/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120202.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, February 2, 2012, Vol. 16, No. 32 Headlines 3 B'S LAND: Case Summary & 18 Largest Unsecured Creditors 5001 SHR: Case Summary & 14 Largest Unsecured Creditors A&P NEW HOLDCO: Moody's Assigns 'Caa1' Corporate Family Rating A-1111 VENTURE: Case Summary & 5 Largest Unsecured Creditors ACCO BRANDS: Moody's Assigns 'Ba2' Rating to Credit Facility ACCO BRANDS: Fitch Assigns Initial 'BB' Issuer Default Rating ADVANCED MICRO: S&P Puts 'B+' Corporate Rating on Watch Positive AES EASTERN: Creditor Says Bankruptcy Belongs in New York AHERN RENTALS: Committee Proposes Covington as Attorneys AHERN RENTALS: Committee Taps FTI Consulting as Fin'l Advisor AHERN RENTALS: Gains Final Approval of DIP Financing AHERN RENTALS: Has Access to Cash Collateral Until March 2013 AMERICAN PACIFIC: To Seek Approval of Plan Disclosures Feb. 9 AMERICAN AIRLINES: Unveils Turnaround Plan to Staff, Union Heads AMERISERV FINANCIAL: Fitch Affirms Issuer Default Rating at 'BB' APTALIS PHARMA: S&P Cuts $897-Mil. Sec. Credit Rating to 'BB-' ART MIDWEST: Voluntary Chapter 11 Case Summary ART MIDWEST: Voluntary Chapter 11 Case Summary AS AMERICA: S&P Cuts Rating on $187.5-Mil. Senior Notes to 'B-' ATLANTIC & PACIFIC: Files Exhibits Related to Plan ATTACHMATE GROUP: Moody's Affirms 'B2' Rating; Outlook Negative BRADFORD ACADEMY: S&P Cuts Rating on Revenue Bonds to 'CCC+' BROOKFIELD RENEWABLE: S&P Affirms 'BB+' Preferred Stock Rating BUFFETS INC: Proposes Paul Weiss, 4 Other Advisors CATALYST PAPER: Forced to Seek CCAA Protection After Deal Fails CATALYST PAPER: Obtains Initial Order Under CCAA CELL THERAPEUTICS: Has $16.6 Million Net Loss in December CELL THERAPEUTICS: Withdraws New Drug Application for Pixuvri CENTRAL FALLS: ACLU Accuses RI City's Receiver of Abusing Power CENTREPOINT DEVELOPMENT: Voluntary Chapter 11 Case Summary CEQUEL COMMUNICATIONS: S&P Affirms 'B+' Corporate Credit Rating CHARLESTON PARTY: Case Summary & 7 Largest Unsecured Creditors CLINTON COURT: Chapter 11 Case Dismissed Effective January 20 CONGAREE TRITON: Voluntary Chapter 11 Case Summary CPG INTERNATIONAL: S&P Affirms 'B' Corporate Credit Rating CRYSTAL CATHEDRAL: Asks Judge to Amend Sale Order E. D. WHITE: Case Summary & 20 Largest Unsecured Creditors EDUCATION CENTER: Case Summary & 20 Largest Unsecured Creditors EMI PUBLISHING: Moody's Assigns 'B1' Corporate Family Rating EMMIS COMMUNICATIONS: Has Retired 386,850 of Preferred Shares ENCORE PROPANE: Voluntary Chapter 11 Case Summary ENERGY FUTURE: Moody's Affirms 'Caa2' Corporate Family Rating ENTERPRISE PRODUCTS: Moody's Lifts Jr. Sub. Note Rating From Ba1 FIRST COMMONWEALTH: Fitch Say 'BB+' Pref. Stock on Watch Neg. FOUR SEASONS: U.S. Trustee Asks Court to Dismiss Chapter 11 Case GAME TRADING: Case Summary & 20 Largest Unsecured Creditors GAMERS FACTORY: Case Summary & 20 Largest Unsecured Creditors GENERAL MOTORS: Settles Old Environment Liabilities for $23.8MM GENWORTH MORTGAGE: S&P Cuts Counterparty Credit Rating to 'B' GEP MIDSTREAM: S&P Withdraws 'BB-' Corporate Credit Rating GLOBAL GEOPHYSICAL: S&P Raises Corporate Credit Rating to 'B+' HAMPTON ROADS: Incurs $98 Million Net Loss in Full Year 2011 HAMPTON ROADS: Donald Price Joins as Bank's Senior Loan Officer HANLEY WOOD: S&P Withdraws 'SD' Corporate Credit Rating HARTFORD COMPUTER: Creditors Aim to Probe Hedge Fund Lender HAWKER BEECHCRAFT: Top Exec Sees Turbulence Ahead in 2012 HEALTHSPRING INC: S&P Lifts Counterparty Credit Rating From BB- HEARUSA INC: Brower Piven Launches Investors' Class Suit HIGHLANDS AT THE RIM: Case Summary & Largest Unsecured Creditors HOSTESS BRANDS: Creditors Says DIP Loan Triggers Liquidation HUDSON TREE: Lender Wants Plan Filed by March 31 IMPERIAL PETROLEUM: CEO J. Ryer Leaves for "Personal Reasons" IMPERIAL SUGAR: Faces Liquidity Crunch, Works to Sell Assets INNER CITY: Parent Sues Lenders to Shield IP Assets INNER CITY: Parent is Suing its Subsidiary in Trademark Dispute INOVA TECHNOLOGY: Three Directors Elected at Annual Meeting INTERNATIONAL ENERGY: Case Converted to Chapter 7 IRA WOOD: Case Summary & 20 Largest Unsecured Creditors JARDEN CORP: Moody's Assigns 'Ba1' Senior Secured Credit Facility JBS USA: Fitch Assigns 'BB-' Rating to $400-Mil. Unsec. Notes JEFFERSON COUNTY: Union Seeks to Move Forward With Lawsuit KAUFMAN BROS.: Ceases Operations Amid Low Volume LEXINGTON ROAD: Case Summary & 14 Largest Unsecured Creditors LI-ON MOTORS: FINRA OKs 1:5 Reverse Split of Common Stock LOS ANGELES DODGERS: 10 Groups Move on to 2nd Round of Bidding M&M PRECAST: Case Summary & 20 Largest Unsecured Creditors MATERIALS SCIENCE: Case Summary & 20 Largest Unsecured Creditors MEDIACOM LLC: S&P Assigns 'B-' Rating on $200-Mil. Senior Notes MGT CAPITAL: NYSE AMEX Accepts Plan of Compliance MILK HOLDING: S&P Assigns 'B' Corporate Credit Rating MOHEGAN TRIBAL: S&P Assigns 'B-' Rating to Credit Facility MORTGAGE GUARANTY: Moody's Cuts Sr. Unsec. Debt Rating to 'Caa2' MORTGAGE GUARANTY: S&P Cuts Issuer Credit Rating to 'CCC' NEFF RENTAL: Moody's Affirms 'B3' CFR; Outlook Stable NEWPAGE CORP: Says Attack to Bonuses Harassment, Bargaining Tactic NIELSEN FINANCE: Moody's Assigns 'Ba2' Rating to New Term Loan NMCAH REALTY: Case Summary & 15 Largest Unsecured Creditors NORTON RETIREMENT: Case Summary & 20 Largest Unsecured Creditors OASIS PETROLEUM: S&P Raises Corporate Credit Rating to 'B+' OLD REPUBLIC: Fitch Downgrades Issuer Default Rating to 'BB' OMNICARE INC: Moody's Says 'Ba3' CFR Unaffected by FTC Complaint OPEN RANGE: U.S. Objects to Unsecured Creditors' Demands OPEN RANGE: Seeks Two-Month Extension to File Payment Plan PACIFIC AUTO: Case Summary & 8 Largest Unsecured Creditors PACKAGING DYNAMICS: S&P Affirms 'B' Corporate Credit Rating PADUCAH ATHLETIC: Case Summary & 13 Largest Unsecured Creditors PEP BOYS: Moody's Says B1 Unaffected by Gores Group Purchase PEP BOYS: S&P Puts 'B' Corporate Credit Rating on Watch Negative PG COLLECTIONS: Case Summary & 9 Largest Unsecured Creditors PITT PENN: Taps Peckar & Abramson as Special Litigation Counsel PMI GROUP: Committee Taps Womble Carlyle as Bankruptcy Co-Counsel PMI GROUP: Panel Taps Morrison & Foerster as Bankruptcy Counsel RADIAN GUARANTY: S&P Cuts Insurer Fin'l Strength Rating to 'B' RCR PLUMBING: Taps Oliva and Associates as Special Counsel REAL MEX: Judge OKs Appointment of Consumer Privacy Ombudsman REAL MEX: Judge Bars Creditors From Pursuing Lender Claims REALTY INCOME: S&P Assigns 'BB+' $325MM Preferred Stock Rating RNFI UNLIMITED: Voluntary Chapter 11 Case Summary ROCK POINTE: Status Quo on Use of DMARC Cash Until April 5 Hearing ROCKET SOFTWARE: Moody's Assigns 'B2' Corporate Family Rating ROCKIES EXPRESS: S&P Lowers Corporate Credit Rating to 'BB' ROOMSTORE INC: Seeks Approval to Replace its Bankruptcy Lender RURAL/METRO CORP: S&P Affirms 'B' Corporate Credit Rating SAMSON INVESTMENT: Moody's Assigns 'Ba3' Corporate Family Rating SAMSON RESOURCES: S&P Assigns 'B+' Corporate Credit Rating SAND SPRING: Taps Walker Truesdell as Independent Agent SERVICEMASTER CO: S&P Rates $400-Mil. Sr. Unsec. Notes at 'B-' SINO-FOREST: Independent Committee Releases Final Report SMART & FINAL: Moody's Confirms 'B3' Corporate Family Rating SOLYNDRA LLC: To Abandon Thousands of Contaminated Assets SOMERSET PROPERTIES: Case Summary & 6 Largest Unsecured Creditors SPANISH BROADCASTING: Moody's Rates 1st Lien Notes at 'Caa1' SPANISH BROADCASTING: S&P Rates Secured First-Lien Notes at 'B-' SUMMIT ENTERTAINMENT: Moody's Assigns 'B1' Corp. Family Rating T&B DEMOLITION: Voluntary Chapter 11 Case Summary TEE INVESTMENT: Fine-Tunes First Amended Chapter 11 Plan THORPE INSULATION: 9th Circ. Rejects Insurer's Contract Claims TOLL BROS: S&P Assigns 'BB+' Rating to $250-Mil. Senior Notes TRANSDIGM INC: Moody's Affirms 'B1' Corporate Family Rating TRIDENT MICROSYSTEMS: U.S. Trustee Opposes 2015 Report Delays TRUMAN LANDSCAPER: Involuntary Chapter 11 Case Dismissed TULSI LODGING: Case Summary & 20 Largest Unsecured Creditors TWCC HOLDING: S&P Affirms 'B+' Corporate Credit Rating UNITED RETAIL: Avenue Brand Owners in Ch. 11 to Sell to Versa UNITED RETAIL: Case Summary & 50 Largest Unsecured Creditors UNIVISION COMMUNICATION: S&P Keeps 'B+' Rating on Secured Notes US SECURITY: S&P Keeps 'B' $345-Mil. Term Loan B Rating VALEANT PHARMA: Moody's Lowers Sr. Sec. Debt Rating to 'Ba1' VALEANT PHARMA: S&P Cuts Senior Unsecured Debt Rating to 'BB-' WIMBERLY ASSOCIATES: Case Summary & 9 Largest Unsecured Creditors WINDSOR QUALITY: S&P Affirms 'B+' Corporate Credit Rating WM. BOLTHOUSE: S&P Affirms 'B' Corporate Credit Rating WPCS INTERNATIONAL: Obtains $12 Million Loan from Sovereign Bank WPCS INTERNATIONAL: Ends Merger Talks with Multiband * Weil Survey Says Distress in Retail, Media Sectors Expected * Richards Kibbe's Nastasi Joins Fulbright & Jaworski as Partner * Macey's J. Umentum Wins Paralegal of the Quarter Award * McKool Smith Launches Whistleblower Litigation Practice * Ex-Prosecutor Joins McDonald Hopkins' White Collar Crime Group * Gross, Polowy & Orlans Opens in Amherst, New York * Asset Management Firms Stalking European Distressed Debt * Recent Small-Dollar & Individual Chapter 11 Filings ********* 3 B'S LAND: Case Summary & 18 Largest Unsecured Creditors --------------------------------------------------------- Debtor: 3 B's Land & Gravel, LLC c/o 201 West Main Grangeville, ID 83530 Bankruptcy Case No.: 12-40392 Chapter 11 Petition Date: January 26, 2012 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Paul B. Snyder Debtor's Counsel: John D. Nellor, Esq. J. D. NELLOR, PC Park Tower One 201 N.E. Park Plaza Drive, Suite 202 Vancouver, WA 98684 Tel: (360) 816-2241 E-mail: jd@nellorlaw.com Scheduled Assets: $5,556,265 Scheduled Liabilities: $2,495,909 A list of the Company's 18 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb12-40392.pdf The petition was signed by Bob Blewett, member. 5001 SHR: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------- Debtor: 5001 SHR, L.C. 5001 Silver Hill Road Suitland, MD 20746 Bankruptcy Case No.: 12-11287 Chapter 11 Petition Date: January 26, 2012 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Debtor's Counsel: Justin Philip Fasano, Esq. WHITEFORD TAYLOR AND PRESTON, LLP 3190 Fairview Park Drive, Suite 300 Falls Church, VA 22042 Tel: (703) 280-3385 E-mail: jfasano@wtplaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 14 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mdb12-11287.pdf The petition was signed by Kevin M. Sills, managing member. A&P NEW HOLDCO: Moody's Assigns 'Caa1' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service assigned a Caa1 corporate family and probability of default rating to A&P New Holdco, the parent entity of The Great Atlantic & Pacific Tea Company, Inc. Moody's also assigned a B3 rating to A&P's new 5 year $350 million first lien senior secured term loan facility. These are first time ratings by Moody's for A&P's proposed debt related to A&P's emergence from bankruptcy (filed in the US on December 12, 2010). "We expect A&P's free cash flow generation and cash interest coverage to be weak and its consolidated capital structure to be very highly leveraged at its emergence from bankruptcy", Moody's Senior Analyst Mickey Chadha stated. "Despite new management initiatives, reversing the company's brand erosion due to an extended period of under performance and historical lack of strategic direction will be challenging in light of stiff competition and a sluggish economy", Chadha further stated. RATINGS RATIONALE The Caa1 corporate family rating reflects our opinion that A&P's cash interest coverage and free cash flow are weak giving consideration to our standard lease and pension adjustments and the challenges faced by new management to reverse an extended period of decline in the company's profitability and sales growth to enhance the company's competitive position. Adjusted financial leverage is also high relative to other rated peers. The volatility in financial policies that accompanies financial sponsor ownership is also a rating factor. The rating gives favorable consideration to our view that A&P's liquidity is adequate and that management is proactively addressing operations with new initiatives which are expected to continue to gain traction. Additionally, the company's good regional market presence and the relief it received from pre- petition liabilities are positive factors that support the rating. These ratings are assigned: A&P New Holdco Corporate Family Rating at Caa1 Probability of default rating at Caa1 The Great Atlantic and Pacific Tea Company, Inc. $350 million First