomberg News reported. "The inclusion of international aviation in the EU emissions trading scheme is compatible with international law," Advocate General Juliane Kokott of the EU Court of Justice in Luxembourg wrote in an October 6, 2011 non-binding opinion, Bloomberg relayed. The court follows this advice at least in part most of the time, Bloomberg wrote. As previously reported, United Continental Holdings, Inc., AMR Corp.'s American Airlines and the Air Transport Association disputed the proposed emission curbs on aviation and filed the current lawsuit before the High Court in London. The High Court then referred the case to the EU Court of Justice to clarify the legality of emission curbs, Bloomberg noted. The EU regulator, however, said it will not ditch its plans to impose carbon curbs on flights to and from the bloc's airports starting next year, the report stated. EU Climate Commissioner Connie Hedegaard in a Bloomberg interview last month said while the regulator does not want to "dictate the world what to do," aviation can not be excluded forever, Bloomberg relayed. "Generally ECJ opinions are very good indication of the final outcome," commented Isabelle Curien, Paris-based carbon analyst at Deutsche Bank AG told Bloomberg. "It'd be very good for the market if the court supported the commission and its credibility. But if the opinion cast additional doubts it would weigh doubts on the market and the moment is not good for that as prices are already low on other concerns." In recent developments, the U.S. House of Representatives passed on October 25, 2011, the "European Union Emissions Trading Scheme Prohibition Act of 2011" after the industry estimated that participation in the cap-and-trade system would cost U.S. airlines $3.1 billion between 2012 and 2020, according to a separate Bloomberg News report. Annie Petsonk, international counsel at the New York-based Environmental Defense Fund, warned that the bill could trigger a "trade war that would put tens of thousands of U.S. jobs in jeopardy," in an e-mailed statement to Bloomberg. "By barring U.S.-based airlines from complying with applicable law for flights traveling to EU airports, this bill would compel those airlines either to drop their EU routes or become scofflaws," Ms. Petsonk added. In addition, the U.S. and 25 other member states of the International Civil Aviation Organization are expected to lodge a complaint against the emissions trading scheme, Reuters related in another report. The ICAO council will meet on November 2, 2011 to discuss, among other things, the proposed EU law, Reuters related. A copy of an ICAO council working paper seen by Reuters stated that the law unilaterally passed by the EU posed major challenges and risks for aircraft operators. EU lawyers said any decision by the ICAO council is not legally binding but acknowledged that it could be a step toward a formal dispute procedure wherein the president of the ICAO would mediate, Reuters related. About United Continental United Continental Holdings, Inc. (NYSE: UAL) is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, these airlines operate a total of approximately 5,800 flights a day to 371 airports throughout the Americas, Europe and Asia from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York, San Francisco, Tokyo and Washington, D.C. United and Continental are members of Star Alliance, which offers more than 21,200 daily flights to 1,172 airports in 181 countries worldwide through its 28 member airlines. United's and Continental's more than 80,000 employees reside in every U.S. state and in many countries around the world. For more information about United Continental Holdings, Inc., go to UnitedContinentalHoldings.com. For more information about the airlines, see http://www.united.com/and http://www.continental.com/,and follow each company on Twitter and Facebook. UAL Corp and its affiliates including United Airlines filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 02-8191) on Dec. 9, 2002 . James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. United Continental carries 'B2' corporate family and probability of default ratings, with stable outlook, from Moody's, 'B' issuer credit ratings, with stable outlook, from Standard & Poor's, and 'B' issuer default rating from Fitch. Fitch upgraded United Continental's IDR from 'B-' to 'B' in September 2011, citing, "The upgrade follows a year of significant debt reduction and strong free cash flow (FCF) generation since the closing of the United-Continental merger on Oct. 1, 2010. In the face of heavy fuel cost pressure during the first half of 2011, UAL has consistently reported industry-leading revenue per available seat mile (RASM) growth while funding heavy debt maturities out of internally generated cash flow. UNITED CONTINENTAL: Faces Mobile Check-In Patents Lawsuits ---------------------------------------------------------- United Air Lines, Inc. and other carriers are facing lawsuits over use of patented wireless transaction technology for mobile check-in and boarding passes, Phil Milford of Bloomberg News reported. Aeritas LLC alleged in four complaints filed in a federal court in Wilmington, Delaware, that air carriers are using its inventions protected by patents awarded in 2007 and 2011, Bloomberg relayed. "Aeritas has suffered monetary damages in an amount adequate to compensate for defendants' infringement, but in no event less than a reasonable royalty," the patent holder wrote in its complaints against United, Continental Airlines, Inc., Delta Air Lines, Inc. and Alaska Air Group, Inc., the report stated. Aeritas seeks a jury trial and a halt to the airlines' use of the inventions, the report added. About United Continental United Continental Holdings, Inc. (NYSE: UAL) is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, these airlines operate a total of approximately 5,800 flights a day to 371 airports throughout the Americas, Europe and Asia from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York, San Francisco, Tokyo and Washington, D.C. United and Continental are members of Star Alliance, which offers more than 21,200 daily flights to 1,172 airports in 181 countries worldwide through its 28 member airlines. United's and Continental's more than 80,000 employees reside in every U.S. state and in many countries around the world. For more information about United Continental Holdings, Inc., go to UnitedContinentalHoldings.com. For more information about the airlines, see http://www.united.com/and http://www.continental.com/,and follow each company on Twitter and Facebook. UAL Corp and its affiliates including United Airlines filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 02-8191) on Dec. 9, 2002 . James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. United Continental carries 'B2' corporate family and probability of default ratings, with stable outlook, from Moody's, 'B' issuer credit ratings, with stable outlook, from Standard & Poor's, and 'B' issuer default rating from Fitch. Fitch upgraded United Continental's IDR from 'B-' to 'B' in September 2011, citing, "The upgrade follows a year of significant debt reduction and strong free cash flow (FCF) generation since the closing of the United-Continental merger on Oct. 1, 2010. In the face of heavy fuel cost pressure during the first half of 2011, UAL has consistently reported industry-leading revenue per available seat mile (RASM) growth while funding heavy debt maturities out of internally generated cash flow. US AIRWAYS: Mum About Potential Merger With American ---------------------------------------------------- Susan Carey, writing for The Wall Street Journal, reports that US Airways Group Inc.'s chief financial officer Derek Kerr said at an investor conference Tuesday the airline continues to be a proponent of industry consolidation. Mr. Kerr said on top of four major industry mergers since 2005, "there is possibly room for more." WSJ notes Mr. Kerr didn't mention any potential pairings, much less a role for his carrier, and wasn't asked about and didn't mention the rampant speculation that US Airways could wind up combining with American Airlines parent AMR Corp. WSJ also relates that before Mr. Kerr's remarks at a Rodman & Renshaw LLC airline conference in Boston, a US Airways spokeswoman reiterated the company's view that consolidation make sense for the industry with or without US Airways' participation. USAir resulted from a 2005 merger of US Airways and America West Airlines. USAir made a hostile run at Delta Air Lines Inc. when that company was in bankruptcy protection a few years ago, and talked twice with United Airlines about a combination. Delta went on to buy Northwest Airlines and United and Continental Airlines merged to form United Continental Holdings Inc. Southwest Airlines Co. acquired discounter AirTran Airways. About US Airways US Airways -- http://www.usairways.com/-- along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 190 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition (Bankr. E.D. Va. Case No. 04-13820) on Sept. 12, 2004. Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). As of Sept. 30, 2010, US Airways had $8.006 billion in total assets, $3.049 billion in current liabilities, $4.883 billion in non-current liabilities, and $74 million in stockholders' equity. * * * US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp. family rating and probability of default rating. Outlook is negative. US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer Credit rating and LT Local Issuer credit rating. Outlook is also negative. US Airways Group carries Fitch's "CCC" LT Issuer default rating and "C" Senior unsecured debt rating. Outlook is also negative About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) U.S. EAGLE: Hires Hilco Real as Real Estate Broker -------------------------------------------------- U.S. Eagle asks the U.S. Bankruptcy Court for the District Court of New Jersey to employ Hilco Real Estate, LLC, as real estate broker and Lee & Associates as the sub-listing broker for certain properties. The Debtors own certain contiguous commercial and industrial properties located in the City of Riverside, California, specifically: (i) 1155 West La Cadena Drive; (ii) 1171 West La Cadena Drive; (iii) 1179 West La Cadena Drive; (iv) 1189 West La Cadena Drive; (v) 3171 Columbia Avenue; and (vi) 3190 Interchange Street. Upon retention, Hilco Real will, among other things: (a) take the necessary steps to list and market the Riverside Properties in a manner to maximize the value thereof; (b) facilitate the dissemination of information to interested parties with respect to the Riverside Properties; and (c) assist the Debtors with the sale process. Hilco will receive 6 percent of the gross sale proceeds from the sale of the Riverside Properties if it is the sole real estate broker. However, if the buyer of the Riverside Properties is represented by a separate broker, the Debtors will seek permission to compensate Hilco at 7 percent of the gross sale proceeds as the commission will be shared with the buyer's broker. Ian S. Fredericks, Hilco vice president and assistant general counsel, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The Debtors and Hilco identified Lee as a capable broker serving the Riverside, California area to assist with the disposition of the Riverside Properties. As compensation for its work on this matter, Lee will receive 50 percent of Hilco's fee, if any. Pursuant to the Real Estate Agreement and Sub-Listing Agreement, Hilco will solely be responsible for payment of compensation, if any, to Lee. Finn L. Comer, senior VP at Lee & Associates, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About U.S. Eagle U.S. Eagle filed for Chapter 11 protection (Bankr. D. N.J. Case No. 11-10392) on Jan. 6, 2011. Samuel Jason Teele, Esq., at Lowenstein Sandler PC, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates U.S. Eagle Litho, Inc. (Bankr. D. N.J. Case No. 11- 10401), Eagle One Golf Products, Inc. (Bankr. D. N.J. Case No. 11- 10397), Julius Realty Corporation (Bankr. D. N.J. Case No. 11- 10393), Traffic Control Service, Inc., An Arizona Corporation (Bankr. D. N.J. Case No. 11-10398), Traffic Control Service, Inc., A California Corporation (Bankr. D. N.J. Case No. 11-10403), and Traffic Control Service, Inc., A Nevada Corporation (Bankr. D. N.J. Case No. 11-10392) filed separate Chapter 11 petitions on Jan. 6, 2011. Three Twenty One Capital Partners, LLC serves as exclusive agent for the Debtors. On Feb. 22, 2011, the U.S. Trustee appointed an Official Committee of Unsecured Creditors. Porzio, Bromberg & Newman, P.C., represents the Committee. No trustee or examiner has been requested or appointed in the Chapter 11 cases. VENTO FAMILY: BNLV Wins Ch. 11 Case Dismissal --------------------------------------------- On Nov. 22, 2011, the U.S. Bankruptcy Court for the District of Nevada granted the motion of Bank of North Las Vegas (BNLV) to dismiss the Chapter 11 case of Vento Family Trust pursuant to 11 U.S.C. Section 109. The Court concludes that the Debtor is not a business trust within the meaning of Section 101(9), is not a person within the meaning of Section 101(41), and therefore is not eligible to be a debtor under Section 109(a). As a result, the Court ordered that all pending hearings in the case, except any pending hearings on fee applications for Chapter 13 cases, are vacated and will be taken off calendar without further notice. As reported in the TCR on Oct. 24, 2011, BNLV said that the Debtor does not qualify as a business trust and is ineligible for bankruptcy relief. BNLV also requested for an appointment of an examiner to investigate the conduct of the Debtor and its beneficiaries with regard to Debtor's prepetition transfers, prepetition asset protection activities, and mismanagement of the Chapter 11 case. BNLV related that the Debtor's unsecured creditors hold fixed, liquidated, unsecured claims in excess of $13 million, which far exceeds the $5 million threshold of Section 1104(c)(2) of the Bankruptcy Code. City National Bank, N.A., joined in both the Examiner Motion and the Dismissal Motion. Vento Family Trust earlier filed a First Amended Disclosure Statement for its Chapter 11 Plan of Reorganization with the U.S. Bankruptcy Court for the District of Nevada. The Plan contemplates the Debtor paying claims from the proceeds of its business operations. The Plan offered monthly payments of $4,000 for 60 months to pay unsecured claims totaling $240,000. A copy of the disclosure Statement is available at: http://bankrupt.com/misc/ventofamily.dkt169.pdf About Vento Family Trust Based in Henderson, Nevada, Vento Family Trust was formed in 1990 for the purpose of holding business related real estate assets of Carmine and Ann Vento. The Trust filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-33909) on Dec. 27, 2010. Judge Mike K. Nakagawa presides over the case. Jason C. Farrington, Esq., and Timothy S. Cory, Esq., at Timothy S. Cory & Associates, in Las Vegas, represents the Debtor. In its amended schedules, the Debtor disclosed $12,840,000 in assets and $11,273,400 in liabilities. About Vento Family Trust Based in Henderson, Nevada, Vento Family Trust was formed in 1990 for the purpose of holding business related real estate assets of Carmine and Ann Vento. The Trust filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-33909) on Dec. 27, 2010. Judge Mike K. Nakagawa presides over the case. Jason C. Farrington, Esq., and Timothy S. Cory, Esq., at Timothy S. Cory & Associates, in Las Vegas, represents the Debtor. In its amended schedules, the Debtor disclosed $12,840,000 in assets and $11,273,400 in liabilities. VILLAGE AT PENN: Seeks to Employ McElroy Deutsch as Attorneys ------------------------------------------------------------- The Village at Penn State Retirement Community seeks permission from the U.S. Bankruptcy Court for the Middle District of Pennsylvania to employ McElroy, Deutsch, Mulvaney & Carpenter, LLP, as its attorneys. Upon retention, McElroy Deutsch will: (a) provide the Debtor with legal services with respect to its powers and duties as debtor-in-possession; (b) prepare on behalf of the Debtor or assist the Debtor in preparing all necessary pleadings, motions, applications, complaints, answers, responses, orders, United States Trustee reports, and other legal papers; (c) represent the Debtor in any matter involving contests with secured or unsecured creditors, including the claims reconciliation process; (d) assist the Debtor in providing legal services required to prepare, negotiate and implement a sale of substantially all of the Debtor's assets; and (e) perform all other legal services for the Debtor which may be necessary, other than those requiring specialized expertise for which special counsel will be employed. The principal professionals expected to represent the Debtor and their current hourly rates are: Barry D. Kleban (Partner) $485 Gary D. Bressler (Partner) $485 David P. Primack (Of Counsel) $385 Aaron S. Applebaum (Associate) $185 Sandi Shidner (Paralegal) $175 The Debtor agrees to reimburse McElroy Deutsch for its expenses including, among other things, mail and express mail, document processing, travel, photocopying and computerized legal research. Prior to the Petition Date, McElroy Deutsch and certain of its partners and associates have rendered legal services to the Debtor in connection with various corporate, financial and other legal matters. On Nov. 17, 2011, McElroy Deutsch received $273,416 from the Debtor. To the best of the Debtor's knowledge, McElroy Deutsch is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Aaron Solomon Applebaum, Esq. MCELROY, DEUTSCH, MULVANEY & CARPENTER 1617 John F. Kennedy Boulevard, Suite 1500 Philadelphia, PA 19146 Tel: (215) 557-2956 Fax: (215) 557-2990 E-mail: Aapplebaum@mdmc-law.com - and Barry David Kleban, Esq. MCELROY, DEUTSCH, MULVANEY & CARPENTER 1617 John F. Kennedy Boulevard, Suite 1500 Philadelphia, PA 19103 