/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120123.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, January 23, 2012, Vol. 16, No. 22 Headlines 17315 COLLINS AVENUE: Wants to Use Condo-Hotel Revenues 29 BROOKLYN: Voluntary Chapter 11 Case Summary ASARCO LLC: Judge Dismisses Union Pacific, Anschutz Cleanup Suit ASTON COURT: Voluntary Chapter 15 Case Summary A.C. PHILLIPS: Seeks to Hire Griffith Jay as Counsel ACCESS PHARMACEUTICALS: Files Amendment No. 2 to Form S-1 AK STEEL: Moody's Assigns B2 Sr. Unsecured Ratings to Bonds AMC ENTERTAINMENT: Moody's Affirms 'B2' CFR; Outlook Negative AMERICAN DENTAL: Moody's Assigns 'B2' Corporate Family Rating AMERICAN LASER: Wins Final OK on $59MM DIP Loan From Versa Unit AMERICAN MARINE: Enters Chapter 11 Protection AMERICAN MARINE: Case Summary & 20 Largest Unsecured Creditors ATLANTIC & PACIFIC: Posts $123.6-Mil. Net Loss in Dec. 3 Quarter BIOVEST INTERNATIONAL: Granted SME Status by European Agency BROOKE CORP: Great American Bank Fails in Bid to Dismiss Suit BUFFETS INC: Gets Court Nod to Start Tapping $50-Mil. Loan CALAIS RESOURCES: Incurs $1.3-Mil. Net Loss in Nov. 30 Quarter CAMPOSOL HOLDING: Moody's Assigns (P)B3 Corporate Family Rating CATALYST PAPER: Chapter 15 Case Summary CAPTAIN HULBERT: Case Summary & 6 Largest Unsecured Creditors CATSKILL CONSTRUCTION: Case Summary & Creditors List CDC CORP: Sues Subsidiary CDC Software to Stop Sale CDC CORP: U.S. Trustee Seeks Turnover of Management CIT GROUP: Redeeming $500MM of Notes as It Continues to Trim Debt CKX ENTERTAINMENT: Moody's Gives 'B3', Still In Talks for Idol CKX ENTERTAINMENT: S&P Assigns 'B' as Idol Still "Stable" CKX ENTERTAINMENT: S&P Assigns 'CCC+' Rating to $160MM Term Loan CATALYST PAPER: Says CBCA Case Not a Bankruptcy Proceeding CIRCLE STAR: Merrill Richards Appointed as Director COLFAX CORP: S&P Assigns 'BB' Corporate Credit Rating COMMERCIAL METALS: S&P Affirms 'BB+' Corporate Credit Rating CORAL CORPORATION: Case Summary & 5 Largest Unsecured Creditors CROWN MEDIA: Extends Employment of Charles Stanford to 2013 DOT VN: Louis Huynh Resigns from Board of Directors EASTMAN KODAK: Bankruptcy Lenders Push Digital Patents to Auction EASTMAN KODAK: Unable to Cope When Innovation Came Along EASTMAN KODAK: S&P Cuts Corp. Credit Rating to 'D' on Bankruptcy ENCOMPASS DIGITAL: Moody's Rates New Credit Facilities at 'B3' ENCOMPASS DIGITAL: S&P Rates $280-Mil. Credit Facility at 'B' ENER1 INC: M. Zoi Intends to Hold Majority Controlling Ownership FILENE'S BASEMENT: Court Approves Employee Retention Plan FIRSTPLUS FINANCIAL: Trustee Can Hire KCC as Claims Agent FLORIDA INSURANCE: Not Liable for Policyholders' Legal Fees FLYING J: Appeals Court Affirms Ruling in CalTrans Case GENERAL MOTORS: Dist. Court Affirms Ruling Against Kodsy Claim GENTA INC: Deadline to Effect Reverse Split Moved to Feb. 15 G&J READY: Case Summary & 21 Largest Unsecured Creditors GILBERT PROFESSIONAL: Case Summary & 9 Largest Unsecured Creditors GLOBAL COMMERCIAL: Voluntary Chapter 11 Case Summary GMJ GLOBAL: Case Summary & 13 Largest Unsecured Creditors GO DADDY: S&P Assigns 'B' Corporate Rating; Outlook Stable G.T.O.T., LLC: Voluntary Chapter 11 Case Summary HANLEY WOOD: Moody's Gives 'D' Default Rating Amid Restructuring HARRISBURG, PA: Didn't Respond to Incinerator Red Flags HERCULES OFFSHORE: Files Fleet Status Report as of Jan. 19 HERCULES OFFSHORE: S&P Affirms 'B-' Corporate Credit Rating HORIZON LINES: F&C Asset Management Does Not Own Common Shares HOSPITALITY GROUP: Case Summary & 20 Largest Unsecured Creditors HOSTESS BRANDS: Union to Lead Fight Against Plan HOSTESS BRANDS: Committee Opposes Pensions Termination HOUGHTON MIFFLIN: Moody's Lowers Corp. Family Rating to 'Caa2' HOVENSA LLC: S&P Withdraws 'B' Rating on $362.5-Mil. Facility IDEARC INC: Investors Want High Court to Review Ch. 11 Plan INDYMAC BANK: Former Chair Seeks to Appeal Ruling in FDIC Suit INPHASE TECHNOLOGIES: Shareholder Retains Drakes Bay Company INTELSAT SA: Silver Lake's D. Roux and S. Patterson Join Board INVESTORS LENDING: Taps Miller and Beare as Real Estate Agents JEFFERSON COUNTY, AL: To Probe JPMorgan Deal With Astros Owner LEE ENTERPRISES: Reports $199.6-Mil. Revenue in Fiscal Q1 LIBERATOR INC: Benefiting From Growth in Sexual Wellness Market LIBERATOR INC: To Present at FSX Investment Conference on Jan. 27 LIONS GATE: S&P Puts 'B-' Corporate Rating on Watch Positive LOCATION BASED TECHNOLOGIES: Renews Pacts With CEO, CDO, and COO LSP BATESVILLE: S&P Cuts Rating on Senior Secured Bonds to 'D' M & M DEVELOPER: Voluntary Chapter 11 Case Summary MA BB OWEN: Wants to Sell Properties to Castle Hill for $23-Mil. MA BB OWEN: Proposes Bid Protections for Stalking Horse Bidder MARKETING WORLDWIDE: Incurs $2.2 Million Net Loss in Fiscal 2011 MC2 CAPITAL: Wants Court's OK to Incur $150,000 Debt from SCP MERIDIAN SHOPPING: Voluntary Chapter 11 Case Summary MICROBILT CORP: Has Full-Payment Reorganization Plan MORRIER RANCH: Case Summary & 20 Largest Unsecured Creditors MRDUCS LLC: Court Approves Terms of Seiller Waterman Employment MSR RESORT: Qualified Bids for Doral Golf Resort & Spa Due Feb. 20 MUNICIPAL MORTGAGE: Lisa Roberts Continues to Serve as CFO MUSCLEPHARM CORP: Files Third Amendment to 126.4 Million Offering NATIONAL GRAPHICS: Whyte Hirschboeck Disqualified as Counsel NATIONAL HOLDINGS: COR Securities Discloses 41% Equity Stake NATIONAL HOLDINGS: Bruce Galloway Discloses 5.7% Equity Stake NATIVE WHOLESALE: Court OKs Gross Shuman as Bankr. Counsel NATIVE WHOLESALE: Can Hire Jaeckle Fleischmann as Special Counsel NATIVE WHOLESALE: Court OKs Mengel Mertzger as Accountants NATIVE WHOLESALE: Court Approves Windels Marx as Special Counsel NEBRASKA BOOK: Wins Approval to Close 7 Off-Campus Stores NEOMEDIA TECHNOLOGIES: Issues $400,000 Conv. Note to YA Global NET ELEMENT: Hikes Base Salaries of Named Executive Officers NET TALK.COM: Adopts 2011 Stock Option Plan NEW ATLANTIC: Voluntary Chapter 11 Case Summary NEWAYS ENTERPRISES: Lenders Swap Debt for Equity NEWPAGE CORP: Noteholders Release Right to Mill Insurance Proceeds NEWPAGE CORP: Wants Plan Filing Period Extended Until July 3 NEWPAGE CORP: Files Schedules of Assets and Liabilities NIELSEN HOLDINGS: S&P Raises Corporate Credit Rating to 'BB' NORTHAMPTON GENERATING: Court Approves Access to Cash Collateral O&G LEASING: Hearing on Assets Sale Rescheduled Until Feb. 23 O&G LEASING: Secured Creditor Hopes to Get Lift Stay Tomorrow OPEN RANGE: Creditors Press to Get Docs From Fed Agencies OPPENHEIMER PARTNERS: Access to MidFirst Cash Collateral Tomorrow OPTIMUMBANK HOLDINGS: Fails to Comply with Nasdaq Directors Rule OPTIONS MEDIA: Holders Convert Pref. Shares to 8MM Common Shares PATHEON INC: S&P Affirms 'B+' Corporate Rating; Outlook Negative PETROBAKKEN ENERGY: Moody's Rates $750-Mil. Notes at 'Caa1' PETROBAKKEN ENERGY: S&P Assigns 'B' Corporate Credit Rating PHARMACEUTICAL PRODUCT: S&P Assigns 'B+' Corporate Credit Rating PILGRIM'S PRIDE: Appeals Ruling on $26MM Price Manipulation Fine PLACID OIL: Bankruptcy Court Revisits Ruling in Tort Case QUANTUM FUEL: Changes Fiscal Year-End to Dec. 31 QUANTUM FUEL: Grants Underwriters Option to Buy 1.5-Mil. Units R-G PREMIER: FDIC Sues 19 Execs for $417MM Over Collapse REAL MEX: Trustee Says Asset Sale Raises Privacy Concerns RECREATIONAL INDUSTRIES: Wants Continued Access to Cash Collateral RIVER EAST PLAZA: 7th Cir. Affirms Dismissal of Chapter 11 Case RIVER ISLAND: Gibraltar Fails to Get Dismissal of Ch. 11 Case RIVER ISLAND: Should Show Ability to Fund $1MM, Gibraltar Says RIVER ROCK: S&P Withdraws 'D' Issuer Credit Rating ROOMSTORE INC: Filing of Nov. 30 Form 10-Q Will be Delayed SAFETY-KLEEN SYSTEMS: S&P Affirms 'B+' Corporate Credit Rating SEALY CORP: Incurs $9.8 Million Net Loss in Fiscal 2011 SHELBRAN INVESTMENTS: Amends Schedules of Assets and Liabilities SHELBRAN INVESTMENTS: Trustee Wants Case Conversion or Dismissal SPANISH BROADCASTING: Sees $37.5MM-$38MM Net Revenue for Q4 2011 SUMMIT ENTERTAINMENT: S&P Withdraws 'B' Corporate Credit Rating SUSTAINABLE ENVIRONMENTAL: Clarifies Purchase Price of Units Sold TELVUE CORP: Enters Into Agreement to Convert Debt to Equity THERMOENERGY CORP: Dileep Agnihotri Elected Class B Director THINES LLC: M&T Trust Has Until Feb. 3 to Challenge Plan Outline TIMMINCO LIMITED: Has $4.25MM Financing for CCAA Case TOWN CENTER: $750,000 Loan from Terra Landmark Gets Final OK TOWN CENTER: Wants Court to Value Tracts of Land at $40 Million TRAILER BRIDGE: Asks Court to Approve Performance-Based KEIP TRAVELPORT HOLDINGS: William Griffith Resigns from Board TRANSWEST RESORT: 2 Westin Resorts Exit Chapter 11 TRIDENT MICROSYSTEM: Court Clears to Auction Set-Top Business TTM MB: Voluntary Chapter 11 Case Summary VALENCE TECHNOLOGY: Berg & Berg Buys 2 Million Common Shares VALLEJO, CA: Bankruptcy Scars Linger in Cash-Crunched City VENOCO INC: S&P Puts 'B' Corp. Credit Rating on Watch Negative VISHAY INTERTECHNOLOGY: Moody's Affirms Ba3 Corp. Family Rating VISUALANT INC: Receives 2nd Patent on Spectral Matching Tech. WASHINGTON MUTUAL: Former Execs' Insurers to Pay $40MM FDIC WASHINGTON MUTUAL: Says Investors' Info Request Delay Tactic WASTE2ENERGY HOLDINGS: U.S. Trustee Wants Ch. 11 Case Converted WASTE2ENERGY HOLDINGS: Ch. Trustee Taps Cole Scholtz as Counsel WASTE2ENERGY HOLDINGS: Trustee Taps GlassRatner as Fin'l Advisor WAVE SYSTEMS: Files Amendment No. 3 to Form S-3 Registration WESTERN ENERGY: S&P Assigns 'B+' Corporate Credit Rating WYSTERIA LLC: Seeks to Employ Joel K. Belway as Counsel Z TRIM HOLDINGS: Holders Convert 21,800 Preferred Shares * It's Vulture Against Vulture as Icahn Buys LightSquared Debt * Abu Dhabi Targets AIM Listing for its Qannas Fund * BOND PRICING -- For Week From Jan. 9 to 13, 2012 ********* 17315 COLLINS AVENUE: Wants to Use Condo-Hotel Revenues ------------------------------------------------------- 17315 Collins Avenue LLC seeks Bankruptcy Court authority to use cash collateral of 17315 Collins Avenue Marketing LLC, which is the assignee of a foreclosure judgment. Absent the ability to use Cash Collateral, the Debtor's operations will come to a halt, the value of the Debtor's assets will dramatically decline, and creditors and parties-in-interest will be severely prejudiced. In contrast, approval of the use of Cash Collateral on an interim basis will maintain the continuity and management of the hotel and condominium units, preserve the project's reputation as a premium hotel and residential community, and thereby preserve the value of the Debtor's assets while it reorganizes. The Debtor is the borrower under a 2004 construction loan for $47,272,000 with Corus Bank N.A. On Sept. 11, 2009, the Office of the Comptroller of the Currency closed Corus Bank, and the Federal Deposit Insurance Corporation was named Receiver. On Oct. 16, 2009, the FDIC assigned the Loan to Corus Construction Venture LLC. The Corus loan matured on Feb. 28, 2008. On March 5, 2010 -- more than two years after the Senior Loan's maturity date -- CCV filed its Complaint against the Debtor, among others, in the Circuit Court of the Eleventh Judicial District in and for Miami-Dade County, asserting claims for mortgage foreclosure, among others. On Nov. 30, 2011, the State Court entered a Partial Final Judgment of Foreclosure and Damages in favor of CCV, and set a foreclosure sale of the Project for Jan. 11, 2012. On Dec. 27, 2011, CCV assigned all of its right, title and interest in and to a foreclosure judgment to 17315 Collins Avenue Marketing, which entity is owned or controlled by CCV. The Debtor's parent company, WaveStone, also owed $13,000,000 under a mezzanine loan agreement with NYLIM-GCR Fund I-2002, L.P. The Debtor said that pursuant to the Foreclosure Judgment, 17315 CAM may have a first priority, perfected lien on the Debtor's cash (or a portion thereof) generated from the operation, sale, disposition or other realization of any assets or property of the Debtor, wherever located, which constitutes cash collateral as defined in Sec. 363 of the Bankruptcy Code. The Debtor said its assets, which include the Hotel and the underlying real property, as well as the 48 unsold condominium units, is valued at nearly $40,000,000, subject to appraisal. The Debtor believes that the value of the Debtor's assets is more than twice the amount due to 17315 CAM pursuant to the Foreclosure Judgment. Such an equity cushion, particularly in an ongoing operating enterprise, is clearly sufficient, in and of itself, to provide adequate protection to 17315 CAM for the use of any cash of the Debtor's business that may constitute cash collateral, the Debtor said. About 17315 Collins Avenue LLC 17315 Collins Avenue LLC owns and operates a luxury, beach-front condominium-hotel located in Sunny Isles Beach, Florida, commonly known as Sole on the Ocean. It filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 12-10631) on Jan. 10, 2012. The Debtor is the sole owner of the Project. WaveStone Properties LLC owns 100% of the membership interests in the Debtor and has no other businesses or assets. Thomas Feeley is the managing member of WaveStone. Judge Robert A. Mark presides over the case. Lawyers at Meland Russin & Budwick P.A. serve as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. Mr. Feeley signed the petition. 29 BROOKLYN: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: 29 Brooklyn Avenue, LLC 3706 Flatlands Avenue Brooklyn, NY 11234 Bankruptcy Case No.: 12-40279 Chapter 11 Petition Date: January 18, 2012 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Joel B. Rosenthal Debtor's Counsel: David Carlebach, Esq. LAW OFFICES OF DAVID CARLEBACH 40 Exchange Place, Suite 1306 New York, NY 10005 Tel: (212) 785-3041 Fax: (212) 785-3618 E-mail: david@carlebachlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Yisroel Barron, managing member. ASARCO LLC: Judge Dismisses Union Pacific, Anschutz Cleanup Suit ---------------------------------------------------------------- Amanda Bransford at Bankruptcy Law360 reports that a Missouri federal judge on Thursday dismissed Asarco LLC's suit against Anschutz Mining Corp. and Union Pacific Railroad Co. seeking contributions toward an $80 million cleanup at a mining site that Asarco fully covered, though the company will be able to try again. Law360 relates that U.S. District Judge John A. Ross said Asarco had failed to allege that the other two companies were responsible for contributing to hazardous waste at the southeastern Missouri mining site, whose cleanup Asarco funded as part of its bankruptcy reorganization. About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection (Bankr. S.D. Tex. Case No. 05-21207) on Aug. 9, 2005. Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On Dec. 9, 2009, Asarco Incorporated and Americas Mining Corporation's Seventh Amended Plan of Reorganization for the Debtors became effective and the ASARCO Asbestos Personal Injury Settlement Trust was created and funded with nearly $1 billion in assets, including more than $650 million in cash plus a $280 million secured note from Reorganized ASARCO. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated ASARCO LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. ASTON COURT: Voluntary Chapter 15 Case Summary ---------------------------------------------- Debtor: Aston Court LLC 1635 N. Greenfield Road, #126 Mesa, AZ 85205 Bankruptcy Case No.: 12-00836 Chapter 11 Petition Date: January 17, 2012 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: George B. Nielsen, Jr. Debtor's Counsel: Mark C. Hudson, Esq. SCHIAN WALKER, P.L.C. 3550 N. Central Avenue, #1700 Phoenix, AZ 85012-2115 Tel: (602) 277-1501 Fax: (602) 297-9633 E-mail: ecfdocket@swazlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Ronald K. Frandsen, manager. A.C. PHILLIPS: Seeks to Hire Griffith Jay as Counsel ---------------------------------------------------- A.C. Phillips Family Properties, Ltd., seeks permission from the U.S. Bankruptcy Court for the Northern District of Texas to employ Griffith, Jay & Michel, L.L.P., as its counsel. GJM will: (a) advise the Alleged Debtor generally with respect to general and restructuring matters; (b) represent and advise the Alleged Debtor with respect to matters that generally arise in this matter or an ordinary chapter 11 case; (c) assist the Alleged Debtor and its other professionals with the protection and preservation of the estate of the Alleged Debtor; (d) assist the Alleged Debtor with preparing necessary motions, applications, answers, orders, reports, and papers in connection with and required for the orderly administration of the estate; and (e) perform any and all other general and restructuring legal services for the Alleged Debtor in connection with the Chapter 11 case the Debtor determines are necessary and appropriate. The hourly billing rates for attorneys at GJM range from $150 to $350. The attorney primarily responsible for this bankruptcy matter will be Mark J. Petrocchi. His hourly rate is $295. The Alleged Debtor agrees to reimburse the firm for all expenses it incurred in connection with its representation. Prior to the bankruptcy filing, the Alleged Debtor paid GJM a retainer of $4,000. Mark J. Petrocchi, Esq., at Griffith, Jay & Mitchel, LLP, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. GJM can be contacted at: Mark J. Petrocchi, Esq. GRIFFITH, JAY & MICHEL, LLP 2200 Forest Park Blvd. Fort Worth, TX 76110 Tel: (817) 926-2500 Fax: (817) 926-2505 E-mail: mpetrocchi@lawgjm.com An involuntary petition was filed against A.C. Phillips Family Properties, Ltd. (Bankr. N.D. Tex. Case No. 11-37792) on Dec. 6, 2011, by Bank of America and Do It Best Corp. No trustee has been appointed in the Chapter 11 case. ACCESS PHARMACEUTICALS: Files Amendment No. 2 to Form S-1 --------------------------------------------------------- Access Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission amendment no. 2 to Form S-1 registration statement relating to the offer and sale of up to 8,615,517 shares of common stock, $0.01 par value per share, of the Company by certain stockholders of Access. Access is not selling any shares of common stock in this offering and therefore will not receive any of the proceeds from this offering. However, if the warrants are exercised, Access will receive the proceeds from such exercise if payment is made in cash. All costs associated with this registration will be borne by Access. The shares of common stock are being offered for sale by the selling stockholders at prices established on the OTC Bulletin Board during the term of this offering. On Jan. 18, 2012, the last reported sale price of the Company's common stock was $1.38 per share. The Company's common stock is presently listed on the OTC Bulletin Board under the symbol "ACCP". These prices will fluctuate based on the demand for the shares of common stock. Brokers or dealers effecting transactions in these shares should confirm that the shares are registered under the applicable state law or that an exemption from registration is available. No underwriter or person has been engaged to facilitate the sale of shares of common stock in this offering. None of the proceeds from the sale of stock by the selling stockholders will be placed in escrow, trust or any similar account. A full-text copy of the amended prospectus is available at: http://is.gd/b2lhRR About Access Pharmaceuticals Access Pharmaceuticals, Inc., is an emerging biopharmaceutical company focused on developing pharmaceutical products primarily based upon its nano-polymer chemistry technologies and other drug delivery technologies. The Company currently has one approved product, one product candidate at Phase 3 of clinical development, three product candidates in Phase 2 of clinical development and other product candidates in pre-clinical development. The Company reported a net loss of $7.54 million on $481,000 of revenue for the year ended Dec. 31, 2010, compared with a net loss of $17.34 million on $352,000 of revenue during the prior year. The Company also reported a net loss of $2.81 million on $1.34 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $9.84 million on $334,000 of total revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $2.22 million in total assets, $25.68 million in total liabilities, and a $23.46 million total stockholders' deficit. As reported by the TCR on April 5, 2011, Whitley Penn LLP, in Dallas, Texas, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's 2010 results. The independent auditors noted that the Company has had recurring losses from operations, negative cash flows from operating activities and has an accumulated deficit. AK STEEL: Moody's Assigns B2 Sr. Unsecured Ratings to Bonds ----------------------------------------------------------- Moody's Investors Service assigned B2 senior unsecured ratings to the $36 million Ohio Air Quality Development Authority Revenue Refunding Bonds, Series 2012-A, the $30 million City of Rockport, Indiana, Revenue Refunding Bonds, Series 2012-A, the $7.3 million Butler County Industrial Development Authority Revenue Refunding Bonds, Series 2012-A and the $26 million Ohio Air Quality Development Authority Taxable Revenue Refunding Bonds Series 2012- B. Each issue of bonds will be issued under separate Trust Indentures, and each issue will have a separate loan agreement with AK Steel Corporation. Each loan agreement will be guaranteed by AK Steel Holding Corporation. RATINGS RATIONALE AK Steel's B1 Corporate Family Rating considers its business mix, its strong contract position, and its excellent reputation for service and technological leadership. In addition, the company's product mix benefits from a meaningful level of value-added products, including coated, electrical and stainless products. However, the rating also considers the cyclicality of the steel industry, the expected slow recovery to volume levels that will result in better fixed cost absorption, and the company's higher, although much improved, cost base relative to its peers. The rating incorporates as well AK Steel's high sensitivity to downward price movements, exposure to raw material cost inflation, particularly for iron ore, and meaningful, although improved, other liabilities such as pension and OPEB. The stable outlook reflects our expectation that the company's overall credit profile is appropriately-positioned for the B- rating category, although metrics could face continued pressure until broader economic and industry conditions improve. The outlook also incorporates our expectation that AK Steel will likely have difficulty in materially improving credit metrics in the near term given the time required before savings from recent initiatives to improve raw material self sufficiency can be realized and our view that conditions in the steel industry will remain challenging in 2012. AK Steel's rating could be downgraded if savings from the company's recent initiatives do not sufficiently offset high raw material costs and if economic weakness and increased competition dampens sales growth, leading to further deterioration in operating performance and credit metrics. Quantitatively, the rating could be downgraded if debt-to-EBITDA does not show an improvement towards at most 5.5 times, EBIT/interest does not track around 2x or CFO minus dividends-to-debt is unlikely to approach at least 10% over a sustained period. The rating is unlikely to be upgraded in the near term, given the structural challenges facing AK Steel's operations and the time required before savings from its recent initiatives will be realized. The rating could be upgraded should economic fundamentals in the U.S. strengthen, and raw material prices moderate for a prolonged period. Quantitatively, the rating could be upgraded if debt-to-EBITDA is sustained below 5x and CFO minus dividends-to-debt is sustained above 15%. The principal methodology used in rating AK Steel Corporation was the Global Steel 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. Headquartered in West Chester, Ohio, AK Steel Corporation ranks as a middle tier, high quality, integrated steel producer in the United States, operating seven steelmaking and finishing plants in Indiana, Kentucky, Ohio and Pennsylvania. The company produces flat-rolled carbon steels, including coated, cold-rolled and hot- rolled products, as well as specialty stainless and electrical steels. Principal end markets include automotive, steel service centers, appliance, industrial machinery, infrastructure, construction and distributors and converters. Revenues for the last twelve months ending September 30, 2011 were approximately $6.3 billion and total shipments of steel were approximately 5.6 billion tons. AMC ENTERTAINMENT: Moody's Affirms 'B2' CFR; Outlook Negative ------------------------------------------------------------- Moody's Investors Service changed the outlook of AMC Entertainment, Inc. (AMC Entertainment) to negative from stable. Anemic movie theater attendance trends are pressuring the already weak credit profile, with no clear trajectory for meaningful improvement. Moody's affirmed AMC's B2 corporate family rating, as well as its SGL-1 speculative grade liquidity rating, along with instrument ratings for AMC Entertainment and its parent company, AMC Entertainment Holdings, Inc. (AMC Holdings). Moody's expects AMC Entertainment's credit metrics to deteriorate modestly based on the reported weak box office trends of the December 2011 quarter, and these results will also likely damage its IPO prospects, at least in the near term. However, very good liquidity continues to support the rating, and Moody's believes the company can address upcoming maturities, including the June 2012 maturity of a $215 million term loan at AMC Holdings, with internal sources. IPO proceeds could reduce debt and therefore improve leverage metrics, but dividend payments as a public company would likely offset the decline in interest expense and hamper any meaningful improvement in free cash flow. However, the IPO would provide an exit strategy for the private equity sponsors, and absent such a transaction, the sponsor ownership continues to weigh negatively on the rating. Moody's also moved the CFR, probability of default rating, and SGL rating to AMC Entertainment, Inc. from Marquee Holdings, Inc. Following the repayment of debt at Marquee Holdings, Inc., this entity merged into AMC Entertainment Holdings, Inc. AMC Entertainment Inc. -- Affirmed B2 Corporate Family Rating -- Affirmed B2 Probability of Default Rating -- Affirmed SGL-1 Speculative Grade Liquidity Rating -- Senior Secured Bank Credit Facility, Affirmed Ba2, LGD lowered to LGD2, 10 % from LGD1, 9% -- 8.75% senior unsec due June 2019, Affirmed B1, LGD lowered to LGD3, 41% from LGD3, 36% -- 9.75% Sr Sub Notes due Dec 2020, Affirmed Caa1, LGD adjusted to LGD5, 78% -- 8% Sr Sub notes due March 2014, Affirmed Caa1, LGD adjusted to LGD5, 78% Outlook, changed to Negative from Stable AMC Entertainment Holdings, Inc. -- PIK Term Loan due June 2012, Affirmed Caa1, LGD6, 95% Outlook, changed to Negative from Stable Marquee Holdings, Inc. -- Outlook, Changed To Rating Withdrawn From Stable -- Probability of Default Rating, Withdrawn, previously rated B2 -- Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-1 -- Corporate Family Rating, Withdrawn, previously rated B2 RATINGS RATIONALE AMC Entertainment's B2 rating continues to incorporate its aggressive capital structure with leverage over 8 times debt-to- EBITDA and minimal free cash flow. This credit profile poses challenge for operating in an inherently volatile industry reliant on movie studios for product to drive the attendance that leads to cash flow from admissions and concessions. Very good near term liquidity enables the company to better manage the attendance related volatility and should allow the company to address near term maturities without requiring access to the capital markets during a period of poor box office trends. Scale and geographic diversification also support the rating. Moody's considers theatrical exhibition a mature industry with low-to-negative growth potential, high fixed costs and increasing competition from alternative media, and Moody's anticipates attendance growth will continue to lag population growth over the long term, with year to year volatility driven by the popularity of the films. However, the industry remains viable and stable throughout economic cycles, in Moody's opinion. The negative outlook reflects the potential for a downgrade should box office trends continue to deteriorate such that leverage continues to rise throughout calendar 2012 and free cash flow turns negative. Erosion of the liquidity profile could also have negative ratings implications. Any use of cash or increase in debt to fund a dividend to shareholders would also likely warrant a downgrade. The current credit profile and sponsor ownership constrain upward ratings potential, and an upgrade is highly unlikely absent a material cash infusion from equity sponsors. AMC'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 AMC's core industry and believes AMC'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 Kansas City, Missouri, AMC Entertainment operates 351 theaters with 5,083 screens, with 99% of these located in the United States and Canada. Its revenue for the trailing twelve months through September 30, 2011, was approximately $2.5 billion. The company is owned by a private equity consortium comprised of: J.P. Morgan Partners, LLC, Apollo Management, L.P. and certain related investment funds and affiliates of Bain Capital Partners, The Carlyle Group and Spectrum Equity Investors. AMERICAN DENTAL: Moody's Assigns 'B2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service assigned B2 Corporate Family and Probability of Default ratings to American Dental Partners, Inc. At the same time, Moody's assigned a B1 rating to the company's proposed senior secured credit facilities, including a $205 million term loan and a $36 million revolver. The outlook for the ratings is stable. The proceeds from the senior secured credit facilities will be used, along with an additional equity contribution, to finance the acquisition of ADPI by JLL Partners, Inc. for a purchase price of approximately $398 million (including existing debt of approximately $81 million), and pay transaction fees and expenses. The contribution of approximately $221 million of common equity being made by JLL includes approximately $63 million from certain other investors arranged or designated by JLL plus management rollover equity. This is the first time Moody's has publicly rated American Dental Partners. All ratings are subject to review of final documentation. Moody's assigned these ratings: $36 million senior secured revolving credit facility, rated B1 (LGD 3, 42%) $205 million senior secured term loan, rated B1 (LGD 3, 42%) Corporate Family Rating, B2 Probability of Default Rating, B2 The outlook is stable. RATINGS RATIONALE "The B2 Corporate Family Rating reflects ADPI's small absolute size relative to other single-B rated companies based on both revenue and earnings, and the significant leverage that is being incurred as a result of the company's leveraged buyout," stated Moody's Analyst, Daniel Gon‡alves. "However, ADPI's credit profile benefits from its strong market presence within the rapidly-growing dental practice management ("DPM") industry," continued Gon‡alves. On a pro forma basis, ADPI's debt to EBITDA including Moody's Standard Adjustments was approximately 4.9 times for the twelve months ended September 30, 2011. While Moody's expects growth within ADPI's base business to remain limited over the intermediate-term, the company will achieve top-line growth through the continuation of its aggressive de novo and acquisition growth strategy. While Moody's expects this strategy to constrain profit margins and free cash flow, the rating is supported by the company's flexibility to reduce de novo expansion if desired, and its ability to then deploy free cash flow toward debt reduction. In addition, ADPI's rating is constrained by legal proceedings with certain affiliated practices, which present some underlying risks and uncertainty to the company's future operating performance. The rating outlook is stable, and reflects Moody's assumption that the company's de novo and acquisition growth strategy will be financed through internally-generated cash. The outlook also reflects Moody's assumption of low-to-mid single digit revenue and earnings growth over the next twelve months, leading to reduced financial leverage. An upgrade of the ratings is unlikely over the near-term due to the company's small absolute size, outstanding litigation, and aggressive growth strategy, which Moody's expects will constrain free cash flow and limit debt repayment. Over time, if the company exhibits sales growth accompanied by a more moderate growth strategy such that adjusted leverage is sustained below 3.5 times and free cash flow to debt exceeds 8%, Moody's could upgrade the ratings. The ratings could be downgraded if financial policies become more aggressive or if liquidity deteriorates. The ratings could also be lowered if the company faces material adverse litigation outcomes. From a financial metrics perspective, the ratings could be downgraded if adjusted debt to EBITDA approaches 6 times or if free cash flow turns negative on a sustained basis. The principal methodology used in rating American Dental Partners, Inc. was the Global Business & Consumer Service Industry 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. Headquartered in Wakefield, Massachusetts, American Dental Partners, Inc. ("ADPI") is a leading provider of dental practice management ("DPM") services in the United States. The company provides dental facilities, support staff and comprehensive business support functions under management services agreements ("MSA") to its affiliated dental groups. ADPI provides all services necessary for the administration of the non-clinical aspects of the dental operations, while the affiliated practices are responsible for providing dental care to patients. During the twelve months ended September 30, 2011, the company generated net revenues of approximately $289 million. AMERICAN LASER: Wins Final OK on $59MM DIP Loan From Versa Unit --------------------------------------------------------------- American Laser Centers LLC, ALC Holdings LLC and their debtor- affiliates won final authority to borrow up to $59.8 million in DIP financing from Bellus ALC Investments 1 LLC, a unit of Philadelphia-based private equity firm Versa Capital Management LLC. Pursuant to the Final DIP Order, the term loan amount has been raised from the original $58.7 million DIP commitment. The Debtors also won approval of procedures that will govern the sale of their assets. Versa has agreed to acquire ALC, subject to higher and better bids and court approval. As reported by the Troubled Company Reporter on Dec. 20, 2011, the Debtors need the liquidity as they pursue a bankruptcy sale of their assets. The Debtors said Bellus, which also serves as agent to the Debtors' prepetition lenders, has a lien on substantially all of the Debtors' cash and is not willing to consent to the use of cash collateral alone. On Dec. 9, Judge Mary F. Walrath granted the Debtors interim authority to tap $13,287,400 from the DIP Loan package. The Final DIP Order extended by a couple of days the Debtors' milestones: The Debtors must commence and conclude an auction by Jan. 30, obtain approval of the sale by Jan. 31, and close the deal by Feb. 3. The Final DIP Order also permits Bellus to credit bid. Pursuant to the bidding procedures order, competing bids are due Jan. 26. The auction will be held at the offices of Landis Rath & Cobb. The sale hearing is on Jan. 31. The DIP loan matures on the earliest of Feb. 3, 2012, or upon the occurrence of an event of default or upon dismissal or conversion of the case to Chapter 7, or upon confirmation of a bankruptcy plan. The DIP Loan carries an interest rate of prime plus 4.25% per annum. The DIP facility earmarks up to $30,000 to be used by any official committee of creditors appointed in the case to investigate and challenge the validity, extent, amount, perfection, priority or enforceability of the prepetition secured lenders' liens. The official committee of unsecured creditors and creditor Syneron Inc. may investigate and challenge the validity of the DIP liens. Stephen Selbst, Esq. -- sselbst@herrick.com -- at Herrick Feinstein LLP, represents the Committee. About American Laser Centers ALC Holdings LLC, dba American Laser Centers, operates 156 laser hair-removal clinics in 27 states. At the peak, the Farmington Hills, Michigan-based company had 222 stores generating $130.6 million in annual revenue. ALC Holdings, along with its affiliates, filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Lead Case No. 11-13853) on Dec. 8, 2011. Assets are $80.4 million. Liabilities include $40.3 million owing on a first-lien debt and $51 million in subordinated notes. Some $17.9 million is owing to trade suppliers. The Company selected Zolfo Cooper LLC as its adviser; Landis Rath & Cobb LLP as legal counsel; Traverse LLC as restructuring adviser; SSG Capital Advisors LLC as investment bankers; and BMC Group as claims agent. Prepetition, the Company signed a deal for Philadelphia-based private equity firm Versa Capital Management LLC to acquire assets, subject to higher and better offers at a bankruptcy court- sanctioned auction. Versa has agreed to pay $30 million plus $18 million of new-money financing to support the bankruptcy, unless outbid at an auction in January 2012. Bellus ALC Investments 1 is represented by Nancy A. Peterman, Esq., at Greenberg Traurig LLP. An official committee of unsecured creditors has retained Herrick Feinstein LLP and Ashby & Geddes, P.A., as counsel; and J.H. Cohn LLP as financial advisor. Albert Altro serves as the Debtors' chief restructuring officer. AMERICAN MARINE: Enters Chapter 11 Protection --------------------------------------------- American Marine Holdings LLC along with affiliates filed for Chapter 11 bankruptcy on Jan. 20, 2012, after being sued for defaulting on its loans. American Marine's primary business consists, inter alia, manufacturing, marketing, distributing, servicing and selling boats and related products in North Carolina. Brand names include Donzi, Fountain, Pro-Line and Baja. But the receiver disclosed that the Debtor had no assets and had liabilities of $60,007,617 in the schedules attached to petition. The receiver said that debt to First Capital is $54 million. Pursuant to an order entered by the General Court of Justice Superior Court Division in Beaufort County, North Carolina (Case No. 11 CVS 1012), Ronald Glass of GlassRatner Advisory & Capital Group, LLC, was named as receiver for American Holdings and its affiliates. Mr. Glass signed the bankruptcy petitions for the American Marine debtors. The Debtors' prepetition secured creditor is FCC LLC d/b/a First Capital. FCC provided several term loans and lines of credit, with outstanding balance totaling not less than $51 million as of October 2011. The receiver was appointed following a complaint filed by FCC in the Superior court. The Debtors said in a bankruptcy filing that they reserve the right to challenge the validity, priority and extent of FCC's liens against the Debtors' assets. American Marine Holdings, LLC, along with affiliates, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 12-11354) on Jan. 18, 2012. John E. Page, Esq., at Shraiberg, Ferrara, & Landau P.A., in Boca Raton, Florida, serves as counsel. GlassRatner Advisory & Capital Group Inc. serves as financial advisor. Palmetto Park Case On January 16, 2012, Joseph Wortley, a former owner and officer, filed a Chapter 11 voluntary petition for Palmetto Park Financial, LLC (Case No. 12-11055-EPK). Mr. Glass contends that the voluntary petitions for Palmetto Park and related cases were null and void as Mr. Wortley no longer had the authority to file the cases. The Debtors are in the process of preparing a motion to dismiss the Palmetto Park case filed by Joseph Wortley. The filing of the Palmetto Park case by Joseph Wortley disrupted a sale of the Debtors' assets in state court. The Receiver has maintained control of the Debtors for approximately 90 days and submits that in the exercise of his business judgment, the Debtors' estates will be better administered in bankruptcy court. AMERICAN MARINE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: American Marine Holdings, LLC 1653 Whichards Beach Road Washington, NC 27889 Bankruptcy Case No.: 12-11354 Chapter 11 Petition Date: January 18, 2012 Court: U.S. Bankruptcy Court Southern District of Florida (West Palm Beach) Debtor's Counsel: John E. Page, Esq. SHRAIBERG, FERRARA, & LANDAU P.A. 2385 NW Executive Center Drive, #300 Boca Raton, FL 33431 Tel: (561) 443-0819 Fax: (561) 998-0047 E-mail: jpage@sfl-pa.com Debtor's Financial Advisor: GLASSRATNER ADVISORY & CAPITAL GROUP INC. Scheduled Assets: $0* Scheduled Liabilities: $60,007,617 * The Debtor estimated $0 to $50,000 in assets in its bankruptcy petition. The petition was signed by Ronald Glass, receiver. Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- Donzi Marine, LLC 12-11355 AMH Government Services, LLC 12-11356 Baja Marine, Inc. f/k/a Baja By Fountain, Inc. 12-11357 Fountain Dealers Factory Super Store, Inc. 12-11358 Fountain Powerboat Industries, Inc. 12-11359 Fountain Powerboats, Inc. 12-11360 Fountain Powerboats, LLC 12-11361 Palmetto Park Financial, LLC 12-11362 Pro-Line Boats, LLC 12-11363 Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ First Capital -- $46,358,997 3520 NW 58th Street Oklahoma City, OK 73112 First Capital -- $7,246,990 3520 NW 58th Street Oklahoma City, OK 73112 TD Bank, N.A. -- $3,102,965 2307 West Kennedy Boulevard Tampa, FL 33609 Mercury Marine -- $1,520,605 P.O. Box 1939 Fond Du Lac, WI 54936-1939 Composites One, LLC -- $539,219 85 West Algonquin Road, Suite 600 Arlington Heights, IL 60005 Ralph R. Crabtree -- $235,216 Ilmor Marine Engines LLC -- $141,531 Ken Burton, Jr. Tax Collector -- $137,871 Sprechman & Assoc, PA -- $131,998 Eromar -- $100,000 Tarek -- $100,000 Janice A. Warren, CFC -- $88,915 Mercury Marine -- $73,840 AndersonGlenn, LLC -- $58,820 Intermedia Outdoors, Inc. -- $56,912 McDermott, Will & Emery -- $38,706 Nelson A. Taylor Co., Inc. -- $29,100 Michigan Composites, Inc. -- $23,943 Sprechman & Assoc., PA -- $21,990 Internal Revenue Service -- Unknown ATLANTIC & PACIFIC: Posts $123.6-Mil. Net Loss in Dec. 3 Quarter ---------------------------------------------------------------- As reported in the TCR on Jan. 20, 2012, Great Atlantic & Pacific filed its quarterly report on Form 10-Q for the 12 weeks and 40 weeks ended Dec. 3, 2011. The Company reported a net loss of $123.6 million on $1.571 billion of sales for the 12 weeks ended Dec. 3, 2011, compared with a net loss of $198.7 million on $1.794 billion of sales for the 12 weeks ended Dec. 4, 2010. For the 40 weeks ended Dec. 3, 2011, the Company reported a net loss of $379.4 million on $5.441 billion of sales, compared with a net loss of $473.5 million on $6.277 billion of sales for the 40 weeks ended Dec. 4, 2010. The Company's balance sheet at Dec. 3, 2011, showed $2.137 billion in total assets, $3.501 billion in total liabilities, $148.3 million in Series A redeemable preferred stock, and a stockholders' deficit of $1.512 billion. A copy of the Form 10-Q is available for free at: http://is.gd/FfGF9D On Jan. 18, 2012, the Company released its results for the last twelve months ended Dec. 3, 2011 ("LTM") as derived from the quarterly consolidated financial statements for the period then ended, which have not been audited. The Company reported a net loss of $502.4 million on $7.242 billion of sales for the last twelve months ended Dec. 3, 2011. Reorganization items included in continuing operations totaled $62.5 million while reorganization items included in discontinued operations totaled $153.1 million for the period. Comparable results for the last twelve months ended Dec. 4, 2010, were not disclosed. After excluding certain non-cash, non-recurring and non-operating items, as well as adjustments to include the net impact of actions taken during the period as if enacted at the beginning of the LTM period, LTM Adjusted EBITDA was $117.0 million for the period ended Dec. 3, 2011, which amount reflects the actions that the Company has taken to implement its turnaround plan to emerge out of the bankruptcy currently scheduled on Feb. 25, 2012. The LTM Adjusted EBITDAR, after excluding the contractual rent expenses, amounted to $342.9 million for the same period. The Company is required to provide certain reconciliations to GAAP financial measures for any non-GAAP financial measures presented in its press releases and SEC filings. The Company uses the non- GAAP measures "Adjusted loss from operations", "EBITDA", "Adjusted EBITDA", "Current Store Footprint Adjusted EBITDA", "LTM Adjusted EBITDA" and "LTM Adjusted EBITDAR" to evaluate the Company's liquidity and performance of its business and these are among the primary measures used by management for planning and forecasting of future periods. Adjusted loss from operations is defined as loss from operations adjusted for items the Company considers non- operating in nature that management excludes when evaluating the results of the ongoing business. EBITDA is defined as earnings before interest expense, interest and dividend income, taxes, depreciation, amortization and discontinued operations. Adjusted EBITDA is defined as EBITDA adjusted to exclude the following, if applicable: (i) goodwill, long-lived asset and intangible asset impairment, (ii) net restructuring and other charges, (iii) real estate related activity, (iv) pension withdrawal costs, (v) insurance reserve adjustments, (vi) stock based compensation, (vii) LIFO provision adjustments, (viii) non-operating income and (ix) other items that management considers non-operating in nature and excludes when evaluating the results of the ongoing business. Current Store Footprint Adjusted EBITDA excludes the actual results of those stores that were closed during the period presented as if the stores were closed at the beginning of the period presented, adjusted for certain corporate or overhead costs that will not be eliminated. LTM Adjusted EBITDA is defined as Current Store Footprint Adjusted EBITDA adjusted to include: (i) the impact of contractual supply and logistics contracts as if enacted as of the beginning of the LTM period, (ii) the impact of negotiated labor contracts that would have resulted had the contracts been in place at the beginning of the LTM period, (iii) the impact of bankruptcy and other disruption such as the impact of vendor funding below historical average experienced during the bankruptcy period, labor protests at store locations and triple coupon promotions and (iv) the impact of reductions in contractual store lease payments that would have resulted had the contracts been in place at the beginning of the LTM period, offset by (v) the impact of store lease payments that are classified as principal payments and interest expense for purposes of US GAAP. LTM Adjusted EBITDAR is defined as LTM Adjusted EBITDA adjusted to include the contractual rent payments for the period. The Company believes the presentation of these measures is relevant and useful for investors because it allows investors to view results in a manner similar to the method used by the Company's management and makes it easier to compare the Company's results with other companies that have different financing and capital structures or tax rates. In addition, these measures are also among the primary measures used externally by the Company's investors, analysts and peers in its industry for purposes of valuation and comparing the results of the Company to other companies in its industry. Adjusted loss from operations, Adjusted EBITDA, Current Store Footprint Adjusted EBITDA, LTM Adjusted EBITDA and LTM Adjusted EBITDAR are reconciled to Net Loss on Schedule 3 of this release. In addition, EBITDA, Adjusted EBITDA, Current Store Footprint EBITDA, LTM Adjusted EBITDA and LTM Adjusted EBITDAR are reconciled to Net Cash provided by /(used in) Operating Activities on Schedule 4 of this release. A copy of the Schedules of Financial Statements is available for free at http://is.gd/x14AIj About Great Atlantic & Pacific 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. On Nov. 14, 2011, the Company filed with the Bankruptcy Court a proposed Chapter 11 plan. On Dec. 20, 2011, the Bankruptcy Court approved the adequacy of information in the disclosure statement explaining the Plan. The deadline for voting on the Plan is Jan. 24, 2012. A hearing before the Bankruptcy Court on the confirmation of the Plan is scheduled for Feb. 6, 2012. BIOVEST INTERNATIONAL: Granted SME Status by European Agency ------------------------------------------------------------ Biovest International, Inc., a majority-owned subsidiary of Accentia Biopharmaceuticals, Inc., announced that the European Medicines Agency (EMA) has granted Small and Medium Sized Enterprise (SME) status to Biovest. With EMA SME status confirmed, Biovest will be provided with certain administrative and economic benefits related to the EU regulatory process for the Company's BiovaxID personalized lymphoma vaccine targeting the treatment of certain B-cell subtypes of non-Hodgkin's lymphoma. According to Biovest's Senior Vice President, Product Development & Regulatory Affairs, Dr. Carlos F. Santos, Ph.D., "Securing EMA SME status is an important regulatory milestone for Biovest, as we will receive procedural assistance in coordinating upcoming BiovaxID meetings with the EMA, and we also expect significant cost-savings based on potential application fee exemptions and fee reductions." Samuel S. Duffey, the Company's President & CEO, added, "After receiving SME status, the next step in our regulatory strategy is to conduct scientific advice meetings with several national regulatory authorities in the EU." In other news, Biovest announced that the Company is scheduled to present at the Phacilitate Vaccine Forum Washington 2012 at the Grand Hyatt Hotel in Washington D.C. On Tuesday, January 31st at 11:55 a.m. EST, Dr. Santos will present on BiovaxID, including a regulatory update, in a session titled, "Effectively Delivering Therapeutic Vaccines to Blockbuster Markets". To meet with Biovest at the Vaccine Forum Washington 2012, please contact Douglas Calder at 813-507-2633 or dwcalder@biovest.com. For agenda, please visit http://is.gd/h67HiF About Biovest International Biovest International, Inc. -- http://www.biovest.com/-- is an emerging leader in the field of active personalized immunotherapies. In collaboration with the National Cancer Institute, Biovest has developed a patient-specific, cancer vaccine, BiovaxID(R), with three clinical trials completed, including a Phase III study, demonstrating evidence of safety and