Lien Term Loan maturing February 2017 at B3 (LGD 3, 33%) The stable outlook incorporates our expectation of improvement in profitability and credit metrics in the near to medium term. Given current credit metrics and the challenging food retailing environment, a rating upgrade is unlikely in the near term. Ratings could be upgraded over the longer term if the company demonstrates sustained positive same store sales growth while maintaining adequate liquidity. Quantitatively ratings could be upgraded if debt/EBITDA is sustained below 6.25 times and EBITA/interest is sustained above 1.0 time. Given that debt/EBITDA and EBITA/interest for fiscal year 2012 is expected to be about 7.0 times and about 1.0 time respectively, ratings could be downgraded if there is no improvement in credit metrics in the near to medium term. Ratings could also be downgraded if liquidity deteriorates or if same store sales do not reverse their declining trend. The principal methodologies used in this rating were Global Retail Industry published in June 2011, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. The Great Atlantic and Pacific Tea Company, Inc. (A&P), headquartered in Montvale, N.J., is a supermarket chain operating 316 supermarkets under the A&P, The Food Emporium, Pathmark, Superfresh, Waldbaums and Foodbasics banners and 19 liquor stores in the Northeast US concentrated in the New York/New Jersey/Pennsylvania markets. The company's annual sales are about $7 billion. A-1111 VENTURE: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: A-1111 Venture LLC P.O. Box 206 Pacific, WA 98047 Bankruptcy Case No.: 12-40432 Chapter 11 Petition Date: January 26, 2012 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Paul B. Snyder Debtor's Counsel: Allan L. Overland, Esq. 901 South I Street, Suite 202 Tacoma, WA 98405 Tel: (253) 383-3053 Fax: (253) 383-3209 Scheduled Assets: $5,800,000 Scheduled Liabilities: $3,195,743 A list of the Company's five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb12-40432.pdf The petition was signed by Scott Haymond, member. ACCO BRANDS: Moody's Assigns 'Ba2' Rating to Credit Facility ------------------------------------------------------------ Moody's Investors Service kept the existing credit ratings of ACCO Brands Corporation's on review, but expects to upgrade the Corporate Family Rating and Probability of Default Rating to Ba3 from B2 if the acquisition of the office product segment of MeadWestvaco closes under its current terms. MeadWestvaco is rated Ba1 with a positive outlook. At the same time, Moody's assigned a Ba2 rating to ACCO's $920 million senior secured credit facility which reflects an expected post-acquisition Ba3 Corporate Family Rating and Probability of Default Rating. The facility is comprised of a $300 million Term Loan A, $370 million Term Loan B and $250 million revolver. The rating on the senior subordinated notes remains under review, but is expected to be upgraded to B2 upon the closing of the acquisition. The senior secured notes are expected to be repaid in full at closing and we expect to withdraw the rating at that time. The speculative grade liquidity rating was affirmed at SGL-2. Ratings assigned: $300 million Term Loan A at Ba2 (LGD2, 27%); $370 million Term Loan B at Ba2 (LGD2, 27%); $250 million Revolver at Ba2 (LGD2, 27%); Ratings remaining under review: Corporate Family Rating at B2; Probability of Default Rating at B2; Senior subordinated notes rating at Caa1; Senior secured notes rating at B1; Rating affirmed: Speculative grade liquidity rating at SGL-2 RATING RATIONALE Upon completion of the transaction, MeadWestvaco shareholders will own 50.5% of the combined company. MeadWestvaco's Consumer & Office Products business is a manufacturer and marketer of school supplies, office products, and planning and organizing tools -- including the Mead(R), Five Star(R), Trapper Keeper(R), AT-A- GLANCE(R), Cambridge(R), Day Runner(R), Hilroy, Tilibra and Grafons brands in the United States, Canada and Brazil. With the addition of this business, ACCO Brands increases its scale and strengthens its position in school and office products. For tax purposes, the transaction is structured as a "Reverse Morris Trust" transaction whereby the transaction will be funded with a combination of $940 million of debt, approximately $544 million of equity based on the current stock price and approximately $56 million of cash. $190 million of the secured debt will initially be issued to a special purpose entity, which will then be assumed by ACCO at close. The company has commitments for a $270 million bridge loan that is expected to be replaced by a senior unsecured bond prior to close. If the senior unsecured bond cannot be issued, the unsecured bridge loan will mature in eight years. Under the terms of the merger agreement, MeadWestvaco will establish a separate entity to hold the Consumer & Office Products business, the shares of which will be distributed to MeadWestvaco shareholders in a tax-free transaction in return for a $460 million dividend to MeadWestvaco from the new entity. Immediately after the spin-off and distribution, the newly formed company will merge with a subsidiary of ACCO Brands. The acquisition is subject to certain conditions including (tax approvals, financing etc.). "The contemplated two notch upgrade of the Corporate Family Rating to Ba3 reflects a material improvement in credit metrics pro forma for the transaction, a significant increase in the scale of the combined company and increased exposure to faster growing emerging markets in Latin America," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. "In addition, the acquisition will broaden ACCO's distribution to more mass retailers and away from the traditional Office Super Stores," he said. ACCO's expected Ba3 Corporate Family Rating post-acquisition reflects its size at over $2 billion for the combined company, moderate financial leverage, measured as Debt/Ebitda, of less than 4 times proforma for the acquisition, good product and geographic diversification, and strong earnings capacity. The rating also considers ACCO's increased exposure to the faster growing emerging markets of Latin America at 11% of pro forma sales. The rating incorporates the mature nature of the office and school supplies industry. ACCO serves a consumable segment about half of which is tied to discretionary consumer spending and a durable exposure, which is driven more by business spending but is more vulnerable to cyclicality. Mitigating these factors is ACCO's solid market position within the office supply product categories, improved margins through a realignment of its cost structure, good free cash flow generation, commitment to pay down debt and good liquidity profile that provides financial flexibility to continue to weather the uncertain economic environment. Moody's also considers the relevance of ACCO to its largest customers as one of only a few global suppliers of office products. The CFR is expected to be upgraded to Ba3 if the transaction closes consistent with the proposed terms. The ratings are unlikely to be downgraded in the near term even if the acquisition of Mead C&OP does not close under its current terms.The B2 CFR could be downgraded if the transaction fails to close and earnings and cash flow materially deteriorate from current levels such that EBITA margins fall to the single digits digits or lower and financial leverage (debt/EBITDA) is sustained around 6 times or higher. The principal methodology used in rating ACCO was Moody's Global Packaged Goods Industry methodology published in July 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ACCO Brands Corporation ("ACCO") is a leading supplier of branded office products, which are marketed in over 100 countries to retailers, wholesalers, and commercial end-users. Revenue for ACCO approximated $1.4 billion for the twelve months ended September 30, 2011. The office product segment of MeadWestvaco ("Mead C&OP"), located in Dayton, Ohio, is a leading provider of school, office, and time-management products in North America and Brazil. It manufactures brands such as At-A-Glance, Day Runner, Five-Star, Mead, and Hilroy. Sales for the twelve months ending September 30, 2011 approximated $740 million. ACCO BRANDS: Fitch Assigns Initial 'BB' Issuer Default Rating ------------------------------------------------------------- Fitch Ratings has assigned initial ratings to ACCO Brands Corporation (ACCO) as follows: -- Long-term Issuer Default Rating (IDR) at 'BB'; -- $420 million 10.625% senior secured notes due March 15, 2015 at 'BB+'; -- $175 million Senior Secured ABL facility due Sept. 30, 2013 at 'BB+'; -- $246 million 7.625% senior subordinated notes due Aug. 15, 2015 at 'BB-'. Fitch expects to rate the company's proposed senior secured credit facilities 'BB+'. The Rating Outlook is Stable. At September 30, 2011 ACCO had $669 million of debt. The ratings and Outlook reflect Fitch's expectation that ACCO will successfully complete its merger with MeadWestvaco Corporation's Consumer and Office Products business (Mead C&OP). Mead C&OP is a leading provider of school, office and time management products in North America and Brazil. The combined entity will benefit from greater scale, a stronger business profile, increased profitability and greater cash flow. The transaction is valued at $860 million and will be funded with a combination of debt and equity. Upon its completion MeadWestvaco shareholders will own 50.5% of the combined company. The transaction is structured as a Reverse Morris Trust and subject to receipt of IRS letter ruling and regulatory and shareholders approval. The transaction is expected to be completed during the first half of 2012. Fitch views the transaction as highly positive. The combined company is estimated to generate revenues in excess of $2 billion and EBITDA of approximately $300 million. ACCO estimates cost savings of $20 million annually by 2014. There is a minimal overlap in the companies' products mix and more importantly Mead C&OP has a larger presence in the consumer retail channel, which is complementary to ACCO's strength in the commercial channel. Another benefit of the merger is greater geographic diversification as the combined entity will generate 11% of its sales from Latin America and will result in the doubling of ACCO's size in Canada. Mead C&OP's higher margins and lower operating earnings volatility reduces the business risk of the combined entities. Fitch expects credit protection measures to improve following the merger. The strong profitability of Mead C&OP, the equity component of the purchase price and refinancing of ACCO's high- coupon senior secured notes will enhance the combined company credit profile. Total debt to operating EBITDA is estimated to be approximately 3.5 times (x) and EBITDA to interest 4.0x. The combined entity is estimated to be able to produce over $100 million of free cash flow annually. If the transaction is not completed, Fitch will review the ratings to ensure they appropriately reflect the cash flow profile and business risk of ACCO on a standalone basis. The office supply industry is in a slow secular decline, with revenues, operating earnings and cash flow highly correlated to the business cycle and corporate spending. Expenditures for office supply products fall during recessionary periods as these items have a discretionary element to them. ACCO experienced revenues declines of approximately 20% in 2008 and 2009 mainly attributed to the U.S. recession; however, they were able to maintain EBITDA margins and even increase them in 2009. In addition, laptop computers, digital pads and smart phones have diminished the need for certain paper based products. Cash flow can be seasonal and periodic heightened competition from private label can exacerbate pressure on earnings and cash flows. Although the combined entity will have greater diversification they will be exposed to these elements, which place a limitation on the ratings to low investment grade. ACCO's credit ratings are further limited by its position as a consolidator in the industry as this growth strategy may lead to periodic increases in its leverage. Current plans to reduce debt when the Mead C&OP transaction is executed will provide the company with greater financial flexibility to make future acquisitions. As a result, Fitch does not anticipate significant improvement in the company's credit measures beyond the near-to- intermediate term. Although ACCO is likely to seek accretive acquisitions and structure them with a minimal impact on its credit profile, such deals are at best opportunistic. As the