Tel: (215) 557-2945 Fax: (215) 557-2990 E-mail: bkleban@mdmc-law.com - and Gary D. Bressler, Esq. MCELROY, DEUTSCH, MULVANEY & CARPENTER 1617 John F. Kennedy Boulevard, Suite 1500 Philadelphia, PA 19103 Tel: (215) 557-2900 Fax: (215) 557-2990 E-mail: gbressler@mdmc-law.com About Village at Penn The Village at Penn State Retirement Community is a nonprofit corporation organized and existing under the laws of the Commonwealth of Pennsylvania and qualifies as a tax exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The Village at Penn was organized in 1998 for the purpose of, inter alia, owning and operating a continuing care retirement community originally located at 361 Presidents Drive, State College, Pennsylvania 16803, and currently located at 260 Lion's Hill Road, State College Pennsylvania 16803. The Debtor is not affiliated with any religious or charitable organization. The Debtor filed for Chapter 11 bankruptcy (Bankr. M.D. Pa. Case No. 11-08005) on Nov. 30, 2011. The Debtor estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. Marianne Hogg signed the petition as executive director. The Debtor's need to seek protection under Chapter 11 of the Bankruptcy Code resulted from, among other things, its inability to make the required payments under the Loan Agreement with Blair County Industrial Development Authority since October 2009. While J.P.. Morgan Trust, Company, as predecessor Indenture Trustee to Wells Fargo Bank, National Association, issued a notice of default to the Debtor on account of those failures, it has opted to work with the Debtor in furtherance of a mutually-agreeable solution rather than pursue state court remedies. This Chapter 11 case, and the sale contemplated to occur in this case, is the direct result of those efforts. The Debtor is indebted under the bond documents in the aggregate amount, as of Nov. 30, 2011, of $27,225,126 on account of certain senior bonds that were issued in 2002. In addition to the senior bonds, the Debtor is also indebted on account of $7,386,250 in subordinated bonds. VILLAGE AT PENN: Seeks to Hire Latsha Davis as Healthcare Counsel ----------------------------------------------------------------- The Village at Penn State Retirement Community asks the U.S. Bankruptcy Court for the Middle District of Pennsylvania for permission to employ Latsha Davis & McKenna, P.C., as its special corporate labor and healthcare counsel to perform specific non- bankruptcy legal services. The Debtor seeks to employ Latsha Davis to provide: (a) general corporate legal advice and assistance to the Debtor and Debtor's bankruptcy counsel on corporate legal issues; (b) legal assistance with any agreements relating to an asset sale, affiliation or similar agreement proposed to be entered into during the chapter 11 bankruptcy case; (c) legal assistance related to labor and employment-law and health care issues; (d) legal assistance related to matters with the Pennsylvania Office of the Attorney General; and (e) representation of the Debtor in the Orphan's Court in connection with any proposed sale of all or substantially all of the Debtor's assets, as the Debtor is a nonprofit corporation organized under the laws of the Commonwealth of Pennsylvania. The attorneys expected to represent the Debtor and their current hourly rates are: (a) Kimber L. Latsha $300 (b) Glenn R. Davis $270 (c) David C. Marshall $260 (d) Peter R. Wilson $250 (e) Angela L. Thomas $235 (f) Lorie A. Taylor $175 (g) Erin L. Bosley $150 (h) Daniel R. Jameson $150 Prior to the Petition Date, the Debtor paid Latsha Davis a retainer of $30,000. The Debtor agrees to reimburse the firm for its actual and necessary expenses and other charges that the firm incurs. To the best of the Debtor's knowledge, Latsha Davis is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Village at Penn The Village at Penn State Retirement Community is a nonprofit corporation organized and existing under the laws of the Commonwealth of Pennsylvania and qualifies as a tax exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The Village at Penn was organized in 1998 for the purpose of, inter alia, owning and operating a continuing care retirement community originally located at 361 Presidents Drive, State College, Pennsylvania 16803, and currently located at 260 Lion's Hill Road, State College Pennsylvania 16803. The Debtor is not affiliated with any religious or charitable organization. The Debtor filed for Chapter 11 bankruptcy (Bankr. M.D. Pa. Case No. 11-08005) on Nov. 30, 2011. The Debtor estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. Marianne Hogg signed the petition as executive director. The Debtor's need to seek protection under Chapter 11 of the Bankruptcy Code resulted from, among other things, its inability to make the required payments under the Loan Agreement with Blair County Industrial Development Authority since October 2009. While J.P.. Morgan Trust, Company, as predecessor Indenture Trustee to Wells Fargo Bank, National Association, issued a notice of default to the Debtor on account of those failures, it has opted to work with the Debtor in furtherance of a mutually-agreeable solution rather than pursue state court remedies. This Chapter 11 case, and the sale contemplated to occur in this case, is the direct result of those efforts. The Debtor is indebted under the bond documents in the aggregate amount, as of Nov. 30, 2011, of $27,225,126 on account of certain senior bonds that were issued in 2002. In addition to the senior bonds, the Debtor is also indebted on account of $7,386,250 in subordinated bonds. VILLAGE AT PENN: Seeks to Employ SF & Company as Accountants ------------------------------------------------------------ The Village at Penn State Retirement Community seeks permission from the U.S. Bankruptcy Court for the Middle District of Pennsylvania to employ SF & Company as its accountants. The Debtor seeks to employ SF & Company to: (a) prepare needed tax returns; (b) assist the Debtor and the Debtor's counsel in preparation of monthly operating reports; (c) assist the Debtor and the Debtor's counsel in preparation of schedules and statement of financial affairs; (d) prepare monthly financials in connection with any proposed sale of the Debtor; and (e) assist in any other matters that may be appropriate in the case, including, but not limited to, consultations concerning bookkeeping and tax issues. The accountants expected to have principal responsibility in handling representation of the Debtor and their current hourly rates are: Heather M. Pleskonko, CPA (Manager) $75 - $260 Calvin J. Wagner, CPA (Shareholder) $288 - $347 James A. Smeltzer, CPA (Shareholder) $288 - $347 Arleen Steiner, CPA (Sr. Manager) $224 - $283 Brandon M. Zlupko, CPA (Shareholder) $258 - $317 Rose M. Fetters, CPA (Staff Acct.) $102 - $161 Joseph T. Kolarik, CPA (Tax Director) $269 - $328 The Debtor will reimburse SF & Company for its expenses including, among other things, document processing, photocopying, travel, and non-ordinary overhead expenses. In the 90-day period prior to the Petition Date, SF & Company received from the Debtor $20,000 as retainer. Heather M. Pleskonko, manager of SF & Company, assures the Court that his firm does not hold or represent any interest adverse to the Debtor or its estate. About Village at Penn The Village at Penn State Retirement Community is a nonprofit corporation organized and existing under the laws of the Commonwealth of Pennsylvania and qualifies as a tax exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The Village at Penn was organized in 1998 for the purpose of, inter alia, owning and operating a continuing care retirement community originally located at 361 Presidents Drive, State College, Pennsylvania 16803, and currently located at 260 Lion's Hill Road, State College Pennsylvania 16803. The Debtor is not affiliated with any religious or charitable organization. The Debtor filed for Chapter 11 bankruptcy (Bankr. M.D. Pa. Case No. 11-08005) on Nov. 30, 2011. The Debtor estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. Marianne Hogg signed the petition as executive director. The Debtor's need to seek protection under Chapter 11 of the Bankruptcy Code resulted from, among other things, its inability to make the required payments under the Loan Agreement with Blair County Industrial Development Authority since October 2009. While J.P.. Morgan Trust, Company, as predecessor Indenture Trustee to Wells Fargo Bank, National Association, issued a notice of default to the Debtor on account of those failures, it has opted to work with the Debtor in furtherance of a mutually-agreeable solution rather than pursue state court remedies. This Chapter 11 case, and the sale contemplated to occur in this case, is the direct result of those efforts. The Debtor is indebted under the bond documents in the aggregate amount, as of Nov. 30, 2011, of $27,225,126 on account of certain senior bonds that were issued in 2002. In addition to the senior bonds, the Debtor is also