efficacy for the treatment of indolent follicular non-Hodgkin's lymphoma. Headquartered in Tampa, Florida, with its bio-manufacturing facility based in Minneapolis, Minnesota, Biovest is publicly- traded on the OTCQB(TM) Market with the stock-ticker symbol "BVTI", and is a majority-owned subsidiary of Accentia Biopharmaceuticals, Inc. (OTCQB: "ABPI"). Biovest, along with its subsidiaries, Biovax, Inc., AutovaxID, Inc., Biolender, LLC, and Biolender II, LLC, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 08-17796) on Nov. 10, 2008. As reported in the Troubled Company Reporter on Nov. 19, 2010, Biovest emerged from Chapter 11 protection, and its reorganization plan became effective, on Nov. 17, 2010. The Company reported a net loss of $15.28 million on $3.88 million of total revenue for the year ended Sept. 30, 2011, compared with a net loss of $8.58 million on $5.35 million of total revenue during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $5.41 million in total assets, $37.96 million in total liabilities and a $32.54 million total stockholders' deficit. CHERRY, BEKAERT, & HOLLAND L.L.P., in Tampa, Fla., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company incurred cumulative net losses since inception of approximately $161 million and cash used in operating activities of approximately $4.6 million during the two years ended Sept. 30, 2011, and had a working capital deficiency of approximately $2.2 million at Sept. 30, 2011. BROOKE CORP: Great American Bank Fails in Bid to Dismiss Suit ------------------------------------------------------------- In the lawsuit, CHRISTOPHER J. REDMOND, Chapter 7 Trustee of Brooke Corporation, Brooke Capital Corporation, and Brooke Investments, Inc., v. FIRST CENTRAL BANK, et al., Adv. No. 10-6241 (Bankr. D. Kan.), Bankruptcy Judge Dale L. Somers denied the request of Great American Bank for dismissal or summary judgment based upon the allegation that it is not the former or current owner of the participation interests. The Chapter 7 Trustee for Brooke Corporation, Brooke Capital Corporation, and Brooke Investments, seeks to recover allegedly fraudulent transfers and preferential transfers made by Brooke Capital from defendants who received the transfers as holders of participation interests in loans made by Aleritas, a non-debtor Brooke-related entity, to various insurance borrowers/franchisees. Great American asserts that because of a sale of GAB's common stock and related asset transfers, GAB never owned a participation interest in the loans for which the payments in issue were made, and therefore has no liability to the Chapter 7 Trustee. GAB refers to itself before the stock sale as "Old GAB" and to itself after the sale as "New GAB." However, the Chapter 7 Trustee asserts that despite these transactions, GAB is the proper party from whom to seek recovery of the transfers. A copy of the Court's Jan. 17, 2012 Memorandum Opinion is available at http://is.gd/B5gNiZfrom Leagle.com. About Brooke Corp. Headquartered in Kansas, Brooke Corp. -- http://www.brookebanker.com-- was an insurance agency and finance company. The company owned 81% of Brooke Capital. The majority of the company's stock was owned by Brooke Holding Inc., which, in turn was owned by the Orr Family. A creditor of the family, First United Bank of Chicago, foreclosed on the BHI stock. The company's revenues were generated from sales commissions on the sales of property and casualty insurance policies, consulting, lending and brokerage services. Brooke Corp. and Brooke Capital Corp. filed separate petitions for Chapter 11 relief on Oct. 28, 2008; Brooke Investments, Inc. filed for Chapter 11 relief on Nov. 3, 2008 (Bankr. D. Kan. Lead Case No. 08-22786). Angela R. Markley, Esq., was the Debtors' in-house counsel. Albert Riederer was appointed as the Debtors' Chapter 11 trustee. He acted as special master of Brooke in prepetition federal court proceedings. Benjamin F. Mann, Esq., John J. Cruciani, Esq., and Michael D. Fielding, Esq,, at Husch Blackwell Sanders LLP, and Kathryn B. Bussing, Esq., at Blackwell Sanders LLP, represented the Chapter 11 trustee as counsel. David A. Abadir, Esq., and Robert J. Feinstein, Esq., at Pachulski Stang Ziehl & Jones LLP, Kristen F. Trainor, Esq., and Mark Moedritzer, Esq., at Shook, Hardy & Bacon, represented the Official Committee of Unsecured Creditors as counsel. The Debtors listed assets of $512,855,000 and debts of $447,382,000. The case was converted to Chapter 7 on June 29, 2009, and Mr. Riederer was appointed Chapter 7 Trustee. On Oct. 29, 2008, the Court granted a motion to jointly administer the bankruptcies of Brooke Corporation, Brooke Capital, and Brooke Investment with the Brooke Corporation bankruptcy case being the lead case. BUFFETS INC: Gets Court Nod to Start Tapping $50-Mil. Loan ---------------------------------------------------------- Dow Jones' DBR Small Cap reports that Buffets Restaurants Holdings Inc. won court approval to tap $9 million of a $50 million bankruptcy loan as it tries once again to shave its debts and survive the downturn in the U.S. economy. About Buffets Inc. Buffets, Inc. and all of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18, 2012. The Company says it has reached a restructuring agreement with 83% of its lenders to eliminate virtually all of the Company's approximately $245 million of outstanding debt. As part of the restructuring process, the Company expects to promptly close 81 underperforming restaurants, representing 16% of its nearly 500 restaurants nationally. Buffets, Inc., the nation's largest steak-buffet restaurant company, currently operates 494 restaurants in 38 states, comprised of 483 steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R) restaurants, and franchises 3 steak-buffet restaurants in two states. The restaurants are principally operated under the Old Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire Mountain(R) brands. Buffets employs 28,000 team members and serves 140 million customers annually. Buffets had 626 restaurants when it began its prior bankruptcy case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged from bankruptcy in April 2009. Higher gasoline and energy costs, along with a decline in guest count, have hampered the Debtors' ability to service their long- term debt and caused a liquidity strain, forcing the Company to return to Chapter 11 bankruptcy. In the new Chapter 11 case, Buffets Inc.'s legal advisors are Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway, Stargatt & Taylor, LLP. The Company's financial advisor is Moelis, Inc. Epiq Bankruptcy Solutions LLC is the claims and notice agent. CALAIS RESOURCES: Incurs $1.3-Mil. Net Loss in Nov. 30 Quarter -------------------------------------------------------------- Calais Resources Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $1.29 million on $76,023 of revenue for the three months ended Nov. 30, 2011, compared with a net loss of $408,894 on $0 of revenue for the same period during the prior year. The Company reported a net loss of $2.11 million on $76,023 of revenue for the six months ended Nov. 30, 2011, compared with a net loss of $802,748 on $0 of revenue for the same period a year ago. The Company's balance sheet at Nov. 30, 2011, showed $254,931 in total assets, $12.44 million in total liabilities and a $12.18 million total shareholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/tB8Opn About Calais Resources Nederland, Colorado-based Calais Resources, Inc. (Pink Sheets: CAAUF) is an exploration and development company and owns and operates the Cross/Caribou gold and silver mine operations in Colorado and the White Caps mine operation in Manhattan, Nevada. The company is currently in the initial stages for reviewing the reopening of the fully permitted Cross Mine which includes planning to resume underground exploration activities in Colorado and surface exploration in Nevada. CAMPOSOL HOLDING: Moody's Assigns (P)B3 Corporate Family Rating --------------------------------------------------------------- Moody's Latin America has assigned a first-time provisional (P) B3 corporate family rating to Camposol Holding Plc. (Camposol). At the same time, Moody's assigned a provisional (P) B3 rating to Camposol's proposed US$ 125 million notes. The provisional ratings are assigned pending the successful placement of the proposed notes. The ratings outlook is stable. RATINGS RATIONALE The (P) B3 ratings reflect the company's small operating scale, limited historical track record in its current business model, high leverage, and our expectations of negative free cash generation next year due to growth investments. The ratings also reflect the sensitivity of the operations to the volatility of the agribusiness industry, as well as cyclical variations in demand for its food products. In addition, the 24,216 hectares of plantations owned by the company, out of which 6,440 are currently planted, are concentrated along the Northern Peruvian coast, which exposes its operations to weather and disease-related risks. The ratings are supported by the company's position as one of the largest fully integrated agribusiness corporations in Peru that includes production, packaging and distribution of agricultural products. The rating reflects Camposol's large holdings of arable land as well as its diversified product mix comprised of a varied range of fruits and vegetables which allows the company to drive growth through expansion and product mix shifts without substantial additional capital expenditures needs. The stable ratings outlook is based on Moody's expectation that Camposol will improve earnings trends over the near term, especially in the growing avocado segment, which is benefiting from tight global supply. The stable outlook also reflects our assumption that the company will be able to fund its substantial near-term investment program without increasing negative free cash flow or requiring material further external funding. An upgrade of the ratings could result if Camposol continues to strengthen revenues while maintaining its operating margins. Quantitatively, upward momentum could result if Camposol's total adjusted debt to EBITDA is sustained below 3 times on a 3-year average basis (4.5 times as of the last twelve months ending September 30, 2011) and retained cash flow to adjusted net debt is sustained above 15% on a 3-year average basis (11% as of the last twelve months ending September 30, 2011). A downgrade of the ratings could result from a prolonged slowdown in its end markets that caused sustained agribusiness price declines and a deterioration in operating margins. Quantitatively, a downgrade in the ratings or outlook could be caused if adjusted debt/EBITDA rises above 5.0x or EBITA to interest expense is less than 1.5 times on a 3-year average basis, both for an extended period of time. Camposol is a public company headquartered in Peru and listed in Oslo, Norway. The company plants, harvests, processes and exports white and green asparagus (fresh, frozen and preserved), avocados, mangos, peppers and table grapes. For the last twelve months ended September 30, 2011 the company reported total revenues of US$151 million. The principal methodologies used in rating Camposol Holding was Global Food - Protein and Agriculture Industry published in September 2009. CATALYST PAPER: Chapter 15 Case Summary --------------------------------------- Chapter 15 Petitioner: Brian Baarda Chapter 15 Debtor: Catalyst Paper Holdings Inc. 2101 Fourth Avenue, Suite 1950 Seattle, WA 98121 Chapter 15 Case No.: 12-10219 Type of Business: The debtor is a specialty paper and newspaper producer. Chapter 15 Petition Date: January 17, 2012 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Peter J. Walsh Debtor's Counsel: Van C. Durrer, II, Esq. SKADDEN ARPS SLATE MEAGHER & FLOM LLP 300 South Grand Avenue Los Angeles, CA 90071-3144 Tel: (213) 687-5000 Fax: (213) 687-5600 E-mail: van.durrer@skadden.com Estimated Assets: More than $1 billion Estimated Debts: More than $1 billion The Company did not file a list of creditors together with its petition. Affiliates that simultaneously filed Chapter 15 petitions: Debtor Case No. ------ -------- Catalyst Paper General Partnership 12-10220 Catalyst Paper Corporation 12-10221 Pacifica Papers U.S. Inc. 12-10222 Pacifica Poplars Inc. 12-10223 Pacifica Papers Sales Inc. 12-10224 Catalyst Paper (USA) Inc. 12-10225 Catalyst Paper (Recycling) Inc. 12-10226 Catalyst Paper (Snowflake) Inc. 12-10227 The Apache Railway Company 12-10228 Catalyst Pulp Operations Limited 12-10229 Catalyst Pulp Sales Inc. 12-10230 Pacifica Poplars Ltd. 12-10231 Catalyst Pulp and Paper Sales Inc. 12-10232 Catalyst Paper Energy Holdings Inc. 12-10233 Elk Falls Pulp and Paper Limited 12-10234 0606890 B.C. Ltd. 12-10235 CAPTAIN HULBERT: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Captain Hulbert House, LLC 212-07 33rd Road Bayside, NY 11361 Bankruptcy Case No.: 12-40161 Chapter 11 Petition Date: January 12, 2012 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Joel B. Rosenthal Debtor's Counsel: Pro Se Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its six largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nyeb12-40161.pdf The petition was signed by Tina S. Nonas, member. CATSKILL CONSTRUCTION: Case Summary & Creditors List ---------------------------------------------------- Debtor: Catskill Construction Corp. 5023 Main Street South Fallsburg, NY 12779 Bankruptcy Case No.: 12-35104 Chapter 11 Petition Date: January 18, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Poughkeepsie) Judge: Cecelia G. Morris Debtor's Counsel: Thomas Genova, Esq. GENOVA & MALIN Hampton Business Center 1136 Route 9 Wappingers Falls, NY 12590-4332 Tel: (845) 298-1600 Fax: (845) 298-1265 E-mail: genmallaw@optonline.net Scheduled Assets: $805,000 Scheduled Liabilities: $1,021,898 The Company's list of its six largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb12-35104.pdf The petition was signed by Nachman Kanovsky, president. CDC CORP: Sues Subsidiary CDC Software to Stop Sale --------------------------------------------------- American Bankruptcy Institute reports that CDC Corp. sued one of its subsidiaries on Tuesday to block the acquisition of two companies by a private investment firm, arguing that the sale of these companies would cause CDC Corp. shareholders to "lose substantial value." Based in Atlanta, CDC Corp. (Nasdaq: CHINA) -- http://www.cdccorporation.net/-- is the parent company of CDC Software (Nasdaq: CDCS). CDC Software is based dually in Shanghai, China, and Atlanta and produces enterprise software applications, IT consulting services, outsourced applications development and IT staffing. The company's owners include Asia Pacific Online Ltd., Xinhua News Agency and Evolution Capital Management. CDC Corporation, doing business as Chinadotcom, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011. James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA, in Atlanta, Georgia, serves as counsel. Moelis & Company LLC serves as its financial advisor and investment banker. Marcus A. Watson at Finley Colmer and Company serves as chief restructuring officer. The Debtor estimated assets and debts at $100 million to $500 million as of the Chapter 11 filing. CDC CORP: U.S. Trustee Seeks Turnover of Management --------------------------------------------------- Dow Jones' DBR Small Cap reports that a federal watchdog is protesting an Atlanta judge's decision to keep the executive team in power at technology provider CDC Corp. throughout its bankruptcy case, arguing that its reorganization should be guided by an outside professional as the company tries pay off a hefty $65 million judgment owed to a California hedge-fund investor. About CDC Corp. Based in Atlanta, CDC Corp. (Nasdaq: CHINA) -- http://www.cdccorporation.net/-- is the parent company of CDC Software (Nasdaq: CDCS). CDC Software is based dually in Shanghai, China, and Atlanta and produces enterprise software applications, IT consulting services, outsourced applications development and IT staffing. The company's owners include Asia Pacific Online Ltd., Xinhua News Agency and Evolution Capital Management. CDC Corporation, doing business as Chinadotcom, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011. James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA, in Atlanta, Georgia, serves as counsel. Moelis & Company LLC serves as its financial advisor and investment banker. Marcus A. Watson at Finley Colmer and Company serves as chief restructuring officer. The Debtor estimated assets and debts at $100 million to $500 million as of the Chapter 11 filing. CIT GROUP: Redeeming $500MM of Notes as It Continues to Trim Debt ----------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Business lender CIT Group Inc. will redeem $500 million of second-lien notes, continuing its efforts to trim its debt. About CIT Group Founded in 1908, CIT Group (NYSE: CIT) -- http://www.cit.com/ -- is a bank holding company with more than $34 billion in financing and leasing assets. A member of the Fortune 500, it provides financing and leasing capital to its more than one million small business and middle market clients and their customers across more than 30 industries. CIT Group Inc. and affiliate CIT Group Funding Company of Delaware LLC filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 09-16565) on Nov. 1, 2009, with a prepackaged Chapter 11 plan of reorganization. Evercore Partners, Morgan Stanley and FTI Consulting served as the Company's financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel in connection with the restructuring plan. Sullivan & Cromwell served as legal advisor to CIT's Board of Directors. The Court validated the vote of CIT's impaired classes of creditors and confirmed the Plan on Dec. 8, 2009. The Plan provided for the conversion to equity or reinstatement of seven classes of debt issued primarily in the form of notes and debentures; one class of unsecured notes was exchanged for new debt. General unsecured creditors, including holders of claims arising from the rejection of executory contracts, were paid in full and deemed unimpaired. Holders of preferred and common stock, as well as subordinated claims, received no recovery. CIT emerged from bankruptcy protection on Dec. 11, 2009. * * * In May 2011, Moody's Investors Service upgraded CIT Group Inc.'s Corporate Family Rating to 'B2' from 'B3'. The rating outlook is stable. The upgrade reflects the progress CIT has made addressing its most immediate organizational, operational, and financial challenges subsequent to its bankruptcy reorganization in December 2009. Moody's, however, notes that CIT's weak margins and uncertainty regarding the pace and adequacy of future margin improvements are constraints on the firm's ratings. As reported by the Troubled Company Reporter on Aug. 7, 2011, Dominion Bond Rating Service affirmed CIT's ratings, including its Issuer Rating of B (high), unchanged following the Company's second quarter 2011 financial results. CKX ENTERTAINMENT: Moody's Gives 'B3', Still In Talks for Idol --------------------------------------------------------------- Moody's Investors Service assigned CKX Entertainment, Inc a B3 Corporate Family Rating (CFR) and B3 Probability of Default Rating, as well as B1 (LGD2, 26%) ratings to the company's $200 million Senior Secured 1st Lien Term Loan and $35 million Senior Secured Revolver, and a Caa2 (LGD5, 79%) rating to its $160 million Senior Secured 2nd Lien Term Loan. The existing $35 million Revolver remains in place at CKX, Inc., an intermediate holding company, and is currently undrawn. Proceeds of this transaction were used to refinance CKX's bridge facility put in place in June when Apollo Group Management, LLC (Apollo) purchased the company for an implied equity value of $511 million. The Outlook for CKX is Stable. Issuer: CKX Entertainment, Inc. -- Corporate Family Rating, Assigned B3 -- Probability of Default Rating, Assigned B3 -- $200 million Senior Secured 1st Lien Term Loan due 2017, Assigned B1 (LGD2, 26%) -- $160 million Senior Secured 2nd Lien Term Loan due 2018, Assigned Caa2 (LGD5, 79%) Outlook, Stable Issuer CKX, Inc. -- $35 million Senior Secured 1st Lien Revolver due 2016, Assigned B1 (LGD2, 26%) RATING RATIONALE CKX's B3 CFR reflects the company's moderately high LTM leverage of 4.9x as of September 30, 2011 (including Moody's standard adjustments and including approximately $23 million of preferred shares treated as debt), its high concentration of EBITDA attributable to the American Idol (Idol) television show and ancillary revenue, weaker than anticipated 2011 performance from Idol ancillary businesses and Graceland operations, the expected cancellation of its Viva Elvis show, as well as Moody's expectation of an increase in competition from similarly themed entertainment based shows resulting in potential rating and revenue deterioration at Idol and So You Think You Can Dance (SYTYCD). Ratings are also constrained by the company's modest scale and Moody's belief that leverage will increase over time absent a deleveraging acquisition. Moody's believes that the company will need to find a replacement for SYTYCD in the future and will look for potential acquisition opportunities for more sustainable revenues, potentially adding incremental debt to the balance sheet. CKX's ratings are supported by the strength derived by its co- ownership of the Idol and to a lesser extent its SYTYCD television shows, its 85% ownership in Elvis Presley Enterprises (including its Graceland operations which over time are expected to provide more reliable long-term revenues), and improvements to its EBITDA margin as a result of aggressive cost cutting in 2010. Moody's expects margins will remain near current levels (mid-to-low 30% range) over the short-term, but will likely see compression as higher margin revenues from its Idol ancillary businesses decline over time. The ratings are also supported by the company's positive free cash flow and minimal maintenance capital expenditures, although most excess cash will likely be reinvested in the business, including potential near term capital improvements to its Graceland property and future acquisitions. The completion of its negotiations with Fox on a new multi-year contract for Idol will provide greater clarity on future performance. However, Moody's remains concerned that much of the company's higher margin Idol ancillary revenues are directly attributable to the success of the show and Moody's expects these revenues to be more dramatically impacted by rating declines. The B1 (LGD2, 26%) rating on the company's Senior Secured Revolver and 1st Lien Term Loan receive lift from the $160 million 2nd Lien Term Loan (Caa2 LGD5, 79%), despite limitations on the collateral and bond like covenant package for the 1st lien Term Loan that contain no maintenance covenants. The revolver has a 3.75x senior secured maintenance covenant when the revolver is drawn. The 1st lien Term Loan is secured by the material assets of the borrower, but exclude cash and assets at Elvis Presley Enterprises and material Idol contracts (although it is secured by a pledge of the equity interests). Despite the senior secured nature of the term loan, the debt is structured like a note instead of a traditional term loan with an incurrence test as the only limitation against the issuance of additional debt, no required amortization payment, and a fixed interest rate. CKX owns two-thirds of Idol (one-third owned by FremantleMedia Limited), but CKX receives approximately half of the economic proceeds. Similarly, SYTYCD is a joint venture with DCP Corp. with all economic benefits shared equally. The Stable Outlook reflects Moody's expectation that the company will continue to benefit from the strength of its Idol television show and Graceland operations over the next 18 -- 24 months. The success of these segments will be mitigated by the anticipated loss of its Viva Elvis show, the expected decline of its Idol brand over time which is facing increasing competition from similarly themed shows, and the maturity of its SYTYCD brand which Moody's expects to lead to increased leverage levels absent a deleveraging acquisition. Moody's would consider an upgrade if the company were to generate new sustainable growth opportunities which do not result in incremental leverage and allow the company to reduce and maintain leverage below the 4.75x range (including Moody's standard adjustments and preferred shares), while continuing to generate free cash flow. The ratings could face downward pressure if the ratings for Idol and SYTYCD television shows meaningfully decline and put future revenue and EBITDA generation at risk. If leverage were expected to exceed and remain above 6.75x, Moody's would consider a downgrade. CKX'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 CKX's core industry and believes CKX'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. CKX Entertainment, Inc. ("CKX"), with its headquarters in New York, owns and develops entertainment content worldwide. It holds rights to the name, image and likeness of Elvis Presley and operations at Graceland through its 85% ownership of Elvis Presley Enterprises, the rights to the name, image and likeness of Muhammad Ali through its 80% ownership of Muhammad Ali Enterprises, and proprietary rights to the IDOLS television brand including the American Idol and So You Think You Can Dance series through its co-ownership of these brands. The company has three reporting segments: 19 Entertainment (79% of LTM revenues), Elvis Presley Enterprises (20%), and Muhammad Ali Enterprises (1%). For LTM through September 30, 2011 the company generated revenue of approximately $258 million. Apollo Global Management, LLC (Apollo) purchased CKX in June for an implied equity value of $511 million and an enterprise value of $572 million. CKX ENTERTAINMENT: S&P Assigns 'B' as Idol Still "Stable" ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to CKX Entertainment Inc., which we rate on a consolidated basis with its operating subsidiary, CKX Inc. The rating outlook is stable. "At the same time, we assigned CKX Inc.'s $35 million first-lien revolving credit facility due 2016 our issue-level rating of 'B+' (one notch higher than the 'B' corporate credit rating) with a recovery rating of '2', indicating our expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default. We also assigned CKX Entertainment Inc.'s new $200 million first-lien senior secured term loan due 2017 our issue- level rating of 'B+' with a recovery rating of '2'," S&P said. "Our 'B' corporate credit rating on CKX Entertainment Inc. incorporates our assumption of stable operating performance at the company's key franchise, 'American Idol,' over at least the next few seasons, but reflects the potential for declines in later years," said Standard & Poor's credit analyst Michael Altberg. "In our opinion, CKX's business risk profile is 'weak' (based on our criteria), owing to its heavy reliance on the IDOLS brand and, to a lesser extent, 'So You Think You Can Dance.' We regard the company's financial risk profile as 'aggressive,' based on pro forma lease-adjusted debt leverage of 4.5x and lack of amortization on the new term loans, which could create refinancing risk when this debt becomes due in 5.5 to 6.5 years from now, when CKX's key shows will likely draw lower ratings than currently," S&P said. CKX owns, develops, and commercializes entertainment content. It owns the rights to the IDOLS television brand, including the "American Idol" series and 40 local adaptations of the show broadcast in over 100 countries. In the U.S., the company co- produces "American Idol" with FreemantleMedia Ltd., and retains 50% of TV license fees after production costs. The company's intellectual property (IP)-related assets consist of copyrights to albums released by "American Idol" finalists, as well as the co- ownership of the name, image, and likeness of Elvis Presley and Muhammad Ali. "We view these assets as relatively more stable, although replenishment of the music catalog partly depends on the success and popularity of the 'American Idol' franchise. While over-dependence on IDOLS is the overriding risk, in our view, CKX's reliance on audience viewing habits, increased competition in the reality-based talent contest format, and the risks of declining ratings over the finite lifecycle of most television shows pose additional risks. In our opinion, a falloff in ratings at 'American Idol' could have negative repercussions for revenue generated from music touring, record sales, merchandizing, artist management, and, to a lesser extent, foreign syndication," S&P said. "Future growth will be contingent on the continued success of the company's programming portfolio, which we believe will be influenced by competing shows, the ongoing quality of on-air contestants and celebrity judges, and the potential for frequent turnover of judges and hosts. Under our base case scenario, we believe the EBITDA margin could expand to roughly 32% to 33% in 2012, owing to higher revenue together with cost savings from 2010 restructuring efforts. Future EBITDA margin expansion will depend on the number of program hours ordered by Fox for key shows, audience ratings performance, and potential increased investment in existing and new content," S&P said. CKX ENTERTAINMENT: S&P Assigns 'CCC+' Rating to $160MM Term Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned CKX Entertainment Inc.'s new $160 million second-lien senior secured term loan due 2018 our issue-level rating of 'CCC+' (two notches below the 'B' corporate credit rating on the company). "We also assigned this debt a recovery rating of '6,' indicating our expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default," S&P said. CKX owns, develops, and commercializes entertainment content. It owns the rights to the IDOLS television brand, including the "American Idol" series and 40 local adaptations of the show broadcast in over 100 countries. "Our corporate credit rating on the company is 'B' and our rating outlook is stable. The rating incorporates our assumption of stable operating performance at the company's key franchise, 'American Idol,' over at least the next few seasons, but reflects the potential for declines in later years. In our opinion, CKX's business risk profile is 'weak' (based on our criteria), owing to its heavy reliance on the IDOLS brand and, to a lesser extent, 'So You Think You Can Dance.' We regard the company's financial risk profile as 'aggressive,' based on pro forma lease-adjusted debt leverage of 4.5x and lack of amortization on the new term loans, which could create refinancing risk when this debt becomes due in 5.5 to 6.5 years from now, when CKX's key shows will likely draw lower ratings than currently," S&P said. Ratings List CKX Entertainment Inc. Corporate Credit Rating B/Stable/-- New Rating CKX Entertainment Inc. $160M second-lien sr secd term loan due 2018 CCC+ Recovery Rating 6 CATALYST PAPER: Says CBCA Case Not a Bankruptcy Proceeding ---------------------------------------------------------- Catalyst Paper Corporation has applied for and received an initial court order under the Canada Business Corporations Act (CBCA) to commence the consensual restructuring process with its noteholders announced on Jan. 14, 2012. The Company said contrary to certain media reports this is not a bankruptcy proceeding. The Company is also seeking recognition of these proceedings with the U.S. Court in order for the Canadian order under the CBCA to be recognized in the United States. The Company will continue to operate and satisfy its obligations to trade creditors, customers, employees and retirees in the ordinary course of business during this restructuring process. Further information concerning the recapitalization is contained in the Agreement, a copy of which is available on SEDAR (www.sedar.com), EDGAR (www.sec.gov) and the Company's web page (www.catalystpaper.com). Investors who have questions about the recapitalization may contact Nancy Turner of Perella Weinberg Partners, the financial advisor for Catalyst Paper, at 415-671- 4550. About Catalyst Paper Catalyst Paper Corp. -- http://www.catalystpaper.com/-- manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With four mills, located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 1.9 million tons. The Company is headquartered in Richmond, British Columbia, Canada and its common shares trade on the Toronto Stock Exchange under the symbol CTL. Catalyst Paper in January 2012 applied for and received an initial court order under the Canada Business Corporations Act (CBCA) to commence a consensual restructuring process with its noteholders. Affiliate Catalyst Paper Holdings Inc., sought creditor protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 12-10219) on Jan. 17, 2012. The company is seeking recognition of these proceedings with the Delaware Court in order for the Canadian order under the CBCA to be recognized in the United States. The company will continue to operate and satisfy its obligations to trade creditors, customers, employees and retirees in the ordinary course of business during this restructuring process. Catalyst on Dec. 15, 2011, deferred a US$21 million interest payment on its outstanding 11.00% Senior Secured Notes due 2016 and Class B 11.00% Senior Secured Notes due 2016 due on Dec. 15, 2011. Catalyst said it was reviewing alternatives to address its capital structures and it is currently in discussions with noteholders. Perella Weinberg Partners served as the financial advisor. In early January 2012, Catalyst said it had entered into a restructuring agreement, which will see its bondholders taking control of the company and includes an exchange of debt for equity. The agreement said it would slash the company's debt by C$315.4 million ($311 million) and reduce its cash interest expenses. Catalyst also said it will continue to "operate and satisfy" its obligations to customers, trade creditors, employees and retirees in the ordinary course of business during the restructuring process. Catalyst Paper joins a line of paper producers that have succumbed to higher costs, increased competition from Asia and Europe, and falling demand as more advertisers and readers move online. Last year, Cerberus Capital-backed NewPage Corp. filed for bankruptcy protection, followed by SP Newsprint Co., owned by newsprint magnate and fine art collector Peter Brant. In December, Wausau Paper said it will close its Brokaw mill in Wisconsin, cut 450 jobs and exit its print and color business. CIRCLE STAR: Merrill Richards Appointed as Director --------------------------------------------------- Pursuant to Article 3, Section 9 of the Bylaws of Circle Star Energy Corp., the Board of Directors of the Company, appointed Thomas Merrill Richards, as a director of the Company to fill a vacancy. Mr. Richards is an oil and gas attorney. Mr. Richards graduated with a B.A. in Finance at Texas Tech University. He earned his Doctorate of Law at Baylor University. Mr. Richards is the Founder and President of "Books for Belize", a Texas company that provides children's books to Central America Countries. He is a Managing Partner and Owner of Richards Cattle Company, and the Founder and President of Redco, Inc., an Oil and Gas Exploration Company. Mr. Richards is a member of the Presidents Council at Texas Tech University. Mr. Richards was formerly the Land and Lease Manager of Cano Petroleum, Inc., a Fort Worth based Oil and Gas Enhanced Recovery Company. About Circle Star Houston, Tex.-based Circle Star Energy Corp. owns royalty, leasehold, operating, net revenue, net profit, reversionary and other mineral rights and interests in certain oil and gas properties in Texas. The Company's properties are in Crane, Scurry, Victoria, Dimmit, Zavala, Grimes, Madison, Robertson, Fayette, and Lee Counties. The Company has sustained losses in all previous reporting periods with an inception to date loss of $3.8 million as of July 31, 2011. "There is substantial doubt about the Company's ability to continue as a going concern," the Company said in the filing. The Company reported a net loss of $6.46 million on $509,971 of total revenues for the six months ended Oct. 31, 2011, compared with a net loss of $11,172 on $0 of total revenues for the same period a year ago. The Company's balance sheet as of Oct. 31, 2011, showed $3.47 million in total assets, $5.84 million in total liabilities, and a $2.37 million total stockholders' deficit. COLFAX CORP: S&P Assigns 'BB' Corporate Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' corporate credit rating to Fulton, Md.-based fluid-handling products manufacturer Colfax Corp. The outlook is stable. At the same time, Standard & Poor's assigned its 'BB+' issue-level rating (one notch higher than the corporate credit rating) to the company's $2.1 billion five-year senior secured credit facility. The recovery rating is '2', indicating that lenders could expect substantial (70% to 90%) recovery in a payment default scenario. "The ratings on Colfax reflect the company's 'satisfactory' business risk profile and 'aggressive' financial risk profile, based on Standard & Poor's criteria. The acquisition of Charter International, which generated $2.7 billion in sales in 2010 (about 80% of Colfax's pro forma total sales), will transform Colfax from a niche market player to a multiplatform industrial company," S&P said. "Although credit ratios will initially be somewhat weak for the rating, we believe that the resulting improvement in Colfax's cash flow and operations will enable the company to achieve credit measures consistent with the corporate credit rating within 12 to 18 months," said Standard & Poor's credit analyst Gregoire Buet. Colfax is a well-established niche player in the industrial pump industry. Charter is organized into two operating groups: ESAB, a welding and cutting company (two-thirds of 2010 sales), and Howden, a manufacturer of air and gas handling products (one-third of 2010 sales). Both Colfax and Charter compete in cyclical and fragmented industrial markets, with end markets consisting of general industrial, commercial marine, oil and gas, power generation, and defense sectors. Charter's large installed equipment base will allow the combined company to generate a sizeable portion of revenue from aftermarket or consumables sales, which tend to be more stable and have higher margins than original equipment revenues. COMMERCIAL METALS: S&P Affirms 'BB+' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services removed all of its ratings on Irving, Texas-based Commercial Metals Co. (CMC) from CreditWatch, where it placed them with negative implications on Nov. 29, 2011. "We have affirmed our ratings on CMC, including the 'BB+' corporate credit rating. The outlook is stable," S&P said. "We also assigned a '3' recovery rating to the company's senior unsecured debt, indicating our expectation that investors can expect to receive a meaningful recovery (50% to 70%) in the event of a payment default. At the same time, we withdrew our 'A-3' short-term corporate credit and CP ratings on CMC," S&P said. "The CreditWatch action reflects our assessment of CMC's financial policy and capital structure following IEP's attempted hostile takeover," said Standard & Poor's credit analyst Maurice Austin. IEP announced that the tender offer for all outstanding shares of common stock of CMC expired at midnight, Tuesday, Jan. 10, 2012, and approximately 23% of the shares were tendered. Since it did not receive 40.1% of the shares needed, IEP will discontinue its proxy fight and has withdrawn its nominees for election to the CMC's board. "It was our belief that a successful takeover had the potential to cause CMC to adopt a more-aggressive financial policy and possibly increase debt significantly," said Mr. Austin. "The rating on CMC reflects our assessment of the company's business risk profile as 'fair' under our criteria, highlighted by the competitive and highly cyclical nature of the steel industry in general, and CMC's sharply lower profitability during the current downturn in particular. It's our opinion that these factors will be somewhat offset over the longer term by the company's position as an efficient producer and by the diversity of its metals-related business mix. Our assessment of CMC's financial risk as 'intermediate' (as our criteria define the term) assumes that EBITDA will gradually improve and cyclically high leverage (above 5x currently) will return to the 2x to 3x range over the next two years on improved sales volumes and easing cost pressure," S&P said. CMC manufactures commodity steel rebar and merchant bar used in a broad range of industrial, construction, and transportation applications. CORAL CORPORATION: Case Summary & 5 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Coral Corporation #623 Ave. Ponce De Leon, Suite 504B San Juan, PR 00917 Bankruptcy Case No.: 12-00207 Chapter 11 Petition Date: January 16, 2012 Court: U.S. Bankruptcy Court District of Puerto Rico Judge: Brian K. Tester Debtor's Counsel: George Otero Calero, Esq. BUFETE OTERO & ASSOCIATES P.O. Box 732 Bayamon, PR 00956-0000 Tel: (787) 798-6290 Fax: (787) 780-6808 E-mail: otero_and_assoc@hotmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its five largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/prb12-00207.pdf The petition was signed by Edgardo Francisco Rivera Maldonado, president. CROWN MEDIA: Extends Employment of Charles Stanford to 2013 ----------------------------------------------------------- Crown Media Holdings, Inc., on Jan. 12, 2012, entered into a new employment agreement with Charles Stanford, Executive Vice President and General Counsel, effective Jan. 1, 2012. Mr. Stanford's new employment agreement has a term through Dec. 31, 2013, and provides for an annual base salary of $543,470, which will be considered for an adjustment in March 2013 and each March during any extension of the employment agreement beyond 2013. In addition to his salary, Mr. Stanford will be eligible to receive an annual performance bonus at a target rate not less than 30% of his annual salary earned and based on achievement of criteria established by the Company's Compensation Committee. He will also be eligible to receive a long term incentive award pursuant to the Company's 2000 Long Term Incentive Plan at a target of annual salary established by the Compensation Committee. Pursuant to the new employment agreement, if the Company terminates employment without cause prior to the expiration thereof, Mr. Stanford will be entitled to 12 months base salary, paid in a lump sum discounted to the present value, pro rata bonus through the date of termination, settlement of any award pursuant to an incentive agreement executed under the Company's 2000 Long Term Incentive Plan and other benefits which may be required by law. Additionally, Mr. Stanford may not compete with the Company during the term of employment and, for one year following termination of employment for any reason, may not employ any person who is working for the Company as an officer, policymaker or in a high- level creative development or distribution position at the date of termination. About Crown Media Studio City, Calif.-based Crown Media Holdings, Inc. (NASDAQ: CRWN) -- http://www.hallmarkchannel.com/-- owns and operates cable television channels dedicated to high quality, broad appeal, entertainment programming. The Company currently operates and distributes Hallmark Channel in both high definition (HD) and standard definition (SD) to 90 million subscribers in the U.S. Crown Media also operates a second 24-hour linear channel, Hallmark Movie Channel, available in both HD and SD, which focuses on family-friendly movies with a mix of classic theatrical films, presentations from the acclaimed Hallmark Hall of Fame library, original Hallmark Channel movies and special events. The Company's balance sheet at Sept. 30, 2011, showed $935.63 million in total assets, $717.89 million in total liabilities and $217.74 million total stockholders' equity. Going Concern KPMG LLP, in Denver, the Company's independent registered public accounting firm, rendered a going concern opinion in connection with the financial statements included in the Company's annual report on form 10-k for the year ended Dec. 31, 2009. The independent auditors noted of the Company's significant short-term debt obligations. KPMG LLP, however, did not issue a going concern opinion in its report on the Company's 2010 financial statements. * * * As reported by the TCR on July 25, 2011, Standard & Poor's Ratings Services assigned Studio City, Calif.-based cable network company Crown Media Holdings Inc. its 'B' corporate credit rating. The outlook is stable. "The stable rating outlook reflects our expectation that the company could reduce its lease-adjusted leverage over the intermediate term through EBITDA growth and modest debt repayment, barring any unforeseen events," S&P said. DOT VN: Louis Huynh Resigns from Board of Directors --------------------------------------------------- Mr. Louis P. Huynh a director of Dot VN, Inc., tendered his resignation as a director of the company. Mr. Huynh's resignation became effective immediately, he has served diligently since 2006. Mr. Huynh has no disagreements with the Company in connection with his resignation as a director. The Company regrets but also respects Mr. Huynh's decision, and the Company thank and acknowledge him for his service and dedication, his guidance and his invaluable contributions to the strategic direction of the Company. Mr. Huynh will continue to provide part-time services to the Company under his Oct. 4, 2011, consulting agreement. About Dot VN Dot VN, Inc. (OTC BB: DTVI) -- http://www.DotVN.com/-- provides Internet and telecommunication services for Vietnam and operates and manages Vietnam's innovative online media web property, http://www.INFO.VN The Company is the "exclusive online global domain name registrar for .VN (Vietnam)." Dot VN is the sole distributor of Micro- Modular Data Centers(TM) solutions and E-Link 1000EXR Wireless Gigabit Radios to Vietnam and Southeast Asia region. Dot VN is headquartered in San Diego, California with offices in Hanoi, Danang and Ho Chi Minh City, Vietnam. Dot VN was incorporated in the State of Delaware on May 27, 1998, under the name Trincomali Ltd. The Company reported a net loss of $2.38 million on $464,886 of revenue for the six months ended Oct. 31, 2011, compared with a net loss of $2.95 million on $578,310 of revenue for the same period a year ago. The Company reported a net loss of $5 million on $1.01 million of revenue for the year ended April 30, 2011, compared with a net loss of $7.32 million on $1.12 million of revenue during the prior year. The Company's balance sheet at Oct. 31, 2011, showed $2.58 million in total assets, $9.24 million in total liabilities and a $6.65 million total shareholders' deficit. PLS CPA, in San Diego, Calif., noted that the Company's losses from operations raise substantial doubt about its ability to continue as a going concern. EASTMAN KODAK: Bankruptcy Lenders Push Digital Patents to Auction ----------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Eastman Kodak Co.'s $950 million bankruptcy loan calls for the struggling company to lay out plans to auction its digital imaging patent portfolio by the end of June, court papers said. Technology companies like Apple Inc. and BlackBerry maker Research In Motion Ltd. accelerated Eastman Kodak Co.'s slide into bankruptcy court by playing hardball in patent negotiations, the struggling film company said, according to Dow Jones' Daily Bankruptcy Review. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. are not included in the filing and will continue to operate as usual. The Company, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Having invested significantly in research and development for over a century, Kodak has a vast portfolio of patents. In 1975, Kodak scientists invented the first digital camera. Kodak then went on to develop a vast collection of patented technologies to enhance digital image capture and processing, technologies that are used in virtually every modern digital camera, smartphone and tablet, as well as numerous other devices. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Kodak says it has "significant" legacy liabilities, which include $1.2 billion in non-U.S. pension liabilities, $1.3 billion of Other Post-Employment Benefit ("OPEB") liabilities and roughly $100 million in environmental liabilities. Kodak has outstanding funded debt in an aggregate amount of roughly $1.6 billion, consisting primarily of roughly: (a) $100 million outstanding under the first lien revolving credit facility plus an additional $96 million in face amount of outstanding letters of credit; (b) $750 million in principal amount of second lien secured notes; (c) $400 million in principal amount of convertible notes; and (d) $283 million in principal amount of other senior unsecured debt. Kodak also has roughly $425 million in outstanding trade debt. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtor. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. EASTMAN KODAK: Unable to Cope When Innovation Came Along -------------------------------------------------------- Hank Lucas, the Robert H. Smith Professor of Information systems, the Robert H. Smith School of Business at the University of Maryland, has written the forthcoming book, Searching for Survival: Lessons from Disruptive Technologies (Praeger, June 2012). It includes a chapter, "Kodak Misses its Moment." Mr. Lucas says Kodak is a tragic example of a company that had everything going for it, but was unable to cope when innovative digital technologies came along. Kodak's demise was brought about not by a single event, but as with many disasters, a series of conditions and events brought the company down. These include: * Kodak's own invention of the digital camera in 1975. * The firm's inability to understand that others flooding the market with digital cameras, combined with the Internet, changed the process by which people captured and shared images. * The company's rigid bureaucratic structure prevented it from responding quickly to threats. * Senior management was unable to convince middle managers to move away from their analog, chemical and film mindset. * Management was distracted by foreign competition (e.g. Fuji) in film and a suit by Polaroid on instant photography. * Kodak exhibited a certain amount of arrogance thinking that it could control the pace at which consumers converted from film to digital photography. * The company wanted to protect its cash cow film business as long as possible. * Over the years Kodak tried to diversify into unrelated fields and then pulled out. * One hundred-plus years of success and a market share that at times exceeded 90 percent. These factors led to skepticism about digital photography and denial of the threat to Kodak from digital technologies, says Mr. Lucas. Kodak appears to have never understood the Internet and digital technologies. Current CEO, Antonio Perez, came from Hewlett Packard's printer division, and picked up on Kodak's research in this area to turn the company into a manufacturer of consumer and commercial printers while living off of its patent inventory. Unfortunately, this strategy has taken too long to work as Kodak has less than a three-percent market share of printers and is rapidly running out of cash. It is trying to sell its patent trove, which is a little like cutting off your arm as one analyst put it. Now, Kodak has joined a growing list of companies like Blockbuster and Borders. For a these firms, the new business models based on technological innovations were well publicized, but the incumbents did not respond until too late, and then they were unable even to copy their competitors, much less come up with something more innovative themselves. Kodak's inability to respond to a digital world has been a disaster for its employees. In the 1980s the company employed 145,000 people around the world. Today that number is around 19,000, and with a bankruptcy filing imminent, their jobs are in jeopardy, as well. What's a company to do? For Kodak, it may be all over at this point. In bankruptcy, Kodak can sell its patent portfolio, find a buyer for its printer business and liquidate. Hopefully Kodak's story will be a lesson for other companies confronted by technological innovations: You cannot wait, and your response must be bold. Kodak Should Have Folded Earlier Brent Goldfarb, associate professor of entrepreneurship and management, recently co-authored "Optimal Inertia: When Organizations Should Fail" recently in the journal Ecology and Strategy. He says Kodak is one such company that should have "failed," or closed down in an orderly fashion, instead of turning to bankruptcy. Kodak has been faced with a particularly difficult problem. The production of film is a very sensitive process, and for this reason Kodak was a rigid organization - as small mistakes could have large consequences. This made the transition to digital costly. Ironically, Kodak was reasonably successful in their transition and quickly achieved a market leading position. The problem was that market leadership in a low-margin business is not a great prize. Kodak has not been a victim of poor management, rather, the poor circumstance of being on the wrong side of creative destruction; its fate largely unavoidable. Instead of trying to pursue the digital photography market, (Kodak) would have been better off slowly shutting down while profiting as much as possible from the dying film market. While this is a terrible outcome for Kodak stakeholders, particularly employees, history did not treat the company kindly anyway. They might have been better off trying to provide enough resources to the employees being displaced and to those managing the shrinking enterprise so as to ensure continuity and thereby extracting as much profit as possible from the market. They could then return what's left to the shareholders, whose dividends are increased further with the company not plowing money back into research and development. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. are not included in the filing and will continue to operate as usual. The Company, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Having invested significantly in research and development for over a century, Kodak has a vast portfolio of patents. In 1975, Kodak scientists invented the first digital camera. Kodak then went on to develop a vast collection of patented technologies to enhance digital image capture and processing, technologies that are used in virtually every modern digital camera, smartphone and tablet, as well as numerous other devices. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Kodak says it has "significant" legacy liabilities, which include $1.2 billion in non-U.S. pension liabilities, $1.3 billion of Other Post-Employment Benefit ("OPEB") liabilities and roughly $100 million in environmental liabilities. Kodak has outstanding funded debt in an aggregate amount of roughly $1.6 billion, consisting primarily of roughly: (a) $100 million outstanding under the first lien revolving credit facility plus an additional $96 million in face amount of outstanding letters of credit; (b) $750 million in principal amount of second lien secured notes; (c) $400 million in principal amount of convertible notes; and (d) $283 million in principal amount of other senior unsecured debt. Kodak also has roughly $425 million in outstanding trade debt. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtor. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. EASTMAN KODAK: S&P Cuts Corp. Credit Rating to 'D' on Bankruptcy ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Rochester, N.Y.-based Eastman Kodak Co. to 'D' from 'CCC-' and removed the ratings from CreditWatch with negative implications. The downgrade follows Kodak's announcement that it and its U.S. subsidiaries filed voluntary petitions for chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York. The company's non-U.S. subsidiaries are not included in the filing, and Kodak expects these subsidiaries to continue operating in ordinary course. Kodak expects to complete its U.S.-based restructuring during 2013. Kodak's voluntary bankruptcy filing relates to continued deterioration in the company's operations from declines in traditional imaging, less favorable terms demanded by trade creditors in recent months, and new business investment funding requirements. The company announced that it has obtained a fully committed $950 million debtor-in-possession (DIP) credit facility with an 18- month maturity from Citigroup. "We are reviewing the effect of the DIP facility, which has a priority claim, on the recovery estimate for the second-lien notes," S&P said. As of the petition date, Kodak had outstanding about $100 million drawn on an unrated priority-lien asset-backed revolving credit facility, $96 million outstanding in letters of credit, $750 million second-lien notes, $683 million senior unsecured notes and loans, $425 million trade debt, about $1.2 billion underfunded non-U.S. defined benefit pension plans, about $1.3 billion of OPEB liabilities, and about $100 million in environmental liabilities. ENCOMPASS DIGITAL: Moody's Rates New Credit Facilities at 'B3' -------------------------------------------------------------- Moody's Investors Service assigned a B3 rating and LGD3 -- 31% assessment to Encompass Digital Media, Inc.'s ("Encompass") proposed $30 Million 1st Lien Senior Secured Revolver and $250 Million 1st Lien Senior Secured Term Loan B. The new credit facilities will be used to partially fund Court Square Capital Partners' $475 million acquisition of an 80% interest in Encompass. In addition, Moody's also upgraded Encompass' Corporate Family Rating (CFR) to B3 from Caa1. The upgrade reflects the new capital structure with reduced debt as well as Moody's expectations for further improvement in credit metrics. The Caa1 Probability of Default Rating (PDR) was affirmed reflecting the all bank debt structure and our expectations for an above average recovery in a distress scenario. The rating outlook is stable. Assignments: Issuer: Encompass Digital Media, Inc. -- NEW $30 Million 1st Lien Senior Secured Revolver: Assigned B3, LGD3 -- 31% -- NEW $250 Million 1st Lien Senior Secured Term Loan B: Assigned B3, LGD3 -- 31% Upgrades: Issuer: Encompass Digital Media, Inc. -- Corporate Family Rating: Upgraded to B3 from Caa1 Unchanged: Issuer: Encompass Digital Media, Inc. -- Probability of Default Rating: Affirmed Caa1 Outlook Actions: Issuer: Encompass Digital Media, Inc. -- Outlook is Stable To be withdrawn upon repayment at the close of the transaction: Issuer: Encompass Digital Media, Inc. -- $20 Million First Lien Senior Secured Revolver due 2016: B2, LGD2 -- 29% -- $175 Million First Lien Senior Secured Term Loan B due 2016: B2, LGD2 -- 29% RATINGS RATIONALE The B3 corporate family rating reflects moderately high, debt-to- EBITDA leverage of 4.6x (including Moody's standard adjustments) expected for the FY ended March 31, 2012 and pro forma for the pending acquisition by Court Square Capital Partners with reduced debt balances. Moody's expects free cash flow to be negative for FY March 2012, due in part to one time working capital adjustments incurred in the first half of the year, and to turn positive next year resulting in free cash flow-to-debt ratios in the low single digits for FY March 2013, increasing thereafter. Ratings are constrained by the company's lack of scale and the need to fund incremental capital expenditures as most new contracts are awarded or as most existing contracts are expanded. Ratings are supported by the contractual or recurring nature of 75% of its annual revenues, as estimated by management, and the $488 million revenue backlog which will contribute more than 50% of revenues over the rating horizon. Ratings are also supported by the company's consistent relationships and high renewal rates exceeding 90%. Given maturation of cable channel proliferation in the U.S., incremental demand for third-party origination and distribution services is expected to be driven largely by the outsourcing of upgraded content management in High Definition/3D versus Standard Definition, proliferation of multiple file formats, potential demand for disaster recovery services, and increased video content consumption. Liquidity is adequate given modest free cash flow and approximately $25 million of expected revolver availability; however, to the extent Encompass chooses to increase capital spending above its current plan, improvements in liquidity would be delayed or liquidity could weaken. Given ownership by a financial sponsor, ratings are constrained by the potential for shareholder friendly actions including additional debt financed acquisitions or dividends. The stable outlook reflects Moody's view that debt-to-EBITDA will be sustained below 4.75x (including Moody's standard adjustments) over the rating horizon and the company's multi-year backlog will continue to support consistent revenue performance. The outlook also incorporates our expectation that liquidity will be adequate, reported EBITDA margins will remain above 22%, and the company will be able to limit capital expenditures to forecasted levels, assuming no significant acquisitions. Ratings could be downgraded if revenue or EBITDA fall short of management's plan due to a decline in contract renewals or an inability to develop new business resulting in debt-to-EBITDA ratios being sustained above 5.0x. A decrease in backlog or margin erosion resulting in weakened liquidity including deterioration in EBITDA cushion relative to financial maintenance covenant requirements would create downward rating pressure. Sizable debt financed acquisitions, distributions or share repurchases could also result in a downgrade. Ratings could be upgraded if debt-to- EBITDA ratios are sustained comfortably below 3.75x with free cash flow-to-debt ratios greater than 10%, reflecting organic growth across all operating segments or improved EBITDA margins, and with an expanded revenue backlog. Encompass' 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 Encompass' core industry and believes Encompass' 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. Encompass Digital Media, Inc., headquartered in Los Angeles, CA, is a leading provider of outsourced network origination and transmission services to broadcasters, cable channels and other media companies. Having acquired the satellite services businesses of Crawford Communications in January 2010 and the content distribution businesses of Ascent Media in February 2011, Encompass now operates in the U.S., Europe and Asia with 59% of revenues from network origination, 26% from occasional-use services and 15% from government services, digital media and other services. On December 13, 2011, Court Square Capital Partners, entered into a definitive agreement to acquire an 80% ownership interest in Encompass for total consideration of $475 million with the remaining 20% owned by management. Revenues for 12 months ended September 2011 totaled approximately $201 million. ENCOMPASS DIGITAL: S&P Rates $280-Mil. Credit Facility at 'B' ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' issue-level rating and '3' recovery rating to Los Angeles-based Encompass Digital Media Inc.'s proposed $280 million senior secured credit facility. "In addition, we affirmed our 'B' corporate credit rating on the company. The outlook is stable," S&P said. "The proposed senior secured credit facility will consist of a $250 million term loan B and a $30 million revolver due 2017. The '3' recovery rating indicates our expectation for meaningful (50%- 70%) recovery of principal in the event of default. Encompass plans to use the proceeds to finance Court Square Capital's acquisition of the company. We will withdraw our ratings on the existing $195 million senior secured credit facility when the transaction closes," S&P said. "The ratings on Encompass reflect a 'weak' business risk profile (as defined in our criteria) that takes into account the company's limited operating history in its present size and scope, its focus on a niche market dominated by the in-house operations of large media companies, and its high capital spending requirements when adding new customers. These business risks more than offset such positive factors as the company's multiyear contracts, high barriers to entry for new competitors, and our expectations that the trend of media companies outsourcing non-core functions will continue to grow," S&P said. "We consider the financial risk profile 'highly leveraged' (as defined in our criteria). Our ratings assume that Encompass will increase revenues in the high-single-digit range for the next few years, primarily due to the full impact of renewed and newly signed contracts. While we believe that network outsourcing will continue to gain traction, we also believe there will be hesitancy among many large broadcasters to fully accept the outsourced services model. We do not project any new significant contracts, although Centralcasting, along with potential channel growth in Asia, could be significant growth drivers exceeding our forecast. We project only modest EBITDA margin improvement because most of the company's expenses are variable, and therefore have assumed that margins remain in the mid- to high-20% area," S&P said. "We assume adjusted leverage will remain elevated, declining from 5.7x, pro forma for the proposed transaction, to about 5.0x by the end of fiscal year 2013 (March 2013). Our adjusted debt total includes the present value of operating leases and fixed-pay satellite contract commitments. As our forecast does not include significant new contract wins, we assume Encompass prepays its debt with its excess cash. We note that free operating cash flow (FOCF) generation could be lower than we expect if the company were to win significant new contracts as this would require upfront capital investments," S&P said. Encompass provides outsourced media distribution services to content providers. Network origination, its core business comprising about 60% of revenue, is the process of aggregating content, including inserting advertisements and overlaying graphics, into a continuous linear cable channel distributed out to cable and IPTV operators. This segment includes Encompass' Centralcasting service, which provides similar network origination and distribution services for local broadcast TV stations. In addition, Encompass also offers satellite-based transmission services for live events (about one-quarter of revenues), government contracts for transmission services, and other outsourced media manipulation and transmission services. Encompass' business requires specialized broadcast facilities equipped with technical infrastructure, creating high barriers to entry. ENER1 INC: M. Zoi Intends to Hold Majority Controlling Ownership ---------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Mike Zoi, Green Venture Group, LLC, and Enerfund, LLC, disclosed that, as of Jan. 4, 2012, they beneficially own 16,387,582 shares of common stock of Ener1, Inc., representing 8.4% of the shares outstanding. The percentage is calculated based on 195,273,025 shares of common stock of the Company outstanding as of Sept. 14, 2011, plus 62,048 shares of common stock of the Company that the reporting person has the right to purchase pursuant to currently exercisable warrants. A full-text copy of the amendment is available for free at: http://is.gd/0xOx3v Mike Zoi requested the Board of Directors of Ener1 Company to appoint a special committee to propose terms on which one or more of the Reporting Persons would purchase from the Company an amount of securities in the Company that would result in their holding a majority controlling ownership stake in the Company, which purchase would be intended to provide sufficient financing for the Company to avoid being forced to file for Chapter 11 protection. Mike Zoi has also had communications with certain debt holders of the Company expressing interest in potentially purchasing from those debt holders certain of their outstanding loans payable by the Company. About Ener1 Ener1 Inc. (OTCBB: ENEI) -- http://www.ener1.com/-- has three business lines, which the company conducts through three operating subsidiaries. EnerDel, an 80.5% owned subsidiary, which is 19.5% owned by Delphi, develops Li-ion batteries, battery packs and components such as Li-ion battery electrodes and lithium electronic controllers for lithium battery packs. EnerFuel develops fuel cell products and services. NanoEner develops technologies, materials and equipment for nano-manufacturing. On Aug. 15, 2011, Ener1 disclosed that the Company's financial statements for the year ended December 31, 2010 and for the quarterly period ended March 31, 2011 should no longer be relied upon and should be restated. The determination was made following an assessment of certain accounting matters related to the loans receivable owed to Ener1 by Think Holdings and accounts receivable owed to Ener1 by Think Global held by the Company, and the timing of the recognition of the impairment charge related to the Company's investment in Think Holdings originally recorded during the quarter ended March 31, 2011. Ener1 in September 2011 announced that it has entered into an agreement to restructure its 8.25% Senior Amortizing Notes with Goldman Sachs Asset Management, L.P., and other holders of the Notes. Ener1 also announced that its primary shareholder, BzinFin S.A., has extended the maturity of its $15-million line of credit from November 2011 to July 2013. The Company and Bzinfin S.A., on Sept. 12, 2011, entered into an amendment to the Line of Credit Agreement dated June 29, 2011. Under the LOC Agreement, Bzinfin established a line of credit for the Company in the aggregate principal amount of $15,000,000, of which approximately $11,241,000 has been borrowed by the Company. Under the terms of the Amendment, the maturity date for the repayment of all advances under the LOC Agreement and all unpaid accrued interest thereon was extended to July 2, 2013, and the interest rate at which all outstanding advances will bear interest from and after Sept. 12, 2011, was increased to 15% per year. FILENE'S BASEMENT: Court Approves Employee Retention Plan --------------------------------------------------------- BankruptcyData.com reports that the U.S. Bankruptcy Court approved Filenes Basement's motion, under Bankruptcy Code Sections 105, 363(b) and 503(c)(3), for a limited, wind-down employee retention plan that calls for periodic payments to a small, core staff of the Debtors' employees necessary to continue the Debtors' wind- down efforts. According to documents filed with the Court, the plan was formulated with both the creditors and equity committees: "Both Committees provided valuable comments and suggestions with respect to formulation of the KEIP as proposed, and both Committees have indicated that they support entry of an order approving the KEIP . . ." About Filene's Basement & Syms Corp. Massachusetts-based Filene's Basement, also called The Basement, is the oldest off-price retailer in the United States. The Basement focuses on high-end goods and is known for its distinctive, low-technology automatic markdown system. Filene's Basement first filed for Chapter 11 bankruptcy protection in August 1999. Filene's Basement was bought by a predecessor of Retail Ventures, Inc., the following year. Retail Ventures in April 2009 transferred the unit to Buxbaum. Filene's Basement, Inc. and its affiliates filed for Chapter 22 (Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy Solutions serves as claims and notice agent. The Debtors disclosed assets of $236 million, including real estate of $97.7 million, and liabilities of $94 million, including $31.1 million owing on a revolving credit with Bank of America NA as agent. In addition, there were $11.1 million in letters of credit outstanding on the revolver. The 2009 Debtor was formally renamed FB Liquidating Estate, following the sale of all of its assets to Syms Corp. in June 2009. Pursuant to the Liquidating Plan confirmed in January 2010, secured creditors in the Chapter 11 case have been paid in full, and holders of priority, administrative and convenience class claims have received 100% of their allowed claims. As reported by the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen, Chairman of Abacus Advisors LLC and Chief Restructuring Officer for FB Liquidating Estate disclosed that a second distribution of dividend checks to Filene's unsecured creditors amounting to 12.5% of approved claims has been made, bringing the cumulative distributions on unsecured claims to 62.5%. On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-13511 to 11-13514) after a failed bid to sell the business. The two units are Syms Clothing Inc. and Syms Advertising Inc. Judge Kevin J. Carey presides over the case. Lawyers at Skadden Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The Debtors tapped Rothschild Inc. as investment banker and Cushman and Wakefield Securities, Inc., as real estate financial advisors. Syms shuttered its namesake and Filene's Basement outlets upon the bankruptcy filing and tapped a joint venture of Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC to run the going-out-of-business sales. The sale may continue until Jan. 31, 2012. Filene's Basement estimated $1 million to $10 million in assets and $50 million to $100 million in debts. The petitions were signed by Gary Binkoski, authorized representative of Filene's Basement. The official committee of unsecured creditors appointed in the 2011 case has retained Hahn & Hessen LLP as legal counsel. Holders of equity in Syms Corp. pushed for an official shareholders' committee and separation of the Syms and Filene's Basement bankruptcy estates. Gordon Brothers and Hilco are represented by Goulston & Storrs, P.C. and Ashby & Geddes, P.A. FIRSTPLUS FINANCIAL: Trustee Can Hire KCC as Claims Agent --------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Matthew D. Orwig, Chapter 11 trustee for Firstplus Financial Group, Inc., to retain Kurtzman Carson Consultants LLC as notice and balloting agent. Pursuant to the Services Agreement, KCC will perform various noticing and other services, if necessary, at the request of the Trustee or the Clerk's Office. Those Services may include: (a) complying with applicable federal, state, municipal, and local statutes, ordinances, rules, regulations, orders and other requirements; (b) establishing and maintaining a public access web site setting forth pertinent case information and documents relating to the Plan and Disclosure Statement in this Bankruptcy Case where parties can view those pleadings and documents without charge during regular business hours; (c) preparing and serving required notices in the bankruptcy case; (d) assisting with solicitation of votes and tabulation of ballots in connection with a plan of reorganization; and (e) providing such other processing, noticing, balloting and administrative services as may be requested from time to time by the Trustee. About FirstPlus Financial Based in Beaumont, Texas, FirstPlus Financial Group, Inc. -- http://www.firstplusgroup.com/-- (Pink Sheets: FPFX) is a diversified company that provides commercial loan, consumer lending, residential and commercial restoration, facility (janitorial and maintenance) services, insurance adjusting services, construction management services and a facilities and restoration franchise business. The Company has three direct subsidiaries, Rutgers Investment Group, Inc., FirstPlus Development Company and FirstPlus Enterprises, Inc. In turn, FirstPlus Enterprises, Inc., has three of its own direct subsidiaries, FirstPlus Restoration Co., LLC, FirstPlus Facility Services Co., LLC and The Premier Group, LLC. FirstPlus Restoration and FirstPlus Facility jointly own FirstPlus Restoration & Facility Services Company. Additionally, FirstPlus Development has one direct subsidiary FirstPlus Acquisitions-1, Inc. A subsidiary of FirstPlus Financial Group -- FirstPlus Financial Inc. -- filed for Chapter 11 bankruptcy in March 1999 before the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, amid turmoil in the asset-backed securitization markets and the lack of a reliable, committed secondary take-out source for high LTV loans. A modified third amended plan of reorganization was confirmed in that case in April 2000. The Company filed for Chapter 11 protection on June 23, 2009 (Bankr. N.D. Tex. Case No. 09-33918). Aaron Michael Kaufman, Esq., and George H. Tarpley, Esq., at Cox Smith Matthews Incorporated, serve as counsel. The Debtor has total assets of $15,503,125 and total debts of $4,539,063 as of June 30, 2008. FirstPLUS Financial Group disclosed $1,264,637 in assets and $10,347,448 in liabilities as of the Chapter 11 filing. Matthew D. Orwig was appointed as the Chapter 11 trustee in the Debtor's cases. He is represented by Peter A. Franklin, Esq., and Erin K. Lovall, Esq. -- pfranklin@fslhlaw.com -- at Franklin Skierski Lovall Hayward LLP. Franklin Skierski was elevated to lead counsel from local counsel in the stead of Jo Christine Reed and SNR Denton US, LLP, due to the maternity leave of Ms. Reed. Kurtzman Carson Consultants serve as notice and balloting agent. FLORIDA INSURANCE: Not Liable for Policyholders' Legal Fees ----------------------------------------------------------- Carolina Bolado at Bankruptcy Law360 reports that the Florida Supreme Court on Thursday ruled that the Florida Insurance Guaranty Association is not liable for a policyholder's attorneys' fees incurred during a coverage dispute with a now-insolvent insurer. Law360 relates that the state high court affirmed the decision of the appeals court, which had said that because plaintiff Diane Petty's attorneys' fees were not based on a coverage provision of her underlying insurance policy, the fees were not a covered claim that FIGA must pay under Florida law. FLYING J: Appeals Court Affirms Ruling in CalTrans Case ------------------------------------------------------- The Court of Appeals of California, Fifth District, affirmed a trial court ruling in the lawsuit, FLYING J, INC., Plaintiff and Appellant, v. DEPARTMENT OF TRANSPORTATION, Defendant and Respondent, No. F060545 (Calif. App. Ct.), in a Jan. 19, 2012 opinion available at http://is.gd/IFr7Dafrom Leagle.com. In the appeal, Flying J contends the trial court erroneously decided that the issue of lost profits caused by the California Department of Transportation's breach of a contract to convey land should not be presented to the jury. The trial court determined that Civil Code section 3306's authorization of the recovery of consequential damages permitted an award of lost profits, but that plaintiff failed to establish that (1) lost profits were within the contemplation of the parties when they entered their contract and (2) the occurrence and extent of the lost profits were reasonably certain as required by case law and Civil Code section 3301. In its ruling, the state appeals court concluded that the trial court correctly granted partial nonsuit as to lost profits because Flying J failed to meet the requirement that "the evidence makes reasonably certain their occurrence and extent." Flying J's theory of lost profits was based on an expert's assumption that traffic and corresponding fuel sales would have been diverted to the location where Flying J intended to build a large truck stop. That diversion of traffic and the related volume of fuel sales were not reasonably certain in their occurrence and extent and, therefore, neither were the corresponding lost profits. Ronald S. Katz, Esq. Benjamin G. Shatz, Esq. Eugene L. Hahm, Esq. Michael M. Berger, Esq. Matthew S. Urbach, Esq. MANATT, PHELPS & PHILLIPS 1841 Page Mill Road, Suite 200 Palo Alto, CA 94304 Tel: 650-812-1300 Fax: 650-213-0260 E-mail: rkatz@manatt.com bshatz@manatt.com ehahm@manatt.com mmberger@manatt.com murbach@manatt.com About Flying J Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- operated a network of travel plazas along state and interstate highways. The travel plazas were large truck stops with (1) parking areas for tractor-trailers to enter and leave easily, (2) convenience stores, (3) driver lounges, (4) game rooms, (5) private showers, and (6) full service restaurants. Flying J and six of its affiliates filed for bankruptcy on (Bankr. D. Del. Lead Case No. 08-13384) on Dec. 22, 2008. At that time, it was among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. The fully integrated oil company employed roughly 14,700 people in the U.S. and Canada through its interstate operations, transportation, refining and supply, exploration and production, as well as its financial services and communications, divisions. Flying J sought Chapter 11 protections after a precipitous drop in oil prices and disruption in the credit markets brought to bear significant short-term pressure on the company's liquidity position. Attorneys at Young Conaway Stargatt & Taylor LLP, and Kirkland & Ellis LLP, represented the Debtors in their Chapter 11 effort. Blackstone Advisory Services L.P. was the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC was the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J disclosed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors was appointed in the case. Pachulski Stang Ziehl & Jones LLP was tapped as counsel for the creditors' panel. Flying J emerged from Chapter 11 bankruptcy protection in July 2010. The Company's plan promised to repay in full the $1.4 billion owed its creditors, with the distributions on allowed claims of the company's creditors expected to commence before the end of July. Flying J struck a deal while in bankruptcy to merer with rival Pilot Travel Centers. GENERAL MOTORS: Dist. Court Affirms Ruling Against Kodsy Claim -------------------------------------------------------------- District Judge Naomi Reice Buchwald affirmed bankruptcy court ruling granting the ninety-eighth omnibus objection of Motors Liquidation Company and its affiliated debtors and reclassifying Sherif Rafik Kodsy's proof of claim from a secured claim to an unsecured claim. Sherif R. Kodsy filed a proof of claim against Remediation and Liability Management Company, Inc., one of the Debtors, seeking $15,000,000 on the basis of "personal injury, conspiracy, fraud, gross negligence, strict liability[, and] punitive damages." He indicated that his claim was "secured by a lien on property." He had commenced a lawsuit against General Motors Corporation in April 2009 in state court in Florida. However, there is no indication that he had achieved a judgment in that lawsuit. Sherif R. Kodsy appealed the ruling pro se. The case is SHERIF RAFIK KODSY, Appellant, v. MOTORS LIQUIDATION COMPANY, et al., Appellees, No. 11 Civ. 4180 (S.D.N.Y.). A copy of the District Court's Jan. 17, 2012 Memorandum and Order is available at http://is.gd/RG5iScfrom Leagle.com. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. GM employs 208,000 people in every major region of the world and does business in more than 120 countries. GM and its strategic partners produce cars and trucks in 30 countries, and sell and service these vehicles through the following brands: Baojun, Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall, and Wuling. GM's largest national market is China, followed by the United States, Brazil, the United Kingdom, Germany, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government once owned as much as 60.8% stake in New GM on account of the financing it provided to the bankrupt entity. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. On Nov. 1, 2011, Moody's Investors Service raised New GM's Corporate Family Rating and Probability of Default Rating to Ba1 from Ba2, and its secured credit facility rating to Baa2 from Baa3. Moody's also raised the Corporate Family Rating of GM's financial services subsidiary -- GM Financial -- to Ba3 from B1. On Oct. 7, 2011, Fitch Ratings upgraded the Issuer Default Ratings of New GM, General Motors Holdings LLC, and General Motors Financial Company Inc., to 'BB' from 'BB-'. On Oct. 3, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on New GM to 'BB+' from 'BB-'; and revised the rating outlook to stable from positive. "We also raised our issue-level rating on GM's debt to 'BBB' from 'BB+'; the recovery rating remains at '1'," S&P said. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. GENTA INC: Deadline to Effect Reverse Split Moved to Feb. 15 ------------------------------------------------------------ on Sept. 2, 2011, Genta Incorporated, entered into a securities purchase agreement with certain accredited investors pursuant to which it agreed to issue up to $12.7 million of units, each 2011 Unit consisting of: (i) 12.00% senior secured convertible promissory notes due Sept. 9, 2021, convertible into shares of the Company's Common Stock, par value $0.001 per share, at an initial conversion rate of 671,040 shares of Common Stock for every $1,000 of principal and accrued interest due under the notes; (ii) 12.00% senior secured cash collateralized convertible promissory notes due Sept. 9, 2021, convertible into shares of Common Stock at an initial conversion rate of 671,040 shares of Common Stock for every $1,000 of principal and accrued interest due under the notes; (iii) senior secured convertible promissory note warrants to purchase an amount of G Notes equal to the G Notes purchased at the closing, at an exercise price of $1,000 per warrant, which purchase price may be paid through a cashless "net exercise" feature; and (iv) senior secured cash collateralized convertible promissory note warrants to purchase an amount of G Notes equal to the H Notes purchased at closing, at an exercise price of $1,000 per warrant, which purchase price may also be paid through a cashless "net exercise" feature. On Jan. 18, 2012, the Company entered into an amendment agreement with certain investors in the September 2011 Financing to amend the terms of the September 2011 Purchase Agreement to extend the deadline for the Company to effect a reverse stock split. As a result of the Twelfth Amendment Agreement, absent any further waiver or amendment, the reverse split must be implemented by Feb. 15, 2012. The Company sought this amendment to the September 2011 Purchase Agreement to enable the continuation of ongoing discussions regarding corporate partnership opportunities for tesetaxel. About Genta Incorporated Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB: GNTA) -- http://www.genta.com/-- is a biopharmaceutical company engaged in pharmaceutical (drug) research and development. The Company is dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. EisnerAmper LLP, in Edison, New Jersey, expressed substantial doubt about Genta's ability to continue as a going concern following the 2010 financial results. The independent auditors noted that of the Company's recurring losses from operations, negative cash flows from operations and current maturities of convertible notes payable. Amper, Politziner & Mattia, LLP, in Edison, New Jersey, did not include a going concern explanatory paragraph in its audit report on the Company's financial statements for fiscal 2009. The Company reported a net loss of $167.3 million on $257,000 of sales for 2010, compared with a net loss of $86.3 million on $218,000 for 2009. The Company also reported a net loss of $37.36 million on $170,000 of net product sales for the nine months ended Sept. 30, 2011, compared with a net loss of $133.43 million on $192,000 of net product sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $16.82 million in total assets, $32.13 million in total liabilities, and a $15.30 million total stockholders' deficit. Bankruptcy Warning In September 2011, the Company issued $12.7 million of units, consisting of $4.2 million of senior secured convertible notes and $8.5 million of senior secured cash collateralized convertible notes. In connection with the sale of the units, the Company also issued two types of debt warrants in an amount equal to 100% of the purchase price for each unit. The Company had direct access to $4.2 million of the proceeds, and the remaining $8.5 million of the proceeds were placed in a blocked account as collateral security for the $8.5 million senior secured cash collateralized convertible notes. Presently, with no further financing, the Company projects that it will run out of funds during the first quarter of 2012. The Company currently does not have any additional financing in place. If it is unable to raise additional funds, the Company could be required to reduce its spending plans, reduce its workforce, license one or more of its products or technologies that it would otherwise seek to commercialize itself, sell some or all of its assets, cease operations or even declare bankruptcy. There can be no assurance that the Company can obtain financing, if at all, or raise those additional funds, on terms acceptable to it. G&J READY: Case Summary & 21 Largest Unsecured Creditors -------------------------------------------------------- Debtor: G&J Ready Mix & Masonry Supply Inc. 183-30 Jamaica Avenue Hollis, NY 11423 Bankruptcy Case No.: 12-40253 Chapter 11 Petition Date: January 17, 2012 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Jerome Feller Debtor's Counsel: Bruce Weiner, Esq. ROSENBERG MUSSO & WEINER LLP 26 Court Street, Suite 2211 Brooklyn, NY 11242 Tel: (718) 855-6840 Fax: (718) 625-1966 E-mail: rmwlaw@att.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its 21 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nyeb12-40253.pdf The petition was signed by John Cervoni, president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- New Atlantic Ready Mix Corp. 12-40252 01/17/12 GILBERT PROFESSIONAL: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Gilbert Professional Center, LLC P.O. Box 964 Queen Creek, AZ 85142 Bankruptcy Case No.: 12-00790 Chapter 11 Petition Date: January 17, 2012 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Redfield T. Baum, Sr. Debtor's Counsel: Blake D. Gunn, Esq. LAW OFFICE OF BLAKE D. GUNN P.O. Box 22146 Mesa, AZ 85277-2146 Tel: (480) 270-5073 E-mail: blake.gunn@gunnbankruptcyfirm.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its nine largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/azb12-00790.pdf The petition was signed by Michael Goodman, manager. GLOBAL COMMERCIAL: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Global Commercial Investments Schoenherr & Canal, LLC 32825 Northwestern Highway Farmington Hills, MI 48334 Bankruptcy Case No.: 12-40967 Chapter 11 Petition Date: January 17, 2012 Court: U.S. Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Steven W. Rhodes Debtor's Counsel: Robert N. Bassel, Esq. P.O. Box T Clinton, MI 49236 Tel: (248) 677-1234 Fax: (248) 369-4749 E-mail: bbassel@gmail.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Raad Asmar, president/member. Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- Global Commercial Investments Gratiot & 14, LLC 12-40968 Global Commercial Investments, LLC 12-40970 Global Commercial Investments Romeo, LLC, 12-40972 Global Commercial Investments New Baltimore, LLC 12-40974 Global Commercial Investments 23 & Schoenher, LLC 12-40975 Global Dining, Shelby, LLC 12-40976 Northstar Dining Washington, LLC 12-40978 Global Dining, Roseville, L.L.C. 12-40980 Northstar Dining Chesterfield, LLC 12-40982 Northstar Dining, Shelby, L.L.C 12-40983 Affiliates that filed separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Great Lakes Properties of Fenton, LLC 12-30005 01/03/12 Northwestern Commercial Investments, LLC 12-40026 01/03/12 GMJ GLOBAL: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------- Debtor: GMJ Global Logistics, Inc. 4600 Kansas Avenue Kansas City, KS 66106 Bankruptcy Case No.: 12-20078 Chapter 11 Petition Date: January 16, 2012 Court: U.S. Bankruptcy Court District of Kansas (Kansas City) Debtor's Counsel: Jonathan A. Margolies, Esq. MCDOWELL RICE SMITH & BUCHANAN, PC 605 W. 47th Street Kansas City, MO 64112 Tel: (816) 753-5400 Fax: (816) 753-9996 E-mail: jmargolies@mcdowellrice.com Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 The Company's list of its 13 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ksb12-20078.pdf The petition was signed by George M. Hersh, II, CEO. Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- GMJ Global Logistics, Inc. 12-20078 Sports Associated, Inc. 12-20079 ONeil Moving & Storage, Inc. 12-20080 ONeil Moving Systems, Inc. 12-20081 ONeil Relocation-Kansas City, Inc. 12-20082 Sports Associates Warehousing, Inc. 12-20083 Sports Associated Transportation, Inc. 12-20084 Corporate Relocation Services, LLC 12-20085 Topeka Transfer & Storage, Inc. 12-20086 Capital City Distribution, Inc. 12-20087 Sports 635, LLC 12-20088 GO DADDY: S&P Assigns 'B' Corporate Rating; Outlook Stable ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Scottsdale, Ariz.-headquartered Go Daddy Operating Co. LLC. The outlook is stable. "At the same time, we assigned an issue-level rating of 'B' (the same as the corporate credit rating) with a recovery rating of '3' to the company's $825 million senior secured credit facilities. The '3' rating indicates our expectation that lenders will receive meaningful (50% to 70%) recovery of principal in the event of a payment default. The senior secured credit facilities consist of a $75 million revolving credit facility due 2016 and a $750 million term loan due 2018," S&P said. "The rating and outlook reflect our expectation that Go Daddy will generate positive discretionary cash flow and steadily reduce debt, absent a leveraging transaction," said Standard & Poor's credit analyst Chris Valentine. "We also expect debt leverage to decline over time, consistent with our expectation of EBITDA growth, and that the company will use positive discretionary cash flow in part to pay down debt." "We assess Go Daddy's business risk profile as 'weak' (as our criteria define the term) because of EBITDA margins lower than its peers' and the competitive nature of the Web services market for small and midsize business spending. We view the financial risk profile as 'highly leveraged' based on the company's high lease- adjusted debt-to-EBITDA ratio, which is consistent with the indicative ratio of 5x or greater that we associate with a 'highly leveraged' financial risk profile, and a lack of clarity around future acquisition potential. These risks are partially offset by the company's well-known brand, a consistent track record of double-digit growth through the downturn, good market share, and increased revenue diversity from higher margin non-domain Web products," S&P said. G.T.O.T., LLC: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: G.T.O.T., LLC 329 North Broad Street Thomasville, GA 31799 Tel: (850) 222-2311 Bankruptcy Case No.: 12-40020 Chapter 11 Petition Date: January 18, 2012 Court: U.S. Bankruptc?? Court Northern District of Florida (Tallahassee) Judge: Lewis M. Killian, Jr. Debtor's Counsel: C. Edwin Rude, Jr., Esq. C. EDWIN RUDE, JR., ATTORNEY AT LAW 211 E. Call Street Tallahassee, FL 32301-7607 Tel: (850) 222-2311 Fax: (850) 222-2120 E-mail: edrudelaw@earthlink.net Scheduled Assets: $3,284,106 Scheduled Liabilities: $5,863,346 The Company's list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by Richard Yates, owner. HANLEY WOOD: Moody's Gives 'D' Default Rating Amid Restructuring ---------------------------------------------------------------- Moody's Investors Service has changed Hanley Wood LLC's Probability of Default Rating (PDR) to D from Ca following the restructuring of the company's debt. Hanley Wood's Ca Corporate Family Rating is unchanged. Moody's has also changed the instrument ratings on Hanley Wood's credit facilities to C, LGD5- 73% from Ca LGD 4-51%. Moody's expects to withdraw all ratings for the company over the near term. The downgrade of the PDR to D follows the company's recapitalization, which Moody's classifies as a "default" event, consistent with the "D" Probability of Default rating. On January 13th, 2012, Hanley Wood announced that it had completed a recapitalization, reducing long term debt to $80 million from roughly $410 million and receiving a $35 million equity capital infusion from its new ownership group. The principal methodology used in rating Hanley Wood was the Global Publishing Industry Methodology published in December 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. Headquartered in Washington, D.C., Hanley-Wood is a leading business-to-business media company serving customers in the residential housing and commercial construction end markets. Revenues for the twelve month period ended September 30, 2011 were approximately $130 million. HARRISBURG, PA: Didn't Respond to Incinerator Red Flags ------------------------------------------------------- An audit report found the outcome of the project to retrofit the Harrisburg, Pa., waste-to-energy plant reflected the accumulated effects of bad decisions on critical project issues, such as the selection of a contractor at the outset and the lack of an independent assessment of the project's financial feasibility. Max Stendahl at Bankruptcy Law360 reports that the disastrous incinerator project that sent Harrisburg, Pa., tumbling into bankruptcy was doomed by a lack of oversight, convoluted financing methods and "the accumulated effects of bad decisions," according to a blistering audit published Wednesday. Law360 relates that the audit, commissioned by the municipal body that owns the trash incinerator, reads like an autopsy report for a city now unable to make payments on $310 million in debt from the project. The city's contentious Chapter 9 bankruptcy case was thrown out in November. 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. The Harrisburg city council voted 4-3 on Oct. 11, 2011, to authorize the filing of a Chapter 9 municipal bankruptcy (Bankr. M.D. Pa. Case No. 11-06938). 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. Judge Mary D. France presided over the Chapter 9 case. Mark D. Schwartz, Esq. and David A. Gradwohl, Esq., served as Harrisburg's 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. Harrisburg 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. The Commonwealth of Pennsylvania, the County of Dauphin, and Harrisburg city mayor Linda D. Thompson and other creditors and interested parties objected to the Chapter 9 petition. The state later adopted a new law allowing the governor to appoint a receiver. Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg, P.C., represented Mayor Thompson in the Chapter 9 case. Counsel to the Commonwealth of Pennsylvania was Neal D. Colton, Esq., Jeffrey G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor. In November 2011, the Bankruptcy Judge dismissed the Chapter 9 case because (1) the 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). That same month, the state governor appointed David Unkovic as receiver for Harrisburg. Mr. Unkovic is represented by the Municipal Recovery & Restructuring group of McKenna Long & Aldridge LLP, led by Keith Mason, Esq., co-chair of the group. HERCULES OFFSHORE: Files Fleet Status Report as of Jan. 19 ---------------------------------------------------------- Hercules Offshore, Inc., posted on its Web site at http://www.herculesoffshore.com/a report entitled "Hercules Offshore Fleet Status Report". The Fleet Status Report includes the Hercules Offshore Rig Fleet Status as of Jan. 19, 2012, which contains information for each of the Company's drilling rigs, including contract dayrate and duration. The Fleet Status Report also includes the Hercules Offshore Liftboat Fleet Status Report, which contains information by liftboat class for December 2011, including revenue per day and operating days. The fleet status report is available for free at http://is.gd/LTRvBS About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. The Company reported a net loss of $134.59 million on $657.48 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $91.73 million on $742.85 million of revenue during the prior year. The Company also reported a net loss of $54.64 million on $492.57 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $50 million on $460.06 million of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $2.05 billion in total assets, $1.12 billion in total liabilities, and $928.65 million in total stockholders' equity. * * * The Troubled Company Reporter said on Nov. 17, 2010, Moody's Investors Service downgraded the Corporate Family Rating of Hercules Offshore Inc. and the Probability of Default Rating to Caa1 from B2. Moody's also downgraded Hercules' 10.5% senior secured notes due 2017, its senior secured revolving credit facility due 2012, and its senior secured term loan B due 2013, all to Caa1 with LGD3, 45%. The outlook remains negative. "The inability of Hercules to generate meaningful free cash flow despite limited reinvestment in its aging fleet of rigs is cause for concern," commented Stuart Miller, Moody's Senior Analyst. "Without a significant de-leveraging of its balance sheet, Hercules is following a path that could lead to financial hardship at the first sign of a market softening." Hercules' Caa1 CFR rating reflects its highly leveraged balance sheet and limited ability to generate free cash flow. The Caa1 rating on the senior secured notes reflects their pari passu secured position in Hercules' capital structure relative to the senior secured credit facilities. HERCULES OFFSHORE: S&P Affirms 'B-' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Houston- based Hercules Offshore Inc. to stable from negative and affirmed its 'B-' corporate credit rating on the company. "The rating on the company's senior secured credit facility remains 'B-' (the same as the corporate credit rating on the company) with a recovery rating of '3', indicating our expectation of a meaningful (50% to 70%) recovery in the event of payment default," S&P said. "The outlook revision reflects our expectation that Hercules' operating results will benefit from better day rates and utilization for its jack-up rigs in the U.S. Gulf of Mexico, primarily due to greater demand for those rigs," said Standard & Poor's credit analyst Stephen Scovotti. "As a result, we expect Hercules' leverage, as measured by adjusted debt to EBITDA, to improve modestly over 2012 to about 4.5x." "Our ratings on Hercules reflect its participation in the highly volatile and competitive shallow-water drilling and marine services segments of the oil and gas industry. The ratings also incorporate our expectation that day rates and utilization for the company's jack-up rigs in the U.S. Gulf of Mexico will remain robust throughout 2012. Moreover, we expect the company's domestic offshore operations will provide the majority of EBITDA generation in 2012, since its international offshore segment will perform more weakly compared with 2011 due to lower contract renewal day rates reflecting current market conditions. The ratings also incorporate the company's geographic and product diversification (provided by the its liftboat segments) and adequate liquidity, as well as the risks associated with the Securities and Exchange Commission's investigation into possible violations of securities law, including possible violations of the Foreign Corrupt Practices Act. The company is also the subject of a review by the U.S. Department of Justice (DOJ)," S&P said. "We assess Hercules' financial risk profile as 'highly levered' under our criteria. As of Sept. 30, 2011, Hercules had approximately $886 million of total debt (including our analytical adjustments for operating leases and accrued interest). Accordingly, total adjusted debt to EBITDA for the 12 months ended Sept. 30, 2011, was high at 5.0x, and EBITDA to interest coverage was 2.2x. In 2012, we expect debt leverage to decrease modestly to approximately 4.5x and EBITDA interest coverage of about 2.5x for the next 12 months, mainly from EBITDA expansion. This EBITDA expansion is driven primarily by increased day rates and rig utilization in the U.S. Gulf of Mexico. Average day rates in the domestic offshore segment increased to $49,060 for the three months ended Sept. 30, 2011, from $39,338 in the prior year period. Given the leading edge day rates in the U.S. Gulf of Mexico, we expect average day rates for the company to increase in 2012," S&P said. "Our ratings also incorporate our assessment of Hercules' business risk profile as 'vulnerable.' We consider the company's drilling and marine services businesses as volatile, since it's highly dependent on the variable levels of capital spending in the exploration and production industry, which, in turn, is largely reliant on volatile crude oil and natural gas prices. Our ratings also incorporate Hercules' good market position as the largest provider of jack-ups in the U.S. Gulf of Mexico (with 18 marketed rigs) and its significant liftboat presence there. Hercules maintains the leading market share position for liftboats in West Africa and the U.S. Gulf of Mexico. We believe liftboat operations are generally tied to more-stable production and maintenance activity, and liftboat activity/demand can sharply increase due to hurricanes or other maritime incidents," S&P said. "In 2011, the company had several of its international contracts - - which were at very high day rates -- expire. While Hercules has been able to re-contract most of these contracts in the second half of 2011, the day rates were much lower than previously. We believe the international jack-up market will face further pressure with an expected influx of new rigs in the next few years, which could depress Hercules' international fleet utilization and day rates," S&P said. "The stable outlook reflects our expectation that Hercules' credit metrics will improve modestly over the coming months while maintaining adequate liquidity. We could lower the ratings if cash flow and/or liquidity weaken considerably or if the SEC and DOJ investigations materially affect the company's operations or liquidity," Mr. Scovotti continued. "We consider a positive rating action unlikely over the next few quarters, given the company's small size relative to peers and its dependence on the U.S. Gulf of Mexico for most of its cash flow generation." HORIZON LINES: F&C Asset Management Does Not Own Common Shares -------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, F&C Asset Management plc disclosed that, as of Dec. 31, 2011, it does not beneficially owns any shares of common stock of Horizon Lines, Inc. A full-text copy of the filing is available at http://is.gd/4Ph4BQ 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. HOSPITALITY GROUP: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Hospitality Group, LLC 6205 Highway 431 South Owens Cross Roads, Al 35763 Bankruptcy Case No.: 12-80142 Chapter 11 Petition Date: January 16, 2012 Court: U.S. Bankruptcy Court Northern District of Alabama (Decatur) Debtor's Counsel: Kevin D. Heard, Esq. HEARD ARY, LLC 307 Clinton Avenue W., Suite 310 Huntsville, AL 35801 Tel: (256) 535-0817 Fax: (256) 535-0818 E-mail: kheard@heardlaw.com Scheduled Assets: $7,882,078 Scheduled Liabilities: $10,032,747 The Company's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/alnb12-80142.pdf The petition was signed by Roger Stanmore, owner. HOSTESS BRANDS: Union to Lead Fight Against Plan ------------------------------------------------ Ian Thoms at Bankruptcy Law360 reports that local labor groups representing workers at Hostess Brands Inc. have tapped their international union to lead a fight against the debtor's plan to jettison existing labor contracts as part of its Chapter 11 reorganization, according to a motion filed Wednesday. The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union will represent 35 local unions in negotiations with Hostess, Law360 says. In a separate report, Dow Jones' Daily Bankruptcy Review reports that one of Hostess Brands Inc.'s largest unions said it offered concessions valued at hundreds of millions of dollars during its pre-bankruptcy discussions with the baker but never received a "comprehensive response" from the maker of Twinkies and Wonder Bread. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. HOSTESS BRANDS: Committee Opposes Pensions Termination ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the labor unions and benefit plans that dominate Hostess Brands Inc.'s official committee of unsecured creditors will face a challenge in a trial set to begin March 5 on whether the company can terminate existing pensions and retiree benefits. The committee, appointed Jan. 18, has four members representing union pension or benefit plans, along with two others for the Teamsters and Stationary Engineers' unions. The seventh member is trade supplier Caravan Ingredients Inc., based in Lenexa, Kansas. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein will head up the legal team for the committee. Meanwhile, U.S. Bankruptcy Judge Robert D. Drain in White Plains, New York, has laid down the schedule for Hostess's motions to terminate existing union contracts and retiree benefits. With regard to the Teamsters and bakery workers' unions, the motions must be filed by Jan. 25. All investigations are to be completed by Feb. 22, in advance of a trial to begin March 5. Hostess isn't required to file motions to terminate contracts with other unions until March 28. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. HOUGHTON MIFFLIN: Moody's Lowers Corp. Family Rating to 'Caa2' -------------------------------------------------------------- Moody's Investors Service downgraded Houghton Mifflin Harcourt Publishers Inc.'s (HMH) Corporate Family Rating (CFR), Probability of Default Rating (PDR) and debt instrument ratings to Caa2 from Caa1. The downgrade reflects Moody's concern that ongoing educational funding pressures at state and local governments are making it increasingly difficult for HMH to engineer the improvement in earnings that is necessary to reduce the company's very high leverage and generate positive free cash flow. Moody's considers the capital structure to be unsustainable without a significant rebound in earnings and there is limited time to accomplish this with the looming maturities of the revolver and term loan in December 2013 and June 2014, respective. A debt restructuring thus appears increasingly likely. The rating outlook is negative. Downgrades: Issuer: Houghton Mifflin Harcourt Publishers Inc. -- Corporate Family Rating, Downgraded to Caa2 from Caa1 -- Probability of Default Rating, Downgraded to Caa2 from Caa1 -- Senior Secured Bank Credit Facility, Downgraded to Caa2, LGD3 - 47% from Caa1, LGD3 - 48% -- Senior Secured Regular Bond/Debenture, Downgraded to Caa2, LGD3 - 47% from Caa1, LGD3 - 48% Outlook Actions: Issuer: Houghton Mifflin Harcourt Publishers Inc. -- Outlook, Changed To Negative From Stable RATINGS RATIONALE HMH's Caa2 CFR is based on its high debt restructuring risk and the operational and investment risks associated with stabilizing earnings and then generating the growth that is necessary to sustain the capital structure. HMH's very high debt-to-EBITDA leverage (exceeding 15x incorporating Moody's standard adjustments and factoring in cash prepublication and restructuring costs as a reduction to EBITDA), negative projected free cash flow generation, and sizable debt maturities in 2013/2014 provide limited time and flexibility to generate the earnings improvement necessary to avoid a restructuring. In Moody's opinion, there are meaningful risks to achieving a turnaround including factors that are not in the company's control such as continued pressure on state and local budget appropriations and the actions of competitors. The significant overlap in the company's debt and equity ownership (more than 75% of the debt and equity are owned by a group of 10 investors) may incentivize the group to maintain the current capital structure as long as the company is meeting its cash obligations, as a restructuring would likely dilute their equity position. The company's sizable cash balance relative to it's 2011 cash burn rate also provides some near-term cushion, although seasonal cash needs are significant. Moody's nevertheless believes a restructuring would improve financial flexibility and will be difficult to avoid. HMH has a good market position within K-12 educational publishing and continues to win a reasonable share of new adoptions, but the company is vulnerable to fluctuations in textbook adoption cycles and is dependent for a majority of revenue on state and local government funding that continues to face cutbacks due to budget pressures. Lower than anticipated spending in the Texas Language Arts adoption in 2011 that may carry over into the spending rate in 2012 , and projected declines in HMH's adoption and open territory markets in 2012 will make it difficult for the company to rebound quickly from the drop in 2011 earnings. The negative rating outlook reflects the potential for additional downward rating pressure as the 2013/2014 maturities approach, if HMH is unable to stabilize revenue and earnings, or if cash consumption is not reduced. Downward rating pressure could occur if free cash flow remains negative, earnings are not stabilized, or the maturities approach without a meaningful improvement in the leverage, cash flow and liquidity position. Heightened risk of a near-term default through depletion of cash resources, diminished or lost access to the accounts receivable facility, an inability to meet maintenance covenants, potential discounted debt repurchases, or changes in the debt and/or equity ownership could also lead to downward rating pressure. Moody's does not believe an upgrade is likely. However, a significant improvement in revenue and EBITDA such that leverage declines, there are reasonable prospects to turn sustainably cash flow positive, and a clear path to refinancing 2013/2014 maturities exists would be necessary for an upgrade. The principal methodology used in rating HMH was the Global Publishing Industry Methodology published in December 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. Houghton Mifflin Harcourt Publishers Inc., headquartered in Boston, MA, is one of the three largest U.S. education publishers focusing on the K-12 market with approximately $1.4 billion of revenue for the 12 months ended September 2011. HOVENSA LLC: S&P Withdraws 'B' Rating on $362.5-Mil. Facility ------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its B/Negative rating on U.S. Virgin Islands-based petroleum refinery HOVENSA LLC's $362.5 million revolving credit facility. "At the same time, the ratings and outlook on it revenue bonds (B/Negative; '2' recovery rating) are unaffected by the project's Jan 18, 2012 announcement that it will shut down its 350,000 barrel per day (bpd) facility in St. Croix. The project has cited losses of $1.3 billion over the past three years, and its expectation of continued poor financial performance as the reasons for closing the refinery," S&P said. "The project terminated its $362.5 million revolving credit facility with no balance outstanding in December 2011, and we expect HOVENSA will commence a tender offer in the next week for all $355.7 million of outstanding bonds at par. When the project successfully redeems the bonds, we expect to withdraw the project ratings," S&P said. Ratings List Ratings Withdrawn To From HOVENSA LLC $362.5 million revolving credit fac NR B/Negative Recovery rating NR 2 Ratings Unchanged Senior secured revenue bonds B/Negative Recovery rating 2 IDEARC INC: Investors Want High Court to Review Ch. 11 Plan ----------------------------------------------------------- Maria Chutchian at Bankruptcy Law360 reports that a group of investors who unsuccessfully attempted to appeal a bankruptcy court's confirmation of the plan for Verizon Communications Inc. spinoff Idearc Inc. in the Fifth Circuit petitioned the U.S. Supreme Court last week to hear their case. In November, the Fifth Circuit affirmed the dismissal of the appeal from the Spencer Ad Hoc Equity Committee -- a group of pre- bankruptcy shareholders who claim their ownership in the reorganized corporation SuperMedia Inc. was canceled by the plan -- on the grounds of equitable mootness. About Idearc Inc. Headquartered in D/FW Airport, Texas, Idearc, Inc., now known as SuperMedia Inc., is the second largest U.S. yellow pages publisher. Idearc was spun off from Verizon Communications, Inc. Idearc and its affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31828). The Debtors' financial condition as of Dec. 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represented the Debtors in their restructuring efforts. The Debtors tapped Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their claims agent. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on the official committee of unsecured creditors. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co- counsel. Idearc completed its debt restructuring and its plan of reorganization became effective as of Dec. 31, 2009. In connection with its emergence from bankruptcy, Idearc changed its name to SuperMedia Inc. Under its reorganization, Idearc reduced its total debt from more than $9 billion to $2.75 billion of secured bank debt. Less than two years since leaving bankruptcy protection, SuperMedia remains in quandary. Early in October 2011, Moody's Investors Service slashed its corporate family rating for SuperMedia to Caa1 from B3 prior. The downgrade reflects Moody's belief that revenues will continue to decline at a double digit rate for the foreseeable future, leading to a steady decline in free cash flow. SuperMedia's sales were down 17% for the second quarter of 2011 in a generally improving advertising sector. Moody's ratings outlook for SuperMedia remains negative. While SuperMedia is attempting to transition the business away from its reliance on print advertising through development of online and mobile directory service applications, Moody's is increasingly concerned that the company will not be able to make this change quickly enough to stabilize the revenue base over the intermediate term. Further, the high fixed cost nature of SuperMedia's business could lead to steep margin compression, notwithstanding continued aggressive cost management. INDYMAC BANK: Former Chair Seeks to Appeal Ruling in FDIC Suit -------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that the former chairman of IndyMac Bank is taking steps to appeal a federal court ruling that puts him in the crosshairs of a $600 million government lawsuit accusing him of negligence in signing off on risky mortgages as the housing market cratered. About IndyMac Bancorp Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) -- http://www.indymacbank.com/-- is the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that originated mortgages in all 50 states of the United States. Through its hybrid thrift- mortgage bank business model, IndyMac designed, manufactured, and distributing cost-efficient financing for the acquisition, development, and improvement of single-family homes. IndyMac also provided financing secured by single-family homes to facilitate consumers' personal financial goals and strategically invests in single-family mortgage-related assets. On July 11, 2008, the Office of Thrift Supervision closed IndyMac Bank and appointed FDIC as the bank's receiver. Thacher Proffitt & Wood LLP was engaged as counsel to the FDIC. Indymac Bancorp filed for Chapter 7 bankruptcy protection (Bankr. C.D. Calif., Case No. 08-21752) on July 31, 2008. Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C. Weitnauer, Esq. Bloomberg noted that Indymac had about $32.01 billion in assets as of July 11, 2008. In court documents, IndyMac disclosed estimated assets of $50 million to $100 million and estimated debts of $100 million to $500 million. INPHASE TECHNOLOGIES: Shareholder Retains Drakes Bay Company ------------------------------------------------------------ Signal Lake, majority shareholder in InPhase Technologies, the global leader in holographic digital storage, has retained Drakes Bay Company LLC, an Intellectual Property (IP) brokerage firm, to sell or license its large IP portfolio. InPhase was founded in 2000 as a Bell Labs spin out and filed for Chapter 11 restructuring with the U.S. Bankruptcy Court in the District of Colorado in October, 2011. InPhase owns a large IP portfolio related to holographic digital storage media, drives, and systems. The portfolio includes more than 200 U.S. and foreign patents and applications, benefits from early priority dates, and is cited by more than 650 patents in the U.S. Market applications for holography include security, displays, and storage, among others. Prior InPhase patent licensees include Hitachi Maxell, Bayer Material Sciences, and Nichia. InPhase joint ventures partners have included Bayer, Hitachi, and Nintendo. "Signal Lake has retained Drakes Bay Company to monetize the InPhase Technologies IP portfolio because of their successful track record, broad network, and management expertise," said Bart Stuck, managing director, Signal Lake. "We believe they will help us unlock the significant value that our portfolio has in holographic technology markets." "We are very pleased to be selected by InPhase shareholder Signal Lake to assist in this monetization process," said Joseph W. Jennings, president, Drakes Bay Company LLC. "We will begin marketing the InPhase patents in February, 2012." About Drakes Bay Company Drakes Bay Company LLC -- http://www.drakesbaycompany.com/-- is an Intellectual Property brokerage firm that serves the IP defense and cash generation needs of operating companies, funds and inventors. Drakes Bay Company was founded by Joseph W. Jennings in 2005 and provides sell- and buy-side services. Mr. Jennings is a member of the Licensing Executives Society and a member of the Intellectual Asset Management 250 World's Leading IP Strategists since 2009. The company is based in Larkspur, CA with website. About InPhase Technologies Based in Longmont, Colorado, InPhase Technologies -- http://www.inphase-tech.com-- develops holographic data storage recording media and systems. InPhase was founded in 2000. InPhase is led by CEO Art Rancis and senior vice president of engineering James Russo. Initial InPhase customers included Turner Broadcasting. InPhase filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 11-34489) on Oct. 18, 2011. The Debtor estimated assets of $50 million to $100 million and estimated debts of $10 million to $50 million in its bankruptcy filing. The Debtor is represented by Joel Laufer, Esq. -- jl@jlrplaw.com -- at Laufer and Padjen LLC. INTELSAT SA: Silver Lake's D. Roux and S. Patterson Join Board -------------------------------------------------------------- David Roux resigned and Simon Patterson was appointed as a member of the Board of Directors of Intelsat S.A. In addition, Egon Durban resigned and Mr. Patterson was appointed as a member of the Audit Committee of the Board of Directors of Intelsat S.A. on the same date. Mr. Durban continues to serve on the Board of Directors of Intelsat S.A. Each of Messrs. Patterson, Roux and Durban is associated with Silver Lake Partners. Funds and investment vehicles advised or controlled by Silver Lake Partners hold more than 15% in the aggregate of the outstanding equity of Intelsat Global S.A., the indirect parent of Intelsat S.A. As set forth in Intelsat S.A.'s Annual Report on Form 10-K for the year ended Dec. 31, 2010, the Silver Lake Funds, or their associates or affiliates, are parties to a monitoring fee agreement with Intelsat (Luxembourg) S.A., a subsidiary of Intelsat S.A., pursuant to which such parties are entitled to receive an annual fee for providing certain monitoring, advisory and consulting services. In addition, in April 2011, entities associated with Silver Lake Funds sold all of the $190.9 million aggregate principal amount of Intelsat Luxembourg's 11 1/4% Senior Notes due 2017 and $854 million aggregate principal amount of Intelsat Luxembourg's 11 1/2/12 1/2% Senior PIK Election Notes due 2017 that they had purchased in 2008. About Intelsat Intelsat S.A., formerly Intelsat, Ltd., provides fixed-satellite communications services worldwide through a global communications network of 54 satellites in orbit as of Dec. 31, 2009, and ground facilities related to the satellite operations and control, and teleport services. It had US$2.5 billion in revenue in 2009. Washington D.C.-based Intelsat Corporation, formerly known as PanAmSat Corporation, is a fully integrated subsidiary of Intelsat S.A., its indirect parent. Intelsat Corp. had US$7.70 billion in assets against US$4.86 billion in debts as of Dec. 31, 2010. The Company reported a net loss of $432.35 million on $1.93 billion of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $392.69 million on $1.90 billion of revenue for the same period during the prior year. The Company reported a net loss of US$507.77 million on US$2.54 billion of revenue for the year ended Dec. 31, 2010, compared with a net loss of US$782.06 million on US$2.51 billion of revenue during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $17.59 billion in total assets, $18.28 billion in total liabilities, $698.94 million total Intelsat S.A. shareholders' deficit, and $1.90 million in noncontrolling interest. * * * Luxembourg-based Intelsat S.A. carries 'B' issuer credit ratings from Standard & Poor's. It has 'Caa1' corporate family and probability of default ratings from Moody's Investors Service. INVESTORS LENDING: Taps Miller and Beare as Real Estate Agents -------------------------------------------------------------- Investors Lending Group, LLC, seeks permission from the U.S. Bankruptcy Court for the Southern District of Georgia to employ Sharon D. Miller of ERA Southeast Coastal Real Estate and Jane Beare of Coldwell Banker Platinum Partners as its real estate agents. Misses Miller and Beare will market certain parcels of real property of the Debtor located in Chatham County, Georgia. In consideration for said services, Ms. Miller will receive as commission on any sales of the Debtor's property, an amount equal to 5% of the sales price, which amount includes reimbursement for her reasonable out of pocket expenses. Ms. Beare will receive as commission on any sales of the Debtor's property, an amount equal to 6% of the sales price, which amount includes reimbursement for her reasonable out of pocket expenses. The Debtor believes that Misses Miller and Beare are "disinterested persons" within the meaning of Section 101(14) of the Bankruptcy Code. About Investors Lending Group LLC Based in Savannah, Georgia, Investors Lending Group LLC filed for Chapter 11 (Bankr. S.D. Ga. Case No. 11-41963) on Sept. 21, 2011. Judge Lamar W. Davis Jr. presides over the case. James L. Drake, Jr., P.C. -- jdrake7@bellsouth.net -- presides over the case. The Debtor scheduled assets of $14,197,900 and debts of $18,634,570. The petition was signed by Isaac L. Rabhan, CEO/assistant manager. James L. Drake, Jr., and James L. Drake, Jr. P.C., acts as counsel who will represent the company in the matter as debtor-in- possession. As reported by the TCR on Nov. 7, 2011, the U.S. Trustee for Region 21 appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Investors Lending. JEFFERSON COUNTY, AL: To Probe JPMorgan Deal With Astros Owner -------------------------------------------------------------- Max Stendahl at Bankruptcy Law360 reports that Jefferson County, Ala., on Wednesday won a federal bankruptcy judge's approval to investigate a settlement reached between J.P. Morgan Chase & Co. and Houston Astros owner Jim Crane, who invested heavily in defaulted county bonds underwritten by the bank. Law360 relates that the ruling by U.S. Bankruptcy Judge Thomas B. Bennett allows the county access to sworn testimony and other documents that led to the confidential Jan. 12 settlement in Texas state court between JPMorgan and Crane. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. LEE ENTERPRISES: Reports $199.6-Mil. Revenue in Fiscal Q1 --------------------------------------------------------- Lee Enterprises, Incorporated, reported that for its first fiscal quarter ended Dec. 25, 2011, reported net income of $14.62 million on $199.56 million of total operating revenue for the 13 weeks ended Dec. 25, 2011, compared with net income of $18.98 million on $207.66 million of revenue for the 13 weeks ended Dec. 26, 2010. Mary Junck, chairman and chief executive officer, said: "Advertising sales in the quarter continued largely in line with recent trends and reflected our expectations, given the still- uneven economy. Comparisons with a year ago should take into account that our December 2010 quarter was our strongest of the year, with revenue then down only 1.0% to prior. We continue to expect revenue trends to improve slowly in 2012, as we press forward with more digital and print initiatives. Meanwhile, we expect to complete our Chapter 11 refinancing process within a few weeks. Our refinancing agreements, along with our continued strong cash flow, will provide a solid financial footing as we continue reshaping Lee for future growth." A full-text copy of the press release is available at: http://is.gd/BiVsYF About Lee Enterprises Lee Enterprises, Inc., headquartered in Davenport, Iowa, publishes the St. Louis Post Dispatch and the Arizona Daily Star along with more than 40 other daily newspapers and about 300 weekly newspapers and specialty publications in 23 states. Revenue for the 12 months ended December 2010 was $780 million. The Company has 6,200 employees, with 4,650 working full-time. Lee Enterprises and certain of its affiliates filed for chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13918) on Dec. 12, 2011, with a prepackaged plan of reorganization. The Debtor selected Young Conaway Stargatt & Taylor LLP as co-counsel; The Blackstone Group as Financial and Asset Management Consultant; and The Garden City Group Inc. as claims, noticing and balloting agent. The Debtor disclosed total assets of $1.15 billion and total liabilities of $1.25 billion at Sept. 25, 2011. The Plan has been proposed to, among other things, amend and extend the maturity of the Debtors' prepetition credit facilities and the so-called PD LLC Notes as part of an overall effort to restructure the Debtors' balance sheet. The Plan was proposed prepetition and obtained the support of 100% of holders of claims related to the Prepetition Credit Agreement, totaling roughly $827.9 million, and 100% of the holders of PD LLC Notes claims, totaling roughly $133.8 million. Priority Non-Tax Claims, Other Secured Claims, The Herald Claim, General Unsecured Claims, and Intercompany Claims against, as well as Interests in, all of the Debtors will not be impaired by the Plan. A hearing is set for Jan. 23 at 2:00 p.m. to consider confirmation of the prepack plan. Certain Holders of Prepetition Credit Agreement Claims, Goldman Sachs Lending Partners LLC, Mutual Quest Fund, Monarch Master Funding Ltd, Mudrick Distressed Opportunity Fund Global, LP and Blackwell Partners, LLC have committed to acquire up to a maximum amount of $166.25 million of loans under a New Second Lien Term Loan Facility. This commitment also includes the potential payment of up to $10 million as backstop cash to Reorganized Lee Enterprises to acquire the loans. Deutsche Bank Trust Company Americas, as DIP Agent and Prepetition Agent, is represented in the Debtors' cases by Sandeep "Sandy" Qusba, Esq., and Terry Sanders, Esq., at Simpson Thacher & Bartlett LLP. The Initial Backstop Lenders are represented by Matthew S. Barr, Esq., and Brian Kinney, Esq., at Milbank, Tweed, Hadley & McCloy LLP. LIBERATOR INC: Benefiting From Growth in Sexual Wellness Market --------------------------------------------------------------- Liberator, Inc., released an in-depth initiation report by fee- based, third-party research firm Goldgaber Research. The report discusses Liberator, its proprietary products at the forefront of the sexual wellness revolution, and initiates coverage with a 12-month price target of $1.00 per share. "Liberator is addressing the growing demand for sexual wellness products in the United States and around the world, through our growing sales initiatives and fantastic brand awareness," said Louis Friedman, President and CEO of Liberator, Inc. "This comprehensive report provides investors with an excellent overview of Liberator and our unique strengths: from our patented iconic Liberator products, our vertically integrated manufacturing process, and our significant potential for expansion based on our mission to grow both organically and through potential accretive acquisitions in 2012." From the Goldgaber Research Report, Mr. Goldgaber states: "Reflecting the progress the franchise has made in becoming a mainstream brand, Liberator has sold $60 million in products and spent nearly $9 million in print advertising including appearances in numerous mainstream publications. Additionally, Liberator has been featured in both television programs and movies, including memorable scenes featured in two movies, Meet the Fockers and Burn After Reading, which had a combined gross of approximately $680 million globally." The report details the significant growth projected in the sexual wellness market, which benefits from a major trend toward greater acceptance of mainstream sex-based products and services, a heightened focus on general health and well-being, as well as domestic and international mega-brands such as Trojan and K-Y that are expected to increase consumer spending and awareness in this multi-billion dollar industry. Goldgaber Research also explains how Liberator is attempting to translate this growth into future results, even at what Goldgaber Research considers conservative growth projections. "As Liberator expands its product distribution more broadly online and continues expanding its bricks and mortar presence by tailoring and packaging products appropriately for retail shelves, the company has an opportunity to create a brand and franchise as mainstream as Trojan and K-Y," explains Mr. Goldgaber. "Goldgaber Research is initiating coverage of LUVU with a target price of $1.00 based on an expectation of a price/revenue multiple expansion reflected in the valuation illustration presented later in the report." The complete report is available in Acrobat format, free of charge: http://www.trilogy- capital.com/content/luvu/luvu_research_initiation.pdf Goldgaber Research has been paid $5,000 by Liberator, Inc. Although the Goldgaber Research report was commissioned and paid for by Liberator, Inc., the company notes that the report was generated independently by Goldgaber Research, and statements by Goldgaber Research are its own and not attributable to Liberator, Inc. Readers are advised to review the report in its entirety, including the disclosures and disclaimers noted therein. About Liberator Inc. Headquartered in Atlanta, Georgia, Liberator, Inc. is a provider of goods and information to consumers who believe that sensual pleasure and fulfillment are essential to a well-lived and healthy life. The information that the Company provides consists primarily of product demonstration videos that the Company shows on its websites and instructional DVD's that the Company sells. The Company reported a net loss of $801,252 on $17.32 million of net sales for the year ended June 30, 2011, compared with a net loss of $1.03 million on $11.07 million of net sales during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $6.64 million in total assets, $5.44 million in total liabilities, and $1.19 million in total stockholders' equity. Gruber & Company, LLC, in Lake Saint Louis, Missouri, noted that conditions exist which raise substantial doubt about the Company's ability to continue as a going concern unless it is able to generate sufficient cash flows to meet its financing requirements and attain profitable operations. LIBERATOR INC: To Present at FSX Investment Conference on Jan. 27 ----------------------------------------------------------------- Liberator, Inc., will present at the FSX (Financial Services Exchange, Inc.) Investment Conference at approximately 9:25 am Central Time on Jan. 27. The FSX Conference is being held at the Ritz Carlton in Dallas, Texas from Jan. 26-28, 2012. Liberator CFO, Ron Scott, and chief marketing officer, Michael Kane, will be presenting to investors and will be available for 1-on-1 meetings throughout the conference. "The FSX Conference is a great opportunity for us to present Liberator and share our unique growth story with a network of investors and bankers from around the country and the world," said Ron Scott, CFO at Liberator, Inc. "We hope to continue to raise awareness within the investment community and build our shareholder base as we execute our business plan in 2012." FSX is the premier investment conference organization in the United States, hosting quarterly investment conferences around the country, providing opportunities for networking and one-on-one communication between independent broker/dealers and companies seeking exposure or funding. FSX conferences also provide a forum for direct investment programs, mutual funds, and asset management companies. For more information visit: http://www.fsx1.com/. About Liberator Inc. Headquartered in Atlanta, Georgia, Liberator, Inc. is a provider of goods and information to consumers who believe that sensual pleasure and fulfillment are essential to a well-lived and healthy life. The information that the Company provides consists primarily of product demonstration videos that the Company shows on its websites and instructional DVD's that the Company sells. The Company reported a net loss of $801,252 on $17.32 million of net sales for the year ended June 30, 2011, compared with a net loss of $1.03 million on $11.07 million of net sales during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $6.64 million in total assets, $5.44 million in total liabilities, and $1.19 million in total stockholders' equity. Gruber & Company, LLC, in Lake Saint Louis, Missouri, noted that conditions exist which raise substantial doubt about the Company's ability to continue as a going concern unless it is able to generate sufficient cash flows to meet its financing requirements and attain profitable operations. LIONS GATE: S&P Puts 'B-' Corporate Rating on Watch Positive ------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'B-' corporate credit ratings on British Columbia-domiciled and Santa Monica, Calif.-headquartered Lions Gate Entertainment Corp. and its subsidiary, Lions Gate Entertainment Inc., on CreditWatch with positive implications. All related issue-level ratings on the company's debt were also placed on CreditWatch with positive implications. The CreditWatch listing follows the announcement that Lions Gate has acquired Summit Entertainment for $412.5 million, plus the assumption of existing debt. The purchase price for the equity interest in Summit was funded with $45 million in cash proceeds from the issuance of new 4% convertible notes at Lions Gate, $55 million of cash from Lions Gate, $50 million of Lions Gate common stock, an additional $20 million of cash or Lions Gate stock at the company's election, and roughly $284 million of cash from the balance sheet at Summit. "We estimate pro forma debt balances at roughly $1.1 billion ($1.5 billion, including film financing obligations) as of Sept. 30, 2011," S&P said. Lions Gate ranked 10th among U.S. motion picture producers and distributors in 2011, with a 1.8% box office market share, and it is a producer of cable network programming. Summit Entertainment ranked seventh in 2011, with a 4% box office market share. Summit's performance has relied heavily on its "Twilight" franchise, of which the final film in the series is scheduled for release in late 2012. Unlike Lions Gate, the company doesn't have TV production operations or an extensive film library to help offset new release volatility. "However, in our view, the acquisition modestly improves Lions Gate's business risk profile, mainly on account of increased leverage over exhibitors and creative capabilities. Still, due to the volatile nature of cash flows in the film industry, as well as the company's upfront cash requirements, we would most likely assess the combined company's business risk profile as 'vulnerable' or 'weak' (based on our criteria)," S&P said. "Including our assumption on administrative cost synergies," said Standard & Poor's credit analyst Deborah Kinzer, "we estimate that the pro forma ratio of lease-adjusted debt (including film financing obligations) to EBITDA could decline to the mid- to high-4x area as of Sept. 30, 2011, down from roughly 8.7x as of the same date on a stand-alone basis. Traling-12-month discretionary cash flow at Lions Gate was modestly negative as of Sept. 30, 2011, mainly because of weak film performance and EBITDA declines, but was less negative than the year-ago period. Excluding the impact of special dividends paid in early 2011 at Summit, pro forma trailing-12-month discretionary cash flow at the combined entity was moderately positive. We expect potential further EBITDA declines for Lions Gate in its fiscal fourth quarter due to print and advertising (P&A) costs related to the March 2012 release of 'Hunger Games.' However, assuming the film is a box office success, EBITDA and discretionary cash flow could meaningfully improve in fiscal 2013. In addition, the company will benefit from the release of the final 'Twilight' film in November 2012. While the combined company has greater cash flow visibility over the next few years, upon the completion of the 'Twilight' series, discretionary cash flow generation will depend on the future magnitude of production spend and success across other releases," S&P said. "In resolving the CreditWatch listing, we will meet with management to discuss its combined operating outlook, financial policy, and business strategy following the transaction. Key ratings considerations will include the combined company's pro forma liquidity position, production strategy, and acquisition orientation under the new structure," S&P said. LOCATION BASED TECHNOLOGIES: Renews Pacts With CEO, CDO, and COO ---------------------------------------------------------------- Location Based Technologies entered into new executive employment agreements with David Morse, Joseph Scalisi and Desiree Mejia effective Jan. 12, 2012. The Agreements were approved by the Company's Board of Directors, with Mr. Morse and Ms. Mejia abstaining. The terms and conditions of the Agreements supersede the preexisting employment agreements between the Executives and the Company. The Executives will continue to be employed in their current positions: David Morse, Chief Executive Officer and Co-President; Joseph Scalisi, Chief Development Officer and Co-President; and Desiree Mejia, Chief Operating Officer. The Agreements expire Jan. 12, 2017, the fifth anniversary of the effective date, provided that they are automatically extended for additional one-year periods unless either party provides written notice to the contrary at least 60 days prior to the end of the term then in effect. The pre-existing employment agreements expired Oct. 9, 2012, subject to extension. Each Executive is entitled to a base salary of $15,000 per month and to adjustments to his or her base salary based on certain performance standards. Under the new performance standards, the base salary is increased in increments of $2,500 per month upon the Company first achieving $1.5 million, $2.5 million, $3.5 million, and $4.5 million in earnings before interest, taxes, depreciation and amortization. Amended and Restated Stock Incentive Plan The Board, at a meeting held Jan. 12, 2012, adopted an amendment and restatement of the 2007 Stock Incentive Plan, which provides for the grant of incentive and nonstatutory options, restricted stock and stock appreciation rights covering up to 20,000,000 shares of common stock of the Company. The Plan becomes effective upon its approval by the Company's stockholders, but awards may be made while receipt of stockholder approval is pending and, to the extent required by applicable law, those awards will be conditioned upon the receipt of that approval. As provided in the Agreements, each Executive was granted an incentive option on Jan. 12, 2012, to purchase 4,000,000 shares of common stock of the Company at a price equal to 10% above the 30- day volume weighted average price on the date of the signing of the Agreements. None of the options may be exercised unless and until the Plan has been approved by the stockholders of the Company. About Location Based Technologies Headquartered in Irvine, Calif., Location Based Technologies, Inc. (OTC BB: LBAS) -- http://www.locationbasedtech.com/-- designs, develops, and sells personal, pet, and vehicle locator devices and services. Location Based Technologies reported a net loss of $8.22 million on $16,969 of total net revenue for the year ended Aug. 31, 2011, compared with a net loss of $9.06 million on $67,090 of total net revenue during the prior year. The Company's balance sheet at Aug. 31, 2011, showed $9.40 million in total assets, $4.17 million in total liabilities, $685,500 in commitments and contingencies and $4.53 million in total stockholders' equity. Comiskey & Company, in Denver Colorado, expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 results. The independent auditors noted that the Company has incurred recurring losses since inception and has an accumulated deficit in excess of $37,000,000. There is no established sales history for the Company's products, which are new to the marketplace. LSP BATESVILLE: S&P Cuts Rating on Senior Secured Bonds to 'D' -------------------------------------------------------------- Standard & Poor's Rating Services lowered its rating on LSP Batesville Funding Corp.'s $150 million senior secured bonds due 2014 and $176 million senior secured bonds due 2025 to 'D' from 'CC'. The co-borrower to the debt is LSP Energy L.P. The recovery rating is '4', indicating our expectation for average recovery of principal (30% to 50%). "The rating action follows the project's failure to make its Jan. 17, 2012, debt service payment of about $16.3 million on its senior secure bonds. The project liquidity has been depleted and we consider the possibility of a substantial equity infusion from sponsors to be remote based on the project's underlying economics and historical operational difficulties," S&P said. "Based on these factors, we have concluded that payment will not be made within the applicable cure period of five days as defined by our criteria. As a result, we are lowering the rating to 'D'," said Standard & Poor's credit analyst Theodore Dewitt. Previously, the project's sponsor, CEP Batesville Acquisition LLC's attempted to sell its stake in the project to TPF II Southeast Holdings LLC pursuant to a purchase agreement entered in late October 2011. The transaction's completion was subject to the receipt of regulatory consents, a successful restart of Unit 1, and a waiver of alleged defaults and certain consents of the bondholders. On Dec. 12, 2011, a restart of Unit 1 was unsuccessful. On Dec. 13, 2011, the project received a notice from TPF II Southeast Holdings that terminated the purchase agreement. Under the terms of the indenture, the issuers have 15 days to cure a missed payment before it becomes an event of default. At this stage the issuers are continuing to evaluate their options concerning payment of interest and principal on the bonds. M & M DEVELOPER: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: M & M Developer LLC 482-484 Seneca Avenue Ridgewood, NY 11385 Bankruptcy Case No.: 12-40281 Chapter 11 Petition Date: January 18, 2012 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Jerome Feller Debtor's Counsel: James O. Guy, Esq. GUY LAW OFFICES 49 Spice Mill Boulevard Clifton Park, NY 12065 Tel: (518) 320-7136 Fax: (518) 320-7136 E-mail: jguylaw@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Morad Yeroushalmi, managing member. MA BB OWEN: Wants to Sell Properties to Castle Hill for $23-Mil. ---------------------------------------------------------------- MA BB Owen LP and MA-BBO Five LP seek entry of an order authorizing the sale of all its properties to Castle Hill Partners, Inc., or any other successful bidder free and clear of all claims, encumbrances, liens, and interests. The Debtors has reached an Asset Purchase Agreement with Castle Hill which provides for the sale of the Debtors' right, title and interest in, to and under substantially all of the Debtors' assets free and clear of any and all liens, encumbrances, claims and other interests. The transaction is subject to higher or better offers. In consideration for the Properties, the Potential Buyer has agreed to provide consideration at the closing of the Transaction comprised of: (i) $23,000,000 with $15,500,000 allocated to the property owned by MA BB Owen, LP and $7,500,000 allocated to the property owned by MA-BBO Five, LP, (ii) $330,000 to cure defaults under the Desired 365 Contracts, (iii) $125,000 to be paid to the Debtors' estates for the benefit of creditors, and (iv) the payment of $22,433.46 of past due ad valorem taxes on the Properties. Under the Purchase Agreement, the Potential Buyer has the right prior to the end of the Designation Period to exclude from the Properties transferred to the Potential Buyer any documents, contracts and assets that the Potential Buyer determines in its sole and absolute discretion that it does not desire to purchase. The Debtors and the Potential Buyer have agreed that in the event that the Purchase Agreement consists of a term sheet rather than a signed asset purchase agreement prior to the Bid Procedures hearing, the Debtors will enter into a binding asset purchase agreement with the Potential Buyer prior to five business days after entry of the Bid Procedures Order unless otherwise consented to in writing by the Potential Buyer in its sole and absolute discretion. In the event that the Debtors do not enter into a binding asset purchase agreement with the Potential Buyer prior to the APA Deadline, the Potential Buyer will have the right, but not the obligation, to file a motion to compel the Debtors to sign an asset purchase agreement that contains terms in accordance with the term sheet that comprises the Purchase Agreement. The Debtors also consent to an expedited hearing on such motion and waive any requirement of an adversary proceeding. In the event that the Potential Buyer extends or waives the APA Deadline, the extension or waiver will not impair the Potential Buyer's right to the Break-Up Fee or to compel the Debtor to sell the Properties to the Potential Buyer in accordance with the Purchase Agreement. The Debtors have extensively explored various sale and reorganization alternatives, including, without limitation, the sale of assets and properties of the Debtors. In consultation with its financial advisors, the Debtors have determined that it is in the best interests of the Debtors' estates to sell the Properties at this time. The Debtors believe that the Transaction, subject to a market test through the auction process, will serve to maximize the value received by the Debtors for the properties. About MA BB Owen MA BB Owen LP and MA-BBO Five LP are single-purpose entities created by Marlin Atlantis, a Dallas, Texas-based commercial real estate developer. MA BB Owen purchased 1,115 acres of land in the City of McKinney, Texas, using a $22.8 million loan from Hillcrest Bank. MA-BBO Five acquired 592 acres of land adjacent to the property utilizing a $11.07 million loan from Heritage bank. MA-BBO Five and MA BB Owen filed for Chapter 11 bankruptcy protection (Bankr. E.D. Tex. Case Nos. 11-40644 and 11-40645) on Feb. 28, 2011. Joyce W. Lindauer, Esq., serves as bankruptcy counsel. MA BB estimated its assets at $10 million to $50 million. MA-BBO Five estimated assets of up to $10 million and liabilities of $50 million to $100 million. MA BB OWEN: Proposes Bid Protections for Stalking Horse Bidder -------------------------------------------------------------- In connection with the sale of all of their assets, MA BB Owen LP and MA-BBO Five LP request that the Bankruptcy Court approve the bid protections, including a "break-up" fee and expense reimbursement for the stalking horse bidder, Castle Hill Partners, Inc. Bids that would compete with the stalking horse-bid must: (a) include aggregate consideration of at least the sum of $250,000 plus the Break-Up Fee plus the Purchase Price; (b) be accompanied by satisfactory evidence of committed financing or other financial ability; (c) identify each executory contract or unexpired lease that is to be assumed and assigned to the Potential Bidder; and (d) provide a good faith deposit in the amount of $1,250,000 to the Debtors. If competing bids are received by the deadline, the Debtors will conduct an auction at 9:30 a.m., prevailing Central time, on Feb. 10, 2012, at the offices of Vinson & Elkins LLP, 2001 Ross Avenue, Suite 3700, Dallas, Texas, or at a later time. The Debtors request that a sale hearing on Feb. 13, 2012 at 10:30 a.m. prevailing Central time. In the event Castle Hill is outbid at the auction, it will receive a break-up fee of $704,323 (approximately 3% of the aggregate gross consideration under the Purchase Agreement) in full in cash. About MA BB Owen MA BB Owen LP and MA-BBO Five LP are single-purpose entities created by Marlin Atlantis, a Dallas, Texas-based commercial real estate developer. MA BB Owen purchased 1,115 acres of land in the City of McKinney, Texas, using a $22.8 million loan from Hillcrest Bank. MA-BBO Five acquired 592 acres of land adjacent to the property utilizing a $11.07 million loan from Heritage bank. MA-BBO Five and MA BB Owen filed for Chapter 11 bankruptcy protection (Bankr. E.D. Tex. Case Nos. 11-40644 and 11-40645) on Feb. 28, 2011. Joyce W. Lindauer, Esq., serves as bankruptcy counsel. MA BB estimated its assets at $10 million to $50 million. MA-BBO Five estimated assets of up to $10 million and liabilities of $50 million to $100 million. MARKETING WORLDWIDE: Incurs $2.2 Million Net Loss in Fiscal 2011 ---------------------------------------------------------------- Marketing Worldwide Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, reporting a net loss of $2.27 million on $1.91 million of revenue for the year ended Sept. 30, 2011, compared with a net loss of $2.34 million on $4.02 million of revenue during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $1.50 million in total assets, $6.06 million in total liabilities, $3.49 million in Series A convertible preferred stock, and a $8.05 million total stockholders' deficiency. RBSM LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's 2011 financing results. The independent auditors noted that the Company has generated negative cash flows from operating activities, experienced recurring net operating losses, is in default of loan certain covenants, and is dependent on securing additional equity and debt financing to support its business efforts. A full-text copy of the Form 10-K is available for free at: http://is.gd/fnb7MC About Marketing Worldwide Based in Howell, Michigan, Marketing Worldwide Corporation operates through the holding company structure and conducts its business operations through its wholly owned subsidiaries Colortek, Inc., and Marketing Worldwide, LLC. Marketing Worldwide, LLC, is a complete design, manufacturer and fulfillment business providing accessories for the customization of vehicles and delivers its products to large global automobile manufacturers and certain Vehicle Processing Centers primarily in North America. MWW operates in a 23,000 square foot leased building in Howell Michigan. Colortek, Inc., is a Class A Original Equipment painting facility and operates in a 46,000 square foot owned building in Baroda, which is in South Western Michigan. MWW invested approximately $2 million into this paint facility and expects the majority of its future growth to come from this business. MC2 CAPITAL: Wants Court's OK to Incur $150,000 Debt from SCP ------------------------------------------------------------- MC2 Capital Partners, LLC, asks the U.S. Bankruptcy Court for the Northern District of California for authorization to incur administrative priority unsecured debt in an amount of up to $500,000 from Shaw Capital Partners, LLC, to pay critical expenses of administration, including the maintenance of property and casualty insurance and security services on the Estate's real property. Shaw Capital Partners is owned and controlled by Thomas Monahan and Monahan Pacific Corporation, the 95% LLC member and manager of the Debtor of the Debtor, respectively. The principal terms of the $150,000 revolving line of credit DIP Financing Agreement are: (1) The loan will bear interest at 10% per annum; (2) Expenditures will be made pursuant to a budget; (3) The loan will be entitled to administrative priority treatment; and (4) the loan will be due on the earlier of May 31, 2012, a sale of substantially all of the Debtor's assets, or the Effective Date of a confirmed Plan of Reorganization. About MC2 Capital MC2 Capital Partners, LLC, based in San Rafael, California, filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 11-14366) on Dec. 1, 2011. Judge Alan Jaroslovsky presides over the case. John H. MacConaghy, Esq., and Jean Barnier, Esq., at MacConaghy and Barnier, PLC, in Sonoma, Calif., serve as counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and $50 million to $100 million in debts. The Debtor's Manager is Monahan Pacific Corporation. Thomas Monahan -- an officer and director of Monahan Pacific Corporation and the holder of 95% of the LLC equity interests in the Debtor -- signed the petition. He has been appointed as responsible individual for the Debtor. MERIDIAN SHOPPING: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Meridian Shopping Center, LLC 428 S. Main Street Milpitas, CA 95035 Bankruptcy Case No.: 12-50380 Chapter 11 Petition Date: January 18, 2012 Court: U.S. Bankruptcy Court Northern District of California (San Jose) Judge: Stephen L. Johnson Debtor's Counsel: Dennis Yan, Esq. LAW OFFICE OF DENNIS YAN 595 Market Street, #1350 San Francisco, CA 94105 Tel: (415)867-5797 E-mail: dennisy@yahoo.com Scheduled Assets: $14,000,000 Scheduled Liabilities: $10,912,623 The Company's list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by John Wynn, manager. MICROBILT CORP: Has Full-Payment Reorganization Plan ---------------------------------------------------- MicroBilt Corporation has filed a disclosure statement in support of its plan of reorganization with the U.S. Bankruptcy Court for the District of New Jersey. All cash necessary for the Reorganized Debtors to make payments pursuant to the Plan will be funded by the use of the Debtors' existing cash on hand as of the Effective Date. As of Dec. 15, 2011, the Debtors' cash on hand is $6,430,721. The Debtors anticipate that the available cash as of the distribution date will be sufficient to pay allowed general unsecured claims in full. The classification and treatment of claims under the plan are: A. Class 1 (Non-Tax Priority Claims) will receive cash equal to the amount of allowed claim. The estimated amount of Class 1 claims is $10,000 and the estimated recovery is 100%. B. Class 2 (General Unsecured Claims) will receive a pro rata share of available cash in the class 2 cash pool. The estimated amount of allowed class 2 claims is $2,658,391 while the estimated percentage recovery of the claims is 75-100%. C. Class 3 (Equity Interests) will be retained and will remain unaffected and unchanged by the Plan. The estimated percentage recovery of Class 3 claims is 100%. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/MICROBILT_ds.pdf About MicroBilt Corporation MicroBilt Corporation in Princeton, New Jersey, and CL Verify LLC in Tampa, Florida, offer small business owner solutions for fraud prevention, consumer financing, debt collection, skip tracing and background screening. MicroBilt provides access to over 3 billion debit account records, nearly 30 billion pieces of demographic and public record data and over 100 million unique consumer records to prevent identity fraud, evaluate credit risk and retain customer relationships. MicroBilt and CL Verify filed for Chapter 11 five days apart: MicroBilt (Bankr. D. N.J. Case No. 11-18143) on March 18, 2011, and CL Verify (Bankr. D. N.J. Case No. 11-18715) on March 23, 2011. The Debtors tapped Lowenstein Sandler PC as their counsel, and Maselli Warren, PC, as their special litigation counsel. MicroBilt estimated $10 million to $50 million in both assets and debts. CL Verify estimated $100 million to $500 million in assets, but under $1 million in debts. Court papers say the Debtors have roughly $8.4 million in unsecured debt and no secured debt. The Debtors believe they have an enterprise value of $150 million to $180 million. No trustee, examiner or committee has been requested or appointed in these Chapter 11 cases. MORRIER RANCH: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Morrier Ranch, Inc. aka Morrier Hop Storage 402 E. Yakima Avenue, Suite 1200 Yakima, WA 98901 Bankruptcy Case No.: 12-00179 Chapter 11 Petition Date: January 17, 2012 Court: U.S. Bankruptcy Court Judge: Patricia C. Williams Debtor's Counsel: James P. Hurley, Esq. HURLEY & LARA 411 N. Second Street Yakima, WA 98901 Tel: (509) 248-4282 Fax: (509) 575-5661 E-mail: jamesphurley@hotmail.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Joseph R. Morrier, president. Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Yakima County Treasurer -- $48,454 P.O. Box 22530 Yakima, WA 98907 Velikanje Halverson, PC -- $21,595 P.O. Box 22550 Yakima, WA 98907 Russ Harman Electric Co. -- $14,253 P.O. Box 547 Yakima, WA 98907 Pacific Power -- $3,397 Roza Irrigation District -- $3,278 Hordan Planning Services -- $2,568 Baker & McKenzie LLP -- $2,497 All American Propane -- $964 Hahn Motor Company -- $902 Cascade Natural Gas Corp. -- $705 Doubl-Kold -- $517 Reyes Landscaping -- $427 Pape' Matrial -- $419 McKinney Glass -- $315 Commercial Tire -- $298 Fireman's Funds Ins. -- $258 Oxarc, Inxc. -- $255 Valley Septic Service -- $242 ASAP Metal Fabricators, Inc. -- $130 Contract Services -- $125 MRDUCS LLC: Court Approves Terms of Seiller Waterman Employment --------------------------------------------------------------- MRDUCS LLC won Bankruptcy Court authority to employ to David Cantor, Esq. -- cantor@derbycitylaw.com -- and the law firm of Seiller Waterman LLC as its counsel -- but not before scrutiny from the United States Trustee. The Debtor sought to hire the firm, nunc pro tunc back to Sept. 19, 2011. The Office of the United States Trustee filed a limited objection to the Application. While the U.S. Trustee had no opposition to the nunc pro tunc employment of the firm, the U.S. Trustee did oppose some of the terms of the retention agreement. In November 2011, the Court approved the nunc pro tunc retention of the firm but granted the Debtor and the U.S. Trustee additional time to supplement the record, after which it would take the terms of the retention agreement under submission. Both the Debtor and the U.S. Trustee filed supplemental pleadings and on Jan. 10, 2012, the Court took the matter under submission. The Debtor's Application indicated that the Debtor had paid the firm a $6,500 retainer for its services to be rendered as the Debtor's counsel. The Application also states, "[i]n anticipation that the aforementioned retainer will not be sufficient to pay for all services performed and expenses incurred, client has agreed to deposit an additional one thousand dollars ($1,000.00) into counsel's escrow account each month while counsel serves as bankruptcy counsel to client. Each said escrow deposit is due on the 5th of each calendar month. All fees will be paid upon approval by the Bankruptcy Court, if necessary." The U.S. Trustee objected on the basis that the $1,000 to be escrowed monthly represents an "evergreen" retainer and that the firm had not demonstrated that the circumstances of this case warranted approving this fee arrangement. Moreover, the U.S. Trustee argued that "[l]ocking substantial funds into escrow for the benefit of counsel deprives the debtor of much needed flexibility in meeting its needs, particularly unanticipated costs which arise in Chapter 11 cases with distressing frequency." At the hearing, the firm argued that it did not take a large retainer in this case as the Debtor was not in a position to pay a large retainer. Furthermore, the small retainer paid is unacceptably small considering the size and complexity of this case. Counsel for SW argued that it would be less of a burden for the Debtor to escrow the $1,000 a month rather than have a large attorney fee invoice three or four months down the road. Finally, Counsel for SW also assured the Court that no monies deposited into the escrow account would be paid without Court approval. In a Jan. 19 Memorandum, Bankruptcy Judge Alan C. Stout approved the terms of the retention agreement as proposed by the Debtor and the law firm. A copy of Judge Stout's decision is available at http://is.gd/s6SCB6from Leagle.com. Louisville, Kentucky-based MRDUCS LLC, doing business as Patriot Tire & Auto Services, fild for Chapter 11 bankruptcy (Bankr. W.D. Ky. Case No. 11-34502) on Sept. 19, 2011, estimating $1 million to $10 million in assets and debts. The petition was signed by Michelle Doss, managing member. MSR RESORT: Qualified Bids for Doral Golf Resort & Spa Due Feb. 20 ------------------------------------------------------------------ As reported in the TCR on Dec. 23, 2011, the U.S. Bankruptcy Court for the Southern District of New York approved procedures to test whether someone else will make a better offer for the Doral Golf Resort & Spa in Miami. Donald Trump, the stalking horse bidder, has signed a deal to open the auction with a $150 million offer for the Property. Other preliminary bids are due initially on Jan. 6. The deadline for the submission of Qualified Bids is Feb. 20. The auction is set for Feb. 27. The winning bidder is to be announced on Feb. 29, before a sale-approval hearing on March 2. In the event, no competing bids are received, the auction will be cancelled and the Debtors will seek approval for the sale of the Property to Trump at the sale hearing. Objections to the proposed sale are due Feb. 13, 2012, at 4:00 p.m. Feb. 20, 2012, is the deadline for filing a response. March 1, 2012, is the deadline for the filing of supplemental objections to the Sale Order based on the results of the auction. A copy of the bid procedures order is available for free at: http://bankrupt.com/misc/msrresort.doc920.pdf About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. MUNICIPAL MORTGAGE: Lisa Roberts Continues to Serve as CFO ---------------------------------------------------------- Municipal Mortgage & Equity, LLC, and Lisa M. Roberts executed an employment agreement effective as of Oct. 1, 2011, pursuant to which Ms. Roberts continues to be employed as Chief Financial Officer. The employment agreement has a term ending on April 1, 2014, and provides for an annual base compensation of $400,000 as of Oct. 1, 2011; $425,000 as of Jan. 1, 2012; and $450,000 as of Jan. 1, 2013. The agreement provides for incentive compensation payable in cash as determined by the Compensation Committee based on the recommendation of the CEO that Employee has met specific goals and objectives for each calendar year 2011, 2012 and 2013, which goals shall include but not be limited to timely filing of our Form 10K. The agreement requires the Company to indemnify Ms. Roberts from any and all liability for acts or omissions performed in the course of her employment. About Municipal Mortgage Baltimore, Md.-based Municipal Mortgage & Equity, LLC (Pink Sheets: MMAB) -- http://www.munimae.com/-- was organized in 1996 as a Delaware limited liability company and is classified as a partnership for federal income tax purposes. When the Company became a publicly traded company in 1996, it was primarily engaged in originating, investing in and servicing tax- exempt mortgage revenue bonds issued by state and local government authorities to finance affordable multifamily housing developments. Since then, the Company made several acquisitions that significantly expanded its business. However, in 2008, due to the financial crisis, the Company began contracting its business. The Company has sold, liquidated or closed down all of its different businesses except for its bond investing activities and certain assets and residual interests related to the businesses and assets that the Company sold due to its liquidity issues. The Company has a majority position in International Housing Solutions S.a.r.l., a partnership that was formed to promote and invest in affordable housing in overseas markets. In addition, at Dec. 31, 2010, the Company has an unfunded equity commitment of $5.1 million, or 2.67% of total committed capital with respect to its role as the general partner to the South Africa Workforce Housing Fund SA I ("SA Fund"). The SA Fund was formed to invest directly or indirectly in housing development projects and housing sector companies in South Africa. A portion of the funding of SA Fund is participating debt provided by the United States Overseas Private Investment Corporation, a federal government entity, and the remainder is equity primarily invested by institutional and large private investors. The Company expects to continue this business. The Company also reported a net loss of $47.59 million on $73.87 million of total revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $69.65 million on $80.05 million of total revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $1.93 billion in total assets, $1.22 billion in total liabilities and $707.23 million in total equity. As reported by the TCR on April 6, 2011, KPMG LLP, in Baltimore, Maryland, expressed substantial doubt about Municipal Mortgage & Equity's ability to continue as a going concern. The independent auditors noted that the Company has been negatively impacted by the deterioration of the capital markets and has liquidity issues which have resulted in the Company having to sell assets, liquidate collateral positions, post additional collateral, sell or close different business segments and work with its creditors to restructure or extend its debt arrangements. Municipal Mortgage reported a net loss of $72.5 million on $107.7 million of total revenue for 2010, compared with a net loss of $380.1 million on $134.8 million of total revenue for 2009. Bankruptcy Warning The Company's ability to restructure its debt is especially important with respect to the subordinated debentures. The weighted average pay rate on the remaining $196.7 million (unpaid principal balance) of subordinated debentures was 2.1% at Sept. 30, 2011. The Company's pay rates are due to increase in the first and second quarters of 2012, which will bring the weighted average pay rate to approximately 8.6%. The Company does not currently have the liquidity to meet these increased payments. In addition, substantially all of the Company's assets are encumbered, which limits its ability to increase its liquidity by selling assets or incurring additional indebtedness. There is also uncertainty related to the Company's ability to liquidate non-bond related assets at sufficient amounts to satisfy associated debt and other obligations and there are a number of business risks surrounding the Company's bond investing activities that could impact its ability to generate sufficient cash flow from the bond portfolio. These uncertainties could adversely impact the Company's financial condition or results of operations. In the event the Company is not successful in restructuring or settling its remaining non-bond related debt, or in generating liquidity from the sale of non-bond related assets or if the bond portfolio net interest income and the common equity distributions the Company receives from its subsidiaries are substantially reduced, the Company may have to consider seeking relief through a bankruptcy filing. MUSCLEPHARM CORP: Files Third Amendment to 126.4 Million Offering ----------------------------------------------------------------- Musclepharm Corporation filed with the U.S. Securities and Exchange Commission amendment no.3 to its Form S-1 registration statement regarding the resale of 126,400,000 Shares of the Company's common stock, par value $0.001 per share, by the selling security holders, including (i) 12,000,000 Put Shares that the Company will put to Southridge pursuant to the Equity Purchase Agreement, (ii) 82,000,000 Purchase Shares, and (iii) 32,400,000 Warrant Shares. The Equity Purchase Agreement provides that Southridge is committed, at the Company's sole option, to purchase up to $10,000,000 of the Company's common stock. The Company may draw on the facility from time to time, as and when the Company determines appropriate in accordance with the terms and conditions of the Equity Purchase Agreement. Southridge is an "underwriter" within the meaning of the Securities Act of 1933, as amended, in connection with the resale of the Put Shares under the Equity Purchase Agreement. No other underwriter or person has been engaged to facilitate the sale of the Put Shares in this offering. This offering will terminate 24 months after the registration statement to which this prospectus is made a part is declared effective by the SEC. Southridge will pay the Company 94% of the average of the lowest closing bid price of the Company's common stock reported by Bloomberg, LP, in any two trading days, consecutive or inconsecutive, of the five consecutive trading day period commencing the date a put notice is delivered. The Company will not receive any proceeds from the sale of the Shares. However, the Company will receive proceeds from the sale of the Company's Put Shares under the Equity Purchase Agreement. The proceeds will be used for working capital or general corporate purposes. The Company will bear all costs associated with the registration of the Shares under the Securities Act. The Company's common stock is quoted on the OTCBB under the symbol "MSLP.OB." The Shares registered hereunder are being offered for sale by the Selling Security Holders at prices established on the OTCBB during the term of this offering. On Jan. 18, 2012, the closing bid price of the Company's common stock was $0.01 per share. These prices will fluctuate based on the demand for the Company's common stock. A full-text copy of the amended prospectus is available at: http://is.gd/2BySwd About MusclePharm Headquartered in Denver, Colorado, MusclePharm Corporation (OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life- style company that develops and manufactures a full line of National Science Foundation approved nutritional supplements that are 100% free of banned substances. MusclePharm is sold in over 120 countries and available in over 5,000 U.S. retail outlets, including GNC and Vitamin Shoppe. MusclePharm products are also sold in over 100 online stores, including bodybuilding.com, Amazon.com and Vitacost.com. Berman & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about MusclePharm's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company had a net loss of $19.6 million and net cash used in operations of $3.8 million for the the year ended Dec. 31, 2010; and a working capital deficit and stockholders' deficit of $2.8 million and $1.7 million, respectively, at Dec. 31, 2010. The Company also reported a net loss of $12.33 million on $13.07 million of sales for the nine months ended Sept. 30, 2011, compared with a net loss of $8.67 million on $3.13 million of sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $5.71 million in total assets, $10.86 million in total liabilities, and a $5.14 million total stockholders' deficit. NATIONAL GRAPHICS: Whyte Hirschboeck Disqualified as Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Wisconsin denied National Graphics, Inc.'s application to employ Whyte Hirschboeck Dudek S.C., as its special counsel. The Court disqualified Whyte Hirschboeck under Section 327(e) of the Bankruptcy Code as holding an interest in the estate. National Graphics, Inc., filed a Chapter 11 petition (Bankr. E.D. Wisc. Case No. 11-36818) on Nov. 7, 2011, in Milwaukee, Wisconsin, Leonard G. Leverson, Esq. at Leverson & Metz S.C. in Milwaukee, Wisconsin serves as counsel to the Debtor. The Debtor estimated up to $50 million in assets and up to $10 million in liabilities. NATIONAL HOLDINGS: COR Securities Discloses 41% Equity Stake ------------------------------------------------------------ In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, COR Securities Holdings Inc. and its affiliates disclosed that, as of Jan. 13, 2012, they beneficially owns 10,860,378 shares of common stock of National Holdings Corporation representing 41% of the shares outstanding. A full- text copy of the filing is available at http://is.gd/Mh5dFi National Holdings New York, N.Y.-based National Holdings Corporation is a financial services organization, operating primarily through its wholly owned subsidiaries, National Securities Corporation, Finance Investments, Inc., and EquityStation, Inc. The Broker-Dealer Subsidiaries conduct a national securities brokerage business through their main offices in New York, New York, Boca Raton, Florida, and Seattle, Washington. Sherb & Co., LLP, in Boca Raton, Florida, expressed substantial doubt about National Holdings' ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses and has a working capital deficit as of Sept. 30, 2011. The Company reported a net loss of $4.7 million on $126.5 million of total revenues for fiscal 2011, compared with a net loss of $6.6 million on $111.0 million on total revenues for fiscal 2010. The Company's balance sheet at Sept. 30, 2011, showed $16.4 million in total assets, $17.8 million in total liabilities, and a stockholders' deficit of $1.4 million. NATIONAL HOLDINGS: Bruce Galloway Discloses 5.7% Equity Stake ------------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Bruce Galloway and his affiliates disclosed that, as of Jan. 13, 2012, they beneficially own 1,249,691 shares of common stock of National Holdings Corporation representing 5.70% of the shares outstanding. The percentage is based of 21,946,704 shares of common stock reported by the Company to be issued and outstanding as of Jan. 11, 2012, in the Company's latest Annual Report on Form 10-K as filed with the Securities and Exchange Commission on Jan. 13, 2012. A full-text copy of the Schedule 13D is available for free at http://is.gd/1INuxJ About National Holdings New York, N.Y.-based National Holdings Corporation is a financial services organization, operating primarily through its wholly owned subsidiaries, National Securities Corporation, Finance Investments, Inc., and EquityStation, Inc. The Broker-Dealer Subsidiaries conduct a national securities brokerage business through their main offices in New York, New York, Boca Raton, Florida, and Seattle, Washington. Sherb & Co., LLP, in Boca Raton, Florida, expressed substantial doubt about National Holdings' ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses and has a working capital deficit as of Sept. 30, 2011. The Company reported a net loss of $4.7 million on $126.5 million of total revenues for fiscal 2011, compared with a net loss of $6.6 million on $111.0 million on total revenues for fiscal 2010. The Company's balance sheet at Sept. 30, 2011, showed $16.4 million in total assets, $17.8 million in total liabilities, and a stockholders' deficit of $1.4 million. NATIVE WHOLESALE: Court OKs Gross Shuman as Bankr. Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of New York authorized Native Wholesale Supply Company to employ Gross, Shuman, Brizdle & Gilfillan, P.C., as its counsel. As counsel, Gross Shuman will: (a) take all necessary action to protect and preserve the estate of the Debtor, including the prosecution of actions on the Debtor's behalf, the defense of any actions commenced against the Debtor, negotiations concerning all litigation in which the Debtor is involved, and objection to claims filed against the estate; (b) prepare on behalf of the Debtor, as debtor-in-possession, all necessary motions, applications, answers, orders, reports and papers in connection with the administration of the estate; (c) negotiate and prepare on behalf of the Debtor a plan of reorganization and all related documents; and (d) perform all other necessary legal services in connection with the Chapter 11 case. The Debtor will pay Gross Shuman at the firm's customary hourly rates which ranges from $250 to $360 per hour for partners, $155 to $295 per hour for associates and $135 per hour for paraprofessionals. The Debtor will also reimburse the firm for its expenses incurred including, among other things, telecopier charges, travel expenses, computerized research and transcription costs. About Native Wholesale Native Wholesale Supply Company is in the business of importing cigarettes and other tobacco products from Canada and selling them within the United States. It purchases the products from Grand River Enterprises Six Nations, Ltd., a Canadian corporation and the Debtor's only secured creditor. Native is an entity organized under the Sac and Fox Nation and has its principal place of business at 10955 Logan Road in Perrysburg, New York. Native filed for Chapter 11 bankruptcy (Bankr. W.D.N.Y. Case No. 11-14009) on Nov. 21, 2011. The Chapter 11 filing was triggered to resolve an ongoing dispute with the United States government regarding up to $43 million in assessments made by the government against the Debtor pursuant to the Fair and Equitable Tobacco Reform Act of 2004 and the Tobacco Transition Payment Program and to restructure the terms of payment of any obligation determined to be owing by the Debtor to the U.S. under the Disputed Assessment. The issues pertaining to the Disputed Assessment resulted in two lawsuits, subsequently consolidated, now pending in the Federal District Court. NATIVE WHOLESALE: Can Hire Jaeckle Fleischmann as Special Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of New York authorized Native Wholesale Supply Company to employ Jaeckle Fleischmann & Mugel, LLP, as its special counsel. Jaeckle Fleischmann will: (a) provide all necessary information to general counsel for the Debtor, including any and all information with respect to the Assessment Dispute, Assessment Dispute litigation and the Debtor's finances or operations; (b) assist, if necessary, in negotiating and preparing on behalf of the Debtor a plan of reorganization and all related documents; and (c) assist general bankruptcy counsel, if necessary, as needed, in connection with the Chapter 11 case. The Debtor will pay Jaeckle Fleischmann based on the firm's customary hourly rates which ranges from $225 to $325 per hour for partners, $135 to $195 per hour for associates and $120 per hour for paraprofessionals. The Debtor will also reimburse the firm for its expenses including, among other things, telecopier charges, mail and express mail charges and travel expenses. About Native Wholesale Native Wholesale Supply Company is in the business of importing cigarettes and other tobacco products from Canada and selling them within the United States. It purchases the products from Grand River Enterprises Six Nations, Ltd., a Canadian corporation and the Debtor's only secured creditor. Native is an entity organized under the Sac and Fox Nation and has its principal place of business at 10955 Logan Road in Perrysburg, New York. Native filed for Chapter 11 bankruptcy (Bankr. W.D.N.Y. Case No. 11-14009) on Nov. 21, 2011. The Chapter 11 filing was triggered to resolve an ongoing dispute with the United States government regarding up to $43 million in assessments made by the government against the Debtor pursuant to the Fair and Equitable Tobacco Reform Act of 2004 and the Tobacco Transition Payment Program and to restructure the terms of payment of any obligation determined to be owing by the Debtor to the U.S. under the Disputed Assessment. The issues pertaining to the Disputed Assessment resulted in two lawsuits, subsequently consolidated, now pending in the Federal District Court. NATIVE WHOLESALE: Court OKs Mengel Mertzger as Accountants ---------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of New York authorized Native Wholesale Supply Company to employ Mengel Mertzger Barr & Co. LLP as its accountants. The firm will, among other things, prepare financial statements and prepare year end payroll tax form. The firm anticipates that other additional accounting services will be needed in formulation of the Debtor's reorganizational Plan. The firm's rates are: Personnel Rates --------- ----- Partners $250 Managers $175 Senior Staff $150 Staff $100 ParaProfessional $50 About Native Wholesale Native Wholesale Supply Company is in the business of importing cigarettes and other tobacco products from Canada and selling them within the United States. It purchases the products from Grand River Enterprises Six Nations, Ltd., a Canadian corporation and the Debtor's only secured creditor. Native is an entity organized under the Sac and Fox Nation and has its principal place of business at 10955 Logan Road in Perrysburg, New York. Native filed for Chapter 11 bankruptcy (Bankr. W.D.N.Y. Case No. 11-14009) on Nov. 21, 2011. The Chapter 11 filing was triggered to resolve an ongoing dispute with the United States government regarding up to $43 million in assessments made by the government against the Debtor pursuant to the Fair and Equitable Tobacco Reform Act of 2004 and the Tobacco Transition Payment Program and to restructure the terms of payment of any obligation determined to be owing by the Debtor to the U.S. under the Disputed Assessment. The issues pertaining to the Disputed Assessment resulted in two lawsuits, subsequently consolidated, now pending in the Federal District Court. NATIVE WHOLESALE: Court Approves Windels Marx as Special Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of New York authorized Native Wholesale Supply Company to employ Windels Marx Lane & Mittendorf, LLP, as its special counsel. As special counsel, Windels Marx will: (a) provide all necessary information to general counsel for the Debtor, including any and all information with respect to the Assessment Dispute, Assessment Dispute litigation and the Debtor's finances or operations; (b) assist, if necessary, in negotiating and preparing on behalf of the Debtor a plan of reorganization and all related documents; and (c) assist general bankruptcy counsel, if necessary, as needed, in connection with the Chapter 11 case. The Debtor will pay Windels Marx in accordance with the firm's customary hourly rates which range from $410 to 850 per hour for partners, $250 to $490 per hour for associates and $135 to $250 per hour for paraprofessionals. The Debtor will also reimburse Windels Marx for its expenses including, among other things, photocopying charges, travel expenses and expenses for "working meals". About Native Wholesale Native Wholesale Supply Company is in the business of importing cigarettes and other tobacco products from Canada and selling them within the United States. It purchases the products from Grand River Enterprises Six Nations, Ltd., a Canadian corporation and the Debtor's only secured creditor. Native is an entity organized under the Sac and Fox Nation and has its principal place of business at 10955 Logan Road in Perrysburg, New York. Native filed for Chapter 11 bankruptcy (Bankr. W.D.N.Y. Case No. 11-14009) on Nov. 21, 2011. The Chapter 11 filing was triggered to resolve an ongoing dispute with the United States government regarding up to $43 million in assessments made by the government against the Debtor pursuant to the Fair and Equitable Tobacco Reform Act of 2004 and the Tobacco Transition Payment Program and to restructure the terms of payment of any obligation determined to be owing by the Debtor to the U.S. under the Disputed Assessment. The issues pertaining to the Disputed Assessment resulted in two lawsuits, subsequently consolidated, now pending in the Federal District Court. NEBRASKA BOOK: Wins Approval to Close 7 Off-Campus Stores -------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Nebraska Book Co. won bankruptcy-court permission to close seven off-campus college bookstores as part of its bid to become leaner in Chapter 11. About Nebraska Book Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the leading providers of new and used textbooks for college students in the United States. Nebraska Book and seven affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002 to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over the case. Lawyers at Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The Debtors; restructuring advisors are AlixPartners LLC; the investment bankers are Rothschild, Inc.; the auditors are Deloitte & Touche LLP; and the claims agent is Kurtzman Carson Consultants LLC. As of the Petition Date, the Debtors had consolidated assets of $657,215,757 and debts of $563,973,688. JPMorgan Chase Bank N.A., as administrative agent for the DIP lenders, is represented by lawyers at Richards, Layton & Finger, P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment Management Inc., the DIP arranger, is represented by lawyers at Bayard, P.A., and Willkie Farr & Gallagher LLP. An ad hoc committee of holders of more than 50% of the Debtors' Second Lien Notes is represented by lawyers at Brown Rudnick. An ad hoc committee of holders of the Debtors' 8.625% unsecured notes are represented by Milbank, Tweed, Hadley & McCloy LLP. The Official Committee of Unsecured Creditors selected Lowenstein Sandler LLP and Stevens & Lee, P.C., as lawyers and Mesirow Financial Inc. as financial advisers. Nebraska Book has been unable to confirm a pre-packaged Chapter 11 plan that would have swapped some of the existing debt for new debt, cash and the new stock, due to an inability to secure $250 million in exit financing. The company's exclusive period for proposing a plan is set to expire on Jan. 23. NEOMEDIA TECHNOLOGIES: Issues $400,000 Conv. Note to YA Global -------------------------------------------------------------- NeoMedia Technologies, Inc., on Jan. 11, 2012, entered into an Agreement to issue and sell a secured convertible debenture to YA Global Investments, L.P., in the principal amount of $400,000. The closing of the transaction was held on Jan. 11, 2012. In addition to the Debenture, the Company also issued a warrant to the Buyer to purchase 1,000,000 shares of the Company's common stock, par value $0.001 per share, for an exercise price of $0.15 per share. The Debenture will mature on July 29, 2012, and will accrue interest at a rate equal to 14% per annum and such interest will be paid on the Maturity Date in cash or, provided that certain Equity Conditions are satisfied. At any time, the Buyer will be entitled to convert any portion of the outstanding and unpaid principal and accrued interest thereon into fully paid and non- assessable shares of Common Stock at a price equal to the lesser of $0.10 and 95% of the lowest volume weighted average price of the Common Stock during the 60 trading days immediately preceding each conversion date. The Debenture is secured by certain pledges made with respect to the assets of the Company and its subsidiaries as set forth in the Fifteenth Ratification Agreement dated Jan. 11, 2012, and that certain Security Agreement and Patent Security Agreement both dated July 29, 2008, by and among the Company, each of the Company's subsidiaries made a party thereto, and the Buyer. In connection with the Agreement, the Company also entered into those certain Irrevocable Transfer Agent Instructions with the Buyer, an escrow agent and WorldWide Stock Transfer, LLC, the Company's transfer agent. The Company will not affect any conversion, and the Buyer will not have the right to convert any portion of the Debenture to the extent that after giving effect to such conversion, the Buyer would beneficially own in excess of 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to such conversion, except for not less than 65 days prior written notice from the Buyer. The Company will have the right to redeem a portion or all amounts outstanding in the Debenture via Optional Redemption by paying the amount equal to the principal amount being redeemed plus a redemption premium equal to 10% of the principal amount being redeemed, and accrued interest. About NeoMedia Technologies Atlanta, Ga.-based NeoMedia Technologies, Inc., provides mobile barcode scanning solutions. The Company's technology allows mobile devices with cameras to read 1D and 2D barcodes and provide "one click" access to mobile content. The Company has historically incurred net losses from operations and expects it will continue to have negative cash flows as it implements its business plan. The Company said there can be no assurance that its continuing efforts to execute its business plan will be successful and that it will be able to continue as a going concern. The Company's balance sheet at Sept. 30, 2011, showed $8.02 million in total assets, $65.98 million in total liabilities, all current, $5.43 million in Series C convertible preferred stock, $2.36 million in Series D convertible preferred stock, and a $65.75 million total shareholders' deficit. Kingery & Crouse, P.A, in Tampa, Fla., expressed substantial doubt about the Company's ability to continue as a going concern. The accounting firm noted that the Company has suffered recurring losses from operations and has ongoing requirements for additional capital investment. NET ELEMENT: Hikes Base Salaries of Named Executive Officers ------------------------------------------------------------ Net Element, Inc., increased the compensation of its Chief Financial Officer and Chief Technology Officer and of the Chief Executive Officer of the Company's subsidiary Openfilm, LLC, effective Nov. 16, 2011. In addition, on Dec. 31, 2011, the Company's Chief Executive Officer, Mike Zoi, was paid the full amount of his compensation that was previously deferred, which totaled $150,000. The annual base salary of the Company's Chief Financial Officer, Jonathan New, was increased from approximately $56,000 per year to $112,000 per year. The annual base salary of the Company's Chief Technology Officer, Ivan Onuchin, was increased from $72,000 per year to $96,000 per year. The annual base salary of the Chief Executive Officer of the Company's subsidiary Openfilm, LLC, Dmitry Kozko, was increased from $48,000 to $96,000. About Net Element Miami, Fla.-based Net Element, Inc. (formerly TOT Energy, Inc.) currently operates several online media websites in the film, auto racing and emerging music talent markets. The Company reported a net loss of $3.1 million on $242 of sales for the nine-month period ended Dec. 31, 2010. The Company had a net loss of $6.6 million on $0 revenue for the twelve months ended March 31, 2010. The Company also reported a net loss of $23.53 million on $143,988 of net revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $2.62 million on $0 of net revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.95 million in total assets, $5.69 million in total liabilities, and a $3.73 million total stockholders' deficit. Daszkal Bolton LLP, in Fort Lauderdale, Fla., expressed substantial doubt about Net Element's ability to continue as a going concern. The independent auditors noted that the Company has experienced recurring losses and has an accumulated deficit and stockholders' deficiency at Dec. 31, 2010. NET TALK.COM: Adopts 2011 Stock Option Plan ------------------------------------------- Net Talk.com, Inc., on June 15, 2011, adopted the 2011 Stock Option Plan which is intended to advance the interests of the Company's shareholders by enhancing the Company's ability to attract, retain and motivate persons who make important contributions to the Company by providing such persons with equity ownership opportunities and performance-based incentives and thereby better aligning the interests of those persons with those of the Company's shareholders. All of the Company's employees, officers, and directors, and those Company's consultants and advisors: (i) that are natural persons; and (ii) who provides bona fide services to the Company not connected to a capital raising transaction or the promotion or creation of a market for the Company's securities, are eligible to be granted options or restricted stock awards under the Plan. The maximum aggregate number of shares of the Company's common stock that may be issued under the Plan is 20,000,000 shares of the Company's common stock. On Jan. 16, 2012, Net Talk.com, Inc., approved and issued 75,000 shares of common stock to a non-employee consultant to be issued and distributed under the Company's 2011 Stock Option Plan. About Net Talk.com Based in Miami, Fla., Net Talk.com, Inc., is a telephone company, who provides, sells and supplies commercial and residential telecommunication services, including services utilizing voice over internet protocol technology, session initiation protocol technology, wireless fidelity technology, wireless maximum technology, marine satellite services technology and other similar type technologies. The Company reported a net loss of $26.17 million $2.72 million of revenue for the year ended Sept. 30, 2011, compared with a net loss of $6.30 million on $737,498 of revenue during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $9.57 million in total assets, $8.14 million in total liabilities, $11.72 million in redeemable preferred stock and a $10.30 million total stockholders' deficit. NEW ATLANTIC: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: New Atlantic Ready Mix Corp. 183-30 Jamaica Avenue Hollis, NY 11423 Bankruptcy Case No.: 12-40252 Chapter 11 Petition Date: January 17, 2012 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Carla E. Craig Debtor's Counsel: Bruce Weiner, Esq. ROSENBERG MUSSO & WEINER LLP 26 Court Street, Suite 2211 Brooklyn, NY 11242 Tel: (718) 855-6840 Fax: (718) 625-1966 E-mail: rmwlaw@att.net Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by John Cervoni, president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- G&J Ready Mix & Masonry Supply Inc. 12-40253 01/17/12 NEWAYS ENTERPRISES: Lenders Swap Debt for Equity ------------------------------------------------ Liz Hoffman at Bankruptcy Law360 reports that new equity investments from Z Capital Partners LLC and SAC Capital Advisors LP have thrown a lifeline to Neways Enterprises Inc. that defaulted on $250 million in loans last May. Neways Enterprises Inc., a Utah-based manufacturer of nutritional products that was majority-owned by Golden Gate Capital Management LLC, emerged from an out-of-court restructuring that began last spring. The company's second-lien lenders -- including Z Capital, SAC and Golden Gate -- swapped their debt for equity in the company, according to Law360. NEWPAGE CORP: Noteholders Release Right to Mill Insurance Proceeds ------------------------------------------------------------------ NewPage Corporation asks the U.S. Bankruptcy Court for the District of Delaware for approval of the Stipulation by the Debtors and the Collateral Trustee for the First Lien Notes Regarding the Release of the Debtors' Mill in Wickliffe, Kentucky. In April and May 2011, the Debtors incurred significant flood damage at the Wickliffe Mill. The mortgage granted to the Collateral Trustee for the real property assets at the Wickliffe Mill entitles the Collateral Trustee to the proceeds of the flood insurance, but the insurer will not release to the Debtors the proceeds from the insurance coverage without first receiving a signature from the Collateral Trustee, as mortgagee and additional insured under the flood insurance policy releasing its rights to receive such proceeds. The material provisions of the Stipulation are: A. The First Lien Collateral Trustee on behalf of the First Lien Noteholders releases and waives any rights it may have under the mortgage (for the real property assets at the Wickliffe Mill), the CTA and the insurance policy to receive the direct proceeds of the such policy related to loss coverage for the 2011 Wickliffe Mill flood. B. The First Lien Collateral Trustee will deliver the shares of capital stock owned by NewPage and the 2007 Guarantors to the Debtors, or such other person as the Debtors may direct, by no later than five (5) business days following the entry of an order approving this Agreement. C. The First Lien Collateral Trustee will provide notice of the Agreement and any motion requesting Court approval of this Agreement to the First Lien Noteholders. About NewPage Corp. Headquartered in Miamisburg, Ohio, NewPage Corporation was 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 Dec. 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 roughly 4.1 million tons of paper, including roughly 2.9 million tons of coated paper, roughly 1.0 million tons of uncoated paper and roughly 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. NEWPAGE CORP: Wants Plan Filing Period Extended Until July 3 ------------------------------------------------------------ NewPage Corporation, et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to file and solicit acceptances of a plan through and including July 3, 2012, and Sept. 1, 2012, respectively. This the first motion for extension of the Debtors' exclusive periods. The Debtors tell the Court that their business plan for a reconfigured entity is only just being completed and, thus, more time is needed to complete these efforts. About NewPage Corp. Headquartered in Miamisburg, Ohio, NewPage Corporation was 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 Dec. 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 roughly 4.1 million tons of paper, including roughly 2.9 million tons of coated paper, roughly 1.0 million tons of uncoated paper and roughly 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. NEWPAGE CORP: Files Schedules of Assets and Liabilities ------------------------------------------------------- NewPage Corporation, et al., 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 $6,011,404 B. Personal Property $1,868,734,069 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $2,795,474,336 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $874,133,278 ----------- ----------- TOTAL $1,874,745,473 $3,669,607,614 A full-text copy of the schedules is available for free at http://bankrupt.com/misc/NEWPAGECORP_sal.pdf About NewPage Corp. Headquartered in Miamisburg, Ohio, NewPage Corporation was 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 Dec. 