company is focused on deploying free cash flow (FCF) for growth, Fitch does not expect the firm to engage in either share repurchases or dividends, as they would weaken its credit profile. Furthermore, a large debt-financed acquisition without concrete measures to reduce debt meaningfully below 4.0x will likely lead to a negative rating action. For the nine months ended Sept. 30, 2011, ACCO sales increased 5% to $967 million primarily due to currency, with modest pricing offsetting volume declines. Operating income increased 5% to $79 million for the period. Higher incentive-related compensation expenses resulted in cash flow from operations being a greater use of cash for the period. The company utilized proceeds from divestments and a portion of its cash balances to reduce debt by $63 million to $669 million at the most recent quarter end. It repurchased $25 million of its senior subordinated notes and $34.9 million of its senior secured notes. For the latest 12-month period ending Sept. 30, 2011, ACCO generated revenues of $1.35 billion and operating EBITDA of $156 million, resulting in an operating EBITDA margin of 11.5%. While FCF was modestly negative for the period, it is expected to recover for the year and be comparable to the most recent prior year periods in which FCF ranged between $40 million-$70 million. Total debt to EBITDA was 4.3x for the LTM period and EBITDA to interest was 2.0x. Liquidity, Financial Covenants and Significant Debt Terms ACCO is expected to obtain a new $920 million secured credit facility to fund the debt portion of the transaction and to refinance the $420 million 10.625% senior secured notes. This facility is likely to be composed of a revolver and term loans. It is expected to have a first priority lien on substantially all assets and negative covenants and financial covenants. ACCO currently has a $175 million senior secured asset based revolving credit facility (ABL) that expires September 2013. The ABL is subject to borrowing base limitations including a $40 million carve-out for letters of credit and an optional $50 million accordion feature to fund working capital growth. At Sept. 30, 2011, the company's liquidity consisted of $169 million of availability under the ABL, after allowing for $6.5 million of outstanding letters of credit, and $41 million of cash. The ABL contains, among other things, a limitation on lien, indebtedness, and asset sales and also has a springing fixed-charge covenant which would be triggered if the excess availability under the facility falls below $20 million of total commitments. The facility's covenants also limit ACCO's ability to repurchase senior subordinated notes while it is being utilized. The senior secured notes are guaranteed on a senior secured basis by ACCO's existing and future subsidiaries. The notes are secured on a first priority basis by a lien on substantially all of ACCO's and guarantors present and future assets, excluding receivables and inventory and certain other assets, in which it has a second priority lien interest. ADVANCED MICRO: S&P Puts 'B+' Corporate Rating on Watch Positive ---------------------------------------------------------------- Standard & Poor's Rating Services placed its ratings on Sunnyvale, Calif.-based semiconductor microprocessor supplier Advanced Micro Devices Inc. (AMD), including its 'B+' corporate credit rating, on CreditWatch with positive implications. "Despite continuing competitive and technological challenges, AMD's more stable performance over the past two years, combined with the debt reduction we anticipate, could support a higher rating if we view it as sustainable," said Standard & Poor's credit analyst John Moore. "AMD has benefited from improved manufacturing yields over the past two quarters at foundry-partner GLOBALFOUNDRIES, which will continue to support AMD's improved revenue and margin stability going forward," he added. "Although we expect that competition from Intel and ARM-based (Advanced Reduced Instruction Set Computing Machine) technologies, along with an evolving personal computer market, will restrain AMD's revenue, margin, and cash flow growth prospects, we recognize that AMD has performed more consistently in this environment over the past two years than it has before. If AMD can continue its recent level of stable revenue and margins, combined with a focus on debt reduction, it could lead to a credit profile stronger than the current 'B+' corporate credit rating," S&P said. "Over the last two quarters, 32-nanometer yields and performance have steadily improved at GLOBALFOUNDRIES. As a result of this improved execution, AMD's 32-nanometer unit shipments increased by more than 80% sequentially in the fourth quarter of 2011 and currently represent about one-third of the company's overall processor mix. We note that AMD's revenue increased 1% year over year for 2011, supporting its stabilizing operating performance, and reported free cash flow of $528 million, exceeding the $355 million free cash flow it generated in 2010. Similarly, Standard & Poor's adjusted debt leverage of 2.4x on Dec. 31, 2011 would decline to 1.9x on a pro forma basis after the anticipated debt reduction later in the year," S&P said. CreditWatch "We will meet with management to assess the company's product roadmap strategy and will review final terms with its foundry suppliers. Based on current performance expectations, upgrade potential would likely be limited to one notch," S&P said. AES EASTERN: Creditor Says Bankruptcy Belongs in New York --------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that a key creditor is arguing for AES Eastern Energy LP's bankruptcy to be moved to New York, where the company's coal-fired power plants are located and where it must win regulatory approval of the plants' proposed sale. About AES Eastern Ithaca, New York-based AES Eastern Energy, L.P. operates four coal-fired electricity generating facilities with a gross capacity of 1,169 MW. AEE leases two of those plants. AEE sells electricity into the spot market at prevailing New York Independent System Operator wholesale market prices. AEE is a special purpose entity that is indirectly wholly owned by AES Corp. AES Eastern Energy and 13 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-14138 through 11-14151) on Dec. 30, 2011. Lawyers at Weil, Gotshal & Manges LLP and Richards, Layton & Finger, P.A. are legal counsel to AES Eastern Energy and affiliates. Barclays Capital is serving as investment banker and financial advisor. Kurtzman Carson Consultants serves as claims and noticing agent. AES Eastern Energy estimated $100 million to $500 million in assets and $500 million to $1 billion in debts. The petition was signed by Peter Norgeot, general manager. AHERN RENTALS: Committee Proposes Covington as Attorneys -------------------------------------------------------- The Official Committee of Unsecured Creditors formed in Ahern Rentals Inc.'s Chapter 11 case seeks authority to retain Covington & Burling LLP as counsel, nunc pro tunc to Jan. 9, 2012. The professional services that Covington will render to the Committee include legal advice and assistance in connection with the Committee's powers and duties, the administration of the Debtor's estates, and the Committee's investigation of the acts and conduct of the Debtor. The firm will charge the Debtor's estates on an hourly basis and will seek reimbursement of necessary expenses. The customary rates of Covington lawyers who are expected to provide services to the Committee are: Michael St. Patrick Baxter, Lead Attorney $855 Susan Powers Johnston, Of Counsel $825 Charles Jeanfreau, Special Counsel $730 Joshua D. McKarcher, Associate $445 Xiaowen Qian, Associate $330 Paralegal and other, non-attorney professional time will be billed at rates from $200 per hour to $360 per hour. The committee attests that to the best of its knowledge, none of the firm's connections constitute Covington's representation of an entity having an adverse interest in connection with the Debtor's case. The firm can be reached at: Michael St. Patricl Baxter, Esq. COVINGTON & BURLING LLP 1201 Pennsylvania Avenue NW Washington DC 20004-2401 Tel: (202) 662-6000 Fax: (202) 662-6291 E-mail: mbaxter@cov.com About Ahern Rentals Ahern Rentals, Inc. -- http://www.ahern.com/-- is an equipment rental company in the United States. The company also sells new and used rental equipment, parts and supplies related to its rental equipment, and merchandise used by the construction industry, as well as provides maintenance and repair services. Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain an extension of the Aug. 21, 2011 maturity of its revolving credit facility. Judge Bruce T. Beesley presides over the case. Lawyers at Gordon Silver serve as the Debtor's counsel. The Debtor's financial advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to Bank of America, as the DIP Agent and First Lien Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer. Attorneys for the Majority Term Lenders are Paul Aronzon, Esq., and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP. Counsel for the Majority Second Lienholder are Paul V. Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq., at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert LLP argue for certain revolving lenders. Attorneys for U.S. Bank National Association, as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard, Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland & Hart. The Company filed for Chapter 11 because it was unable to extend the maturity of its revolving credit facility. In its schedules, the Debtor disclosed $485,807,117 in assets and $649,919,474 in liabilities. The Official Committee of Unsecured Creditors has tapped Downey Brand LLP as local counsel and FTI Consulting as financial advisor. AHERN RENTALS: Committee Taps FTI Consulting as Fin'l Advisor ------------------------------------------------------------- Ahern Rentals Inc.'s Official Committee of Unsecured Creditors is proposing to retain FTI Consulting, Inc., as financial advisor, effective as of Jan. 10, 2012. FTI will provide consulting and advisory services to the Committee and its legal advisor in the course of the Chapter 11 case, including, but not limited to, assistance in the review of financial-related disclosures of the Debtor, assistance with respect to the proposed DIP financing; and assistance in the review and preparation of information and analysis necessary for the confirmation of a Chapter 11 plan. FTI is proposed to be paid on a fixed monthly basis of $65,000, plus reimbursement of actual and necessary expenses. FTI's provision of valuation or litigation advisory services or expert witness testimony will not be included in the monthly fixed fee. FTI will charge on an hourly basis at these rates: Senior managing directors $780-$895 Directors / managing directors $560-$745 Consultants/ senior consultants $280-$530 Administrative / paraprofessionals $115-$230 The Committee proposes that the Debtor will indemnify the firm for any claims arising from in connection with FTI's engagement. The firm can be reached at: Matthew Pakkala FTI CONSULTING INC. 633 West 5th Street, 16th Floor Los Angeles, CA 90071 Tel: (213) 689-1200 Fax: (213) 452-6099 E-mail: matthew.pakkala@fticonsulting.com About Ahern Rentals Ahern Rentals, Inc. -- http://www.ahern.com/-- is an equipment rental company in the United States. The company also sells new and used rental equipment, parts and supplies related to its rental equipment, and merchandise used by the construction industry, as well as provides maintenance and repair services. Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain an extension of the Aug. 21, 2011 maturity of its revolving credit facility. Judge Bruce T. Beesley presides over the case. Lawyers at Gordon Silver serve as the Debtor's counsel. The Debtor's financial advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to Bank of America, as the DIP Agent and First Lien Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer. Attorneys for the Majority Term Lenders are Paul Aronzon, Esq., and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP. Counsel for the Majority Second Lienholder are Paul V. Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq., at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert LLP argue for certain revolving lenders. Attorneys for U.S. Bank National Association, as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard, Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland & Hart. The Company filed for Chapter 11 because it was unable to extend the maturity of its revolving credit facility. In its schedules, the Debtor disclosed $485,807,117 in assets and $649,919,474 in liabilities. The Official Committee of Unsecured Creditors has tapped Covington & Burling LLP as counsel, and Downey Brand LLP as local counsel. AHERN RENTALS: Gains Final Approval of DIP Financing ---------------------------------------------------- Ahern Rentals Inc., won final approval from the Bankruptcy Court to obtain DIP financing and to use cash collateral. Ahern Rentals had proposed to obtain DIP financing under an asset- based revolving credit facility to be provided by lending institutions including Bank of America, N.A., as administrative agent for itself and the DIP Lenders and as a "Decision Agent"; Wells Fargo Bank, N.A., as collateral agent for the DIP Lenders and as a "Decision Agent"; and Merrill Lynch, Pierce Fenner & Smith Incorporated as lead arranger. The DIP Lenders have agreed to provide up to $350 million including a $10 million sub-limit for letters of credit. Prepetition letters of credit issued under Ahern's First Lien Credit Agreement in the approximate aggregate undrawn principal amount of $410,000 will also be deemed to have been issued under the DIP Agreement. The Official Committee of Unsecured Creditors had filed an objection to the proposed DIP financing. Ahern also won permission to use cash collateral and provide adequate protection for the use of the cash collateral to (i) BofA, which serves as administrative agent for itself and the First Lien Lenders; and Wells Fargo Bank serves as collateral agent for itself and the First Lien Lenders; and (ii) U.S. Bank National Association as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005. As of its bankruptcy filing, Ahern owed the First Lien Lenders $352,742,749, consisting of $257,332,749 in revolving credit loans, $95,000,000 in term loans, and $410,000 in letters of credit. Ahern owed the Second Lien Holders $236,666,667. The Debtor also will pay all reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy LLP as well as those of a Nevada counsel for their representation of the Majority Term Lenders prior to the Petition Date or during the case. The DIP Lenders and the First Lien Lenders will have the right to "credit bid" the amount of their claims during any sale of all or substantially all of the Debtor's assets, including without limitation, sales occurring pursuant to section 363 of the Bankruptcy Code or included as part of any restructuring plan subject to confirmation under section 1129(b)(2)(A)(ii)-(iii) of the Bankruptcy Code. The Second Lien Holders also will retain their right, if any, to credit bid, the amount of their claims during any sale of all or substantially all of the Debtor's assets, including without limitation, sales occurring pursuant to section 363 of the Bankruptcy Code or included as part of any restructuring plan. The final order provides that upon the occurrence of an Event of Default or a Termination Event, the Majority Term Lenders will be entitled to retain one (1) financial advisor, investment banker, or consultant pursuant to section 506(b) of the Bankruptcy Code. About Ahern Rentals Ahern Rentals, Inc. -- http://www.ahern.com/-- is an equipment rental company in the United States. The company also sells new and used rental equipment, parts and supplies related to its rental equipment, and merchandise used by the construction industry, as well as provides maintenance and repair services. Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain an extension of the Aug. 21, 2011 maturity of its revolving credit facility. Judge Bruce T. Beesley presides over the case. Lawyers at Gordon Silver serve as the Debtor's counsel. The Debtor's financial advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to Bank of America, as the DIP Agent and First Lien Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer. Attorneys for the Majority Term Lenders are Paul Aronzon, Esq., and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP. Counsel for the Majority Second Lienholder are Paul V. Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq., at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert LLP argue for certain revolving lenders. Attorneys for U.S. Bank National Association, as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard, Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland & Hart. The Company filed for Chapter 11 because it was unable to extend the maturity of its revolving credit facility. In its schedules, the Debtor disclosed $485,807,117 in assets and $649,919,474 in liabilities. The Official Committee of Unsecured Creditors has tapped Covington & Burling LLP as counsel, Downey Brand LLP as local counsel, and FTI Consulting as financial advisor. AHERN RENTALS: Has Access to Cash Collateral Until March 2013 ------------------------------------------------------------- Ahern Rentals Inc. signed a stipulation with majority term lenders for access to the term lenders' cash collateral during the pendency of the Chapter 11 case. The Majority Term Lenders comprise Liberty Harbor Master Fund I, L.P., and Goldman Sachs Palmetto State Credit Fund, L.P. The stipulation presented by the parties provide that the Debtor's access to cash collateral will expire 11:59 p.m. (New York City time) on March 22, 2013, or at an earlier date in the event certain conditions are not met by the Debtor. The Debtor has said that it needs access to DIP financing and cash collateral in order to permit the orderly continuation of the business, preserve the going-concern value of the Debtor and satisfy other working capital needs. The parties have agreed to a 13-week cash flow budget. To the extent of any diminution in value of the prepetition collateral, the Debtor agrees to provide adequate protection in the form of, among other things, first lien adequate protection liens, claims under 11 U.S.C. Sec 507(b), and payment of all interest accruing on the term loan, and reimbursement of expenses. The Term Lenders will be entitled to retain one financial advisor or consultant upon the occurrence of an event of default under the DIP financing. About Ahern Rentals Ahern Rentals, Inc. -- http://www.ahern.com/-- is an equipment rental company in the United States. The company also sells new and used rental equipment, parts and supplies related to its rental equipment, and merchandise used by the construction industry, as well as provides maintenance and repair services. Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain an extension of the Aug. 21, 2011 maturity of its revolving credit facility. Judge Bruce T. Beesley presides over the case. Lawyers at Gordon Silver serve as the Debtor's counsel. The Debtor's financial advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to Bank of America, as the DIP Agent and First Lien Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer. Counsel for the Majority Second Lienholder are Paul V. Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq., at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert LLP argue for certain revolving lenders. Attorneys for U.S. Bank National Association, as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard, Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland & Hart. The Company filed for Chapter 11 because it was unable to extend the maturity of its revolving credit facility. In its schedules, the Debtor disclosed $485,807,117 in assets and $649,919,474 in liabilities. The Official Committee of Unsecured Creditors has tapped Covington & Burling LLP as counsel, Downey Brand LLP as local counsel, and FTI Consulting as financial advisor. The Majority Term Lenders are represented by: Robert J. Moore, Esq. Haig M. Maghakian, Esq. MILBANK, TWEED, HADLEY & MCCLOY LLP 601 S. Figueroa Street, 30th Floor Los Angeles, CA 90017-5735 Tel: (213) 892-4501 Fax: (213) 892-4701 E-mail: rmoore@milbank.com hmaghakian@milbank.com AMERICAN PACIFIC: To Seek Approval of Plan Disclosures Feb. 9 ------------------------------------------------------------- American Pacific Financial Corp. and the Official Committee of Unsecured Creditors will seek approval at a hearing on Feb. 9, 2012, at 9:00 a.m. of the disclosure statement explaining their Third Amended Plan of Reorganization. The Plan, as proposed, provides for the creation of a liquidating trust, a settlement agreement to contribute additional assets to the liquidating trust, and a release of certain parties if the trust receives at least $25 million in funds over six years. The Creditors Committee has backed the Plan proposed by the Debtor based on the Debtor's agreement to transfer its assets to the trust and pursuant to the terms of an agreement with the Debtor's principal, Larry Polhill. The settlement agreement provides for two entities related to Mr. Polhill to contribute 90% of their receipts from the Debtor's primary asset, Capital Foods, LLC, until the Trust receives $30 million. The settlement agreement also provides for additional contributions beyond that on a sliding scale, designed to provide an incentive for Mr. Polhill and the related entities to maximize the return from Capital Foods. If the Plan is confirmed, the settlement provides a contingent release for Mr. Polhill and certain third parties. The Committee negotiated the settlement agreement based on its belief that Debtor's assets and the assets contributed have a greater long-term value. The entity in the settlement agreement owns approximately $15 million in publicly traded stock of Inventure Foods, Inc. Although the stock is currently pledged as collateral, the Committee believes that over time the pledge will be released and the value of the stock will increase. There is a risk that the value may be lost that will be lost if there is a Chapter 7 liquidation due to potential loan defaults and violations of tax credit agreements. Under the Plan, the trust will pay all allowed cure claims on or before 10 days following the effective date of the Plan. The Debtor no longer has any secured creditors. Mr. Polhill, a holder of an $11,000 priority claim on account of wages, will receive payment in full without interest. The Debtor owes $159.5 million to holders of general unsecured claims. Unsecured creditors classified under the "administrative convenience class" under Class 4 (for claims $5,000 or less), will receive cash of 50% of their claims in cash after administrative and wage claims are paid in full. Other unsecured creditors (Class 3) will receive beneficial interests in a creditor's trust. The Plan does not provide for an estimated recovery by Class 3 unsecured creditors. Under the Plan, trust assets will be liquidated and proceeds paid to the trust beneficiaries with the reversion after all creditors are paid in full with interest to Debtor's equity. The Committee and the Debtor do not believe there will be any payment to Debtor's equity. Conversion If Not Confirmed If the plan is not confirmed, the Chapter 11 Trustee will proceed with his motion to convert the case to a Chapter 7 liquidation. The Chapter 11 Trustee asserts cause exists to convert the case to Chapter 7 due to alleged misconduct by the Debtor. The Bankruptcy Court previously found cause to appoint the Chapter 11 Trustee, and Chapter 11 Trustee alleges further cause based on the bookkeeping and financial records of the Debtor and other entities, including what the Chapter 11 Trustee asserts is a change to the operating agreement of Capital Foods, LLC, with materially adverse effects for the Debtor. The Chapter 11 Trustee is not a proponent of the Plan. About American Pacific Financial Las Vegas, Nevada-based American Pacific Financial Corporation has been involved in private equity and sub-debt investment in various types of companies since 1978. APFC's assets include loans and investments in distressed real estate development projects and in other types of distressed operating companies throughout various industries. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-27855) on Sept. 21, 2010. The Company disclosed $16,597,647 in assets and $160,977,435 in liabilities as of the Chapter 11 filing. The Debtor is represented by Kaaran Thomas, Esq., and Ryan J. Works, Esq., at McDonald Carano Wilson, LLP, in Las Vegas, Nevada. Christopher R. Barclay, the Chapter 11 trustee appointed to take over management of the assets, has selected Sullivan, Hill, Lewin, Rez & Engel, as counsel. The Creditors Committee is represented by: Louis M. Bubala III, Esq. ARMSTRONG TEASDALE LLP 50 W. Liberty St., Ste. 950 Reno, Nevada 89501 Tel: (775) 322-7400 Fax: (775) 322-9049 E-mail: lbubala@armstrongteasdale.com AMERICAN AIRLINES: Unveils Turnaround Plan to Staff, Union Heads ---------------------------------------------------------------- Susan Carey and Jack Nicas, writing for The Wall Street Journal, report that executives at AMR Corp. unveiled the first details of their turnaround plan to staff and labor leaders in an effort to win backing for new pay and work rules considered essential to avoid the airline's collapse: -- American Airlines wants to cut 13,000 jobs; -- terminate employee pension plans; and -- boost revenue by a $1 billion a year WSJ reports the plan laid out by Chief Executive Tom Horton calls for $2 billion in annualized cost savings by 2017 and $1 billion in extra revenue by shedding about 15% of the work force, grounding planes, redoing supplier contracts and restructuring its debt and aircraft leases. Mr. Horton said AMR must obtain more than $1.25 billion in annual labor savings. The report says, of the 13,000 proposed job cuts, more than two thirds would come from maintenance and ground staff. WSJ reports that AMR executives want to win backing from its main unions for the plan and avoid asking the court to terminate existing contracts and impose new terms. WSJ also notes that if the bankruptcy judge allows AMR to terminate the underfunded plans because those liabilities would impede a successful reorganization, the Pension Benefit Guaranty Corp. would have to assume plans that cover 130,000 workers and retirees. The PBGC estimates the plans have assets of $8.3 billion to cover $18.5 billion in benefits. AMR said Wednesday that it would move its employees to 401k plans. AMR intends to emerge from bankruptcy protection as a viable standalone company. In January, reports surfaced that Delta Air Lines and private equity TPG are considering a deal with AMR. US Airways Group, meanwhile, has confirmed it has retained advisors to review a potential merger. Mr. Horton assumed the CEO post the day AMR filed for bankruptcy protection. In a statement, the PBGC said the pensions are underfunded by about $10 billion, and Americans' retirees would lose at least $1 billion in benefits if the plans end. Under federal law, if a company in bankruptcy wants to end its pensions, it must demonstrate that doing so is the only way it can reorganize. Patrick Fitzgerald, writing for Dow Jones' Daily Bankruptcy Review, relates that PBGC director Josh Gotbaum, told reporters on Tuesday from the PBGC's Washington headquarters, that "Our basic goal is very simple, which is we want American Airlines to be able to reorganize successfully and to succeed as a business. "However, if at all possible, we would like for it to reorganize and succeed as a business without killing its employees' pension plans and terminating them." DBR notes Mr. Gotbaum is a former airline executive who guided Hawaiian Airlines through its Chapter 11 proceeding. Early in January, AMR paid only $6 million of the required $100 million into the employees' pension plans. The PBGC has filed $91.7 million in liens against the airline's assets outside the U.S. Those assets aren't part of the Chapter 11 case. DBR relates American Airlines spokesman Bruce Hicks said, "We agree with Mr. Gotbaum's statement that the most important thing is for American Airlines to reorganize successfully and succeed as a business." The spokesman noted the PBGC routinely files liens like these in major restructuring cases. DBR also reports that PBGC officials on Monday said that at least $1 billion of American's pension shortfall comes from a law passed by Congress in 2007 that allowed American and a few other airlines to contribute less cash to their pension plans. That funding relief, Mr. Gotbaum noted, is equal to 25% of AMR's entire bankruptcy war chest. AMR filed for bankruptcy in November with more than $4 billion in cash on hand. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, John Lyons, Felecia Perlman and Jay Goffman at Skadden, Arps, Slate, Meagher & Flom LLP entered their appearance as proposed counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings on Dec. 9, 2011. The Committee has selected Togut, Segal & Segal LLP as co-counsel for conflicts and other matters; Moelis & Company LLC as its investment banker, and Mesirow Financial Consulting, LLC as its financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AMERISERV FINANCIAL: Fitch Affirms Issuer Default Rating at 'BB' ---------------------------------------------------------------- Fitch Ratings has affirmed Ameriserv Financial Inc.'s (Ameriserv) Issuer Default Rating (IDR) at 'BB'; the Rating Outlook is Stable. The affirmation reflects the improvements in asset quality and return to consistent profitability that the company has achieved since the last rating action. Fourth quarter 2011 (4Q'11) marked the fifth consecutive quarter of either a zero or negative provision for loan losses, reflecting the company's low net charge-offs during this period (24 basis points [bps] year-to-date [YTD] 2011) as well as its conservative build up of reserves during the 2008-2009 period. The most recent quarterly income figure also represents the company's 7th consecutive quarter with positive earnings after posting four consecutive quarters of losses, primarily building up the aforementioned reserves. While the consistent profitability is viewed positively, core performance lags the company's rated peer group with pre-provision net revenues (PPNR) of roughly .7% of total assets and a return on assets (ROA) of 68 bps YTD 2011, despite the negative provisions. Substantial risk remains in the loan book as well where 53% of total loans are secured by commercial real estate (CRE). Furthermore, the CRE credits are rather large in relation to the bank's capital with the 20 largest credits representing roughly two times total capital. Half of the bank's employees are represented by the USWA labor union, which impacts the bank's credit rating by driving larger compensation expense than that of similar banks. The union affiliation along with a lack of scale are the primary drivers behind the below-average performance measures. Capital levels from a core tangible common equity perspective are considered adequate at the current rating level but given the large and lumpy CRE portfolio referenced above are not considered a positive rating driver at their current level of 8.15%. Regulatory capital levels are meaningfully in excess of the well- capitalized regulatory thresholds as they are benefited by $21 million of small business lending fund (SBLF) preferred as well as roughly $13 million of TRUPS. The SBLF preferred shares are not considered core equity by Fitch due to the rate step-up in four years. Fitch views the refinance of TARP into the SBLF program with caution because of the additional incentive to lend to small businesses and the potential for additional credit risk associated with this activity. The Outlook is Stable reflecting sound asset quality metrics and consistent profitability which counters negative pressures caused by lagging financial performance and large concentrations. Positive rating momentum is not expected in the near term as stronger performance and a more diversified business mix are issues that will not be easily resolved. Negative rating pressure in the near to intermediate-term could occur should credit stress elevate to a level that threatens profitability and, consequently, the company's capital base. Negative rating action could also occur should the company materially alter its capital structure. Fitch has affirmed the following ratings with a Stable Outlook: Ameriserv Financial, Inc. -- Long-Term IDR at 'BB'; -- Short-Term IDR at 'B'; -- Viability rating at 'bb'; -- Support Rating at '5'; -- Support floor at 'NF'. Ameriserv Financial Bank -- Long-Term IDR at 'BB'; -- Long-Term Deposits at 'BB+'; -- Short-Term IDR at 'B'; -- Short-Term Deposits at 'B'; -- Viability rating at 'bb'; -- Support Rating at '5'; -- Support floor at 'NF'. Ameriserv Capital Trust I -- Preferred at 'B+', remains on Rating Watch Negative. APTALIS PHARMA: S&P Cuts $897-Mil. Sec. Credit Rating to 'BB-' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its debt rating on New Jersey-based specialty pharmaceutical company Aptalis Pharma Inc.'s $897 million senior secured credit facility to 'BB-' from 'BB' and lowered its recovery rating on the debt to '2' from '1'. A '2' recovery rating indicates its expectation of substantial (70%-90%) recovery in the event of default. "We base the downgrade and recovery rating revision on our re- evaluation of the enterprise value of the guarantor subsidiaries, as Aptalis continues to integrate Eurand N.V., which it acquired in early 2011," said Standard & Poor's credit analyst Arthur Wong. At the same time, Standard & Poor's affirmed its 'B+' long-term corporate credit rating on Aptalis and its 'B' senior unsecured debt rating on the company's $235 million of senior unsecured notes. The '5' recovery rating on the senior unsecured debt is unchanged, indicating our expectation of modest (10%-30%) recovery in a default scenario. "The ratings on Aptalis (formerly Axcan Intermediate Holdings Inc.) reflect what Standard & Poor's sees as the company's weak business risk profile, an aggressive financial risk profile, and adequate liquidity. Aptalis is susceptible to competition and regulatory changes in its narrow focus on gastroenterology and cystic fibrosis treatments and the need to efficiently integrate its recent acquisitions. These risks are somewhat offset by the company's relatively diverse product portfolio. Aptalis maintains an aggressive financial risk profile, highlighted by its heavy debt burden, following the company's mainly debt-financed acquisition of Eurand in early 2011," S&P said. Aptalis specializes in the treatment of gastrointestinal (GI) diseases and disorders, including pancreatic enzyme deficiencies, cholestatic liver diseases, and inflammatory bowel disease. The company focuses on niche opportunities in the GI market, where competition from much larger pharmaceutical companies is limited, enabling Aptalis to build a leading market share with its small, but highly trained, specialty sales force. "The company's portfolio is relatively diverse in our opinion. However, this portfolio was affected by the Federal Drug Administration (FDA)-mandated withdrawal of Aptalis' then leading product franchise, Ultrase and Viokase in 2010; these pancreatic enzyme products (PEPs) collectively accounted for about one-fifth of revenues. Although the company had long marketed both products without formal FDA approval, the FDA mandated that all PEPs needed to be approved by April 28, 2010, or be withdrawn until the FDA gave its approval. Both have failed to get approval, and Aptalis is now in ongoing discussions with the FDA to resolve manufacturing and control issues at the contract manufacturer for the active ingredients for both products. The timing of the resolution is uncertain. Standard & Poor's also believes that Aptalis could find it difficult to re-establish both products in the market and that future earnings and cash flows might suffer until the company regains lost market share," S&P said. "Our stable outlook on Aptalis reflects our belief that the continued integration of Eurand will go smoothly and that realized cost savings, growing Zenpep sales, and continued steady sales of the company's core portfolio will enable Aptalis to generate increasing free cash flows and allow it to steadily reduce debt over time. An upgrade in the near term seems unlikely, given the decidedly aggressive financial risk profile of sponsor-owned Aptalis following the Eurand acquisition. We project that adjusted debt leverage will fall to the 5x range by end of 2012. We have not projected any major acquisitions in the next year and believe Aptalis will rely on in-licensing deals to further expand its portfolio and product pipeline. We could lower our ratings if the company encounters setbacks in the PEP market, suffers an unexpected sales decline in its core portfolio, or adopts more aggressive financial policies, such as additional large debt- financed acquisitions or sizable dividends, resulting in sustained leverage above 5.5x," S&P said. ART MIDWEST: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Art Midwest, Inc. 953 East Sahara Avenue Suite 200 Las Vegas, NV 89104 Bankruptcy Case No.: 12-10887 Chapter 11 Petition Date: January 26, 2012 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Ogonna M. Atamoh, Esq. SANTORO DRIGGS WALCH KEARNEY HOLLEY & THOMPSON 400 S. 4th Street, 3rd Floor Las Vegas, NV 89101 Tel: (702) 791-0308 Fax: (702) 791-1912 E-mail: oatamoh@nevadafirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Steven