indebted on account of $7,386,250 in subordinated bonds. VILLAGE AT PENN: Opposes Patient Care Ombudsman Appointment ----------------------------------------------------------- The Village at Penn State Retirement Community asks the U.S. Bankruptcy Court for the Middle District of Pennsylvania to enter an order finding that the appointment of a patient-care ombudsman is not necessary, or, in the alternative, directing appointment of a State Long-Term Care Ombudsman. Section 333(a)(1) of the Bankruptcy Code states "If the debtor in a case under chapter 7, 9, or 11 is a health care business, the court shall order, not later than 30 days after the commencement of the case, the appointment of an ombudsman to monitor the quality of patient care and to represent the interests of the patients of the health care business unless the court finds that the appointment of such ombudsman is not necessary for the protection of patients under the specific facts of the case." The Debtor asserts that the appointment of an Ombudsman, in addition to being unnecessary to preserving the quality of patient care, would be an added expense that could not easily be borne by the estate. However, the Debtor said it is prepared to accept the appointment by the U.S. Trustee of a State Long-Term Care Ombudsman. The Debtor's position as to this alternative relief is based on the likelihood that the state-appointed ombudsman will not likely seek independent compensation from the Court or the Debtor's estate. About Village at Penn The Village at Penn State Retirement Community is a nonprofit corporation organized and existing under the laws of the Commonwealth of Pennsylvania and qualifies as a tax exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The Village at Penn was organized in 1998 for the purpose of, inter alia, owning and operating a continuing care retirement community originally located at 361 Presidents Drive, State College, Pennsylvania 16803, and currently located at 260 Lion's Hill Road, State College Pennsylvania 16803. The Debtor is not affiliated with any religious or charitable organization. The Debtor filed for Chapter 11 bankruptcy (Bankr. M.D. Pa. Case No. 11-08005) on Nov. 30, 2011. The Debtor estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. Marianne Hogg signed the petition as executive director. The Debtor's need to seek protection under Chapter 11 of the Bankruptcy Code resulted from, among other things, its inability to make the required payments under the Loan Agreement with Blair County Industrial Development Authority since October 2009. While J.P.. Morgan Trust, Company, as predecessor Indenture Trustee to Wells Fargo Bank, National Association, issued a notice of default to the Debtor on account of those failures, it has opted to work with the Debtor in furtherance of a mutually-agreeable solution rather than pursue state court remedies. This Chapter 11 case, and the sale contemplated to occur in this case, is the direct result of those efforts. The Debtor is indebted under the bond documents in the aggregate amount, as of Nov. 30, 2011, of $27,225,126 on account of certain senior bonds that were issued in 2002. In addition to the senior bonds, the Debtor is also indebted on account of $7,386,250 in subordinated bonds. VILLAGE AT PENN: Seeks to Tap Pepper Hamilton as Litig. Counsel --------------------------------------------------------------- The Village at Penn State Retirement Community seeks permission from the U.S. Bankruptcy Court for the Middle District of Pennsylvania to employ Pepper Hamilton LLP as its special construction litigation counsel. Prior to the Petition Date, Pepper Hamilton provided certain legal services to the Debtor. These services consisted primarily of representing the Debtor in construction litigation matters. Upon approval of the Application, Pepper Hamilton will: (a) continue to handle all matters related to the construction disputes; and (b) advise the Debtor and the Debtor's general bankruptcy counsel. The attorneys of Pepper Hamilton expected to handle representation of the Debtor and their current hourly rates are: Thomas B. Schmidt, III $485 Raymond DeLuca $475 Frederick Alcaro $375 The Debtor agrees to reimburse Pepper Hamilton for its expenses including, among other things, toll and telephone charges, special or hand deliveries, document processing and travel. Prior to the Petition Date, the Debtor paid Pepper Hamilton a retainer of $16,000. To the best of the Debtor's knowledge, Pepper Hamilton is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Village at Penn The Village at Penn State Retirement Community is a nonprofit corporation organized and existing under the laws of the Commonwealth of Pennsylvania and qualifies as a tax exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The Village at Penn was organized in 1998 for the purpose of, inter alia, owning and operating a continuing care retirement community originally located at 361 Presidents Drive, State College, Pennsylvania 16803, and currently located at 260 Lion's Hill Road, State College Pennsylvania 16803. The Debtor is not affiliated with any religious or charitable organization. The Debtor filed for Chapter 11 bankruptcy (Bankr. M.D. Pa. Case No. 11-08005) on Nov. 30, 2011. The Debtor estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. Marianne Hogg signed the petition as executive director. The Debtor's need to seek protection under Chapter 11 of the Bankruptcy Code resulted from, among other things, its inability to make the required payments under the Loan Agreement with Blair County Industrial Development Authority since October 2009. While J.P.. Morgan Trust, Company, as predecessor Indenture Trustee to Wells Fargo Bank, National Association, issued a notice of default to the Debtor on account of those failures, it has opted to work with the Debtor in furtherance of a mutually-agreeable solution rather than pursue state court remedies. This Chapter 11 case, and the sale contemplated to occur in this case, is the direct result of those efforts. The Debtor is indebted under the bond documents in the aggregate amount, as of Nov. 30, 2011, of $27,225,126 on account of certain senior bonds that were issued in 2002. In addition to the senior bonds, the Debtor is also indebted on account of $7,386,250 in subordinated bonds. VILLAGE AT PENN: Seeks to Employ RBC Capital as Broker ------------------------------------------------------ The Village at Penn State Retirement Community asks the U.S. Bankruptcy Court for the Middle District of Pennsylvania for permission to employ RBC Capital Markets as broker or advisor. The Debtor seeks to retain RBC Capital as its broker because of the RBC Capital's experience and knowledge in the field of marketing and soliciting bids for the sales of businesses in a variety of areas, including those focusing on Senior-Living and especially continuing care retirement communities or "CCRC". The Debtor is seeking to pursue a potential sale of its CCRC facility located in State College, Pennsylvania, through a sale process in connection the Chapter 11 case. The Debtor seeks to retain RBC Capital to perform these services: (a) Assess the proposed Asset Sale and Affiliation/Debt Restructure strategies for the Debtor and its representatives; (b) Review and analyze the base Financials, Financial Model, Market Studies, Marketing Program and Residency Agreements. Provide high-level market analysis and assemble local MLS real estate data as needed; (c) Develop Materials and Summaries for the marketing of the Facility for the purpose of sale; (d) Advise of current conditions in the local and national relevant Continuing Care Retirement Community market, and other general information and economic data; (e) Interface with the Debtor's Management & Staff, Board Members, and the Indenture Trustee of the holders of the Bonds as required in addition to outside professionals and representatives of the Borrower and other Creditors. Facilitate dialogue and coordinate with Bondholders and Creditors as requested; (f) Attend meetings and conference calls amongst the Borrower, Designated professionals and Bondholders. Also attend meetings for the Borrower, Creditors and Working Groups as needed. The firm's hourly rates are: Director/MD $450 Vice President $350 Associate $250 The Marketing Process is capped at $50,000 for 2 months marketing period. RBC Capital would be due a Success Fee plus expenses at closing. The Debtor will reimburse RBC Capital for its expenses, including among other things, document processing, photocopying, travel and "working meals". In the 90-day period before the Petition Date, RBC Capital received $6,681 from the Debtor. To the best of the Debtor's knowledge, RBC Capital is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Village at Penn The Village at Penn State Retirement Community is a nonprofit corporation organized and existing under the laws of the Commonwealth of Pennsylvania and qualifies as a tax exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The