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 roughly 4.1 million tons of paper, including roughly 2.9 million tons of coated paper, roughly 1.0 million tons of uncoated paper and roughly 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. NIELSEN HOLDINGS: S&P Raises Corporate Credit Rating to 'BB' ------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on New York City-based Nielsen Holdings N.V. to 'BB' from 'BB-.' The outlook is stable. "In addition, we assigned a 'BB+' issue-level rating (one notch above the 'BB' corporate credit rating on parent The Nielsen Holdings N.V.) and '2' recovery rating to the $1.25 billion senior secured term loan A due 2017 issued by Nielsen Finance LLC. The '2' recovery rating indicates our expectation of substantial (70%- 90%) recovery in the event of a payment default," S&P said. "The company intends to use the proceeds of the term loan to refinance most of its existing senior secured term loan due 2013," S&P related. "We raised the ratings on Nielsen Holdings N.V. and its operating company, The Nielsen Co. B.V., because the company is amending its credit agreement, pushing out its 2013 maturities. In addition, in the third quarter, the company's EBITDA grew 14%, exceeding our expectations," S&P said. "We expect that, given the company's operating momentum, Nielsen's leverage will be at or below 4.75x when it reports its fiscal 2011 results or within six months after that," said Standard & Poor's credit analyst Tulip Lim. "The ratings reflect our expectation that the company will continue to reduce leverage, although we expect its leverage will remain relatively high over the near term," continued Ms. Lim. "The rating also reflects our expectation that the company's operating performance will remain stable, given its significant sources of recurring revenue and its strong market position. These factors and Nielsen's strong market positions in its two principal businesses underpin our assessment of Nielsen's business risk profile as 'satisfactory', based on our criteria." "The outlook is stable. We expect Nielsen's business to grow moderately, and believe the company will de-lever over the intermediate term. Although we do not expect this would occur over the near term, we could raise the rating if the company reduces adjusted leverage to below 4x. We think this could occur if its revenue grows at a high-single-digit percent rate, its EBITDA margin rises by 50 basis points (bps), and the company directs more than $700 million of its discretionary cash flow to debt reduction, rather than to shareholder returns or cash- and debt- financed acquisitions. We also factor into our view of the company its success in building online audience measurement tools that gain market acceptance," S&P said. "We could lower the rating if we believe the company's leverage will remain above the high-4x area or if we believe that competition is intensifying and that this will result in margin deterioration," S&P said. NORTHAMPTON GENERATING: Court Approves Access to Cash Collateral ---------------------------------------------------------------- The Hon. J. Craig Whitley of the U.S. Bankruptcy Court for the Western District of North Carolina authorized, on a final basis, Northampton Generating Co. LP to use cash collateral. U.S. Bank National Association, as successor collateral agent and successor senior bond trustee for the senior bonds and Law Debenture Trust Company of New York, not individually but as successor bond trustee has consented to the Debtor's access to the cash collateral to operate its business postpetition. As of the Petition Date, the Debtor has obligations associated with certain resource recovery revenue bonds issued for Debtor's benefit in 1994. As of the Petition Date, the amounts due and owing by Debtor with respect to the Bonds and Bond Documents are: i) unpaid principal on the Senior Bonds in the amount of $71,400,000; ii) unpaid principal on the Junior Bonds in the amount of $19,100,000; iii) accrued but unpaid interest on the Senior Bonds in the amount of $2,011,496; iv) accrued but unpaid interest on the Junior Bonds in the amount of $2,688,749; and v) unliquidated, accrued and unpaid fees and expenses of the Bond Trustees and their counsel incurred through the Petition Date. As adequate protection from diminution in value of the lenders' collateral the Debtor will grant each Bond Trustee replacement lien and security interest (the Rollover Lien) in all assets of the Debtor existing on or after the Petition Date of the same type as the prepetition Bond Collateral, a superpriority administrative expense claim status, subject to carve out. Additionally, the Debtor will make adequate protection payments based on fees and expenses of (x) the Bond Trustees and their respective professionals and (y) certain specified professionals representing the holders of the Junior Bonds, incurred in connection with the Bonds, including the Prepetition Expense Claim. About Northampton Generating Co. LP Northampton Generating Co. LP is the owner of a 112 megawatt electric generating plant in Northampton, Pennsylvania. The plant is fueled with waste products, including waste coal, fiber waste, and tires. The power is sold under a long-term agreement to an affiliate of FirstEnergy Corp. Northampton Generating filed for Chapter 11 bankruptcy (Bankr. W.D.N.C. Case No. 11-33095) on Dec. 5, 2011. Attorneys at Moore & Van Allen PLLC serve as counsel to the Debtors. Houlihan Lokey Capital, Inc., is the financial advisor. The Debtor estimated assets and debts of up to $500 million. Debt includes $73.4 million owing on senior bonds issued through the Pennsylvania Economic Development Financing Authority. The U.S. Trustee was unable to appoint a committee because no one was willing to serve. O&G LEASING: Hearing on Assets Sale Rescheduled Until Feb. 23 ------------------------------------------------------------- The Hon. Edward Ellington of the U.S. Bankruptcy Court for the Southern District of Mississippi authorized O&G Leasing, LLC, to to amend the agreed order granting amended motion of First Security Bank, as indenture trustee, to amend timeline of sales procedures order after the entry of the agreed order. The Court, in its order, said that it recognized that because of the President's Day holiday on Feb. 20, 2012, the Court's regular, Chapter 13 hearing day will be on Feb. 22, instead of Feb. 20. Accordingly, the date of the hearing on any objection for the determination of the lead bid or the secondary bid as set forth in the amended sales procedures will be moved from Feb. 22, to Feb. 23, at 9:30 a.m. (central time). The Court noted that the agreed order and the amended sales procedures are amended in that respect only; in all other respects, the agreed order remains effective. 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 O&G LEASING: Secured Creditor Hopes to Get Lift Stay Tomorrow ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Mississippi has rescheduled until Jan. 24, 2012, at 1:30 p.m., the hearing to consider Washington State Bank's request for lift the automatic stay against O&G Leasing, LLC. WSB has filed a Notice of Default of agreed order dated Nov. 9, 2011, resolving WSB's motion for abandonment and request for termination of Section 362 automatic stay or, in the alternative, motion for adequate protection and resolving use of cash collateral and other pending matters. WSB noted that the Debtor has submitted insufficient funds. For September 2011, the Debtor paid WSB $100,592 instead of the correct amount of $107,277 (a difference of $6,685) and for October 2011, the Debtor paid WSB $51,447 instead of the correct amount of $55,028 (a difference of $3,581). WSB has not deposited the payments for September and October because WSB does not want the Debtor to assert that WSB accepted the payments and thereby confirmed the payments as being accurate and complete. Thus, the Debtor is delinquent for the months of September and October, 2011 in the amount of $10,266. The order provided that if the default is not cured within 30 days from the date of the notice, the collateral of WSB will be abandoned from the bankruptcy estate and the Section 362 automatic stay will be terminated without further order of the Court to allow WSB to foreclosure or repossess its collateral. On Jan. 10, 2012, WSB entered into a stipulation with the Debtor preserving status quo of WSB's Notice of Default of agreed order and Debtors' objection thereto. 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. OPEN RANGE: Creditors Press to Get Docs From Fed Agencies --------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that the unsecured creditors committee for Open Range Communications Inc. asked a Delaware bankruptcy judge on Tuesday to force various federal agencies to hand over documents, as the committee gears up to sue the government on the rural Internet provider?s behalf. As reported in the Troubled Company Reporter on Jan. 17, 2012, Bankruptcy Law360 said unsecured creditors in Open Range's case won a hotly contested motion to extend the time in which they can investigate and sue federal agencies on the Internet provider's behalf, a move the government had called unnecessary and burdensome. Law360 related that U.S. Bankruptcy Judge Kevin Carey said the committee could have until Feb. 16 to gather information and bring claims against the U.S. Department of Agriculture, the Rural Utilities Service, the Federal Communications Commission and other government agencies. About Open Range Greenwood Village, Colo.-based Open Range Communications Inc., a provider of wireless broadband services to 26,000 rural customers in 12 states, filed a Chapter 11 petition (Bankr. D. Del. Case No. 11-13188) on Oct. 6, 2011, to either sell the business or shut down and liquidate. Open Range listed about $115.1 million in assets and $102.8 million in debts. Open Range started its WiMax broadband and voice service in late 2009, backed by a $267 million loan from the U.S. Department of Agriculture's Rural Utility Service and $100 million invested by One Equity Partners, a financing arm of JPMorgan Chase & Co. Judge Kevin J. Carey presides over the case. Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman & Leonard, serves as bankruptcy counsel. Logan & Co. serves as claims agent. FTI Consulting, Inc., will provide a chief restructuring officer, Michael E. Katzenstein; an associate chief restructuring officer, Chris Lewand; and hourly temporary staff. The petition was signed by Chris Edwards, chief financial officer. On filing for Chapter 11 protection, Open Range said it would shut down and liquidate the network if a buyer couldn't be found. Roberta A. DeAngelis, the United States Trustee for Region 3, pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Open Range Communications Inc. In December 2011, Ann Schrader at the Denver Post reported that Open Range has shut down operations after failing to get the broadcast spectrum it needed, problems with network quality and vendors, and the "sporadic" flow of money from a $267 million federal loan, of which Open Range owes a balance of $73.5 million. Open Range hired RB Capital LLC and Heritage Global Partners Inc. as auctioneers and sales agents to conduct an auction of the Debtor's assets. OPPENHEIMER PARTNERS: Access to MidFirst Cash Collateral Tomorrow ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona has granted Oppenheimer Partners Properties, LLP, permission to use MidFirst Bank's cash collateral until Jan. 25, 2012, the date scheduled for the Final Hearing on the Cash Collateral motion. As of the Petition Date, MidFirst is owed under the Loan Docuemtns the principal amount of $12,400,000, plus accrued and accruing interest, costs, and attorneys fees, and other amounts, secured by a lien on the Debtor's residential apartment complex located at 1502 East Osborn Road, in Phoenix, Arizona, and and the cash collateral it generates. Oppenheimer is authorized to use collateral (i) to pay ordinary, necessary and actual operating expenses for the purposes and up to the Cumulative Monthly Amounts set forth in a budget, (ii) to pay any other expenses approved by the prior written consent of MidFirst, in its sole discretion, and (iii) one-third (1/3) of the current management fee. Oppenheimer may use Cash Collateral to pay up to 105% of the amount for a month in any line item category. Oppenheimer is not authorized to and will not without the express written consent of MidFirst, pay any of the following: (i) any salary, management fees, personal expenses (including permits, fees and bonds related to Debtor's General Contracting License), reimbursement (including meals, vehicle expense and health care), or other forms of remuneration to Karl D. Haytcher, Eric M. Hamburger or any insiders of the Debtor; (ii) capital improvements; and (iii) the fees and costs of professionals employed by the Debtor. As adequate protection, MidFirst is granted a Replacement Lien in all of Oppenheimer's now owned or after acquired personal property. The Replacement Lien does not encumber any avoidance actions pursuant to 11 U.S.C. Sections 544, 545, 547, 548, and 553(b) and any proceeds therefrom. To the extent that MidFirst's interest in the Cash Collateral is not adequately protected by the terms of this Order, MidFirst will also have an allowed superpriority administrative expense claim pursuant to 11 U.S.C. Section 507(b). Oppenheimer will pay to MidFirst from cash collateral a monthly payment beginning with payment of $26,910, which will be paid to MidFirst within two (2) business days of the date of the entry of this Order. Thereafter, Oppenheimer will pay to MidFirst from Cash Collateral, the regular monthly payment due under the Loan Documents. Counsel for MidFirst Bank may be reached at: Alan A. Meda, Esq. STINSON MORRISON HECKER LLP 1850 N. Central Avenue, Suite 2100 Phoenix, AZ 85004-4584 Tel: (602) 279-1600 Fax: (602) 240-6925 E-mail: ameda@stinson.com A copy of the interim cash collateral order is available for free at http://bankrupt.com/misc/oppenheimerpartners.doc29.pdf Oppenheimer Partners Properties, LLP, is an Arizona limited liability company engaged in the ownership and operation of a residential apartment complex consisting of 184 residential apartment units in Phoenix, Arizona. The Company filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 11-33139) on Dec. 2, 2011. Judge Sarah Sharer Curley presides over the case. Robert C. Warnicke, Esq., at Gordon Silver, in Phoenix, Ariz., serves as Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Eric Hamburger, managing partner. OPTIMUMBANK HOLDINGS: Fails to Comply with Nasdaq Directors Rule ---------------------------------------------------------------- OptimumBank Holdings, Inc., received a written notice from the Listing Qualifications Staff of The Nasdaq Stock Market notifying the Company that it fails to comply with the independent director requirement set forth in Nasdaq's Listing Rule 5605(b)(1) due to the resignation of Larry Willis from the Company's board of directors on Jan. 1, 2012. The Rule requires the board of directors to have a majority of members who are independent. As a result of Mr. Willis' resignation, the Company has only three independent directors on its six member board. In accordance with Listing Rule 5605(b)(1)(A), the Company will be provided a cure period in order to regain compliance with the Rule as follows: (a) the earlier of the Company's next annual shareholders' meeting or Jan. 1, 2013; or (b) if the next annual shareholders' meeting is held before June 29, 2012, no later than June 29, 2012. The Company must submit to the Staff documentation, including biographies of any new directors, evidencing compliance with the Rule no later than the above deadline. If the Company cannot demonstrate compliance with the Rule by the above deadline, the Staff will provide written notice that the Company's common stock will be delisted. At that time, the Company may appeal the Staff's determination to delist its common stock to a Listing Qualifications panel. The Company is actively seeking a qualified independent director to fill the vacancy on its board of directors. About OptimumBank Holdings Fort Lauderdale, Fla.-based OptimumBank Holdings, Inc. is a is a one-bank holding company and owns 100% of OptimumBank, a state (Florida)-chartered commercial bank. The Bank offers a variety of community banking services to individual and corporate customers through its three banking offices located in Broward County, Florida. The Bank's wholly-owned subsidiaries are OB Real Estate Management, LLC, OB Real Estate Holdings, LLC, OB Real Estate Holdings 1503, LLC, and OB Real Estate Holdings 1695, LLC, all of which were formed in 2009. OB Real Estate Management, LLC, is primarily engaged in managing foreclosed real estate. OB Real Estate Holdings, LLC, OB Real Estate Holdings 1503, LLC, and OB Real Estate Holdings 1695, LLC, hold and dispose of foreclosed real estate. OptimumBank is currently operating under a Consent Order issued by the Federal Deposit Insurance Corporation ("FDIC") and the State of Florida Office of Financial ("OFR"), effective as of April 16, 2010. As of Sept. 30, 2010, the Bank was considered "undercapitalized" under these FDIC requirements. As an "undercapitalized" institution, the Bank is subject to restrictions on capital distributions, payment of management fees, asset growth and the acceptance, renewal or rollover of brokered and high-rate deposits. In addition, the Bank must obtain prior approval of the FDIC prior to acquiring any interest in any company or insured depository institution, establishing or acquiring any additional branch office, or engaging in any new line of business. "The Bank [OptimumBank] has experienced recent and continuing increases in nonperforming assets, declining net interest margin, increases in provisions for loan losses, continuing high levels of noninterest expenses related to the credit problems, and eroding regulatory capital which raise substantial doubt about the Bank's ability to continue as a going concern," the Company said in its Form 10-Q for the quarter ended Sept. 30, 2010. The Company's continuing high levels of nonperforming assets, declining net interest margin, continuing high levels of noninterest expenses related to the credit problems, and eroding regulatory capital raise substantial doubt about the Company's ability to continue as a going concern. Moreover, as reported by the TCR on April 20, 2011, Hacker, Johnson & Smith PA, in Fort Lauderdale, Florida, noted that the Company's operating and capital requirements, along with recurring losses raise substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $8.45 million on $8.78 million of total interest income for the year ended Dec. 31, 2010, compared with a net loss of $11.48 million on $14.00 million of total interest income during the prior year. The Company also reported a net loss of $3.69 million on $5.06 million of total interest income for the nine months ended Sept. 30, 2011, compared with a net loss of $6.77 million on $6.94 million of total interest income for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $167.12 million in total assets, $168.83 million in total liabilities and a $1.71 million total stockholders' deficit. OPTIONS MEDIA: Holders Convert Pref. Shares to 8MM Common Shares ---------------------------------------------------------------- Three persons who held shares of Options Media Group Holdings, Inc.'s Series A Preferred Stock converted those shares into an aggregate of 8.5 million shares of the Company's Common Stock during the period from Jan. 11, 2012, to Jan. 13, 2011. Pursuant to agreements between such stockholders and the Company the conversions were effected at a rate of $.01 per share of Common Stock rather than the conversion rate of $.03 per share provided in the terms of the Series A preferred Stock. The shares of Common Stock were issued pursuant an exemption from the registration requirements of the Securities Act contained in Section 3(a)(9) of the Securities Act for securities exchanged with existing securities exclusively where no commission or other remuneration is paid or give directly or indirectly for soliciting that exchange. About Options Media Boca Raton, Fla.-based Options Media Group Holdings, Inc., had historically been an Internet marketing company providing e-mail services to corporate customers. Additionally, Options Media has a lead generation business and disposed of its SMS text messaging delivery business. In 2010, Options Media transitioned by changing its focus to smart phones and acquiring a robust anti- texting program that prohibits people in vehicles from texting, e- mailing, and reading such communications while moving. As part of its focus on mobile software applications, Options Media has also broadened its suite of products by continuing to improve the features of its Drive Safe(TM) anti-texting software. In conjunction with this change of focus, in February 2011, Options Media sold its e-mail and SMS businesses. Options Media retains its lead generation business. The Company also reported a net loss of $11.93 million on $525,103 of net revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $5.79 million on $633,208 of net revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $3.37 million in total assets, $5.76 million in total liabilities, and a $2.39 million total stockholders' deficit. As reported in the TCR on May 31, 2011, Salberg & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about Options Media Group Holdings' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has a net loss of $9.86 million, and net cash used in operations of $2.02 million for the year ended Dec. 31, 2010, and a working capital deficit and an accumulated deficit of $524,157, and $22.74 million respectively at Dec. 31, 2010. The independent auditors noted that the Company has also discontinued certain operations. PATHEON INC: S&P Affirms 'B+' Corporate Rating; Outlook Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Research Triangle Park, N.C.-based Patheon Inc. We revised the outlook to negative from stable. The 'BB' issue-level rating and '1' recovery rating on Patheon's asset-backed loan (ABL) and the 'B+' issue-level rating and '4' recovery rating on Patheon's senior notes are unaffected by the outlook change. "We expect that EBITDA will decline in 2012 because of planned restructuring spending during the first nine months of the year," said Standard & Poor's credit analyst Shannan Murphy. "While we believe that the restructuring could lead to higher margins and more consistent positive cash flow generation over time, we view 2012 as a transformational year and expect that meaningful margin improvement, and stronger cash flows, will not be seen until 2013." "We could revise the outlook to stable if we see evidence of sustainable margin improvement as a result of the current transformation plan that allows the company to improve margins and generate consistent positive free operating cash flow. Alternatively, we could downgrade the company if the transformation plan is unsuccessful and the company is unable to improve margins and cash flow," S&P said. PETROBAKKEN ENERGY: Moody's Rates $750-Mil. Notes at 'Caa1' ----------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to PetroBakken Energy Ltd.'s (PetroBakken) proposed US$750 million senior unsecured notes issue. Moody's also assigned PetroBakken a B2 Corporate Family Rating (CFR) and Probability of Default Rating (PDR), as well as an SGL-3 Speculative Grade Liquidity rating. The rating outlook is stable. This is the first time that Moody's has rated PetroBakken. "The B2 CFR primarily reflects Petrobakken's high level of debt and very high finding and development costs, offset by the high percentage of light oil in its reserves with consequent strong cash margins and reasonable cash flow leverage," said Terry Marshall, Moody's Senior Vice President. "In addition, PetroBakken has a short reserve life, and has principal production in two fields, the southeast Saskatchewan Bakken and the Cardium." RATINGS RATIONALE PetroBakken's liquidity is adequate. Upon closing of the notes in the first quarter of 2012 Moody's expects that PetroBakken will have minimal cash and C$600 million available under its C$1.5 billion senior secured revolving credit facility due June 2014. In 2012, Moody's expects that PetroBakken will generate negative free cash flow of about C$140 million, which will likely be funded with assets sales and drawings under the revolver. The convertible bonds due in 2016 have an investor put in February 2013. If the put is exercised, as expected by Moody's, remaining revolver availability would drop to about C$160 million without asset sales. PetroBakken is expected to comply with its financial covenants through the first quarter of 2013. Alternate liquidity is limited given that substantially all of the company's assets are pledged under the revolver, but Moody's believes the company may sell some assets to reduce the funding required if the convertible bond put is exercised in 2013. The senior unsecured notes are rated two notches below the B2 CFR due to the large amount of prior ranking debt in the capital structure in the form of the secured revolver. While the senior unsecured notes benefit from the cushion of lower ranking convertible bonds, Moody's assumes that the convertible bonds will be re-financed by their February 2013 put date on a either a secured or unsecured basis and no longer benefit from the cushion provided by the convertible bonds. The stable outlook reflects PetroBakkens' production base of about 40,000 barrels of oil equivalent per day of light oil and our view that oil prices will remain at levels that continue to support the generation of strong cash margins. The rating could be raised if PetroBakken sustainably improves its leveraged full-cycle ratio (LFCR) to about 1.5x and reduces its ratio of E&P debt to PD reserves to less than $15/ boe. The improvement in LFCR is likely to come from the lowering of drilling costs with the expansion of bi-lateral wells, and perhaps more reserve adds as decline curves tied to horizontal drilling become more established in both the Saskatchewan Bakken and the Cardium. The lowering of the E&P debt to PD metric would be dependent on higher reserves adds and outright debt reduction. The rating could be lowered if the LFCR appears likely to decline and remain below 1.0x, or if production is not sustainable above 40,000 barrels of oil equivalent (boe)/day net of reserves (50,000 boe/day gross). The rating could also be lowered if PetroBakken's liquidity appears at any time to be insufficient to fund the convertible put and other cash funding requirements. The principal methodology used in rating PetroBakken was the Independent Exploration and Production (E&P) Industry Methodology published in December 2008. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. PetroBakken is a Calgary, Alberta based exploration and production company with about 40,000 barrels of oil equivalent (boe) of production and proved developed and total proved reserves of 64 million and 90 million boe, respectively. Assignments: Issuer: PetroBakken Energy -- Probability of Default Rating, Assigned B2 -- Speculative Grade Liquidity Rating, Assigned SGL-3 -- Corporate Family Rating, Assigned B2 -- Senior Unsecured Regular Bond/Debenture, Assigned a range of 84 - LGD5 to Caa1 PETROBAKKEN ENERGY: S&P Assigns 'B' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' long-term corporate credit rating to Calgary, Alta.-based PetroBakken Energy Ltd. The outlook is stable. At the same time, Standard & Poor's assigned its 'CCC+' issue-level rating and '6' recovery rating to the company's proposed $750 million senior unsecured notes due 2020. The '6' recovery rating indicates our expectation of negligible (0%-10%) recovery in the event of a default. PetroBakken management plans to use proceeds to redeem $450 million of its 3.125% convertible notes and pay down borrowings under its C$1.35 billion secured credit facility," S&P said. "The ratings on PetroBakken reflect what we view as the company's less-than-adequate liquidity, high fixed cash charges; management's aggressive financial policy; and high finding, development, and acquisition costs," said Standard & Poor's credit analyst Aniki Saha-Yannopoulos. "In addition, we base the ratings on the company's operations in a highly cyclical, capital- intensive, and competitive industry," Ms. Saha-Yannopoulos added. "The ratings also reflect PetroBakken's large exposure to light oil and natural gas liquids, growth prospects, and undeveloped acreage. As of Sept. 30, 2011, pro forma for the notes offering, the company will have about C$2.2 billion in adjusted debt, which includes convertible debentures and asset-retirement obligations," S&P said. PetroBakken is a midsized exploration and production company that operates mostly in Western Canada. Most of the company's reserves and production are from the Bakken and Cardium resource plays. PetroBakken started operating as a public entity in mid-2009, when it acquired substantial Bakken assets through acquisitions and contributions of legacy assets from PetroBank Energy and Resources Ltd. It established its Cardium assets through acquisitions in early 2010. A combination of acquisitions, aggressive capital expenditure, and delays in bringing production online (in part due to weather) has led the company to outspend cash flow in the past few quarters. At the same time, cash interest and dividend payments have reduced PetroBakken's liquidity to C$220 million as of Sept. 30. We expect the company to have ended 2011 with less than C$200 million in availability under its bank facility. To manage its liquidity situation, Petrobakken plans to spend C$700 million for its 2012 capital expenditure program (compared with about C$950 million for 2011) and initiated a dividend reinvestment program in December 2011. "The stable outlook reflects Standard & Poor's expectation that pro forma for the notes offering, PetroBakken will continue focusing on organic, drill-bit-related reserves and production growth, which we expect will improve its full-cycle economics. We expect the company will not generate any cash flow after funding its capital expenditures and dividends through 2013. The outlook also incorporates our view that the remaining convertible notes outstanding will be settled in cash in February 2013. We could consider a positive rating action in mid-2013 if the company executes as planned while improving its balance sheet and liquidity. A negative rating action could occur if PetroBakken's liquidity falls below C$150 million, it cannot achieve internal reserves and production growth, or its debt to EBITDAX increases above 4.5x due to operational setbacks or shareholder-friendly actions," S&P said. PHARMACEUTICAL PRODUCT: S&P Assigns 'B+' Corporate Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Wilmington, N.C.-based contract research organization (CRO) Pharmaceutical Product Development Inc. (PPD). The outlook is stable. "At the same time, we assigned our 'BB-' issue-level rating and '2' recovery rating on PPD's $1.625 billion senior secured credit facilities and assigned our 'B' issue-level rating and '5' recovery rating to PPD's $575 million issue of senior notes. The senior secured credit facility consists of a $175 million revolving credit facility due 2016 and a $1.45 billion term loan B due 2018. The senior credit facility also has an incremental facility that provides the company with the ability to upsize the term loan by the greater of $200 million and an amount capped at 3.25x gross senior secured leverage," S&P said. "Our speculative-grade ratings on PPD primarily reflect the company's 'highly leveraged' financial risk profile (as defined in our criteria) following the planned leveraged buyout (LBO) by Hellman & Friedman and the Carlyle Group for $4 billion (including fees). The LBO will result in pro forma adjusted leverage of more than 6x and funds from operations (FFO) to total debt of about 10%," S&P said. "PPD's leading market position in the late-stage clinical segment of the CRO market, its substantial revenue visibility, and our favorable view of the CRO industry's medium-term growth prospects support our belief that PPD has a 'fair' business risk profile (as defined in our criteria)," said Standard & Poor's credit analyst Shannan Murphy. "It also supports our expectation that PPD will generate low- to mid-single-digit revenue and EBITDA growth over the near term." "Our stable rating outlook on PPD reflects our expectations of modest revenue and EBITDA growth in the near term that continues to result in free cash flow generation. This results from its position as a top three player in the rebounding late-stage CRO business. We do not expect a meaningful change in the company's credit profile over the next few years," S&P said. "An upgrade over the next 12 months is unlikely given pro forma high leverage and our expectation that an aggressive financial policy that prioritizes business development and returning capital to shareholders ahead of debt repayment will sustain leverage at more than 5x over the near term. Ample room under a generous financial covenant test and availability under its incremental facility further support this expectation of minimal debt repayment," S&P said. "We could lower the rating, though, if a significant operational misstep damaged PPD's reputation, resulting in contract losses and a diminished ability to effectively compete for new work. If this were to be sustained, we could revise our assessment of the business risk profile to 'weak' from fair. We could also lower the rating in the unlikely event that significant contract cancellations result in EBITDA declines that push leverage above 6x for a sustained period," S&P said. PILGRIM'S PRIDE: Appeals Ruling on $26MM Price Manipulation Fine ---------------------------------------------------------------- Evan Weinberger at Bankruptcy Law360 reports that Pilgrim's Pride Corp. on Thursday appealed a September ruling that it must pay nearly $26 million for violating antitrust law when it suspended operations at an Arkansas plant during the company?s bankruptcy, artificially raising chicken prices while avoiding payments to farmers. The company filed a notice of appeal asking the Fifth Circuit to review a December order denying its request for a retrial, Law360 says. About Pilgrim's Pride Pilgrim's Pride Corporation -- http://www.pilgrimspride.com/-- is one of the largest chicken companies in the United States, Mexico and Puerto Rico. The Company's fresh chicken retail line is sold throughout the US, throughout Puerto Rico, and in the northern and central regions of Mexico. The Company exports commodity chicken products to 90 countries. The Company operates feed mills, hatcheries, processing plants and distribution centers in 15 U.S. states, Puerto Rico and Mexico. Pilgrim's Pride and six of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 08-45664) on Dec. 1, 2008. The Company's subsidiaries in Mexico and certain subsidiaries in the United States were not included in the filing and operated outside of the Chapter 11 process. Attorneys at Weil, Gotshal & Manges LLP served as bankruptcy counsel. Lazard Freres & Co., LLC, was the Company's investment bankers. Kurtzman Carson Consulting LLC served as claims and notice agent. Kelly Hart and Brown Rudnick represented the official equity committee. Attorneys at Andrews Kurth LLP represented the official committee of unsecured creditors. On Dec. 10, 2009, the Bankruptcy Court confirmed the Joint Plan of Reorganization filed by the Debtors. The Plan was premised on the sale of the business to JBS SA. Under the Plan, creditors are paid in full. Existing owners retained 34% of the equity. The Company emerged from its Chapter 11 bankruptcy proceedings on Dec. 28, 2009. * * * According to the Troubled Company Reporter on July 5, 2011, Moody's Investors Service downgraded Pilgrim's Pride's Corporate Family and Probability of Default ratings to B2 from B1 and senior unsecured note rating to Caa1 from B3 given the lack of improvement in chicken prices and its consequent impact on Pilgrim's Pride's financial performance, including expectations for modest EBITDA at best for 2011. Moody's concern is somewhat mitigated by the covenant relief provided by Pilgrim's lenders and the cash advance of $50 million from JBS USA (a PIK subordinated loan provided by a sister company). The SGL-3 speculative grade liquidity rating was affirmed. The outlook is stable. PLACID OIL: Bankruptcy Court Revisits Ruling in Tort Case --------------------------------------------------------- Bankruptcy Judge Stacey Jernigan ruled on cross motions for summary judgment, responses, and supporting documentary evidence in the adversary proceeding, PLACID OIL COMPANY, Plaintiff, v. JIMMY WILLIAMS, SR., JIMMY WILLIAMS, JR., DALTON GLEN WILLIAMS, JEANETTE WILLIAMS SHOWS, & GWENDOLYN WILLIAMS PEACOCK, Individually and on behalf of the deceased, MYRA WILLIAMS, Defendants, Adv. Proc. No. 09-03356 (Bankr. N.D. Tex.). Placid Oil was in a Chapter 11 bankruptcy case in the mid-1980s. Placid filed the Adversary Proceeding, approximately two decades after confirmation of a Chapter 11 plan and closure of its bankruptcy case, to determine whether certain tort claims that have been asserted in a Louisiana state court, post-confirmation, by Jimmy Williams, Sr., Jimmy Williams, Jr., Dalton Glen Williams, Jeanette Williams Shows, and Gwendolyn Williams Peacock, individually and on behalf of the deceased, Myra Williams, were discharged by the Confirmation Order in Placid's chapter 11 case. On March 21, 2011, the Adversary Proceeding seemed to be concluded, when the Bankruptcy Court entered a Memorandum Opinion and Order: (1) Granting Motion for Summary Judgment of Reorganized Debtor Placid Oil Company; and (2) Denying Motion for Summary Judgment of Post-Confirmation Tort Claimants. On June 8, 2011, Placid filed a Motion to Reopen Summary Judgment Record and to Alter or Amend Memorandum Opinion due to certain late-discovered errors that were contained in an "Agreement of Counsel Regarding Assumed Facts for Adversary Proceeding 09-3356" and submitted to the Bankruptcy Court as part of the original summary judgment record. The late-discovered errors had to do with the number of post-confirmation, asbestos-related claims that have been brought over the last several decades against Placid. On July 27, 2011, the Court entered its Order Reopening Summary Judgment Record and Setting Filing Deadlines. The Order Reopening Record allowed for the filing of a "Revised Agreement of Counsel Regarding Assumed Facts for Adversary Proceeding 09-3356" as well as additional briefing by both Placid and the Williams Defendants, but only as to issues raised by the changes to the assumed facts. After considering the Revised Agreement filed on Aug. 18, 2011, as well as the additional briefing, the Bankruptcy Court has concluded that the revised facts do not impact the ultimate ruling contained in the Original Opinion, but, that certain revisions to the Original Opinion are, nonetheless, necessary. Accordingly, Judge Jernigan granted Placid's Motion for Summary Judgment and denied the Post-Confirmation Tort Claimants' Motion for Summary Judgment. A copy of the Court's Jan. 18, 2012 Revised Memorandum Opinion is available at http://is.gd/FGzjDPfrom Leagle.com. Placid Oil Company sought chapter 11 protection (Bankr. N.D. Tex. Case No. 86-33419) on Aug. 29, 1986, owing secured creditors more than $770 million, unsecured creditors more than $50 million, and taxing authorities more than $543 million. The Honorable Harold C. Abramson confirmed Placid's plan of reorganization on Sept. 30, 1988, and Placid emerged from bankruptcy in mid-1988. QUANTUM FUEL: Changes Fiscal Year-End to Dec. 31 ------------------------------------------------ Quantum Fuel Systems Technologies Worldwide, Inc.'s Board of Directors approved a change in the Company's fiscal year-end from April 30 to December 31. The change is effective as of Dec. 31, 2011. The Company will file a Form 10-K covering the eight month period beginning May 1, 2011, and ending Dec. 31, 2011. The Company's next fiscal year will cover the period from Jan. 1, 2012, through Dec. 31, 2012. About Quantum Fuel Based in Irvine, California, Quantum Fuel Systems Technologies Worldwide, Inc., is a fully integrated alternative energy company and considers itself a leader in the development and production of advanced clean propulsion systems and renewable energy generation systems and services. Quantum Fuel and its senior lender, WB QT, LLC, entered into a Ninth Amendment to Credit Agreement and a Forbearance Agreement on Jan. 3, 2011. The Senior Lender agreed to provide the Company with a $5.0 million non-revolving line of credit, which may be drawn upon at any time prior to April 30, 2011. Advances under the New Line of Credit do not bear interest -- unless an event of default occurs, in which case the interest rate would be 10% per annum -- and mature on April 30, 2011. The Senior Lender also agreed to forbear from accelerating the maturity date for any portion of the Senior Debt Amount and from exercising any of its rights and remedies with respect to the Senior Debt Amount until April 30, 2011. The Company reported a net loss attributable to stockholders of $11.03 million on $20.27 million of total revenue for the year ended Apri1 30, 2011, compared with a net loss attributable to stockholders of $46.29 million on $9.60 million of total revenue during the prior year. The Company reported a net loss attributable to stockholders of $16.26 million on $19.77 million of total revenue for the six months ended Oct. 31, 2011, compared with a net loss attributable to stockholders of $3.06 million on $7.44 million of total revenue for the same period a year ago. The Company's balance sheet at July 31, 2011, showed $74.15 million in total assets, $31.62 million in total liabilities, and $42.53 million total stockholders' equity. Ernst & Young LLP, in Orange County, California, noted that Quantum Fuel's recurring losses and negative cash flows combined with the Company's existing sources of liquidity and other conditions raise substantial doubt about the Company's ability to continue as a going concern. Possible Bankruptcy The Company anticipates that it will need to raise a significant amount of debt or equity capital in the near future in order to repay certain obligations owed to the Company's senior secured lender when they mature. As of June 15, 2011, the total amount owing to the Company's senior secured lender was approximately $15.5 million, which includes approximately $12.5 million of principal and interest due under three convertible promissory notes that are scheduled to mature on Aug. 31, 2011, and a $3.0 million term note that is potentially payable in cash upon demand beginning on Aug. 1, 2011, if the Company's stock is below $10.00 at the time demand for payment is made. If the Company is unable to raise sufficient capital to repay these obligations at maturity and the Company is otherwise unable to extend the maturity dates or refinance these obligations, the Company would be in default. The Company said it cannot provide any assurances that it will be able to raise the necessary amount of capital to repay these obligations or that it will be able to extend the maturity dates or otherwise refinance these obligations. Upon a default, the Company's senior secured lender would have the right to exercise its rights and remedies to collect, which would include foreclosing on the Company's assets. Accordingly, a default would have a material adverse effect on the Company's business and, if the Company's senior secured lender exercises its rights and remedies, the Company would likely be forced to seek bankruptcy protection. QUANTUM FUEL: Grants Underwriters Option to Buy 1.5-Mil. Units -------------------------------------------------------------- Pursuant to the underwriting agreement entered into on Dec. 15, 2011, among Quantum Fuel Systems Technologies Worldwide, Inc., and Merriman Capital, Inc., and J.P. Turner & Company, L.L.C., the Company granted the Underwriters a 30-day option to purchase up to 1,509,062 units, with each Unit consisting of one share of common stock, $0.02 par value per share, and one warrant to purchase 0.6 of a share of common stock, to cover overallotments further to the offering of 10,526,315 Units that closed on Dec. 21, 2011. On Jan. 13, 2012, the Underwriters exercised their Over-Allotment Option with respect to 221,250 Units at a price to the public of $0.95 per Unit. The closing of the Over-Allotment Option occurred on Jan. 19, 2012, resulting in net proceeds to Quantum of approximately $193,793 after deducting underwriting discounts and commissions. Under the Underwriting Agreement, Quantum has sold a total of 10,747,565 Units to the Underwriters to date for aggregate net proceeds to Quantum of approximately $9.4 million, after deducting underwriting discounts and commissions. The Units were offered and sold pursuant to a prospectus dated Sept. 29, 2011, and a preliminary and final prospectus supplement dated Nov. 25, 2011, and Dec. 15, 2011, respectively, in connection with a takedown from the Company's effective shelf registration statement on Form S-3 declared effective by the U.S. Securities and Exchange Commission on Sept. 29, 2011. About Quantum Fuel Based in Irvine, California, Quantum Fuel Systems Technologies Worldwide, Inc., is a fully integrated alternative energy company and considers itself a leader in the development and production of advanced clean propulsion systems and renewable energy generation systems and services. Quantum Fuel and its senior lender, WB QT, LLC, entered into a Ninth Amendment to Credit Agreement and a Forbearance Agreement on Jan. 3, 2011. The Senior Lender agreed to provide the Company with a $5.0 million non-revolving line of credit, which may be drawn upon at any time prior to April 30, 2011. Advances under the New Line of Credit do not bear interest -- unless an event of default occurs, in which case the interest rate would be 10% per annum -- and mature on April 30, 2011. The Senior Lender also agreed to forbear from accelerating the maturity date for any portion of the Senior Debt Amount and from exercising any of its rights and remedies with respect to the Senior Debt Amount until April 30, 2011. The Company reported a net loss attributable to stockholders of $11.03 million on $20.27 million of total revenue for the year ended Apri1 30, 2011, compared with a net loss attributable to stockholders of $46.29 million on $9.60 million of total revenue during the prior year. The Company reported a net loss attributable to stockholders of $16.26 million on $19.77 million of total revenue for the six months ended Oct. 31, 2011, compared with a net loss attributable to stockholders of $3.06 million on $7.44 million of total revenue for the same period a year ago. The Company's balance sheet at July 31, 2011, showed $74.15 million in total assets, $31.62 million in total liabilities, and $42.53 million total stockholders' equity. Ernst & Young LLP, in Orange County, California, noted that Quantum Fuel's recurring losses and negative cash flows combined with the Company's existing sources of liquidity and other conditions raise substantial doubt about the Company's ability to continue as a going concern. Possible Bankruptcy The Company anticipates that it will need to raise a significant amount of debt or equity capital in the near future in order to repay certain obligations owed to the Company's senior secured lender when they mature. As of June 15, 2011, the total amount owing to the Company's senior secured lender was approximately $15.5 million, which includes approximately $12.5 million of principal and interest due under three convertible promissory notes that are scheduled to mature on Aug. 31, 2011, and a $3.0 million term note that is potentially payable in cash upon demand beginning on Aug. 1, 2011, if the Company's stock is below $10.00 at the time demand for payment is made. If the Company is unable to raise sufficient capital to repay these obligations at maturity and the Company is otherwise unable to extend the maturity dates or refinance these obligations, the Company would be in default. The Company said it cannot provide any assurances that it will be able to raise the necessary amount of capital to repay these obligations or that it will be able to extend the maturity dates or otherwise refinance these obligations. Upon a default, the Company's senior secured lender would have the right to exercise its rights and remedies to collect, which would include foreclosing on the Company's assets. Accordingly, a default would have a material adverse effect on the Company's business and, if the Company's senior secured lender exercises its rights and remedies, the Company would likely be forced to seek bankruptcy protection. R-G PREMIER: FDIC Sues 19 Execs for $417MM Over Collapse -------------------------------------------------------- Amanda Bransford at Bankruptcy Law360 reports that the Federal Deposit Insurance Corp. on Wednesday launched a $417 million suit against 19 former directors and officers of R-G Premier Bank of Puerto Rico for causing one of the largest bank failures in Puerto Rico's history. The complaint, filed in Puerto Rico federal court, accuses the directors and officers, including bank founder Victor J. Galan- Alvarez, of negligently overseeing the bank's expansion into commercial lending, ignoring repeated warnings by regulators and personally approving just about any loan request, no matter how unlikely the loan's eventual repayment, according to Law360. As reported in the Troubled Company Reporter on May 4, 2010, R-G Premier Bank of Puerto Rico in Hato Rey, P.R., was closed on April 30, 2010, by the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Scotiabank de Puerto Rico of San Juan, P.R., to assume all of the deposits of R-G Premier Bank of Puerto Rico. REAL MEX: Trustee Says Asset Sale Raises Privacy Concerns --------------------------------------------------------- Juan Carlos Rodriguez at Bankruptcy Law360 reports that Roberta A. DeAngelis, the U.S. Trustee for Delaware, New Jersey and Pennsylvania, said that a bankruptcy settlement proposed by Real Mex Restaurants Inc. doesn't do enough to protect consumers' private information. The U.S. Trustee objected to a proposed sale of Real Mex's assets and asked the Delaware bankruptcy judge overseeing the case to block it until her privacy concerns are addressed, according to Law360. 