A. Shelley, vice president. ART MIDWEST: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Art Midwest, Inc. 953 East Sahara Avenue Suite 200 Las Vegas, NV 89104 Bankruptcy Case No.: 12-10903 Chapter 11 Petition Date: January 27, 2012 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Ogonna M. Atamoh, Esq. SANTORO DRIGGS WALCH KEARNEY HOLLEY & THOMPSON 400 S. 4th Street, 3rd Floor Las Vegas, NV 89101 Tel: (702) 791-0308 Fax: (702) 791-1912 E-mail: oatamoh@nevadafirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Steven A. Shelley, vice president. AS AMERICA: S&P Cuts Rating on $187.5-Mil. Senior Notes to 'B-' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered the issue-level rating on AS America Inc.'s $187.5 million senior secured notes to 'B-' (one notch lower than the corporate credit rating) from 'B'. "We also revised the recovery rating to '5', indicating our expectation of modest (10% to 30%) recovery for lenders in the event of a payment default, from '4'," S&P said. The revision reflects lower recovery prospects for lenders due to higher expected priority claims on the company's asset-based lending facilities. "The 'B' corporate credit rating on AS America reflects the combination of what we consider to be the company's 'weak' business risk and 'highly leveraged' financial risk. The weak business risk profile reflects AS America's dependence on the challenging residential and nonresidential construction end markets, high customer concentrations, thin operating profit margins, and competitive markets. It is partially offset by the company's leading positions in the chinaware and baths categories, and a competitive position in faucets," S&P said. Ratings List AS America Inc. Corporate credit rating B/Negative/-- To From Rating Lowered; Recovery Rating Revised $187.5 mil sr secd nts B- B Recovery rating 5 4 ATLANTIC & PACIFIC: Files Exhibits Related to Plan -------------------------------------------------- BankruptcyData.com reports that Great Atlantic & Pacific Tea Company filed with the U.S. Bankruptcy Court these Exhibits related to the Company's Plan Supplement for its Chapter 11 Plan of Reorganization: Exhibit E - Composition of New Board, Exhibit F - Bylaws and Exhibit G - Certificate of Incorporation. According to these documents, the new board will consist of these individuals: Andrew Axelrod (managing director, Mount Kellett Capital Management); Ronald W. Burkle (managing partner, The Yucaipa Companies); Lou Giraurdo (co-founder, senior managing partner, GESD Capital Partners); Samuel Martin (chief executive officer, Great Atlantic & Pacific Tea Company); Brendan McGovern (managing director, portfolio manager, head of research, Liberty Harbor); Ken Murphy (head of asset management, Mount Kellett Capital Management) and Thomas Secor (vice president, Liberty Harbor). The Court is scheduled to consider confirming the Plan on Feb. 6, 2012. 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. ATTACHMATE GROUP: Moody's Affirms 'B2' Rating; Outlook Negative --------------------------------------------------------------- Moody's Investors Service revised Attachmate Group Inc.'s ratings outlook to negative from stable and affirmed the company's B2 ratings as a result of the company's proposed debt financed dividend. Moody's also affirmed the increased first lien term loan B1 rating. The increased first lien loan (approximately $300 million) along with an unrated incremental second lien loan and cash on hand will be used to fund a $609 million distribution to equity holders. The change in outlook to negative is driven by the increase in debt and decrease in liquidity as a result of the dividend while the company is still integrating the Novell acquisition. To fund the distribution the company will use approximately $242 million of its existing in cash on hand. While the company has taken considerable costs out of the combined companies, it is still too early to determine the impact of the restructuring on the business. The company experienced several quarters of declining revenues post closing though there are early indications that the declines are reversing or at least slowing in the December quarter. RATINGS RATIONALE The B2 corporate family rating reflects the leverage pro forma for the proposed dividend, the Novell acquisition and its cost reductions enacted to date (approximately 3.7x pro forma) but tempered by the challenges of reversing declines in Novell's and NetIQ's revenues as well the competitive positioning of the combined company's product lines. While the combined Attachmate and Novell businesses will have meaningful scale, the non- mainframe product lines, while fairly broad, have limited market positions in the competitive infrastructure software tools sector. The rating also recognizes the recurring nature of revenues and cash flows as well as strong customer retention rates of Attachmate's mainframe terminal emulation software business and strength through the last downturn. The ratings could be downgraded if the business does not show signs of stabilizing over the next several quarters or leverage is not on track to get below 3.5x over the next twelve months on an actual basis. Given the financial policies of the company, an upgrade is not likely over the near to medium term. These ratings were affirmed: Corporate family rating: B2 Probability of default: B2 $40 million senior secured first lien revolver, B1 LGD3 (36%) $1,175 million ($300 million upsized) senior secured first lien term loan, B1 LGD3 (36%) Ratings outlook: negative The individual debt instrument ratings were assigned using Moody's Loss Given Default Methodology. The B1 rating on the first lien debt is driven by its senior most position in the capital structure. The principal methodology used in rating Attachmate was the Global Software Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Attachmate is a leading independent provider of software connectivity products primarily for the legacy, mainframe computing user base as well as a niche participant in the larger, more fragmented systems and security management market. Revenues pro forma for a full year of Novell ownership are approximately $1.1 billion. The company is headquartered in Seattle, Washington. BRADFORD ACADEMY: S&P Cuts Rating on Revenue Bonds to 'CCC+' ------------------------------------------------------------ Standard & Poor's Ratings Services removed its rating from CreditWatch with negative implications and lowered its long-term rating to 'CCC+' from 'B-' on Michigan Public Educational Facilities Authority's series 2007 and 2009 limited obligation revenue bonds, issued on behalf of Bradford Academy. The outlook is negative. "The lowered rating and negative outlook reflects our view of the academy's operating instability and dramatically weakening liquidity following a 19% enrollment decline in the fall of 2011 that brings the long-term viability of the school into question," said Standard & Poor's credit analyst Shari Sikes. "According to the academy's authorizer, its issues put the charter at risk for non-renewal," Ms. Sikes added. The school will likely deplete its reserve position as the result of deficit operations and increase its leverage during the current fiscal year, Ms. Sikes said. "As such, its continued operation is significantly dependent on favorable market and economic factors." BROOKFIELD RENEWABLE: S&P Affirms 'BB+' Preferred Stock Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB' long-term corporate credit rating and 'A-2' short-term rating to the newly formed Brookfield Renewable Energy Partners L.P. (BREP). The outlook is stable. At the same time, Standard & Poor's affirmed its 'BBB' issue-level rating on the approximately C$1.1 billion rated unsecured debt at BRP Finance ULC and 'BB+' global scale and 'P-3(High)' Canada scale ratings on Brookfield Renewable Power Preferred Equity Inc.'s preferred stock that BREP assumed as part of the combination. Standard & Poor's also withdrew its ratings, including its 'BBB' long-term corporate credit rating, on both Brookfield Renewable Power Inc. (BRPI) and Brookfield Renewable Power Fund (BRPF) at the companies' request as a consequence of combination of the two companies. "We base the rating on our view that the combined credit risk profile of BREP's portfolio being at least as good as BRPI's portfolio combined with BRPF" said Standard & Poor's credit analyst Stephen Goltz. "In addition, the assets benefit from a long-term power purchase agreement with Brookfield Asset Management Inc. (A-/Stable/A-2). We also base the ratings on what we view as BREP's intermediate financial risk profile." "We believe BREP's hydroelectric generation enjoys strong competitive interconnections to a diverse pool of power markets, and the availability of water storage facilities that enhance the company's operational flexibility and profitability. In addition, the energy reallocation mechanism materially reduces hydrology risk in BREP's Brazilian assets, which make up 20% of total generation capacity," S&P said. "The stable outlook reflects our view of the company's satisfactory business risk profile, which reflects its diversified electricity generation asset portfolio. We do not expect to raise or lower the ratings during our two-year outlook horizon," S&P said. BUFFETS INC: Proposes Paul Weiss, 4 Other Advisors -------------------------------------------------- BankruptcyData.com reports that Buffets Restaurants Holdings filed with the U.S. Bankruptcy Court motions to retain: * Paul, Weiss, Rifkind, Wharton & Garrison (Contact: Jeffrey Safterstein) as attorney at these hourly rates: partner at $830 to 1,120, counsel at 760 to 795, associate at 375 to 760 and legal assistant at 85 to 250; * Young Conaway Stargatt & Taylor (Contact: Pauline K. Morgan) as attorney at hourly rates ranging from $230 to 700,; * Moelis & Company (Contact: Robert J. Flachs) as financial advisor and capital markets advisor for a monthly fee of $150,000 and a $3 million restructuring fee; * Huntley, Mullaney, Spargo & Sullivan (Contact: William Sullivan) as special real estate consultant for a monthly fee of $10,000; and * PricewaterhouseCoopers (Contact: Chad Berge) as tax consultant at these hourly rates: partner at $735, director at 595, manager at 495, senior associate at 395 and associate at 285. About Buffets Inc. Buffets Inc., the nation's largest steak-buffet restaurant company, 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 Inc. and all of its subsidiaries filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18, 2012, after it reached a restructuring support agreement with 83% of its lenders to eliminate virtually all of the Company's roughly $245 million of outstanding debt. The Debtors are seeking to reject leases for 83 underperforming restaurants. 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. An ad hoc committee of secured lenders is represented by Willkie Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP Agent and Prepetition First Lien Agent, is represented by Skadden Arps Slate Meagher & Flom as counsel. CATALYST PAPER: Forced to Seek CCAA Protection After Deal Fails --------------------------------------------------------------- Catalyst Paper Corporation disclosed that to facilitate an orderly restructuring of its business and operations, the board of directors of the company has approved a filing for an Initial Order from the Supreme Court of British Columbia to commence proceedings under the Companies' Creditors Arrangement Act. The terms and conditions of the restructuring plan have not yet been determined by the company. The operations of Catalyst and its subsidiaries are intended to continue as usual and obligations to employees and suppliers during the restructuring process are expected to be met in the ordinary course. Catalyst management will remain responsible for the day-to-day operations of the company. The company expects that the Interim Order will provide that while the company and its subsidiaries are under CCAA protection, all proceedings on the part of their creditors will be stayed. The company previously announced a consensual recapitalization transaction under the Canada Business Corporations Act (CBCA) that had the support of certain of the holders of the company's 11% senior secured notes due 2016 and 7 3/8% senior notes due 2014 who were parties to a Restructuring and Support Agreement (Agreement). The Agreement provided that, among other conditions, the recapitalization transaction was subject to the following two conditions being met by Jan. 31, 2012: (a) a new labour agreement ratified by all six union locals at the company's BC mills and (b) two-thirds support of all 2014 and 2016 noteholders. Since these conditions will not be met, the company will not be proceeding with a recapitalization under the CBCA. "Our debt restructuring objective remains clear and unchanged though our path forward was altered by recent setbacks," said Catalyst President and Chief Executive Officer, Kevin J. Clarke. "Without the new labour agreement, and without two-thirds support of 2014 noteholders, the economics of the previously announced consensual restructuring transaction was undermined. After reviewing this matter carefully with our Board of Directors and advisors, we have elected to begin the CCAA proceeding," he said. "The Board, management and our advisors believe this approach will best facilitate the completion of a recapitalization transaction that delivers the improvements to our liquidity and capital structure which are necessary to put our company on firm financial and competitive footing in the current business and economic environment." 