Village at Penn was organized in 1998 for the purpose of, inter alia, owning and operating a continuing care retirement community originally located at 361 Presidents Drive, State College, Pennsylvania 16803, and currently located at 260 Lion's Hill Road, State College Pennsylvania 16803. The Debtor is not affiliated with any religious or charitable organization. The Debtor filed for Chapter 11 bankruptcy (Bankr. M.D. Pa. Case No. 11-08005) on Nov. 30, 2011. The Debtor estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. Marianne Hogg signed the petition as executive director. The Debtor's need to seek protection under Chapter 11 of the Bankruptcy Code resulted from, among other things, its inability to make the required payments under the Loan Agreement with Blair County Industrial Development Authority since October 2009. While J.P.. Morgan Trust, Company, as predecessor Indenture Trustee to Wells Fargo Bank, National Association, issued a notice of default to the Debtor on account of those failures, it has opted to work with the Debtor in furtherance of a mutually-agreeable solution rather than pursue state court remedies. This Chapter 11 case, and the sale contemplated to occur in this case, is the direct result of those efforts. The Debtor is indebted under the bond documents in the aggregate amount, as of Nov. 30, 2011, of $27,225,126 on account of certain senior bonds that were issued in 2002. In addition to the senior bonds, the Debtor is also indebted on account of $7,386,250 in subordinated bonds. WACHOVIA: NCUA Files Suit Over Securities Law Violations -------------------------------------------------------- The National Credit Union Administration (NCUA) has filed suit in Federal District Court in Kansas against Wachovia and its subsidiaries. The suit alleges violations of federal and state securities laws and misrepresentations in the sale of securities to now-failed U.S. Central Federal Credit Union (US Central) and Western Corporate Federal Credit Union (WesCorp). This lawsuit follows several similar legal proceedings previously filed by NCUA against Morgan Securities, LLC, RBS Securities and Goldman Sachs. As liquidating agent for failed corporate credit unions US Central and WesCorp, NCUA has a statutory duty to seek recoveries from responsible parties in order to minimize the cost of any failure to its insurance funds and the credit union industry. NCUA recently settled claims with Deutsche Bank Securities becoming the first federal regulatory agency for depository institutions to recover losses on behalf of failed financial institutions that resulted from investments in these securities. "NCUA continues to do everything within our authority to seek maximum recoveries and ensure that those who caused the problems in wholesale credit unions pay for the losses incurred by retail credit unions," said NCUA Board Chairman Debbie Matz. "By filing these suits, we intend to hold responsible parties accountable for their actions." NCU's complaint alleges that there were numerous material misrepresentations made by the sellers, issuers and underwriters in the offering documents of securities sold to the failed corporate credit unions. These misrepresentations caused the corporate credit unions that bought the securities to believe the risk of loss associated with the investment was minimal, when in fact the risk was substantial. Any recoveries from these legal actions would reduce the total losses resulting from the failure of the five corporate credit unions. Losses from those failures must be paid from the Temporary Corporate Credit Union Stabilization Fund or the National Credit Union Share Insurance Fund. Expenditures from these funds must be repaid through assessments against all federally insured credit unions. Thus, any recoveries would help to reduce the amount of future assessments on credit unions. Corporate credit unions are wholesale credit unions that provide various services to retail credit unions, which in turn serve consumers, or "natural persons." Natural person credit unions rely on corporate credit unions to provide them such services as check clearing, electronic payments and investments. This suit was filed in the Federal District Court for the District of Kansas. The complaint is posted to NCUA's Web site at the following link: http://www.ncua.gov/News/Press/NW20111128WachoviaComplaint.pdf NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions. With the backing of the full faith and credit of the U.S. Government, NCUA operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of more than 91 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. WEST END FINANCIAL: Sets Jan. 26 Plan Confirmation Hearing ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that bankrupt fund adviser West End Financial Advisors LLC received approval from the bankruptcy judge for the disclosure statement explaining the liquidating Chapter 11 plan. The confirmation hearing for approval of the plan is set for Jan. 26. According to the report, the plan pays creditors in the order of priority outlined in bankruptcy law. There are three secured creditors with claims aggregating about $13 million. West End believes the security interest for a $5 million claim is invalid, according to the disclosure statement. There are $6.6 million in general unsecured creditor claims and $84.6 million in unsecured investor claims. The investors' claims will be treated as claims rather than equity, although they won't be paid until after non- investor's claims. The plan creates a trust to pursue lawsuits and distribute proceeds to creditors. Mr. Rochelle recounts that in July the bankruptcy judge ruled that West End should be substantively consolidated with affiliates. Consequently, unsecured creditors of all the companies presumptively would receive the same percentage distribution. About West End Financial West End Financial Advisors LLC, Sentinel Investment Management Corp. and a number of affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-11152) in Manhattan on March 15, 2011. New York-based West End estimated its assets and debts at $1 million to $10 million. Arnold Mitchell Greene, Esq., at Robinson Brog Leinwand Greene Genovese & Gluck, P.C., serves as the Debtors' bankruptcy counsel. William Landberg created WEFA in 2000 as an investment and financial management company. Subsequently he purchased Sentinel Investment Management Corp., a boutique investment advisory company. Sentinel and WEFA targeted individual private clients for investments in fixed income funds and alternative investment products. Mr. Landberg's ultimately resigned from all West End related entities effective June 2, 2009, following a probe on misappropriation of funds. Schedules of assets and liabilities for West End and its funds showed assets of $400,000 and debt of $6.7 million, not including $66 million from investors who may or may not be considered creditors. Debt includes $5.5 million in secured claims, according to the schedules. Secured creditors with the largest claims are DZ Bank ($118.1 million), West LB ($41 million), Iberia Bank ($11.3 million), and Suffolk County National Bank ($8.3 million). West End Financial filed a plan of liquidation in bankruptcy court in August. WESTERN CORPORATE: Wachovia Forced Credit Unions Into Liquidation ----------------------------------------------------------------- Courthouse News Service reports that the National Credit Union Administration Board claimed in Federal Court that Wachovia Capital Markets' disregard for industry underwriting guidelines forced two of the nation's largest federal credit unions into involuntary liquidation, after they lost $127 million in residential mortgage-backed securities. The U.S. Central Federal Credit Union and Western Corporate Federal Credit Union were forced into liquidation in March 2009, after the securities tanked, the report recalls. Courthouse News discloses that the credit unions lost more than $127 million in 12 months from the securities, all of which the NCUAB claims were artificially inflated to have a "triple-A" rating. According to the report, the losses were 14 times more than expected and the NCUAB claims this excessive rate shows that Wachovia systematically disregarded underwriting standards. "The total collapse in the credit ratings of the RMBS U.S. Central and WesCorp purchased, typically from triple-A to non-investment speculative grade, is evidence of the originators' systematic disregard of underwriting guidelines, amplifying that these securities were impaired from the outset," according to the complaint obtained by Courthouse News Service. The report relates that the NCUAB seeks damages for violations of the Securities Act. The complaint, as cited by the report, states that any recovery made will reduce the total losses from U.S. Central. Wachovia Capital, now known as Wells Fargo Securities, is the lone defendant. As reported in the Troubled Company Reporter on March 23, 2009, the National