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. RECREATIONAL INDUSTRIES: Wants Continued Access to Cash Collateral ------------------------------------------------------------------ Recreational Industries, Inc., seeks Bankruptcy Court permission to continue using cash collateral from Jan. 16, 2012, through April 15, 2012. The Debtor's principal secured creditor, First United Bank and Trust, has a first lien on all of the Debtor's assets, including cash and accounts receivable, which constitute "cash collateral" as that term is defined in 11 U.S.C. Sec. 363(a). The Debtor said it needs continued access to Cash Collateral to fund necessary and essential day-to-day costs of operating the Wisp Resort. Pursuant to an amended consent order, the Debtor had obtained permission to use through and including Jan. 15, cash collateral securing its obligations to First United and Branch Banking & Trust. The Debtor owes First United roughly $12.7 million under several loan agreements. BB&T is owed roughly $30.2 million. The Debtor acknowledges that First United has a perfected first priority security interest and lien on the Debtor's cash collateral. BB&T asserts a security interest and lien in some portion of the Debtor's cash collateral. The Bankruptcy Court will hold a hearing on the request for continued use of cash collateral on Jan. 26. About Wisp Resort Recreational Industries Inc., D.C. Development LLC, Wisp Resort Development Inc., and The Clubs at Wisp LLC own and operate the Wisp Resort, a sky resort in the mountains of Garrett County, Maryland. The ski and golf resort is situated on 2,200 acres with two golf courses, 32 ski trails, and 12 ski lifts. The hotel has 102 suites and 67 guest rooms. Financial problems were caused by a guarantee given to Branch Banking & Trust Co. to secure a $29.6 million judgment the bank obtained on a real estate development within the property. Recreational Industries, D.C. Development, Wisp Resort Development and The Clubs at Wisp filed for Chapter 11 bankruptcy (Bankr. D. Md. Lead Case No. 11-30548) on Oct. 15, 2011. D.C. Development disclosed $91,155,814 in assets and $46,141,245 in liabilities as of the Chapter 111 filing. The Debtors engaged Logan, Yumkas, Vidmar & Sweeney LLC as counsel and tapped Invotex Group as financial restructuring consultant. The Official Committee of Unsecured Creditors has tapped Cole, Schotz, Meisel, Forman & Leonard, P.A. as counsel. RIVER EAST PLAZA: 7th Cir. Affirms Dismissal of Chapter 11 Case --------------------------------------------------------------- The U.S. Court of Appeals for the Seventh Circuit affirmed the Bankruptcy Court's dismissing the "single asset real estate" bankruptcy proceeding of River East Plaza, LLC. LNV Corporation, River East's principal creditor, successfully urged the dismissal of the case. The Seventh Circuit also vacated the stay it granted pending appeal. The Seventh Circuit held that with River East having compromised its credibility by submitting two plans that sought to circumvent bankruptcy statutes, and the 90-day deadline having expired long ago (the Chapter 11 petition was filed Feb. 10, 2011, and the third proposed plan on Aug. 23 -- 194 days later), and LNV having waited years to enforce its lien, the bankruptcy judge was not required to stretch out the Chapter 11 proceeding any longer. LNV is owed $38.3 million but River East's building is currently valued at only $13.5 million. Under the third proposed plan, LNV would retain its lien on the building, and $13.5 million in 30- year Treasury bonds would guarantee payment in full of LNV's mortgage over 30 years. A copy of the Seventh Circuit's Jan. 19 decision is available at http://is.gd/cITvRkfrom Leagle.com. Chicago, Illinois-based River East Plaza, LLC, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 11-05141) on Feb. 10, 2011 . Michael E. Gosman, Esq., at Whyte Hirschboeck Dudek S.C., serves as the Debtor's bankruptcy counsel. The Debtor disclosed $19,410,255 in assets and $45,268,651 in liabilities as of the Chapter 11 filing. Judge Eugene R. Wedoff dismissed the Chapter 11 case on Sept. 7, 2011. RIVER ISLAND: Gibraltar Fails to Get Dismissal of Ch. 11 Case ------------------------------------------------------------- Judge Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida has denied the motion of secured creditor Gibraltar Private Bank & Trust Company to dismiss the Chapter 11 case of River Island Farms Inc. However, Gibraltar is granted relief from the automatic stay to obtain foreclosure judgments and foreclosure sale dates in Gibraltar v. Corrie Development, et al., Case No. 11-5331, Broward County, Florida Circuit Court, with respect to the Debtor's Aqua Vista property at 2328 Aqua Vista Boulevard in Ft. Lauderdale, Fla., and the Debtor's 2001 SE St. Lucie property at 2001 SE St. Lucie Boulevard in Stuart, Fla. Judge Ray clarifies that Gibraltar is not granted stay relief to credit bid its foreclosure judgments at the foreclosure sales of the Aqua Vista and 2001 SE St. Lucie properties unless Gibraltar obtains further relief from the automatic stay to credit bid its judgments at one or both of the foreclosure sales of the Aqua Vista and 2001 SE St. Lucie properties. Further, if this Committee does not grant Gibraltar further relief from the automatic stay to credit bid its foreclosure judgments, Gibraltar will cancel the foreclosure sales. Dismissal to Foreclose As reported in the Troubled Company Reporter on Nov. 15, 2011, secured creditor Gibraltar Private Bank & Trust Company asked that the Court dismiss the Debtor's case for bad faith filing; and deny the confirmation of the Debtor's Plan of Reorganization. According to Gibraltar, the Debtor sought bankruptcy protection eight months ago to block foreclosure of its four unsold luxury homes with the hope that the market would rebound enough to allow the Debtor to sell its properties for prices that would enable its insiders to recover their working capital loans and other investments in the Debtor. Gibraltar notes that pursuant to the Plan: (i) Plan payments will come first, from Gibraltar's cash collateral, the Mercedes property sale proceeds and second, from the Debtor's stockholder on an "as needed" basis; (ii) the Plan does not explain who the Debtor believes is entitled to vote on the Plan, does not estimate the allowed amount of the secured claims, nor states the minimum amount of the Debtor's stockholder's "new value" contribution to enable him to retain his equity interests in the reorganized Debtor. About River Island Farms Fort Lauderdale, Florida-based River Island Farms, Inc., was initially formed as a single asset entity that acquired an 80% interest in 55 acres of developable property opposite Blackhawk in Danville, California. On June 30, 2004, the Company sold the 55 acre property to Shapell Industries. The sale was structured as an Internal Revenue Code Section 1031 exchange. Due to the requirements that River Island purchase property within a specified time period in order to take advantage of the IRS Code provision, River Island purchased property in Ft. Lauderdale and Stuart, Florida consisting of 2328 Aqua Vista Blvd., Ft. Lauderdale, Florida; 2521 Mercedes Drive, Ft. Lauderdale, Florida; 2001 SE St. Lucie Blvd., Stuart, Florida; and 1735 SE St. Lucie Blvd., Stuart, Florida. The Mercedes Drive residence was sold in June 2011. The other remaining properties are being actively marketed. The Company filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 11-15410) on Feb. 28, 2011. Martin L. Sandler, Esq., at Sandler & Sandler, in Miami, Fla., serves as the Debtor's bankruptcy counsel. The Debtor disclosed $23,974,222 in assets and $14,467,808 in liabilities as of the Chapter 11 filing. The bankruptcy case was commenced as a result of a pending foreclosure sale regarding one of the properties owned by the Debtor. RIVER ISLAND: Should Show Ability to Fund $1MM, Gibraltar Says -------------------------------------------------------------- Secured creditor Gibraltar Private Bank & Trust Company objects to the disclosure statement explaining the proposed plan filed by River Island Farms, Inc. Thomas R. Lehman, Esq., representing Gibraltar, notes that the Disclosure Statement and associated Plan are based entirely on Sidney Corrie's promise to fund the Debtor's $1,051,334 plan payments to creditors. According to Mr. Lehman, the Disclosure Statement fails to give any explanation about Corrie's ability to fund more than $1 million for the Debtor's creditors. The Debtor does not state that Corrie has sufficient cash in his accounts, loan commitments from financial institutions, or existing lines of credit to fund Plan payments. Moreover, the Disclosure Statement fails to explain how Gibraltar's claim, which would total $5,748,977 as of Dec. 5, 2011, if the Aqua Vista Property is sold and Gibraltar is paid $4.65 million as planned from the sale, could be fully satisfied based solely on a future sale of the 2001 property, which has a market value of $4.3 million. For these reasons, and because the Debtor manufactured an impaired class of unsecured creditors under the Plan, the Debtor's Plan is unconfirmable under the mandates set forth in 11 U.S.C. Section 1129. The Debtor should state in its Disclosure Statement that the foregoing deficiencies exist in the Plan. Mr. Lehman contends that the current Disclosure Statement does not allow creditors to make an informed decision concerning how to vote on the Plan. It does not contain any financial projections, any business reasons for Corrie to retain his equity in the Debtor in violation of the absolute priority rule, or sufficient details concerning the Debtor's plan to market the 2001 and 1735 properties. Consequently, Gibraltar urges the Court to deny approval of the Disclosure Statement. Gibraltar Private Bank & Trust Company is represented by: Thomas R. Lehman, Esq. Jennifar M. Hill, Esq. LEVINE KELLOGG LEHMAN SCHNEIDER + GROSSMAN LLP 201 South Biscayne Boulevard 34th Floor, Miami Center Miami, Florida 33131 Tel: (305) 403-8788 Fax: (305) 403-8789 E-mail: trl@LKLlaw.com jmh@LKLlaw.com About River Island Farms Fort Lauderdale, Florida-based River Island Farms, Inc., was initially formed as a single asset entity that acquired an 80% interest in 55 acres of developable property opposite Blackhawk in Danville, California. On June 30, 2004, the Company sold the 55 acre property to Shapell Industries. The sale was structured as an Internal Revenue Code Section 1031 exchange. Due to the requirements that River Island purchase property within a specified time period in order to take advantage of the IRS Code provision, River Island purchased property in Ft. Lauderdale and Stuart, Florida consisting of 2328 Aqua Vista Blvd., Ft. Lauderdale, Florida; 2521 Mercedes Drive, Ft. Lauderdale, Florida; 2001 SE St. Lucie Blvd., Stuart, Florida; and 1735 SE St. Lucie Blvd., Stuart, Florida. The Mercedes Drive residence was sold in June 2011. The other remaining properties are being actively marketed. The Company filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 11-15410) on Feb. 28, 2011. Martin L. Sandler, Esq., at Sandler & Sandler, in Miami, Fla., serves as the Debtor's bankruptcy counsel. The Debtor disclosed $23,974,222 in assets and $14,467,808 in liabilities as of the Chapter 11 filing. The bankruptcy case was commenced as a result of a pending foreclosure sale regarding one of the properties owned by the Debtor. RIVER ROCK: S&P Withdraws 'D' Issuer Credit Rating -------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings, including its 'D' issuer credit rating, on Sonoma Co., Calif.-based River Rock Entertainment Authority (RREA) at the request of the issuer. RREA was created to operate the River Rock Casino for the Dry Creek Rancheria Band of Pomo Indians. "On Nov. 2, 2011, we lowered our issuer credit rating on RREA, as well as our issue-level rating on RREA's existing $200 million senior notes, to 'D' from 'CCC'. The rating actions followed RREA's failure to repay the principal on its existing $200 million senior notes by the Nov. 1, 2011 maturity. On Dec. 21, 2011, RREA announced it had reached an agreement to exchange 98.20% of the total principal amount of the defaulted existing notes for $96,622,000 of new 9% series A senior notes due 2018, $93,302,000 of new 8% tax-exempt series B senior notes due 2018, and cash payments totaling nearly $19 million," S&P said. ROOMSTORE INC: Filing of Nov. 30 Form 10-Q Will be Delayed ---------------------------------------------------------- RoomStore, Inc., discloses that its Form 10-Q for the quarterly period ended Nov. 30, 2011, could not be filed within the prescribed time period without unreasonable effort and expense. The Company determined that it was necessary and prudent to delay the filing of the Form 10-Q to focus on providing the required information and making the necessary filings with the U.S. Bankruptcy Court for the Eastern District of Virginia and to focus on certain other business matters. Due to the competing demands on Company management as a result of the Chapter 11 filing, the Company cannot reasonably estimate the results of operations for the three months ended Nov. 30, 2011. For the same quarter ending Nov. 30, 2010, the Company reported a net loss of $7.2 million. The Company reported a net loss of $3.1 million on $70.7 million of sales for the three months ended Aug. 31, 2011, compared with net income of $111,000 on $92.0 million of sales for the three months ended Aug. 31, 2010. For the six months ended Aug. 31, 2011, the Company reported a net loss of $7.7 million on $138.0 million of sales, compared with a net loss of $2.5 million on $170.6 million of sales for the six months ended Aug. 31, 2010. The Company's balance sheet at Aug. 31, 2011, showed $70.4 million in total assets, $60.3 million in total liabilities, and stockholders' equity of $10.1 million. A copy of the Form 10-Q for the three months ended Aug. 31, 2011, is available for free at http://is.gd/dZeirx About RoomStore Inc. Richmond, Virginia-based RoomStore, Inc., operates a chain of 64 retail furniture stores, including both large-format stores and clearance centers in eight states: Pennsylvania, Maryland, Virginia, North Carolina, South Carolina, Florida, Alabama, and Texas. It also has five warehouses and distribution centers located in Maryland, North Carolina, and Texas that service the Retail Stores. The Company also offers its home furnishings through Furniture.com, a provider of internet-based sales opportunities for regional furniture retailers. The Company owns 65% of Mattress Discounters Group LLC, which operates 83 mattress stores (as of Aug. 31, 2011) in the states of Delaware, Maryland and Virginia and in the District of Columbia. RoomStore was founded in 1992 in Dallas, Texas, with four retail furniture stores. With more than $300 million in net sales for its fiscal year ending 2010, RoomStore is one of the 30 largest furniture retailers in the United States. RoomStore filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case No. 11-37790) on Dec. 12, 2011, following store-closing sales at four of its retail stores, located in Hoover, Alabama; Fayetteville, North Carolina; Tallahassee, Florida; and Baltimore, Maryland. Judge Douglas O. Tice, Jr., presides over the case. Lawyers at Lowenstein Sandler PC and Kaplan & Frank, PLC serve as the Debtor's bankruptcy counsel. The Company's balance sheet at Aug. 31, 2011, showed $70.4 million in total assets, $60.3 million in total liabilities, and stockholders' equity of $10.1 million. The petition was signed by Stephen Girodano, president and chief executive officer. Liquidator Hilco Merchant Resources, Inc., is represented in the case by Gregg M. Galardi, Esq., at DLA Piper LLP (US); and Robert S. Westermann, Esq., and Sheila de la Cruz, Esq., at Hirschler Fleischer, P.C. The U.S. Trustee for Region 4 named seven members to the official committee of unsecured creditors in the case. SAFETY-KLEEN SYSTEMS: S&P Affirms 'B+' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'B+' corporate credit rating, on Plano, Texas-based Safety- Kleen Systems Inc. and revised the outlook to stable from negative. "At the same time, we assigned the company's proposed $150 million first-lien revolving credit facility due 2017 and $250 million term loan due 2017 our issue ratings of 'BB-' (one notch higher than the 'B+' corporate credit rating) with recovery ratings of '2', indicating our expectation of a substantial (70% to 90%) recovery for lenders in the event of a payment default," S&P said. "The outlook revision reflects our view that Safety-Kleen's debt maturity profile will become more manageable following the completion of the refinancing transaction," said Standard & Poor's credit analyst James Siahaan. "It also reflects our expectation that continued economic recovery, strength in oil prices, and operating efficiencies will enable the company to continue to generate credit metrics that are appropriate for the rating." "The ratings on Safety-Kleen reflect our assessment of the company's financial risk profile as 'aggressive' (under our criteria) due to the company's equity being controlled by financial sponsors, which raises some uncertainty with respect to financial policies. While financial metrics are strong relative to our expectations for the financial risk profile, we believe the company may engage in a moderate amount of share repurchases. Safety-Kleen's equity sponsors could also raise additional debt to fund a dividend recapitalization within the next few years, although the company has not disclosed any specific plans in this regard," S&P said. "The ratings also reflect profitability metrics that, while improved, are still somewhat low and more variable than those of its sector peers. We consider the company somewhat vulnerable to fluctuations in industry demand and raw material costs; its leading positions in niche markets and its diversified customer base only partially mitigate these weaknesses," S&P said. "Safety-Kleen's EBITDA margins of about 13% as of Oct. 1, 2011, have increased from the 7% experienced two years ago due to increased oil collection revenues arising from higher oil prices and volumes. However, margins are still somewhat low compared with other environmental services companies. We believe Safety-Kleen will continue to boost profitability through cost savings and other measures such as continuing to improve sales of blended lubricants, as well as its customer focus initiative to reduce churn rates. We believe tax payments should not be significant over the next few years, since we expect the company to retain some of its operating loss carry-forwards since its emergence from Chapter 11," S&P related. "We characterize Safety-Kleen's financial risk profile as aggressive due to its ownership by equity sponsors, and we believe that the probability of increasing debt as a result of a dividend recapitalization or change of ownership is high. A large portion of the company's equity is owned by affiliates of Highland Capital Management L.P. (39%), Contrarian Capital Management LLC (19%), JPMorgan Chase & Co. (15%), and the GSC Group Inc. (9%). Safety- Kleen's capital structure is only moderately leveraged at present, with an adjusted total debt to EBITDA ratio of about 2.0x and an adjusted funds from operations (FFO) to debt ratio of 44% for the 12 months ended Oct. 1, 2011. Pro forma for the refinancing, we estimate that these numbers would be 2.2x and 40%, respectively. Standard & Poor's adjusts debt to capitalize operating lease commitments and to add tax-adjusted asset retirement and environmental obligations, which mostly consist of cleanup work the company must perform at historic sites over the next 30 years," S&P said. "The outlook is stable. Following the completion of its refinancing, Safety-Kleen will have a manageable debt maturity profile with no major maturities due until 2017. The ratings incorporate some cushion for potential debt incurrence via a future dividend recapitalization, although we could lower ratings if the company's financial risk profile is threatened to a greater degree than we expected. The consistency in the demand for Safety-Kleen's products and services, the increase in the proportion of less-cyclical blended products, good free cash generation, and adequate liquidity partially offset the pressures from uncertain financial policies and the cyclical nature of the company's operations. Our current ratings assume that environmental liabilities will not increase significantly and that any related cash outlays will remain manageable," S&P said. "We could lower the ratings if debt leverage increases to more than we expected, so that adjusted total debt to EBITDA approaches 5x," Mr. Siahaan continued. "This could occur if incremental debt were to near $475 million while EBITDA remained relatively constant. We could also lower the ratings if operating performance deteriorates or if increased capital investments cause the company's free cash flow generation to erode. While less likely, we could raise the ratings modestly if Safety-Kleen maintains its track record of improved earnings and profitability and demonstrates a commitment to keeping debt at manageable levels." SEALY CORP: Incurs $9.8 Million Net Loss in Fiscal 2011 ------------------------------------------------------- Sealy Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, reporting a net loss of $9.88 million on $1.23 billion of sales for the 12 months ended Nov. 27, 2011, compared with a net loss of $13.74 million on $1.21 billion of net sales during the prior year. The Company reported a net loss of $15.20 million on $269.25 million of net sales for the three months ended Nov. 27, 2011, compared with a net loss of $4.48 million on $296.55 million of net sales for the same period a year ago. The Company's balance sheet as of Nov. 27, 2011, showed $919.19 million in total assets, $999.75 million in total liabilities, and a $80.56 million stockholders' deficit. "We were disappointed with our performance in the fourth quarter and the full fiscal year 2011," stated Larry Rogers, Sealy's president and chief executive officer. "These results were not in line with the goals that we set forth in the beginning of 2011 and we are making operational changes to improve our future business results." A full-text copy of the Form 10-K is available at: http://is.gd/z6miML About Sealy Corp. Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) -- http://www.sealy.com/-- is the largest bedding manufacturer in the world with sales of $1.5 billion in fiscal 2008. The Company manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), including SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns & Foster(R), and Bassett(R) brands. Sealy operates 25 plants in North America, and has the largest market share and highest consumer awareness of any bedding brand on the continent. In the United States, Sealy sells its products to approximately 3,000 customers with more than 7,000 retail outlets. Sealy carries 'B' local and issuer credit ratings from Standard & Poor's. SHELBRAN INVESTMENTS: Amends Schedules of Assets and Liabilities ---------------------------------------------------------------- Shelbran Investments, L.P. filed with the U.S. Bankruptcy Court for the Middle District of Florida amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $27,574,200 B. Personal Property $10,231,030 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $15,300,994 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $5,878,515 ----------- ----------- TOTAL $37,805,230 $21,179,509 A full-text copy of the schedules is available for free at http://bankrupt.com/misc/SHELBRANINVESTMENTS_sal.pdf The Debtor disclosed personal property of $731,030, and total assets of $28,305,230 in the previous schedules. About Shelbran Investments Ocala, Florida-based Shelbran Investments, L. P., filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 10- 10937) on Dec. 21, 2010. The Debtor estimated its assets and debts at $10 million to $50 million. Robert Wilcox, Esq., and Emily M. Friend, Esq., at Brennan, Manna & Diamond, P.L., represent the Debtor. The U.S. Trustee for Region 21 said it won't appoint an Official Committee of Unsecured Creditors of Shelbran Investments because of an insufficient number of creditors willing or able to serve on the committee. A Chapter 11 Trustee was appointed on Aug. 16, 2011. SHELBRAN INVESTMENTS: Trustee Wants Case Conversion or Dismissal ---------------------------------------------------------------- Aaron R. Cohen, as Chapter 11 trustee for the bankruptcy estate of Shelbran Investments, L.P., asks the U.S. Bankruptcy Court for the Middle District of Florida to dismiss or convert the Chapter 11 case of the Debtor to one under Chapter 7 of the Bankruptcy Code. According to the trustee, the Debtor's Plan sets forth numerous "debt-for-debt" classes, whereby the Debtor proposes to transfer certain parcels of real property to secured creditors in full satisfaction of the creditors' debts. Based on, inter alia, the proposals and communications with counsel for secured creditors that have claims they will contest confirmation of the Plan, the trustee believes the Plan in its current form is unlikely to be confirmed. Additionally, the trustee believes the bankruptcy estate is or is soon to be administratively insolvent. The trustee is represented by: Jacob A. Brown, Esq. Katherine C. Fackler, Esq. AKERMAN SENTERFITT 50 North Laura St., Suite 3100 Jacksonville, FL 32202 Tel: (904) 798-3700 Fax: (940) 798-3730 E-mail: jacob.brown@akerman.com katherine.fackler@akerman.com About Shelbran Investments Ocala, Florida-based Shelbran Investments, L. P., filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 10- 10937) on Dec. 21, 2010. The Debtor disclosed $37,805,230 in assets and $21,179,509 in liabilities. Robert Wilcox, Esq., and Emily M. Friend, Esq., at Brennan, Manna & Diamond, P.L., represent the Debtor. The U.S. Trustee for Region 21 said it won't appoint an Official Committee of Unsecured Creditors of Shelbran Investments because of an insufficient number of creditors willing or able to serve on the committee. A Chapter 11 Trustee was appointed on Aug. 16, 2011. SPANISH BROADCASTING: Sees $37.5MM-$38MM Net Revenue for Q4 2011 ---------------------------------------------------------------- Spanish Broadcasting System, Inc., announced preliminary financial results for the three-months ended Dec. 31, 2011. Based on preliminary information and subject to the year-end accounting close and audit, the Company expects fourth quarter 2011 consolidated net revenue to be between $37.5 million and $38.0 million, resulting in expected growth of 7.5% to 9.0% over the comparable period in 2010. The Company expects a significant reduction in its television segment station operating loss, a non- GAAP measure, during the fourth quarter of 2011 compared to the fourth quarter of 2010. The Company also expects operating income before depreciation and amortization, (gain) loss on the disposal of assets, net and impairment charges and restructuring costs, a non-GAAP measure, to be between $10.5 million and $11.5 million, resulting in expected growth of 10% to 21% when compared to the fourth quarter of 2010. The Company's cash balance is expected to be above $70 million as of Dec. 31, 2011. "The significant improvement in our results for the fourth quarter reflects the continued benefits of a healthier advertising environment, the strength of our broadcasting properties and affiliated special events, and a singular focus on achieving profitability in our television segment," said Raul Alarc¢n, Jr., Chairman and CEO. "We are further monetizing and expanding our audience reach, while effectively managing our costs, which is leading to increased cash flow from our business. Moving forward, we remain well positioned in the nation's largest Hispanic markets and are focused on generating improved financial performance and long-term value." The Company's consolidated financial statements as of and for the year ended Dec.31, 2011, are not yet available. The Company's expectations of its results of operations and financial condition discussed above are based upon management estimates. This financial and operating data is unaudited and is subject to revision based on the completion of the accounting and financial reporting processes necessary to finalize its financial statements as of and for the year ended Dec. 31, 2011. About Spanish Broadcasting Headquartered in Coconut Grove, Florida, Spanish Broadcasting System, Inc. -- http://www.spanishbroadcasting.com/-- owns and operates 21 radio stations targeting the Hispanic audience. The Company also owns and operates Mega TV, a television operation with over-the-air, cable and satellite distribution and affiliates throughout the U.S. and Puerto Rico. Its revenue for the twelve months ended Sept. 30, 2010, was approximately $140 million. The Company's balance sheet at Sept. 30, 2011, showed $495.67 million in total assets, $441.65 million in total liabilities, $92.34 million in cumulative exchangeable redeemable preferred stock, and a $38.33 million total stockholders' deficit. * * * In November 2010, Moody's Investors Service upgraded the corporate family and probability of default ratings for Spanish Broadcasting System, Inc., to 'Caa1' from 'Caa3' based on improved free cash flow prospects due to better than anticipated cost cutting and the expiration of an unprofitable interest rate swap agreement. Moody's said Spanish Broadcasting's 'Caa1' corporate family rating incorporates its weak capital structure, operational pressure in the still cyclically weak economic climate, generally narrow growth prospects (though Spanish language is the strongest growth prospect) given the maturity and competitive pressures in the radio industry, and the June 2012 maturity of its term loan magnify this challenge. In July 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Miami, Fla.-based Spanish Broadcasting System Inc. to 'B-' from 'CCC+', based on continued improvement in the company's liquidity position. The rating outlook is stable. "The rating action reflects S&P's expectation that, despite very high leverage, SBS will have adequate liquidity over the intermediate term to meet debt maturities, potential swap settlements, and operating needs until its term loan matures on June 11, 2012," said Standard & Poor's credit analyst Michael Altberg. SUMMIT ENTERTAINMENT: S&P Withdraws 'B' Corporate Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Summit Entertainment LLC, including its 'B' corporate credit rating. The outlook was stable at the time of the ratings withdrawal. The ratings withdrawal follows the completed acquisition of Summit by Lions Gate Entertainment Corp. for $412.5 million, plus assumed debt. Outstanding debt at Summit, including its $550 million term loan due 2016 ($508 million outstanding at time of transaction), was refinanced with a new $500 million term loan facility due September 2016. SUSTAINABLE ENVIRONMENTAL: Clarifies Purchase Price of Units Sold ----------------------------------------------------------------- Sustainable Environmental Technologies Corporation filed a Current Report on Form 8-K to report that on Jan. 12, 2012, the Company entered into an agreement with an accredited investor for the purchase of 5,000,000 units of securities of the Company for $500,000. Each individual Unit had the purchase price of $0.10 per Unit and consisted of one share of restricted common stock and one warrant to purchase one share of restricted common stock at the exercise price of $0.15. The Company filed an amendment to the Current Report to clarify that the accredited investor purchased 5,000,000 Units, totaling 5,000,000 shares of restricted common stock for $500,000 and a warrant to purchase 5,000,000 shares of restricted common stock at $0.15 per share for a total of $750,000. The Units sold by the Company relied upon exemptions from registration provided for in Regulation S and Sections 4(2) and 4(6) of the Securities Act of 1933, as amended, including Regulation D promulgated thereunder based on the accredited investors knowledge of the Company's operations, financial condition and experience in financial and business matters that allowed them to evaluate the merits and risk of receipt of the Units. About Sustainable Environmental Upland, Calif.-based Sustainable Environmental Technologies Corporation (formerly RG Global Lifestyles, Inc.) offers water and wastewater treatment engineering and construction services. The Company's balance sheet at Sept. 30, 2011, showed $3.21 million in total assets, $3.40 million in total liabilities and a $192,319 total stockholders' deficit. During the quarter ended Dec. 31, 2010, the Company incurred an operating loss from continuing operations before income taxes of $265,464. As of Dec. 31, 2010, the Company had a working capital deficit of approximately $2.3 million. "These conditions raise substantial doubt about the Company's ability to continue as a going concern," the Company said in the filing. TELVUE CORP: Enters Into Agreement to Convert Debt to Equity ------------------------------------------------------------ TelVue Corporation had executed an agreement with H.F. "Gerry" Lenfest, its Chairman and majority stockholder, under which approximately $30.6 million in debt and accrued interest held by Mr. Lenfest would be converted into TelVue common stock and new preferred stock. The agreement is subject to certain conditions, including stockholder approval of the agreement itself as well as changes to TelVue's authorized capital stock and other matters. Under the terms of the agreement, a promissory note recently issued to Mr. Lenfest in the principal amount of $5.0 million, which was designed to provide funding for development, would be converted into a new class of redeemable convertible preferred stock, with a conversion price of $0.35 per share. The new class of preferred stock would have an annual dividend of 4% payable in cash or in kind, at TelVue's option. Under the terms of the agreement, the remaining debt and accrued interest through the effective date would be converted into common stock at a price per share of $0.35. Pending stockholder approval, the agreement will eliminate all of the Company's outstanding debt to Mr. Lenfest. TelVue plans to hold a stockholder vote to approve required elements of the transaction. "This agreement represents a major step forward for TelVue," said Jesse Lerman, TelVue's President and CEO, "We believe that, pending stockholder approval, the Company's balance sheet, fortified with the recent $5.0 million funding and debt conversion, provides TelVue with a solid foundation for expansion of its current broadcast products and services and will assist in establishing TelVue as the provider of choice in the rapidly growing area of cloud-based video services." TelVue will file a proxy statement with respect to the Debt Conversion Agreement and related matters with the U.S. Securities and Exchange Commission. The proxy statement will be sent to TelVue's stockholders for their approval of the Debt Conversion Agreement at a special meeting of stockholders. Stockholders are urged to read the proxy statement and any other relevant documents when filed because they contain important information about the Company, the Debt Conversion Agreement and related matters. Stockholders may obtain a free copy of the proxy statement and other documents when they become available at the SEC's Web site at www.sec.gov. The proxy statement and other related SEC documents may also be obtained free of charge by contacting the Company at (800) 885-8886. TelVue and its officers, directors and employees may be deemed to be participants in the solicitation of proxies from the Company's stockholders with respect to approval of the Debt Conversion Agreement. Those participants may have interests in the transaction, including as a result of holding shares of the Common Stock. Information regarding the participants and their interests will be contained in the proxy statement. About TelVue Corporation Mt. Laurel, N.J.-based TelVue Corporation is a broadcast technology company that specializes in playback, automation and workflow solutions for public, education and government ("PEG") television stations; cable, telephone company ("Telco") and satellite television providers; K-12 and higher education institutions; and professional broadcasters. The Company also reported a net loss of $2.43 million on $3.40 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $2.53 million on $2.71 million of revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $1.62 million in total assets, $26.15 million in total liabilities, and a $24.52 million stockholders' deficit. ParenteBeard LLC, in Huntingdon Valley, Pa., expressed substantial doubt about TelVue'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 from operations and has a net accumulated deficit. THERMOENERGY CORP: Dileep Agnihotri Elected Class B Director ------------------------------------------------------------ The incumbent members of ThermoEnergy Corporation's Board of Directors who serve as Series B Directors elected Dr. Dileep Agnihotri to fill a vacancy on the Company's Board of Directors in a seat designated as a Series B Directorship. Dr. Agnihotri was designated for election as a Series B Director by The Quercus Trust, pursuant to a Voting Agreement dated as of Nov. 19, 2009, by and among the Company and certain holders of the Company's Series B Convertible Preferred Stock, namely Quercus, Empire Capital Partners, LP, and its affiliates, Focus Fund, L.P. and Robert S. Trump. Dr. Agnihotri will serve as a member of the Company's Board of Directors until the 2012 Annual Meeting of Shareholders or until his earlier resignation or removal. Dr. Agnihotri is CEO, President, and a member of the Board of Directors of Advanced Hydro Inc., a privately held company commercializing novel membranes technology and turn-key systems for treatment of waste-water in the oil and gas industry, including hydraulic fracturing wastewater recycling applications. He is also serving as acting CEO and a member of the Board of Directors of Graphene Energy, Inc., also a privately held company. Dr. Agnihotri has been a principal at 21 Ventures, LLC, a venture capital management firm providing seed, growth and bridge capital for technology ventures, since 2008. Prior to 21 Ventures and Advanced Hydro, he spent 8 years, from 2001 to 2008, as director and world-wide manager of Jordan Valley Semiconductors Inc., an Israeli private company in the thin-film metrology market, where he managed technology development, applications development and strategic, technical and product marketing. Dr. Agnihotri holds a PhD in Nuclear Chemistry and an MS in Physical Chemistry from the University of Rochester. He also has an MS degree in Physics from Agra University. He has published more than 30 articles and holds more than half a dozen patents. Dr. Agnihotri brings to the Board expertise in new and disruptive technologies, their market potential and commercialization aspects. Pursuant to the Company's 2008 Incentive Stock Plan, Dr. Agnihotri, as a non-employee Director, was automatically granted an option to purchase 30,000 shares of the Company's Common Stock at an exercise price of $0.23 per share. This option vests and becomes exercisable on the date of the Company's 2012 Annual Meeting of Shareholders and has a term of ten years. About ThermoEnergy Corporation Little Rock, Ark.-based ThermoEnergy Corporation is a clean technologies company engaged in the worldwide development of advanced municipal and industrial wastewater treatment systems and carbon reducing clean energy technologies. As reported by the TCR on April 7, 2011, Kemp & Company, a Professional Association, in Little Rock, Arkansas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred net losses since inception and will require substantial capital to continue commercialization of the Company's technologies and to fund the Companies liabilities. The Company reported a net loss of $9.85 million on $2.87 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $12.98 million on $4.01 million of revenue during the prior year. The Company also reported a net loss of $11.87 million on $3.57 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $8.49 million on $2.05 million of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $4.27 million in total assets, $11.09 million in total liabilities and a $6.81 million total stockholders' deficiency. THINES LLC: M&T Trust Has Until Feb. 3 to Challenge Plan Outline ---------------------------------------------------------------- Manufacturers and Traders Trust Company's deadline to file an objection or otherwise respond to Thines LLC's disclosure statement has been extended to Feb. 3, 2012, according to a Second Stipulation between the parties signed off by Bankruptcy Judge Nancy V. Alquist available at http://www.leagle.com/xmlResult.aspx?xmldoc=In%20BCO%2020120118832 .xml&docbase=CSLWAR3-2007-CURR from Leagle.com. Michael Bolesta, Esquire, Gebhardt & Smith, LLP, Baltimore, MD, Attorneys for Manufacturers and Traders Trust Company. TIMMINCO LIMITED: Has $4.25MM Financing for CCAA Case ----------------------------------------------------- Timminco Limited and its wholly-owned subsidiary Becancour Silicon Inc. has secured a commitment for "debtor-in-possession" financing of US$4.25 million, for the purposes of funding the Company's operating costs, transaction costs and other expenses during the course of the proceedings commenced by the Company under the Companies' Creditors Arrangement Act on Jan. 3, 2012. The DIP Facility is being provided by QSI Partners Ltd. pursuant to the terms and conditions of a DIP Agreement dated Jan. 18, 2012. The DIP Facility expires on June 20, 2012. Funding under the DIP Facility will be available immediately following an order from the Ontario Superior Court of Justice approving the DIP Facility and the super-priority ranking of the charge required by the DIP Lender. The Company will be seeking such Court order, along with an order extending the CCAA stay of proceedings to April 30, 2012, at a hearing currently scheduled for Jan. 27, 2012. In connection with the DIP Facility, the Company has granted to the DIP Lender the exclusive right until Jan. 31, 2012 to conduct due diligence and negotiate a "stalking horse bid" for the acquisition of the Company's business and assets, including its interests in Quebec Silicon Limited Partnership and Timminco Solar. The exclusivity will be extended by one week, to Feb. 7, 2011, if by Jan. 31, 2012 the DIP Lender submits a stalking horse bid that is in a form and substance that the Company is prepared to consider. The Company is under no obligation to accept any stalking horse bid from the DIP Lender, nor is there any obligation on the DIP Lender to submit any bid for all or any portion of the Company's business or assets. Availability under the DIP Facility is not conditional upon the Company accepting any stalking horse bid from the DIP Lender. The Company intends to seek Court approval of a marketing process after the expiry of the exclusivity period, which will provide all interested parties the opportunity to submit offers for the acquisition of the business and assets of the Company, or for the sponsorship of a plan of arrangement in respect of the Company. "We are delighted to have achieved this significant milestone," said Mr. Douglas A. Fastuca, Chief Executive officer of the Company. "This facility provides the necessary funds to allow us to operate throughout the anticipated duration of the CCAA restructuring process. We can now focus on moving toward a successful outcome to the restructuring, through an open and competitive process. In the meantime, we expect to continue to purchase silicon metal from our Quebec Silicon joint venture and ship product to our customers as planned." About Timminco Timminco produces silicon metal for the chemical (silicones), aluminum and electronics/solar industries, through its 51%-owned production partnership with Dow Corning, known as Quebec Silicon. Timminco is also a producer of solar grade silicon, using its proprietary technology for purifying silicon metal, for the solar photovoltaic energy industry, through Timminco Solar, a division of its wholly owned subsidiary Becancour Silicon. TOWN CENTER: $750,000 Loan from Terra Landmark Gets Final OK ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Florida authorized Town Center at Doral, LLC, et al., to obtain postpetition financing in an aggregate principal amount up to $750,000 from Terra Landmark, LLC. 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. The Debtors will use the postpetition financing to operate their business operations. The Debtors as a group are unable to obtain credit for borrowed money without granting to the DIP Lender the DIP Protections. As adequate protection from diminution in value of the lender's collateral, the Debtors will grant the DIP lender a superpriority administrative claim status, subject to carve out. The Court also ordered that all postpetition financing of the Debtors owed to the DIP Lender will be immediately due and payable, and authority to use the proceeds of the postpetition financing will cease on the earlier of (a) April 1, 2012, or on the occurrence of an event of default. 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. TOWN CENTER: Wants Court to Value Tracts of Land at $40 Million --------------------------------------------------------------- Town Center at Doral, LLC, et al., ask the U.S. Bankruptcy Court for the Southern District of Florida to determine that the value of their property is $40 million. The Debtors are the fee simple owners of land (approximately 120 contiguous acres) located on the east side of NW 107th Avenue and the north side of NW 58th Street in Doral, Florida, a majority of which is zoned TND (Traditional Neighborhood Development), with the remainder zoned IU-1 (for flex office development allowing for light industrial development). 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. The Debtors relate that according to the Miami-Dade County Property Appraiser, the current assessed values of the Debtors' parcels are: NAME OF DEBTOR LOT SIZE VALUE -------------- -------- ----- Town Center at Doral, LLC 57.09 acres $24,297,300 Landmark at Doral East, LLC 15.72 acres $4,745,449 Landmark Club at Doral, LLC 70,131.5 sq. ft. $724,500 Landmark at Doral South, LLC 18.93 acres $6,621,975 Landmark at Doral Developers, LLC Air rights over 18.93 acres Unknown Total: $36,389,224 The Debtors explain that in order to successfully propose and confirm a plan of reorganization, they must establish the value of the property, which serves as the sole source of collateral in these cases. Specifically, the Debtors need to know the value of the property to classify the claims of creditors Landmark at Doral Community Development District (CDD) and AMT CADC Venture, LLC (AMT) and determine the appropriate treatment for the claims under the plan. In this relation, the Debtors retained Waronker & Rosen, Inc. to prepare an appraisal of the property. The Debtor believes that the property is worth approximately $40 million in the aggregate. 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. TRAILER BRIDGE: Asks Court to Approve Performance-Based KEIP ------------------------------------------------------------ On Jan. 12, 2012, Trailer Bridge, Inc., filed a motion with the the U.S. Bankruptcy Court for the Southern District of New York for approval of a performance-based key employee incentive plan. The Incentive Plan provides for participation by thirty-two of the Company's key employees, including William G. Gotimer, Jr., Co- Chief Executive Officer and General Counsel, and Mark Tanner, Co- Chief Executive Officer and Chief Financial Officer. The Incentive Plan provides for a bonus pool available for distribution to the key employees based on the achievement of certain EBITDA levels. In the event that the Company achieves 95- 105% of the EBITDA projections, approximately $800,000 will be available for distribution to the key employees. In the event that the Company exceeds the EBITDA projections by 25%, the bonus pool will increase to approximately $990,500, which amount represents the maximum amount to be paid under the Incentive Plan. On the other hand, if the Company fails to meet the EBITDA projections, the bonus pool will decrease based on the percentage of variance from the EBITDA projections. With respect to each of William G. Gotimer, Jr. and Mark Tanner, the Target bonus award opportunity under the Incentive Plan is $200,000. Payment of the amounts due under the Incentive Plan will occur on the day that is five (5) days after the effective date of a plan or reorganization and will be paid from the proceeds of the exit financing provided to the reorganized Company on the effective date. If a key employee's employment terminates for any reason (other than death or without cause) prior to the payment of any bonus, the employee automatically forfeits the payment of that bonus. No amounts will be earned if a plan of reorganization is not confirmed prior to April 15, 2012. About Trailer Bridge Jacksonville, Fla.