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. CATALYST PAPER: Obtains Initial Order Under CCAA ------------------------------------------------ Catalyst Paper Corporation disclosed that the company and certain of its subsidiaries have obtained an Initial Order from the Supreme Court of British Columbia under the Companies' Creditors Arrangement Act (CCAA). The terms and conditions of the restructuring plan have not yet been determined by the company. The company also announced that JP Morgan has agreed to provide debtor-in possession (DIP) financing to Catalyst, which is expected to provide the company with up to approximately $175 million of available capital during the CCAA proceedings. Advances under the DIP will be available after approval by the Court, which the company expects to obtain on Feb. 3, 2012. The Initial Order provides the company with access to an amount the company believes is sufficient to fund operations until the Court hearing on Feb. 3, 2012. The company's operating revenue combined with the proposed DIP financing are expected to provide sufficient liquidity to meet ongoing obligations to employees and suppliers and ensure that normal operations continue during the restructuring process. Catalyst management will remain responsible for the day-to-day operations of the company. The company intends to apply for recognition of the Interim Order under chapter 15 of title 11 of the US Code. The Court granted protection under the CCAA for an initial period expiring on Feb. 14, 2012 to be extended as required and approved by the Court. While the company and its subsidiaries are under CCAA protection, all proceedings on the part of their creditors are stayed. The CCAA filing applies to Catalyst, Catalyst Paper General Partnership, Catalyst Pulp Operations Limited, Catalyst Pulp Sales Inc., Pacifica Poplars Ltd., Catalyst Pulp and Paper Sales Inc., Elk Falls Pulp and Paper Limited, Catalyst Paper Energy Holdings Inc., 0606890 B.C. Ltd., Catalyst Paper Recycling Inc., Catalyst Paper (Snowflake) Inc., Catalyst Paper Holdings Inc., Pacifica Papers U.S. Inc., Pacifica Poplars Inc., Pacifica Papers Sales Inc., Catalyst Paper (USA) Inc. and The Apache Railway Company. Catalyst manufactures diverse specialty 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 tonnes. The company is headquartered in Richmond, British Columbia, Canada and its common shares trade on the Toronto Stock Exchange under the symbol CTL. Catalyst is listed on the Jantzi Social Index(R) and is also ranked by Corporate Knights as one of the 50 Best Corporate Citizens in Canada. 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. CELL THERAPEUTICS: Has $16.6 Million Net Loss in December --------------------------------------------------------- Cell Therapeutics, Inc., provided information pursuant to a request from the Italian securities regulatory authority, CONSOB, pursuant to Article 114, Section 5 of the Unified Financial Act, that the Company issue at the end of each month a press release providing a monthly update of certain information relating to the Company's management and financial situation. The Company reported a net loss attributable to common shareholders of US$16.67 million on US$0 of net revenue for the month ended Dec. 31, 2011, compared with a net loss attributable to common shareholders of US$5.21 million on US$0 of net revenue for during the prior month. A full-text copy of the press release is available at: http://is.gd/tuoNag About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a bi4opharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. The Company reported a net loss of $82.64 million on $319,000 of revenue for the 12 months ended Dec. 31, 2010, compared with a net loss of $82.64 million on $80,000 of total revenue during the same period in 2009. The Company also reported a net loss attributable to CTI of $53.39 million on $0 of revenue for the nine months ended Sept. 30, 2011, compared with a net loss attributable to CTI of $62.92 million on $319,000 of total revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $62.85 million in total assets, $33.89 million in total liabilities, $13.46 million in common stock purchase warrants, and $15.49 million total shareholders' equity. Marcum LLP, in San Francisco, Calif., expressed substantial doubt about the Company's ability to continue as a going concern in its audit reports for the financial statements for 2009 and 2010. The independent auditors noted that the Company has incurred losses since its inception, and has a working capital deficiency of approximately $14.2 million at Dec. 31, 2010. Bankruptcy Warning The Company has incurred losses since inception and expect to generate losses for the next few years primarily due to research and development costs for Pixuvri, OPAXIO, tosedostat, brostallicin and bisplatinates. If the Company receives approval of Pixuvri by the European Medicines Agency or the Food and Drug Administration, the Company would anticipate additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and is currently exploring alternative sources of equity or debt financing. The Company may seek to raise such capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, the Company may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CELL THERAPEUTICS: Withdraws New Drug Application for Pixuvri ------------------------------------------------------------- Cell Therapeutics, Inc., has voluntarily withdrawn its New Drug Application for Pixuvri (pixantrone) for the treatment of relapsed or refractory aggressive non-Hodgkin's lymphoma in patients who failed two or more lines of prior therapy. The NDA was withdrawn because, after communications with the U.S. Food and Drug Administration, CTI needed additional time to prepare for the review of the Pixuvri NDA by the FDA's Oncologic Drugs Advisory Committee at its Feb. 9, 2012, meeting. Prior to withdrawing the NDA, CTI requested that the FDA consider rescheduling the review of the Pixuvri NDA to the ODAC meeting to be held in late March. The FDA was unable to accommodate CTI's request to reschedule, and given the April 24, 2012, Prescription Drug User Fee Act date, the only way to have Pixuvri possibly considered at a later ODAC meeting was for CTI to withdraw and later resubmit the NDA. CTI plans to resubmit the NDA in 2012. About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a bi4opharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. The Company reported a net loss of $82.64 million on $319,000 of revenue for the 12 months ended Dec. 31, 2010, compared with a net loss of $82.64 million on $80,000 of total revenue during the same period in 2009. The Company also reported a net loss attributable to CTI of $53.39 million on $0 of revenue for the nine months ended Sept. 30, 2011, compared with a net loss attributable to CTI of $62.92 million on $319,000 of total revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $62.85 million in total assets, $33.89 million in total liabilities, $13.46 million in common stock purchase warrants, and $15.49 million total shareholders' equity. Marcum LLP, in San Francisco, Calif., expressed substantial doubt about the Company's ability to continue as a going concern in its audit reports for the financial statements for 2009 and 2010. The independent auditors noted that the Company has incurred losses since its inception, and has a working capital deficiency of approximately $14.2 million at Dec. 31, 2010. Bankruptcy Warning The Company has incurred losses since inception and expect to generate losses for the next few years primarily due to research and development costs for Pixuvri, OPAXIO, tosedostat, brostallicin and bisplatinates. If the Company receives approval of Pixuvri by the European Medicines Agency or the Food and Drug Administration, the Company would anticipate additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and is currently exploring alternative sources of equity or debt financing. The Company may seek to raise such capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, the Company may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CENTRAL FALLS: ACLU Accuses RI City's Receiver of Abusing Power -------------------------------------------------------------- Amanda Bransford at Bankruptcy Law360 reports that the Rhode Island branch of the American Civil Liberties Union has accused the receiver appointed to oversee the bankruptc y of Central Falls, R.I., of illegally conducting city meetings. In a letter Rhode Island ACLU Executive Director Steven Brown sent to receiver Robert Flanders Jr. on Jan. 11, Mr. Brown said that the organization was considering legal action against Mr. Flanders for, among other things, violating the statute granting him authority over city business by failing to attend city meetings at which important decisions were made, Law360 relates. About Central Falls Central Falls is a city in Providence County, Rhode Island. The population was 18,928 at the 2000 census. Central Falls is the smallest and most densely populated city in Rhode Island. Central Falls sought bankruptcy protection under Chapter 9 of the U.S. Bankruptcy Code (Bankr. D. R.I. Case No. 11-13105) on Aug. 1, 2011. The Chapter 9 filing was made after former Rhode Island Supreme Court Judge Robert Flanders, who serves as state-appointed receiver for the city, was unable to negotiate significant concessions from unions representing police officers, firefighters and other city workers. The city grappled with an $80 million unfunded pension and retiree health benefit liability that is nearly quadruple its annual budget of $17 million. Judge Robert Flanders succeeded the role from retired Superior Court Associate Justice Mark A. Pfeiffer, who was appointed in July 2010. The Central Falls receivership, the state's first, has left the mayor and council without any power to govern. Judge Frank Bailey presides over the Chapter 9 case. Theodore Orson, Esq., at Orson and Brusini Ltd., serves as bankruptcy counsel to the receiver. The receiver is negotiating new contracts with unions representing city workers. The receiver filed a proposed debt adjustment plan for the city in September. It won't affect bondholders. CENTREPOINT DEVELOPMENT: Voluntary Chapter 11 Case Summary ---------------------------------------------------------- Debtor: CentrePoint Development ? Global Vision Investment Fund Limited Partnership 1635 N. Greenfield Rd., #126 Mesa, AZ 85205 Bankruptcy Case No.: 12-01446 Chapter 11 Petition Date: January 26, 2012 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Dale C. Schian, Esq. SCHIAN WALKER, P.L.C. 3550 N. Central Ave. #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: $10,000,001 to $50,000,000 Affiliates that filed separate Chapter 11 petitions: Petition Debtor Date Case No. ------ ---- -------- CentrePoint Development Investment Fund GP, LLC 1/26/12 12-01448 Assets: $0 to $50,000 Debts: $10,000,001 to $50,000,000 CentrePoint Development, LLC 1/26/12 12-01449 Assets: $1,000,001 to $10,000,000 Debts: $10,000,001 to $50,000,000 CentrePoint Development ? Lanesborough Asset Management Investment Fund Limited Partnership 1/30/12 12-01622 Assets: $0 to $50,000 Debts: $1,000,001 to $10,000,000 Each of the Debtors did not file a list of its largest unsecured creditors together with its petition. The petitions were signed by Ronald K. Frandsen, beneficial owner of CentrePoint Development, LLC and CentrePoint Holdings, LLC. CEQUEL COMMUNICATIONS: S&P Affirms 'B+' Corporate Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on St. Louis-based cable-TV operator Cequel Communications