Credit Union Administration Board placed U.S. Central Federal Credit Union, based in Lenexa, Kansas, and Western Corporate (WesCorp) Federal Credit Union, based in San Dimas, California, into conservatorship on March 20, 2009, to stabilize the corporate credit union system and resolve balance sheet issues. These actions are the latest NCUA efforts to assist the corporate credit union network under the Corporate Stabilization Plan. WORLDWIDE ENERGY: Signs Forbearance Pact with Bank of the West -------------------------------------------------------------- Worldwide Energy & Manufacturing USA, Inc., on Nov. 21, 2011, entered into a Forbearance Agreement with Bank of the West relating to that certain Business Loan Agreement dated as of May 20, 2008, as amended. Pursuant to the terms of the Loan Agreement, the Company issued to Bank a promissory note in the original principal amount of $2,000,000 on May 20, 2008, with an amended maturity date of Nov. 30, 2011, and a promissory note in the original principal amount of $500,000 on May 20, 2008, having a maturity date of June 1, 2012, issued to Bank by the Company pursuant to the Loan Agreement. As of Oct. 1, 2011, Note No. 1 had an unpaid principal balance of $1,250,000 plus accrued and unpaid interest owing of $4,687. As of Oct. 1, 2011, Note No. 2 had an unpaid principal balance of $111,111 and accrued but unpaid interest owing of $338. The Bank notified the Company that all obligations under the Loan Documents, were accelerated as a result of the occurrence of an event of default due to: (i) the Company's failure to furnish Bank with its annual financial statements for the fiscal year ended Dec. 31, 2010, by April 30, 2011; (ii) the Company's failure to furnish Bank with its quarterly financial statements for its fiscal quarter ended March 31, 2011; (iii) the change in the Company's management, as previously disclosed in the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 27, 2011, constitutes an "Adverse Change" under the Loan Documents; and (iv) the aforementioned change in management, the Bank believes itself insecure under the Loan Agreement. Pursuant to the terms of the Agreement, Bank has agreed to forbear from proceeding to exercise any and all of its rights and remedies in law or equity under the Loan Documents, from July 14, 2011, through and including May 1, 2012, in consideration for certain covenants and agreements of the Company. A full-text copy of the Forbearance Agreement is available for free at http://bankrupt.com/misc/WORLDWIDEwestforbear.pdf About Worldwide Energy Worldwide Energy & Manufacturing USA, Inc., headquartered in South San Francisco, California with manufacturing facilities in China, is a manufacturer of photovoltaic (PV) solar modules under the 'Amerisolar' brand. Founded in 1993, the Company sells its products primarily to clients in Europe, North America and Asia. The Company also operates several subsidiaries in the People's Republic of China (PRC) that provide mechanical, electronic and fiber optic products manufacturing. For more information about Worldwide Energy & Manufacturing USA, please visit its Web site at http://www.wwmusa.com. W.R. GRACE: Wants PwC Waived From 6 Minute Increments in Billing ---------------------------------------------------------------- W.R. Grace & Co. and its affiliates ask the bankruptcy court for an order amending its previous order authorizing the employment and retention of PricewaterhouseCoopers LLP as independent accountants and auditors to the Debtors by waiving the requirement that PwC bill activities in tenth of an hour units and authorizing PwC to record and submit a summary time report kept in one hour increments in its fee applications. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, relates that since the Petition Date and following the entry of the original retention order, PwC has performed services that are all non-restructuring in nature and unrelated to the administration of the Debtors' Chapter 11 cases. PwC's continued compliance with the Six Minute Increments Requirement is an additional expense for the Debtors, Ms. Jones contends. She asserts that it is not the general practice of PwC to keep detailed time records similar to those customarily kept by restructuring attorneys so as to comply with the Six Minute Increments Requirement. She says that to comply with the Six Minute Increments Requirement, PwC has had to institute a special timekeeping record system for all professionals and paraprofessionals recording time concerning the Chapter 11 Cases. The Office of the United States Trustee for the District of Delaware has no objection to the waiver of PwC's compliance with the Six Minute Increments Requirement. The Debtors submit that the relief requested is in the best interests of their estates, their creditors and stakeholders, because allowing PwC to streamline its time entry requirements will reduce costs incurred by the Debtors and, thus, their estates, and allow PwC to focus its resources on its professional activities. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace has obtained confirmation from the bankruptcy court of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Zonolite-Related Class Action Lawsuits Remain Stayed ---------------------------------------------------------------- Class action lawsuits commenced against W. R. Grace & Co. remain stayed due to its bankruptcy filing, according to the Company's November 4, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2011. In April 2, 2001, W. R. Grace & Co. and 61 of its United States subsidiaries and affiliates filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. Grace is a defendant in property damage and personal injury lawsuits relating to previously sold asbestos-containing products, including Zonolite(R) Attic Insulation, a former Grace attic insulation product. Eight of the ZAI cases were filed as purported class action lawsuits in 2000 and 2001. In addition, 10 lawsuits were filed as purported class actions in 2004 and 2005 with respect to persons and homes in Canada. These cases seek damages and equitable relief, including the removal, replacement and disposal of all the insulation. The plaintiffs assert that this product is in millions of homes and that the cost of removal could be several thousand dollars per home. As a result of the Filing, the eight U.S. cases have been stayed. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace has obtained confirmation from the bankruptcy court of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: To Improve Albany, Oregon Manufacturing Facility ------------------------------------------------------------ W. R. Grace & Co. is planning to improve its current facility, in Albany, Oregon, by adding equipment and building modifications for $14.7 million and at least seven new jobs, the democratherald.com reports. As previously reported, Grace said in a statement that in 2011, it continued expanding its polypropylene catalyst manufacturing capacity through an investment in its Albany facility. According to the democratherald.com report, the project would include $700,000 for facility improvements and $14 million for machinery and equipment at the plant. The report added that the Company is planning to increase its manufacturing capacity for an existing product line and the addition of a new line. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace has obtained confirmation from the bankruptcy court of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) Z TRIM HOLDINGS: Five Directors Elected at Annual Meeting --------------------------------------------------------- At the Annual Meeting held on Dec. 1, 2011, the total number of shares represented in person or by proxy was 9,022,378 of the 13,453,407 shares of Common Stock outstanding and entitled to vote at the Annual Meeting. Five persons were elected as Directors of Z Trim Holdings, Inc., to serve until the next Annual Meeting of Shareholders in 2012 or until their successors are elected and qualified. They are: (1) Steven J. Cohen; (2) Morris Garfinkle; (3) Brian S. Israel; (4) Mark Hershhorn; and (5) Edward Smith III. The shareholders voted to ratify the appointment of M&K CPAs, LLC, as the Company's independent registered accounting firm for the fiscal year 2011. About Z Trim Mundelein, Ill.