-based Trailer Bridge, Inc. -- http://www.trailerbridge.com/-- provides integrated trucking and marine freight service to and from all points in the lower 48 states and Puerto Rico and Dominican Republic. This total transportation system utilizes its own trucks, drivers, trailers, containers and U.S. flag vessels to link the mainland with Puerto Rico via marine facilities in Jacksonville, San Juan and Puerto Plata. Trailer Bridge filed a voluntary Chapter 11 petition (Bankr. M.D. Fla. Case No. 11-08348) on Nov. 16, 2011, one day after its $82.5 million 9.25% Senior Secured Notes became due. Judge Jerry A. Funk presides over the case. Gardner F. Davis, Esq., at Foley & Lardner LLP, and DLA Piper LLP (US) serve as the Debtor's counsel. Global Hunter Securities LLC serves as the Debtor's investment banker. RAS Management Advisors LLC serves as the Debtor's financial advisor. The Debtor listed $97,345,981 in assets, and $112,538,934 in liabilities. The petition was signed by Mark A. Tanner, co-chief executive officer. TRAVELPORT HOLDINGS: William Griffith Resigns from Board -------------------------------------------------------- In connection with his departure from Technology Crossover Ventures, William J.G. Griffith has resigned from Travelport Limited's Board of Directors, as well as the Committees of the Company's Board of Directors. The vacancy on the Company's Board of Directors will be filled in the near future with a director to be designated by Technology Crossover Ventures. About Travelport Holdings Travelport Holdings is the direct parent of Travelport Limited, is a broad-based business services company and a leading provider of critical transaction processing solutions to companies operating in the global travel industry. With a presence in 160 countries and approximately 3,500 employees, Travelport is comprised of the global distribution system (GDS) business, which includes the Galileo and Worldspan brands and its Airline IT Solutions business, which hosts mission critical applications and provides business and data analysis solutions for major airlines. Travelport also owns approximately 48% of Orbitz Worldwide (NYSE: OWW), a leading global online travel company. Travelport is a private company owned by The Blackstone Group, One Equity Partners, Technology Crossover Ventures, and Travelport management. Travelport Holdings Limited is a holding company with no direct operations. Its principal assets are the direct and indirect equity interests it holds in its subsidiaries, including Travelport Limited. Travelport Limited, a direct subsidiary of Travelport Holdings Limited, reported net income of $283 million on $1.061 billion of of net revenue for the six months ended June 30, 2011, compared with net income of $1 million on $1.056 billion of net revenue for the same period of 2010. Results for the six months ended June 30, 2011, includes gain of $312 million, net of tax, from the sale of sale of the Gullivers Travel Associates ("GTA") business to Kuoni Travel Holdings Limited ("Kuoni"). The sale was completed on May 5, 2011. Loss from continuing operations was $4 million during the six months ended June 30, 2011, compared with a loss of $2 million for the same period of 2010. The Company's balance sheet at Sept. 30, 2011, showed $3.43 billion in total assets, $4.21 billion in total liabilities and a $780 million total deficit. * * * As reported by the TCR on Oct. 10, 2011, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on travel services provider Travelport Holdings Limited (Travelport Holdings) and indirect subsidiary Travelport LLC (Travelport) to 'SD' (selective default) from 'CC'. The downgrades follow the implementation of a capital restructuring, which was necessary because of the Travelport group's high leverage, weak liquidity, and the upcoming maturity of its $693 million (as of end-June 2011) PIK loan in March 2012. "According to our criteria, we view this restructuring as a distressed exchange and tantamount to a default (see 'Rating Implications Of Exchange Offers And Similar Restructurings, Update,' published May 12, 2009, on RatingsDirect on the Global Credit Portal)," S&P related. TRANSWEST RESORT: 2 Westin Resorts Exit Chapter 11 -------------------------------------------------- The Westin La Paloma Resort & Spa in Tucson, Arizona and the Westin Hilton Head Island Resort & Spa on Hilton Head Island, South Carolina won court approval on Tuesday, January 17, 2012, to emerge from bankruptcy. The ruling marks a new beginning and a return to prominence for both resorts managed by Starwood Hotels & Resorts Worldwide, Inc. HOT -0.03% with new owners, Southwest Value Partners ("SWVP" -- San Diego, California), who will infuse in excess of $60 million of new equity into the hotels, the majority of which will be used to complete a major capital improvement plan for both hotels. SWVP co-managing partners Mark Schlossberg and Cary Mack structured the transaction, and positioned SWVP as equity to the reorganizing debtors. The Debtor's plan of reorganization was confirmed by the Bankruptcy Court on January 3, 2012 and went effective on January 18, 2012. "We viewed this as an ideal reorganization situation involving incredibly high quality assets that required strong ownership and equity to provide Westin with the tools necessary to position each hotel properly, allow them to emerge from bankruptcy, and maximize their operating performance," said Mark Schlossberg. Cary Mack added, "We are pleased with our investments on Hilton Head Island and in Tucson, and with the growth potential of these hotels over the near and long term as we renovate them and continue to maintain their focus on excellence. In partnership with Starwood Hotels we will meaningfully enhance the guest experience at each property through completing the largest capital improvement investment in the history of the resorts since their initial construction." Starwood Hotels will continue to manage both resorts under a long- term, 20-year management agreement. The improvements planned for both resorts include renovations of every guest room, all meeting spaces, main lobby areas, outdoor venues and pool areas. The plans are currently being finalized, with renovations slated to begin immediately. With a reorganization plan and new ownership in place, both Westin properties are poised for an exciting transformation. According to The Westin Hilton Head Island Resort & Spa General Manager, Andrew Czarnecki, "The Westin Hilton Head Island Resort & Spa has recently made some significant property improvements but has been on hold with any major remodeling and renovations. The capital infusion from Southwest Value Partners will allow us to make this truly remarkable property even more outstanding." The Westin La Paloma's General Manager, Jonathan Litvack adds, "The capital improvement plans for La Paloma will allow us to exceed all possible customer expectations with full facility renovations. We have been in a holding pattern on major improvements but now we can move full-steam ahead on the exciting transformation process for The Westin La Paloma Resort & Spa." About Southwest Value Partners Southwest Value Partners -- http://www.swvp.com/-- is a private real estate investment firm based in San Diego and founded in 1990. The firm acquires diverse real estate assets focusing on growth markets throughout the country. About Starwood Hotels & Resorts Starwood Hotels & Resorts Worldwide, Inc. -- http://www.starwoodhotels.com/-- is one of the leading hotel and leisure companies in the world with 1,071 properties in 100 countries and territories with 145,000 employees at its owned and managed properties. Starwood Hotels is a fully integrated owner, operator and franchisor of hotels, resorts and residences with the following internationally renowned brands: St. Regis(R), The Luxury Collection(R), W(R), Westin(R), Le Meridien(R), Sheraton(R), Four Points(R) by Sheraton, Aloft(R) and Element(SM). The company boasts one of the industry's leading loyalty programs, Starwood Preferred Guest (SPG), allowing members to earn and redeem points for room stays, room upgrades and flights, with no blackout dates. Starwood Hotels also owns Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. About Transwest Resort Tucson, Arizona-based Transwest Resort Properties, Inc., indirectly owns an interest in two companies, Transwest Tucson Property, L.L.C., and Transwest Hilton Head Property, L.L.C. These two companies each own and manage a resort hotel: the Westin La Paloma Resort and Country Club in Tucson, Arizona (the "La Paloma Resort" or "La Paloma"), which is owned and managed by Transwest Tucson Property, L.L.C., and the Westin Hilton Head Island Resort and Spa on Hilton Head Island in South Carolina (the "Hilton Head Resort," and collectively with La Paloma, the "Resorts"), which is owned and managed by Transwest Hilton Head Property, L.L.C. TRP, Transwest Tucson Property, and Transwest Hilton Head property are affiliates of Transwest Partners, a real estate development and investment firm which has been active in the hospitality sector in Southern Arizona and Sonora, Mexico. Transwest Tucson Property is a wholly owned subsidiary of Transwest Tucson II, L.L.C. Transwest Hilton Head Property is a wholly owed subsidiaryof Transwest Hilton Head II, L.L.C. TRP filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 10-37134) on Nov. 17, 2010. Kasey C. Nye, Esq., Susan g. Boswell, Esq., and Elizabeth S. Fella, Esq., at Quarles & Brady LLP, in Tucson, Ariz., assist the Debtor in its restructuring effort. The Debtor estimated its assets at up to $50,000 and debts at $10 million to $50 million. Affiliates Transwest Hilton Head Property, L.L.C. (Bankr. D. Ariz. Case No. 10-37170), Transwest Tucson Property, L.L.C. (Bankr. D. Ariz. Case No. 10-37160), Transwest Tucson II, L.L.C. (Bankr. D. Ariz. Case No. 10-37151), and Transwest Hilton Head II, L.L.C. (Bankr. D. Ariz. Case No. 10-37145) filed separate Chapter 11 petitions on Nov. 17, 2010. BeachFleischman PC serves as tax preparer and advisor, accountant and auditor. Hundley & Company, LLC, serves as financial restructuring and interest rate experts, and Hospitality Real Estate Counselors as valuation consultant and expert. Transwest Hilton Head Property estimated assets at $10 million to $50 million and debts at $100 million to $500 million. Transwest Tucson Property estimated assets at $50 million to $100 million and debts at $100 million to $500 million. The U.S. Trustee appointed an Official Committee of Unsecured Creditors on Dec. 15, 2010. TRIDENT MICROSYSTEM: Court Clears to Auction Set-Top Business ------------------------------------------------------------- Dow Jones' DBR Small Cap reports that Trident Microsystems Inc. got court permission to auction its set-top business next month, with Entropic Communications Inc. kicking off bidding with a $55 million offer. About Trident Microsystem Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $309,992,980 in assets and $39,607,591 in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. TTM MB: Voluntary Chapter 11 Case Summary ----------------------------------------- Debtor: TTM MB Park, LLC 13 Midtown Park East Mobile, AL 36609 Bankruptcy Case No.: 12-00174 Chapter 11 Petition Date: January 18, 2012 Court: U.S. Bankruptcy Court Southern District of Alabama (Mobile) Debtor's Counsel: Lawrence B. Voit, Esq. SILVER, VOIT & THOMPSON 4317-A Midmost Drive Mobile, AL 36609-5507 Tel: (251) 343-0800 E-mail: lvoit@silvervoit.com Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Todd Martin, manager. VALENCE TECHNOLOGY: Berg & Berg Buys 2 Million Common Shares ------------------------------------------------------------ Berg & Berg Enterprises, LLC, purchased 2,078,068 shares of Valence Technology, Inc., common stock at a price per share of $0.97, the closing bid price of the Company's common stock on the purchase date. The purchase price for the shares was $2,015,726. Payment of the purchase price consisted of the surrender of the promissory note issued by the Company on Oct. 24, 2011, to Berg and Berg, under which $2,000,000 in principal and $15,726 in accrued interest was outstanding. The shares were issued in a private placement transaction exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof. Under Rule 144 of the Securities Act, these shares are restricted from being traded by Berg & Berg for a period of six months from the date of issuance, unless registered, and thereafter may be traded only in compliance with the volume restrictions imposed by this rule and other applicable restrictions. On Oct. 26, 2010, the Company's Board of Directors authorized the Company to engage in financing transactions with Berg & Berg, Carl E. Berg, or their affiliates from time to time in an aggregate amount of up to $10,000,000, if, and when needed by the Company, and as may be mutually agreed. The $2,000,000 promissory note was made pursuant to this authorization and following such transaction, $2,000,000 remains available under this authorization. The managing member of Berg & Berg is Carl E. Berg, who is the Chairman of the Company's Board of Directors and the principal stockholder of the Company. About Valence Technology Austin, Texas-based Valence Technology, Inc. (NASDAQ: VLNC) -- http://www.valence.com/-- is a global leader in the development of safe, long-life lithium iron magnesium phosphate energy storage solutions and provides the enabling technology behind some of the world's most innovative and environmentally friendly applications. Valence Technology has its Research & Development Center in Nevada, its Europe/Asia Pacific Sales office in Northern Ireland and global fulfillment centers in North America and Europe. The Company reported a net loss of $12.68 million on $45.88 million of revenue for the year ended March 31, 2011, compared with a net loss of $23.01 million on $16.08 million of revenue during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $41.23 million in total assets, $89.47 million in total liabilities, $8.61 million in redeemable convertible preferred stock, and a $56.84 million total stockholders' deficit. As reported by the TCR on June 3, 2011, PMB Helin Donovan, LLP, in Austin, Texas, noted that Company's recurring losses from operations, negative cash flows from operations and net stockholders' capital deficiency raise substantial doubt about its ability to continue as a going concern. VALLEJO, CA: Bankruptcy Scars Linger in Cash-Crunched City ---------------------------------------------------------- Dow Jones' DBR Small Cap reports that six months after emerging from Chapter 9 bankruptcy, this city isn't yet out of the woods as it deals with a budget crunch and the effects of a hollowed-out civil service. About Vallejo, California Vallejo -- http://www.ci.vallejo.ca.us/-- is a city in Solano County, California in the United States. As of the 2000 census, the city had a total population of 116,760. It is located in the San Francisco Bay Area on the northern shore of San Pablo Bay. It was named for General Mariano Guadalupe Vallejo. Vallejo filed for protection under Chapter 9 of the U.S. Bankruptcy Code (Bankr. E.D. Calif. Case No. 08-26813) on May 23, 2008, after it was unable to persuade labor unions to accept salary concessions as the recession began cutting into local government tax collections nationwide. Marc A. Levinson, Esq., and Norman C. Hile, Esq., at Orrick, Herrington & Sutcliffe LLP in Sacramento, California, represented the City. The city estimated $500 million to $1 billion in assets and $100 million to $500 million in debts in its petition. According to Vallejo's comprehensive annual report for the year ended June 30, 2007, the city has $983 million in assets and $358 million in debts. In August 2011, Vallejo was given green light to exit the municipal reorganization. The Chapter 9 plan restructures $50 million of publicly held debt secured by leases on public buildings. Although the Plan doesn't affect pensions, it adjusts the claims and benefits of current and former city employees. A federal judge released the city of Vallejo from bankruptcy on Nov. 1, 2011. VENOCO INC: S&P Puts 'B' Corp. Credit Rating on Watch Negative -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Venoco Inc., including the 'B' corporate credit rating, on CreditWatch with negative implications. "The rating action follows the announcement that Venoco has entered into a definitive merger agreement under which its Chairman and CEO Tim Marquez will acquire the company through a wholly owned entity, Denver Parent Corp. The announcement followed a five-month evaluation of the proposal by a special committee of Venoco's board of directors, who concluded that Marquez's proposal was in the best interests of the public stockholders," S&P said. "The total purchase price equates to about $1.45 billion, including the assumption of $685 million in debt. Marquez, along with affiliated trusts and foundations, currently owns 50.3% of Venoco's common shares outstanding, which ?- if the deal is approved--will be reinvested into Denver Parent Corp. Consequently, Denver Parent will have to raise about $385 million to fund the buyout," S&P said. "If the buyout is funded with equity, there would be minimal impact to our leverage ratios," said Standard & Poor's credit analyst Carin Dehne-Kiley. "However, if the deal is funded with 50% or more debt, debt-to-EBITDA could exceed 5x at the end of 2012, which is above our expectations for the current rating. (Our EBITDA estimates are based on the Standard & Poor's price deck of $80/Bbl WTI crude oil and $3.75/Mcf Henry Hub natural gas.) We believe the financing will include some portion of debt. Although covenants on Venoco's existing credit facility require the company to maintain leverage below 4x, we believe a new or amended facility could be put in place following the capital restructuring." "The buyout proposal is subject to shareholder approval (a majority of the remaining 49.7% shareholders must vote in favor), customary regulatory approvals, and a financing condition. Assuming acceptable financing is obtained, we expect closing to occur by the end of June 2012," S&P said. "Depending on how the buyout proposal is ultimately structured," added Ms. Dehne-Kiley, "we could lower the corporate and issue- level ratings if leverage approaches the 5x level." VISHAY INTERTECHNOLOGY: Moody's Affirms Ba3 Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service affirmed Vishay Intertechnology, Inc.'s ("Vishay") Ba3 Corporate Family Rating (CFR) and the Ba1 rating for its senior credit facility, and changed the ratings outlook to stable from positive. These were affirmed: Issuer: Vishay Intertechnology, Inc. -- Corporate family rating -- Ba3 -- Probability-of-default rating -- Ba3 -- $450 million Senior Secured Revolving Credit Facility due 2015 -- Ba1, LGD 2, 16% (changed from 19%) -- Speculative Grade Liquidity -- SGL-1 Outlook action: Issuer: Vishay Intertechnology, Inc. -- Outlook changed to stable, from positive RATINGS RATIONALE The change in the ratings outlook reflects Moody's view that weak end-market demand and excessive inventory conditions that Vishay is experiencing could persist in the first half of 2012 and that the company's revenue and cash flow from operations will likely decline in 2012. Moody's expects Vishay's operating margin to deteriorate in 2012 amid weak demand and given the company's high fixed costs, and that Vishay's Total Debt-to-EBITDA leverage could approach 3.0x (Moody's adjusted, primarily for underfunded pension obligations and capitalized operating leases) towards year-end 2012, compared to 1.7x at 3Q 2011. However, the ratings agency expects the company's financial leverage, free cash flow and interest coverage metrics to remain supportive of the existing Ba3 CFR. The Ba3 CFR reflects Vishay's good operating scale, moderate financial risk and good market position as a manufacturer and supplier of a broad range of semiconductors and passive electronic components to industrials, telecommunications, automotive, computing and consumer electronics end-markets. Vishay's very good liquidity, moderate financial leverage and its track record of free cash flow generation mitigate the company's high business risks stemming from the deeply cyclical demand patterns in its end-markets and the intense competition and pricing pressure the company faces, especially in the semiconductor product lines. Vishay's Ba3 rating is supported by the company's commitment to manage acquisitions and maintain Debt-to-EBITDA leverage below 2.5x, pro forma for acquisitions, which mitigates the event risk given the company's history of growth through numerous acquisitions. The stable ratings outlook reflects Moody's expectations that despite challenging business conditions, Vishay will produce free cash flow of about 20% of total adjusted debt, and its leverage will remain in the 2.5x to 3.0x (Moody's adjusted) range in the next 12 months. Moody's could upgrade Vishay's ratings if Vishay's organic growth resumes, the company demonstrates the ability to sustain operating margins in the 10% to 12% range, total debt-to-EBITDA leverage under 2.5x (Moody's adjusted), and free cash flow-to-total debt ratio in excess of 20%, through industry cycles, and it pursues a conservative financial strategy. Conversely, the ratings could be downgraded if Vishay experiences sustained erosion in operating margins or revenue such that debt- to-EBITDA ratio exceeds 3.5x (Moody's adjusted) for a protracted period and free cash flow declines to less than 10% of total debt. In addition, deterioration in liquidity or aggressive shareholder- friendly policies could trigger a rating downgrade. The principal methodologies used in this rating were Global Semiconductor Industry published in November 2009, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Vishay Intertechnology, Inc., headquartered in Malvern, PA, is one of the largest manufacturers and suppliers of discrete passive and active electronic components. Vishay reported $2.7 billion in revenue in the twelve months ended October 1, 2011. VISUALANT INC: Receives 2nd Patent on Spectral Matching Tech. ------------------------------------------------------------- Visualant, Inc., has received its second patent on its Spectral Pattern Matching. The Visualant technology was developed by renowned research scientists, Drs. Tom Furness and Brian Schowengerdt. A number of years were spent in the laboratory developing a unique proprietary approach to mapping color at the photon level and using that mapping as a basis for authentication and diagnostics. In conjunction with the stellar work being done in the lab, the Company pursues an aggressive patent strategy to protect its unique intellectual property. Drs. Furness and Schowengerdt and their laboratory development team brought a generation of experience to the Visualant SPM development process. Dr. Furness is known in many circles as the "Father of Virtual Reality." Dr. Schowengerdt is an internationally renowned leader in the field of color perception. The patent issued by the United States Office of Patents and Trademarks is US Patent No. 8,081,304 and is entitled "Method, Apparatus and Article to Facilitate Evaluation of Objects Using Electromagnetic Energy." Ron Erickson, Visualant Founder and CEO, stated, "We are very pleased to receive our second patent covering our SPM technology. We expect more patents to be issued as we build the intellectual property foundation for Visualant's business and move into the marketplace with diverse applications of our SPM technology. With the issuance of this patent we also want to acknowledge the extraordinary work of our patent counsel, Frank Abramonte of the Seed Intellectual Property Group PLLC." About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on October 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant reported a net loss of $2.39 million on $9.13 million of revenue for the year ended Sept. 30, 2011, compared with a net loss of $1.14 million on $2.54 million of revenue during the previous year. The Company's balance sheet at Sept. 30, 2011, showed $4.31 million in total assets, $5.87 million in total liabilities, a $1.61 million total stockholders' deficit and $43,828 in noncontrolling interest. In its report Visualant's 2011 results, Madsen & Associates CPA's, Inc., in Salt Lake City Utah, noted that the Company will need additional working capital for its planned activity and to service its debt, which raises substantial doubt about its ability to continue as a going concern. Bankruptcy Warning The Company had cash of $92,000, a net working capital deficit of approximately $3.2 million and total indebtedness of $2.6 million as of Sept. 30, 2011. The Company will need to obtain additional financing to implement the business plan, service its debt repayments and acquire new businesses. There can be no assurance that the Company will be able to secure funding, or that if such funding is available, the terms or conditions would be acceptable to the Company. If the Company is unable to obtain additional financing, it may need to restructure its operations, divest all or a portion of its business or file for bankruptcy. WASHINGTON MUTUAL: Former Execs' Insurers to Pay $40MM FDIC ----------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that insurers for three former executives of Washington Mutual Inc. will pay nearly $40 million as part of a proposed settlement with the Federal Deposit Insurance Corp., according to documents filed in Delaware bankruptcy court Thursday. Under the terms of the deal, ex-WMI CEO Kerry K. Killinger, Chief Operating Officer Stephen J. Rotella and Home Loans President David C. Schneider will also pay $275,000, $100,000 and $50,000 out of their own pockets, respectively, to the FDIC. The three will make additional cash payments as well, according to Law360. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York, and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. On Jan. 7, 2011, the Bankruptcy Court entered a 107-page opinion determining that the global settlement agreement, among certain parties including WMI, the Federal Deposit Insurance Corporation and JPMorgan, upon which the Plan is premised, and the transactions contemplated therein, are fair, reasonable, and in the best interests of WMI. However, the Opinion and related order denied confirmation, but suggested certain modifications to the Company's Sixth Amended Joint Plan of Affiliated Debtors that, if made, would facilitate confirmation. WaMu filed a Modified Sixth Amended Joint Plan and a related Supplemental Disclosure Statement, which it believes would address the Bankruptcy Court's concerns. On Sept. 13, 2011, Judge Walrath denied confirmation of WaMu's Modified Sixth Amended Plan and granted equity committee standing to prosecute claims for equitable disallowance but stayed the ruling pending mediation. WaMu said it would seek confirmation of a revised plan "as soon as practicable." The Plan proposes to pay more than $7 billion to creditors and incorporates a global settlement agreement resolving issues among the Debtors, JPMorgan Chase, the Federal Deposit Insurance Corp. in its corporate capacity and as receiver for WaMu Bank, certain large creditors, certain WMB senior noteholders, and the creditors' committee. The Settlement Noteholders are Appaloosa Management, L.P., Aurelius Capital Management LP, Centerbridge Partners, LP, and Owl Creek Asset Management, L.P. WASHINGTON MUTUAL: Says Investors' Info Request Delay Tactic ------------------------------------------------------------ Juan Carlos Rodriguez at Bankruptcy Law360 reports that Washington Mutual Inc. and a group of hedge funds helping to craft the bank's reorganization plan asked a judge Wednesday to reject a motion that would force them to give a group of shareholders more information before the plan is confirmed, calling it an effort to stall the process. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York, and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. On Jan. 7, 2011, the Bankruptcy Court entered a 107-page opinion determining that the global settlement agreement, among certain parties including WMI, the Federal Deposit Insurance Corporation and JPMorgan, upon which the Plan is premised, and the transactions contemplated therein, are fair, reasonable, and in the best interests of WMI. However, the Opinion and related order denied confirmation, but suggested certain modifications to the Company's Sixth Amended Joint Plan of Affiliated Debtors that, if made, would facilitate confirmation. WaMu filed a Modified Sixth Amended Joint Plan and a related Supplemental Disclosure Statement, which it believes would address the Bankruptcy Court's concerns. On Sept. 13, 2011, Judge Walrath denied confirmation of WaMu's Modified Sixth Amended Plan and granted equity committee standing to prosecute claims for equitable disallowance but stayed the ruling pending mediation. WaMu said it would seek confirmation of a revised plan "as soon as practicable." The Plan proposes to pay more than $7 billion to creditors and incorporates a global settlement agreement resolving issues among the Debtors, JPMorgan Chase, the Federal Deposit Insurance Corp. in its corporate capacity and as receiver for WaMu Bank, certain large creditors, certain WMB senior noteholders, and the creditors' committee. The Settlement Noteholders are Appaloosa Management, L.P., Aurelius Capital Management LP, Centerbridge Partners, LP, and Owl Creek Asset Management, L.P. WASTE2ENERGY HOLDINGS: U.S. Trustee Wants Ch. 11 Case Converted --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada will convene a hearing on Feb. 7, 2012, at 11:00 a.m., to consider the request of Roberta A. DeAngelis, the U.S. Trustee for Region 3, to convert the Chapter 11 case of Waste2Energy Holdings, Inc. The U.S. Trustee claims that since the date of the Chapter 11 trustee's appointment, there has been no activity on the court docket. There have been no retention applications filed, no First Meeting of Creditors has been scheduled. The Chapter 11 trustee has not filed a list of creditors or any schedules or statement of financial affairs as required by Fed. R. Bankr. 1007. The U.S. Trustee also asserts that the Chapter 11 trustee has failed to file any MORs or pay the proper sum. The Chapter 11 trustee is delinquent in the payment of Quarterly Fees and there appears to be an eminent likelihood of a substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation. The U.S. Trustee is represented by: Richard L. Schepacarter, Esq. United States Department of Justice Office of the United States Trustee J. Caleb Boggs Federal Building 844 King Street, Room 2207 Wilmington, DE 19801 Tel: (302) 573-6491 Fax: (302) 573-6497 About Waste2Energy Holdings Greenville, S.C.-based Waste2Energy Holdings, Inc. (Pink Sheets: WTEZ) -- http://www.waste2energy.com/-- is a "cleantech" technology company that designs, builds, installs and sells waste to energy plants that generate "Renewable Green Power" converting biomass or other solid waste streams traditionally destined for landfills into clean renewable energy. The Company's balance sheet at June 30, 2010, showed $3.4 million in total assets, $11.7 million in total liabilities, and a stockholders' deficit of $8.3 million. On Aug. 8, 2011, four creditors filed an involuntary Chapter 11 petition against Waste2Energy Holdings (Bankr. D. Del. Case No. 11-12504). Judge Kevin J. Carey presides over the case. The petitioning creditors, allegedly owed $3.2 million in the aggregate, are represented by Frederick B. Rosner, Esq., at The Rosner Law Group, LLC. On Sept. 21, 2011, the Court entered an order effectively converting the case from an involuntary to voluntary chapter 11 proceeding. On Oct. 4, 2011, Wayne P. Weitz was appointed Chapter 11 trustee. WASTE2ENERGY HOLDINGS: Ch. Trustee Taps Cole Scholtz as Counsel --------------------------------------------------------------- Wayne P. Weitz, Chapter 11 Trustee for Waste2Energy Holdings, Inc., asks authorization from the U.S. Bankruptcy Court for the District of Delaware to employ Cole, Schotz, Meisel, Forman & Leonard, P.A., as bankruptcy counsel. As Trustee's bankruptcy counsel, the firm, will among other things: a) advise the Trustee with respect to his rights and duties as Chapter 11 Trustee; b) appear on behalf of the Trustee in proceedings and hearings in the Court to represent and protect the interests of the Trustee and the Debtor's estate; c) assist in the Trustee's investigation of the acts, conducts, assets, liabilities and financial condition of the Debtor and any other matters relevant to the case or the formulation and negotiation of a plan of reorganization or liquidation; and d) prepare on behalf of the Trustee any necessary motions, applications, orders, reports, responses, statements of investigation and other legal papers, along with the Debtor's schedules and statement of financial affairs. Cole Schotz will charge for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates. The firm will also seek reimbursement of actual and necessary out-of- pocket expenses. The current rates of Cole Schotz members, associates and paralegals are: Members and Special Counsel $340 to $775 per hour Associates $210 to $425 per hour Paralegals $160 to $240 per hour The current rates of Cole Schotz members, associates and paralegals expected to perform significant work in the case are: Laurence May, Member $700 per hour Jill B. Bienstock, Associate $275 per hour Therese Scheuer, Associate $285 per hour Pauline Ratkowiak, Paralegal $230 per hour Frances Pisano, Paralegal $240 per hour The Chapter 11 Trustee believes that Cole Schotz does not hold any interest adverse to any Debtor's estates and, while employed by the Trustee, will not represent any person having an interest adverse to any Debtor's estate. The Trustee also believes that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Waste2Energy Holdings Greenville, S.C.-based Waste2Energy Holdings, Inc. (Pink Sheets: WTEZ) -- http://www.waste2energy.com/-- is a "cleantech" technology company that designs, builds, installs and sells waste to energy plants that generate "Renewable Green Power" converting biomass or other solid waste streams traditionally destined for landfills into clean renewable energy. The Company's balance sheet at June 30, 2010, showed $3.4 million in total assets, $11.7 million in total liabilities, and a stockholders' deficit of $8.3 million. On Aug. 8, 2011, four creditors filed an involuntary Chapter 11 petition against Waste2Energy Holdings (Bankr. D. Del. Case No. 11-12504). Judge Kevin J. Carey presides over the case. The petitioning creditors, allegedly owed $3.2 million in the aggregate, are represented by Frederick B. Rosner, Esq., at The Rosner Law Group, LLC. On Sept. 21, 2011, the Court entered an order effectively converting the case from an involuntary to voluntary chapter 11 proceeding. On Oct. 4, 2011, Wayne P. Weitz was appointed Chapter 11 trustee. WASTE2ENERGY HOLDINGS: Trustee Taps GlassRatner as Fin'l Advisor ---------------------------------------------------------------- Wayne P. Weitz, Chapter 11 Trustee for Waste2Energy Holdings, Inc., asks authorization from the U.S. Bankruptcy Court for the District of Delaware to retain GlassRatner Advisory & Capital Group LLC as his financial advisor. Upon retention, the firm will, among other things: a) advise the Trustee with respect to his rights and duties as a chapter 11 trustee; b) analyze and negotiate terms of debtor-in-possession financing and related documents; c) assist in the Trustee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtor and any other matters relevant to the case or the formulation and negotiation of a plan of reorganization or liquidation; d) coordinate the sale of assets pursuant to section 363 of the Bankruptcy Code; and e) prepare on behalf of the Trustee any necessary reports, and statements of investigation together with the Trustee's proposed counsel, Cole Schotz. GlassRatner will charge for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates. The firm will also seek reimbursement of actual and necessary out-of- pocket expenses. The current rates of GlassRatner professionals and support staff are: Principals $350 to $575 per hour Directors $240 to $425 per hour Managers, Staff and Admin $95 to $295 per hour The current rates of GlassRatner professionals and support staff expected to perform significant work in the case are: Evan Blum $450 per hour Arnold Farber $265 per hour Sean Allen $265 per hour Tess Wolf $195 per hour GlassRatner was retained by the Trustee pursuant to an engagement agreement executed on Dec. 15, 2011. The Chapter 11 Trustee believes that GlassRatner does not hold any interest adverse to any Debtor's estates and, while employed by the Trustee, will not represent any person having an interest adverse to any Debtor's estate. The Trustee also believes that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Waste2Energy Holdings Greenville, S.C.-based Waste2Energy Holdings, Inc. (Pink Sheets: WTEZ) -- http://www.waste2energy.com/-- is a "cleantech" technology company that designs, builds, installs and sells waste to energy plants that generate "Renewable Green Power" converting biomass or other solid waste streams traditionally destined for landfills into clean renewable energy. The Company's balance sheet at June 30, 2010, showed $3.4 million in total assets, $11.7 million in total liabilities, and a stockholders' deficit of $8.3 million. On Aug. 8, 2011, four creditors filed an involuntary Chapter 11 petition against Waste2Energy Holdings (Bankr. D. Del. Case No. 11-12504). Judge Kevin J. Carey presides over the case. The petitioning creditors, allegedly owed $3.2 million in the aggregate, are represented by Frederick B. Rosner, Esq., at The Rosner Law Group, LLC. On Sept. 21, 2011, the Court entered an order effectively converting the case from an involuntary to voluntary chapter 11 proceeding. On Oct. 4, 2011, Wayne P. Weitz was appointed Chapter 11 trustee. WAVE SYSTEMS: Files Amendment No. 3 to Form S-3 Registration ------------------------------------------------------------ Wave Systems Corp. filed with the U.S. Securities and Exchange Commission amendment no.3 to Form S-3 registration statement relating to the sale, from time to time, of up to 5,267,374 shares of Wave's Class A common stock, par value $0.01 per share, by Amiti Ventures I LP, Brevan Howard Master Fund Limited, Elron Electronic Industries Ltd, et al. The shares of Class A common stock were initially issued to the selling stockholders on Sept. 22, 2011, in connection with Wave's acquisition of Safend Ltd., a company formed under the laws of Israel, or Safend. The selling stockholders may sell these securities on a continuous or delayed basis directly, through agents, dealers or underwriters as designated from time to time, or through a combination of these methods. The Company will not receive any proceeds from the sale of these shares of Class A common stock by the selling stockholders. Wave's Class A common stock is traded on the Nasdaq Capital Market under the symbol "WAVX." The last reported sale price of the Company's Class A common stock on the Nasdaq Capital Market on Jan. 17, 2012, was $2.35 per share. A full-text copy of the amended prospectus is available at: http://is.gd/Pq4UyT About Wave Systems Lee, Massachusetts-based Wave Systems Corp. (NASDAQ: WAVX) -- http://www.wave.com/-- develops, produces and markets products for hardware-based digital security, including security applications and services that are complementary to and work with the specifications of the Trusted Computing Group, an industry standards organization comprised of computer and device manufacturers, software vendors and other computing products manufacturers. The Company reported a net loss of $4.12 million on $26.05 million of total net revenues for the year ended Dec. 31, 2010, compared with a net loss of $3.34 million on $18.88 million of total net revenues during the prior year. The Company also reported a net loss of $5.93 million on $25.10 million of total net revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $2.91 million on $19.01 million of total net revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $27.53 million in total assets, $13.23 million in total liabilities and $14.30 million in total stockholders' equity. Due to the early stage nature of its market category, Wave is unable to predict with a high enough level of certainty whether enough revenue will be generated to fund its cash flow requirements for the twelve-months ending Sept. 30, 2012. Given the uncertainty with respect to Wave's revenue forecast for the twelve-months ending Sept. 30, 2012, Wave may be required to raise additional capital through either equity or debt financing in order to adequately fund its capital requirements for the twelve- months ending Sept. 30, 2012. As of Sept. 30, 2011, the Company had approximately $6.9 million of cash on hand and positive working capital of approximately $1.3 million. Considering the Company's current cash balance and Wave's projected operating cash requirements, the Company projects that it will have enough liquid assets to continue operating through Sept. 30, 2012. However, due to the Company's current cash position, its capital needs over the next twelve months and beyond, the fact that it may require additional financing and uncertainty as to whether it will achieve its sales forecast for its products and services, substantial doubt exists with respect to its ability to continue as a going concern. Wave's independent registered public accounting firm has issued a report dated March 16, 2010, that includes an explanatory paragraph referring to its significant operating losses and substantial doubt about its ability to continue as a going concern. WESTERN ENERGY: S&P Assigns 'B+' Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' long-term corporate credit rating to Calgary, Alta.-based land driller Western Energy Services Corp. The outlook is stable. At the same time, Standard & Poor's assigned its 'B+' issue-level rating (the same as the corporate credit rating on Western), and '3' recovery rating, to the company's proposed C$125 million senior unsecured notes due 2019. A '3' recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery in the event of default. "If the company increases the notes offering to C$150 million, we will not change the issue rating but will revise the recovery rating to '4', indicating our expectation of average (30%-50%) recovery," S&P said. "Western plans to use proceeds of the notes to repay borrowings under the revolver. We do not rate the company's C$150 million revolving credit facility," S&P said. "The ratings on Western reflect our view of the company's weak business risk profile and aggressive financial risk profile," said Standard & Poor's credit analyst Aniki Saha-Yannopoulos. "Our assessment of Western's business risk profile hinges on the company's position as a land driller subject to the high degree of demand cyclicality and price volatility inherent in the market for oilfield services, especially drilling. The weak business risk profile also reflects what we believe to be the industry's highly competitive nature as well as Western's small fleet size, limited geographic diversity, and financial leverage. The business risk profile also takes into account our view of the company's strong fleet quality and its long-term contracts." "In addition, the ratings reflect our expectations that Western will have debt leverage of about 1.7x; pro forma the acquisition of Stoneham Drilling Corp. and including Stoneham's 2011 EBITDA, debt leverage will be 1.3x. We expect metrics to improve through 2012. Specifically, we expect Western to continue benefiting from near-term strong demand for its land rigs due to a combination of increased horizontal drilling as well as exploration and production companies' increased capital budgets," S&P said. "Western had started operating land rigs in 2010, and we base our analysis on the assumption that the company will integrate Stoneham successfully. Western has 43 rigs, and is building a four new rigs, all of which are already contracted for. The average age of the company's consolidated fleet is six years, and almost all the assets are capable of horizontal drilling. As an indication of its asset quality, both Stoneham and Western's assets also had higher utilization compared with the Canadian fleet's average utilization (as reported by the Canadian Association of Oilwell Drilling Contractors)," S&P said. "The stable outlook reflects Standard & Poor's expectations that Western's adjusted debt-to-EBITDA will remain below 1.5x through 2012. Strong industry conditions should continue to improve the company's operating cash flow and EBITDA margins such that adjusted debt-to-EBITDA will improve below its current measures. Nevertheless, we could take a negative rating action if debt-to- EBITDA increases above 3x, which could occur as a result of poor integration, significantly weaker market fundamentals, or through aggressively financed growth initiatives. We do not expect a positive rating action in the next 12 months, as the company's asset base and narrow geographic diversity limits the ratings," S&P said. WYSTERIA LLC: Seeks to Employ Joel K. Belway as Counsel ------------------------------------------------------- Wysteria, LLC, seeks permission from the U.S. Bankruptcy Court for the Northern District of California to employ Joel K. Belway of The Law Office of Joel K. Belway Professional Corporation as its counsel. Mr. Belway's scope of the services will include all services necessary to represent the Debtor as a debtor in possession in the Chapter 11 case. Debtor's manager, Steve Kendrick, paid Mr. Belway a retainer of $22,000 on November 18, 2011 for representation of Debtor. Mr. Belway's current hourly billing rate is $400. The Debtor assures the Court that Mr. Belway does not presently represent any other person or entity in connection with the Chapter 11 case and does not have any interest adverse to the Debtor. Wysteria, LLC, filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 11-34171) on Nov. 18, 2011. The Company estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. The petition was signed by Stephen H. Kendrick, as manager. Judge Dennis Montali presides the case. The Debtor is represented by Joel K. Belway, Esq., at the Law Offices of Joel K. Belway. Z TRIM HOLDINGS: Holders Convert 21,800 Preferred Shares -------------------------------------------------------- Holders of Z Trim Holdings, Inc., Series I 8% Convertible Preferred Stock, between Dec. 22, 2011, and Jan. 15, 2012, elected to convert an aggregate of 21,800 shares of the Company's Series I Preferred Stock, plus accrued but unpaid dividends of $17,440 on such shares of Series I Preferred Stock, into an aggregate of 126,440 shares of the Company's common stock, par value $0.00005 per share, pursuant to the terms of the Statement of Resolution Establishing the Series I Preferred Stock. For each converted share of Series I Preferred Stock, the holder thereof was entitled to receive such number of shares of Common Stock as determined by dividing (x) the Original Series I Issue Price of $5.00 per share plus the amount represented by accrued but unpaid dividends on such share by (y) the Conversion Price of $1.00 applicable to such share. Between Dec. 22, 2011, and Jan. 15, 2012, the Company also received notice from debt holders electing to convert $1,784,000 of principal balance on outstanding convertible notes, plus $285,440 of interest accrued thereon, into 2,069,440 shares of the Company's Common Stock. This is equivalent to a conversion price of $1.00 per share of Common Stock. In connection with the shares of Common Stock issued as a result of the foregoing conversion of Notes, 1,508,000 shares were issued to the Company's largest shareholder, Brightline Ventures I, LLC, in exchange for the conversion of $1,300,000 in principal balance on Notes it held, plus $208,000 of interest accrued thereon. The shares of Common Stock issued as part of the conversion of the Series I Preferred Stock and Notes are being issued pursuant to the effective registration statement on Form S-1. 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. * It's Vulture Against Vulture as Icahn Buys LightSquared Debt -------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Philip Falcone, one of Wall Street's most prominent distressed-debt investors, has just received a dose of his own medicine from a veteran in the field, Carl Icahn. * Abu Dhabi Targets AIM Listing for its Qannas Fund --------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Abu Dhabi Capital Management, an alternative investment management firm focusing on the Gulf region, is set to float Qannas, its latest fund, on London's Alternative Investment Market as part of a capital- raising program. * BOND PRICING -- For Week From Jan. 9 to 13, 2012 -------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- ACARS-GM 8.100 6/15/2024 1.000 AGY HOLDING COR 11.000 11/15/2014 25.900 AHERN RENTALS 9.250 8/15/2013 26.270 ALION SCIENCE 10.250 2/1/2015 49.800 AM AIRLN PT TRST 7.379 5/23/2016 17.250 AM AIRLN PT TRST 7.377 5/23/2019 18.500 AM AIRLN PT TRST 9.730 9/29/2014 23.750 AM AIRLN PT TRST 10.180 1/2/2013 56.000 AMBAC INC 9.375 8/1/2011 10.000 AMBAC INC 9.500 2/15/2021 10.000 AMBAC INC 7.500 5/1/2023 10.001 AMBAC INC 5.950 12/5/2035 13.250 AMERICAN ORIENT 5.000 7/15/2015 46.390 AMR CORP 10.125 6/1/2021 15.500 AMR CORP 10.550 3/12/2021 18.250 AMR CORP 10.290 3/8/2021 19.100 AMR CORP 10.150 5/15/2020 20.000 AMR CORP 10.200 3/15/2020 20.770 AMR CORP 9.750 8/15/2021 21.000 AMR CORP 9.800 10/1/2021 21.100 AMR CORP 10.000 4/15/2021 21.218 AMR CORP 9.880 6/15/2020 21.715 AMR CORP 9.000 8/1/2012 23.500 AMR CORP 6.250 10/15/2014 23.550 AQUILEX HOLDINGS 11.125 12/15/2016 41.500 BANKUNITED FINL 3.125 3/1/2034 4.915 BLOCKBUSTER INC 11.750 10/1/2014 1.625 BON-TON DEPT STR 10.250 3/15/2014 53.000 BON-TON DEPT STR 10.250 3/15/2014 54.125 CALIF BAPTIST 7.600 11/15/2012 20.000 CALIF BAPTIST 7.900 11/15/2017 20.000 CIRCUS & ELDORAD 10.125 3/1/2012 76.250 CIT-CALL01/12 7.000 5/1/2015 99.944 DELTA PETROLEUM 3.750 5/1/2037 70.000 DIRECTBUY HLDG 12.000 2/1/2017 21.625 DIRECTBUY HLDG 12.000 2/1/2017 29.000 DUNE ENERGY INC 10.500 6/1/2012 90.260 DYNEGY HLDGS INC 8.750 2/15/2012 61.550 EASTMAN KODAK CO 7.000 4/1/2017 27.000 EASTMAN KODAK CO 9.950 7/1/2018 27.000 EASTMAN KODAK CO 7.250 11/15/2013 30.750 EDDIE BAUER HLDG 5.250 4/1/2014 6.750 ENERGY CONVERS 3.000 6/15/2013 39.500 EVERGREEN SOLAR 4.000 7/15/2020 0.250 EVERGREEN SOLAR 13.000 4/15/2015 45.000 FAIRPOINT COMMUN 13.125 4/2/2018 4.950 FIBERTOWER CORP 9.000 11/15/2012 9.375 GLOBALSTAR INC 5.750 4/1/2028 45.000 GMX RESOURCES 5.000 2/1/2013 58.000 GMX RESOURCES 5.000 2/1/2013 65.250 GREAT ATLA & PAC 5.125 6/15/2011 2.000 HAWKER BEECHCRAF 9.750 4/1/2017 12.550 HAWKER BEECHCRAF 8.500 4/1/2015 20.440 HUTCHINSON TECH 3.250 1/15/2026 62.000 JPMORGAN CHASE 4.500 1/15/2012 100.043 KELLWOOD CO 7.625 10/15/2017 21.150 LEHMAN BROS HLDG 5.000 1/22/2013 23.143 LEHMAN BROS HLDG 5.100 1/28/2013 24.000 LEHMAN BROS HLDG 5.000 8/3/2014 24.000 LEHMAN BROS HLDG 7.000 6/26/2015 24.000 LEHMAN BROS HLDG 5.000 8/5/2015 24.000 LEHMAN BROS HLDG 7.000 12/18/2015 24.000 LEHMAN BROS HLDG 6.000 2/12/2018 24.000 LEHMAN BROS HLDG 5.000 2/11/2013 24.350 LEHMAN BROS HLDG 11.000 7/18/2022 24.500 LEHMAN BROS HLDG 9.500 12/28/2022 24.500 LEHMAN BROS HLDG 9.500 1/30/2023 24.500 LEHMAN BROS HLDG 9.500 2/27/2023 24.825 LEHMAN BROS HLDG 5.875 11/15/2017 24.880 LEHMAN BROS HLDG 4.700 3/6/2013 25.000 LEHMAN BROS HLDG 10.000 3/13/2023 25.000 LEHMAN BROS HLDG 10.375 5/24/2024 25.000 LEHMAN BROS HLDG 5.000 3/27/2013 25.125 LEHMAN BROS HLDG 5.150 2/4/2015 25.125 LEHMAN BROS HLDG 11.000 3/17/2028 25.250 LEHMAN BROS HLDG 11.500 9/26/2022 25.300 LEHMAN BROS HLDG 5.750 5/17/2013 25.416 LEHMAN BROS HLDG 8.500 8/1/2015 25.500 LEHMAN BROS HLDG 5.500 4/4/2016 25.500 LEHMAN BROS HLDG 5.250 2/11/2015 25.550 LEHMAN BROS HLDG 8.800 3/1/2015 25.625 LEHMAN BROS HLDG 4.800 3/13/2014 25.700 LEHMAN BROS HLDG 11.000 6/22/2022 25.750 LEHMAN BROS HLDG 5.625 1/24/2013 26.000 LEHMAN BROS HLDG 6.000 7/19/2012 26.130 LEHMAN BROS HLDG 6.200 9/26/2014 27.000 LOCAL INSIGHT 11.000 12/1/2017 0.501 MANNKIND CORP 3.750 12/15/2013 53.000 MF GLOBAL LTD 9.000 6/20/2038 34.000 MOHEGAN TRIBAL 7.125 8/15/2014 57.500 MOHEGAN TRIBAL 8.000 4/1/2012 86.000 PENSON WORLDWIDE 8.000 6/1/2014 39.816 PMI GROUP INC 6.000 9/15/2016 21.500 RADIAN GROUP 5.625 2/15/2013 70.875 REAL MEX RESTAUR 14.000 1/1/2013 50.125 REDDY ICE CORP 13.250 11/1/2015 39.250 RESIDENTIAL CAP 8.500 4/17/2013 67.125 RESIDENTIAL CAP 8.500 6/1/2012 87.875 TEXAS COMP/TCEH 10.250 11/1/2015 26.250 TEXAS COMP/TCEH 10.250 11/1/2015 28.000 TEXAS COMP/TCEH 10.250 11/1/2015 31.100 THORNBURG MTG 8.000 5/15/2013 8.000 TIMES MIRROR CO 7.250 3/1/2013 36.250 TITAN INTL INC 8.000 1/15/2012 99.750 TOUSA INC 9.000 7/1/2010 12.967 TOUSA INC 9.000 7/1/2010 12.967 TRAVELPORT LLC 11.875 9/1/2016 28.875 TRAVELPORT LLC 11.875 9/1/2016 31.000 TRICO MARINE 3.000 1/15/2027 1.000 TVL-CALL01/12 6.500 5/15/2013 100.250 VERSO PAPER 11.375 8/1/2016 41.500 WILLIAM LYON INC 10.750 4/1/2013 26.500 WILLIAM LYON INC 7.500 2/15/2014 26.583 WILLIAM LYONS 7.625 12/15/2012 25.902 YELLOW CORP 5.000 8/8/2023 19.500 ********* 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 2012. 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 ***