-based Z Trim Holdings, Inc., is a functional food ingredient company which provides custom product solutions that help answer the food industry's problems. Z Trim's revolutionary technology provides value-added ingredients across virtually all food industry categories. Z Trim's all-natural products, among other things, help to reduce fat and calories, add fiber, provide shelf-stability, prevent oil migration, and add binding capacity -- all without degrading the taste and texture of the final food products. The Company reported a net loss of $10.91 million on $903,780 in total revenues for the year ended Dec. 31, 2010, compared with a net loss of $12.21 million on $559,910 of revenue during the prior year. The Company's balance sheet at June 30, 2011, showed $6.50 million in total assets, $16.09 million in total liabilities, $1.52 million in total commitment and contingencies, and a $11.11 million total stockholders' deficit. As reported in the Troubled Company Reporter on April 12, 2010, M&K, CPAs, PLLC, in Houston, expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted that the Company has suffered recurring losses from operations and requires additional financing to continue in operation. The Company said that for the year ended Dec. 31, 2009, it did not have enough cash on hand to meet its current liabilities or to fund on-going operations beyond one year. As a result, the report of independent registered public accounting firm included an explanatory paragraph in respect to the substantial doubt of the Company's ability to continue as a going concern. The Company's cash on hand as of Dec. 31, 2010 is $2,327,013. Since June 2010, the Company brought in $8,170,988 in funds through the sale of Preferred Stock, and our investors converted approximately $8,100,000 of convertible debt into common stock. In addition to the fundraising efforts, the Company intends to make capital expenditures necessary to increase its capacity and to reduce its cost per pound. Due to the expected increase in production capacity, the Company anticipates its sales for fiscal year ended Dec. 31, 2011 will approximately double those of fiscal year ended Dec. 31, 2010. Although the Company has recurring operating losses and negative cash flows from operating activities, the Company has positive working capital and believe it has enough cash on hand to satisfy current obligations. If the Company is unsuccessful in its plans to increase revenue and capacity, the impact may have a material impairment on its ability to continue as a going concern. * Interest Drops Below Contract Rate After Confirmation ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that an over-secured creditor is only entitled to interest at the higher contract rate until a Chapter 13 plan is confirmed. After confirmation, the interest rate drops to the level consistent with the Supreme Court's Till v. SCS Credit Corp. decision, the U.S. Court of Appeals in Atlanta ruled on Nov. 30. The report relates that the creditor's $26,000 claim was fully secured by automobiles concededly worth $33,000. The contract interest rate was 10.25 percent. The bankruptcy court and the district court ruled that the creditor was entitled to the contract until confirmation of the Chapter 13 plan. At that time, the interest rate dropped to 4.25 percent using the Till formula. According to Mr. Rochelle, the 11th Circuit in Atlanta, in an opinion by Chief Circuit Judge Joel F. Dubina, held that imposing the lower interest rate after confirmation is the proper interpretation of Section 506(b) of the Bankruptcy Code. The Atlanta court said its ruling is consistent with opinions from the courts of appeal in New York and San Francisco. The case is First United Security Bank v. Garner (In re Garner), 11-10465, U.S. 11th Circuit Court of Appeals (Atlanta). * Denial of Dismissal for Abuse is Appealable Order --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that an order denying a motion to dismiss a Chapter 7 case for abuse is appealable, the U.S. Court of Appeals in Richmond ruled on Nov. 30. According to the report, the 12-page opinion written by Circuit Judge Paul V. Niemeyer joined with five other circuits reaching the same conclusion, although three were under an earlier version of Section 707 of the Bankruptcy Code. The report relates that the Court of Appeals for the 11th Circuit in Atlanta holds to the contrary and adheres to a view that refusal to dismiss for abuse is an interlocutory order than can't be appealed. The 4th Circuit in Richmond based its ruling on the concept that decisions on finality should be made more pragmatically in bankruptcy. Orders can be considered final and appealable if they "finally dispose of discrete disputes." Mr. Rochelle notes that the circuit court's result was influenced by amendments to Section 707 which reflect a congressional policy, the court said, that dismissal for abuse is a subject to be examined early in every individual's bankruptcy. The 4th Circuit reversed the district court which had dismissed the appeal as interlocutory. The case is McDow v. Dudley, 10-1732, U.S. 4th Circuit Court of Appeals (Richmond). * South-Central Texas Bankruptcy Filings Hit Lowest Level in Nov. ----------------------------------------------------------------- MySA reports that bankruptcy filings in November in South-Central Texas hit their lowest level in nearly four years. According to MySA, the U.S. Bankruptcy Court for the Western District of Texas in San Antonio tallied 260 new bankruptcy cases last month, a nearly 41% drop from the 439 filings in October. Filings fell by a third from November 2010, when 389 cases were filed, the report discloses. Last month's filings were the fewest recorded since January 2008 when 216 cases were filed, according to MySA. There was also a steep decline in both Chapter 13 and Chapter 7 cases last month, the report adds. * S&P's Global Corporate Default Tally Rises to 43 Issuers ---------------------------------------------------------- Two U.S.-based issuers defaulted last week, raising the tally of global corporate default in 2011 to 43, said an article published Dec. 1 by Standard & Poor's Global Fixed Income Research, titled "Global Corporate Default Update (Nov. 23 - 30, 2011)." The first default, The PMI Group Inc., filed for Chapter 11 on Nov. 28, three months after the Arizona Department of Insurance placed the company's subsidiary, PMI Mortgage Insurance Co., under supervision. As a result, Standard & Poor's Rating Services lowered the rating on the company to 'R' -- a rating tantamount to default under Standard & Poor's criteria. Standard & Poor's lowered its rating on the second issuer, AMR Corp., to 'D' after the company and its subsidiary, American Airlines Inc., filed for Chapter 11 bankruptcy on Nov. 29. Of the total defaulters this year, 32 are based in the U.S., three are based in New Zealand, two are in Canada, and one each is in the Czech Republic, Greece, France, Israel, Italy, and Russia. Of the defaulters by this time in 2010, 56 were U.S.-based issuers, 10 were from the other developed region (Australia, Canada, Japan, and New Zealand), eight were from the emerging markets, and two were European issuers. Seventeen of this year's defaults were due to missed interest or principal payments and eight were due to distressed exchanges -- both of which were among the top reasons for defaults in 2010. Bankruptcy filings followed with nine defaults, and regulatory actions accounted for three. Of the remaining defaults, one issuer failed to finalize refinancing on its bank loan, one had its banking license revoked by its country's central bank, another was appointed a receiver, and three were confidential. By comparison, in 2010, 28 defaults resulted from missed interest or principal payments, 25 from Chapter 11 and foreign bankruptcy filings, 23 from distressed exchanges, three from receiverships, one from a regulatory directive, and one from administration. Following a year of record-setting highs in terms of global corporate default statistics, 2010 provided the markets with a noticeable reversal. In 2010, 81 global corporate issuers defaulted, down from the record high of 265 in 2009. None of the 81 defaulters began the year rated investment grade. The debt amount affected by these defaults fell to $95.7 billion, which was also considerably lower than in 2009. * S&P: Global Default Rate Increases After 5 Mos. of Declines ------------------------------------------------------------- The number of global weakest links increased marginally to 128 on Nov. 15 from 124 on Oct. 21, and they have total rated debt of $193.1 billion, said an article published Dec. 2 by Standard & Poor's Global Fixed Income Research, titled "Global Weakest Links And Default Rates: The Global Default Rate Increased Slightly In October." Weakest links are issuers rated 'B-' and lower with either negative outlooks or ratings on CreditWatch with negative implications. "So far, 41 issuers have defaulted globally in 2011 through Nov. 15, six of which have defaulted since October," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "These defaulted issuers have combined outstanding debt worth $69.9 billion." By comparison, 82 issuers defaulted on debt worth $97.5 billion in 2010, and 264 issuers defaulted on debt worth $627.7 billion in 2009. "The 12-month-trailing global corporate speculative-grade default rate slightly increased to 1.68% in October from 1.65% in September," said Ms. Vazza. Regionally, the U.S. corporate speculative-grade corporate default rate increased to 2.06% from 1.94%, and the European default rate rose sharply to 1.23% from 0.86%. The default rate in the emerging markets also increased, to 0.58% from 0.52%. The U.S. has the weakest links, with 83, or 64.8% of the global total. By sector, media and entertainment, banks, and forest products and building materials have the greatest concentrations of weakest links. * Massachusetts Sues Five Banks over Foreclosures ------------------------------------------------- American Bankruptcy Institute reports that JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. were among five banks sued by Massachusetts for allegedly conducting unlawful foreclosures and deceiving homeowners. * Oaktree Capital Wraps Up Latest European Distressed Fund ---------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Oaktree Capital Management has wrapped up its latest European distressed vehicle at the fund's EUR3 billion ($4.04 billion) hard cap, and has started putting the money to work, said a person familiar with the matter. * Judit Fabian Joins Cassel Salpeter as Venture Capital Director ---------------------------------------------------------------- Cassel Salpeter & Co recently hired Judit Fabian to its professional staff. Ms. Fabian will serve as the Director of Venture Capital Services and focus on financial advisory services and capital sourcing for emerging, high growth companies primarily in technology, mobile applications, biotechnology, and healthcare industries. In this new role, Ms. Fabian will assist companies with raising early stage and venture capital. "Judit is experienced with industries and companies of interest to venture capitalists," said James Cassel, the company's chairman and co-founder. "She brings a wealth of knowledge and contacts to Cassel Salpeter and will help expand our capabilities." Ms. Fabian's past experience demonstrates her interest in business development and fundraising at all levels; previously, she was Interim Chief Financial Officer for Incubated Companies at Nextera Enterprises; she also worked with Early Stage IT & Internet Companies as a financial advisor through a Baltimore based incubator, and provided market expansion services to U.S. technology companies doing business in Europe; Ms. Fabian was also an Underwriting Analyst, GMAC Commercial Mortgage Corporation. Additionally, Ms. Fabian serves on the Board of Trustees for the Miami Science Museum. About Cassel Salpeter & Co., LLC Cassel Salpeter & Co., LLC -- http://www.casselsalpeter.com/--is a middle market investment bank focused on providing independent and objective advice to middle market and emerging growth companies. Its investment banking and advisory services include broad capabilities for both private and public companies: Mergers and Acquisitions; Restructurings, including 363 Sales and Plans of Reorganization; Equity and Debt Capital Raises; Fairness and Solvency Opinions; Valuations; and Financial and Strategic Advisory. Headquartered in Miami, Florida, Cassel Salpeter is led by James Cassel and Scott Salpeter. * Michael Cho Joins Allegiance Capital's Dallas Office ------------------------------------------------------ Allegiance Capital Corporation on Nov. 28 disclosed that Michael Cho has joined its Dallas office as a Vice President. Mr. Cho has more than 13 years of experience as corporate legal counsel in successfully managing mergers, acquisitions, and cross- border business transactions "Michael's considerable legal experience as a former attorney, along with his deal making experience both in real estate and cross-border transactions, has been of particular value to the firm," says David Mahmood, Chairman of Allegiance Capital Corporation. "His skills in the Korean language have helped Allegiance Capital work with significant companies in South Korea, as well as American Marianas which Allegiance Capital Corporation is joint venturing. His deal making experience and cultural knowledge have been invaluable in helping Allegiance Capital grow its business." Before joining Allegiance Capital Mr. Cho was associated with Akin Gump Strauss Hauer & Feld LLP as its corporate attorney, Mr. Cho represented various growth companies in their mergers and acquisitions, leveraged buy-outs, roll-up transactions and initial public offerings with the transactions ranging up to $200 million. During his career at Akin Gump, Mr. Cho was one of the key outside counsels for Packaged Ice, Inc. in their growth strategy of acquiring more than 30 companies, culminating in their public offering of $250 million. Most notably while associated with the capital market group of Jones Day LLP as a corporate attorney, Mr. Cho participated in various transactions involving securitization of non-performing loans, private placement of senior and mezzanine notes and related sale of real estate portfolios. Mr. Cho also participated in transactions representing the Morgan Stanley Real Estate Funds in their joint venture with Korean Asset Management Corporation for the purchase and securitization of real estate secured loans ranging up to $350 million. "I have known David Mahmood for over eight years, a few of which I have spent representing him and Allegiance Capital Corporation, supporting several successful deals. I always admired the professionalism, persistence and the incredible focus that David Mahmood and Allegiance Capital Corporation has shown their clients. I sincerely appreciate the opportunity to work with him as a deal-maker and will enjoy the collective "ride" along the way." About Allegiance Capital Corporation Allegiance Capital Corporation -- http://www.allcapcorp.com-- is an investment bank specializing in financing and selling businesses in the middle market. Allegiance Capital has won multiple awards recognizing the value it delivers to clients. Examples include: 2009 Dealmaker of the Year (Dallas Business Journal), 2008 Boutique Investment Bank of the Year (M&A Advisor), 2006 Investment Bank of the Year (Dallas Business Journal). * Joseph Smith Joins Cassel Salpeter & Co. as Director ------------------------------------------------------ Cassel Salpeter & Co. recently hired Joseph "Joey" Smith to its professional staff in the role of Director. He brings more than 20 years of middle-market investment banking experience to the firm. "Mr. Smith's career spans over two decades and has given him hands-on experience working in the capital markets and the securities industry on an international scale," said James Cassel, the company's chairman and co-founder. "We're looking forward to Joey fostering new client relationships, integrating our advisory services into existing relationships, and continuing to work with institutional quality, lower middle-market private and public companies on capital raising and sell-side engagements." Mr. Smith most recently held the position of senior vice president at Catalyst Financial and was previously a principal and head of investment banking for Capital City Partners and a principal and managing director for First Equity Corporation of Florida. Over the course of his investment banking career, he has worked with middle-market and small cap companies along with institutional investors, family offices, advisors, intermediaries, and high net worth investors. About Cassel Salpeter & Co., LLC Cassel Salpeter & Co., LLC -- http://www.casselsalpeter.com/--is a middle market investment bank focused on providing independent and objective advice to middle market and emerging growth companies. Its investment banking and advisory services include broad capabilities for both private and public companies: Mergers and Acquisitions; Restructurings, including 363 Sales and Plans of Reorganization; Equity and Debt Capital Raises; Fairness and Solvency Opinions; Valuations; and Financial and Strategic Advisory. Headquartered in Miami, Florida, Cassel Salpeter is led by James Cassel and Scott Salpeter. * Skadden's Jay Goffman Earns Spot in Law360's Bankruptcy MVP ------------------------------------------------------------- Evan Weinberger at Bankruptcy Law360 reports that despite being the creator of the now-frequent prepackaged bankruptcy in the early 1990s, Skadden Arps Slate Meagher & Flom LLP's Jay M. Goffman has not slowed down his practice. And the past year was a bumper crop that saw the prepack make its way to Australia and Mr. Goffman stare down Carl Icahn, landing him a spot on Law360's list of Bankruptcy MVPs. * Kirkland & Ellis' Sathy Named as One of Law360's Bankruptcy MVP ----------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that Kirkland & Ellis LLP's Anup Sathy was one of the lead attorneys representing nearly 400 General Growth Properties Inc. affiliates in their monumental and novel restructuring, laying the groundwork for similar special purpose entities and landing him a spot on Law360's list of Bankruptcy MVPs. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- April 3-5, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Grand Hyatt Atlanta, Atlanta, Ga. Contact: http://www.turnaround.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2011. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***