Holdings I LLC, including its 'B+' corporate credit rating, ''B-' unsecured issue-level rating, and the 'BB-' issue level rating on its existing credit facilities. The outlook is stable. "The company' Cequel Communications LLC unit is proposing to refinance its existing $1.9 billion of term debt with a new $2.2 billion term loan, to which we assigned a 'BB-' issue-level rating and a '2' recovery rating. We also assigned a 'BB-' issue-level rating and '2' recovery to its proposed $500 million revolving credit. The '2' recovery rating indicates our expectations for substantial (70%-90%) recovery of principal in the event of default. When the transaction is completed, we will withdraw our ratings on the prior credit facilities," S&P said. "The transaction moderately increases Cequel's consolidated leverage to about 6.5x for the 12 months ended Sept. 30, 2011 from 5.9x, which remains within the parameters of the current ratings," said Standard & Poor's credit analyst Catherine Cosentino. "The ratings on Cequel reflect mature revenue growth prospects for basic video services, competitive pressure on the video customer base from direct-to-home (DTH) satellite TV providers, the potential for increased competition in high-speed data (HSD) and video services from the local telephone companies, and a 'highly leveraged' financial profile. Partly tempering these factors are the company's position as the dominant provider of pay-TV services in its markets and revenue growth opportunities from advanced video services, HSD, and voice over Internet protocol (VoIP) telephony," S&P said. "The outlook is stable. Cequel should benefit from its continued roll-out of advanced video services, residential HSD and VoIP telephony, and growth in its commercial services. The current ownership structure and resulting financial policy considerations, however, limit a possible upgrade," S&P said. "Conversely, if missteps in achieving higher penetration levels occur or competitive pressures escalate, or if the company's financial policy becomes substantially more aggressive, with either resulting in leverage rising above 7x, we could lower the rating," S&P said. CHARLESTON PARTY: Case Summary & 7 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Charleston Party, LLC 124 Sondley Parkway Asheville, NC 28805 Bankruptcy Case No.: 12-10064 Chapter 11 Petition Date: January 26, 2012 Court: United States Bankruptcy Court Western District of North Carolina (Asheville) Judge: George R. Hodges Debtor's Counsel: H. Trade Elkins, Esq. ELKINS LAW FIRM, PA 228 6th Avenue East Suite 1B Hendersonville, NC 28792 Tel: (828) 692-2205 Fax: (828) 692-8469 E-mail: htelkins@prodigy.net Scheduled Assets: $2,000,000 Scheduled Liabilities: $2,234,456 A list of the Company's seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ncwb12-10064.pdf The petition was signed by Jim Short, member. CLINTON COURT: Chapter 11 Case Dismissed Effective January 20 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has dismissed the Chapter 11 case of Clinton Court Development LLC, pursuant to pursuant to 11 U.S.C. Section 1112(b), effective as of Jan. 20, 2012. The Debtor will be prohibited from filing another bankruptcy case under any chapter of the Bankruptcy Code for 2 years from the date the Order becomes effective. As reported in the TCR on Jan. 18, 2012, Clinton Court told the Court that there is no longer the need for bankruptcy court protection. On Nov. 3, 2011, the Court entered an order granting the motion of T.D. Bank, N.A., for relief from the automatic stay provisions of 11 U.S.C. Sec. Section 362. The Debtor was advised that TD Bank is prepared to proceed with its foreclosure sale of the Debtor's real property located at 525 Clinton Avenue, Brooklyn, New York and 508 Waverly Avenue, Brooklyn, New York, respectively. Since the Debtor has no other substantial assets to administer in the proceeding, there was no need for the bankruptcy case to continue. About Clinton Court Development Clinton Court Development LLC, the owner of a 13-story mixed-use building on Clinton Avenue in Brooklyn, filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 11-14673) on Oct. 5, 2011, claiming the property is worth about $17 million. Mortgages total roughly $42.3 million. The primary secured creditor is TD Bank NA. The Company also owns a two-story commercial building on Waverly Avenue in Brooklyn. Judge Robert E. Gerber presides over the case. The Debtor is represented by Robert R. Leinwand, Esq., at Robinson Brog Leinwand Greene Genovese & Gluck P.C. as counsel. The Debtor scheduled $17,210,000 in assets and $47,347,150 in liabilities. The petition was signed by David Weiss, manager. Attorneys for TD Bank N.A., are H. Michael Lynch, Esq., and Gary O. Ravert, Esq., at Lynch & Associates. CONGAREE TRITON: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Congaree Triton Acquisitions, LLC, Congaree Triton Acquisitions, LLC dba Triton Stone Group dba Triton Stone of Myrtle Beach dba Triton Stone Group of Charlotte dba Triton Stone dba Triton Stone Group of Myrtle Beach dba Triton Stone Carolinas dba Triton Stone of Charlotte dba Triton Stone Group of the Carolinas 1813 Marion St Columbia, SC 29201 Bankruptcy Case No.: 12-00456 Chapter 11 Petition Date: January 26, 2012 Court: United States Bankruptcy Court District of South Carolina (Columbia) Judge: John E. Waites Debtor's Counsel: James J. Kincannon, Esq. THE KINCANNON FIRM 1327 Richland Street Columbia, SC 29201 Tel: (877) 992-6878 E-mail: todd@thekincannonfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by John D. Cattano, chief financial officer. CPG INTERNATIONAL: S&P Affirms 'B' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Scranton, Pa.-based CPG International Inc. (CPG) to stable from positive. "At the same time we affirmed our 'B' corporate credit rating on the company, as well as our 'B' issue rating and '4'recovery rating -- indicating our expectations for an average (30% to 50%) recovery in a default scenario -- on the company's $282 million secured term loan," S&P said. "The rating on CPG reflects our assessment of the company's financial risk profile as 'aggressive' and business risk profile as 'weak' -- as our criteria define these terms," said Standard & Poor's credit analyst James Fielding. "Our aggressive financial risk assessment is based on our expectation that CPG's revenues will improve only modestly over the next 12 months, in line with our forecast for single-digit growth in U.S. residential and nonresidential construction spending, and that leverage will remain within the 4x to 5x EBITDA range during that period." "Our 'weak' business risk assessment reflects the company's cyclical construction-related end markets, exposure to volatile resin prices, and somewhat concentrated distributor base. These risks are mitigated to a degree by improving customer acceptance of CPG's synthetic-based building products as viable alternatives to wood-based and other traditional materials and by the company's leading market position in several niches such as polyvinylchloride (PVC) decking materials," S&P said. "Privately held CPG has not published its recent financial results, but we estimate that 2011 revenues were flat to down slightly year-over-year and that adjusted leverage ended the year at the higher end of the 4x to 5x EBITDA range. Our baseline scenario for CPG indicates that revenue could improve about 5% in 2012 and by about 10% in 2013. This is in line with our baseline economic view that U.S. residential construction spending will grow about 7% this year and 15% next year, while nonresidential spending growth will remain weak at less than 2% in both years," S&P said. "Our baseline scenario further assumes that prices for resins and other input costs don't change significantly, on average, over the next two years. Given these assumptions, we expect CPG to post about $65 million of adjusted EBITDA in 2012 and slightly over $70 million in 2013. This would imply that leverage gradually improves to closer to 4x EBITDA. That being said, we view a significant increase in typically volatile resin prices to be a primary downside risk to our baseline forecast," S&P said. "The stable outlook reflects our expectation for gradual, but steady, improvement in demand for most of CPG's products and relatively flat pricing and input costs. We further estimate that the company could absorb an increase in resin prices of 5% to 15% at the current rating, even if it was unable to fully pass these higher costs along to customers," S&P said. "We would lower our rating if leverage increases and is sustained above 5x EBITDA for several quarters," Mr. Fielding continued. "This could occur, in our view, if resin prices were to increase more than 15% to 20% and CPG was unable to raise its prices due to more-competitive market conditions." "We would raise our rating if leverage falls and is sustained below 4x EBITDA. This could occur if residential and nonresidential construction recovers more quickly than we currently anticipate, CPG's sales improve by about 20%, and prices for resin and other raw materials don't increase," S&P said. CRYSTAL CATHEDRAL: Asks Judge to Amend Sale Order ------------------------------------------------- Kaitlin Ugolik at Bankruptcy Law360 reports that Crystal Cathedral Ministries and its plan agent on Friday asked a California bankruptcy judge to amend the sale order for the group's megachurch property to clarify that there are no liens against it, despite claims of a 99-year lease from an entity called The Crystal Cathedral. CCM and its financial adviser have been unable to find evidence of any such lease agreement with The Crystal Cathedral, which shares several voting board members with CCM but is a separate entity, according to the motion obtained by Law360. About Crystal Cathedral Crystal Cathedral Ministries is a Southern California-based megachurch founded by television evangelist Robert Schuller. The church, known for its television show "The Hour of Power." Mr. Schuller retired from his role as senior pastor of Crystal Cathedral in 2006. His daughter Sheila Schuller Coleman has been senior pastor since July 2009. Contributions declined 24% in 2009, in part on account of "unsettled leadership." Crystal Cathedral filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. 10-24771) on Oct. 18, 2010. The Debtor disclosed $72,872,165 in assets and $48,460,826 in liabilities as of the Chapter 11 filing. Marc J. Winthrop, Esq., at Winthrop Couchot P.C. represents the Debtor. Todd C. Ringstad, Esq., at Ringstad & Sanders, LLP, represents the Official Committee of Unsecured Creditors. In November 2011, Crystal Cathedral won Court permission to sell its property to the Roman Catholic Diocese of Orange for $57.5 million. The Diocese beat a rival bid from Chapman University. The sale agreement provides that the congregation will have three years to find new premises. Chapman University, the secular bidder, has been the preferred buyer as far as the church members are concerned, because Chapman would allow the ministry to continue to use the main buildings on the premises. It also offered the option of allowing church administrators to buy the property back at a later point. Chapman had raised its bid to $59 million, but the Crystal Cathedral board still chose the Diocese. E. D. WHITE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: E. D. White Corporation dba Tidewater Roofing 812 Plum Avenue Hampton, VA 23661-1768 Bankruptcy Case No.: 12-50137 Chapter 11 Petition Date: January 30, 2012 Court: United States Bankruptcy Court Eastern District of Virginia (Newport News) Judge: Frank J. Santoro Debtor's Counsel: Joseph T. Liberatore, Esq. CROWLEY, LIBERATORE, RYAN & BROGAN, P.C. Town Point Center, Suite 300 150 Boush Street Norfolk, VA 23510 Tel: (757) 333-4500 Fax: (757) 333-4501 E-mail: jliberatore@clrbfirm.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vaeb12-50137.pdf The petition was signed by Emmit D. White, president. EDUCATION CENTER: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: The Education Center, Inc. P.O. Box 10858 Greensboro, NC 27404-0858 Bankruptcy Case No.: 12-10095 Chapter 11 Petition Date: January 27, 2012 Court: United States Bankruptcy Court Middle District of North Carolina (Greensboro) Judge: Catharine R. Aron Debtor's Counsel: John A. Northen, Esq. Vicki L. Parrott, Esq. NORTHEN BLUE, LLP P.O. Box 2208 Chapel Hill, NC 27514-2208 Tel: (919) 968-4441 E-mail: jan@nbfirm.com vlp@nbfirm.com Scheduled Assets: $6,326,721 Scheduled Liabilities: $19,771,228 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ncmb12-10095.pdf The petition was signed by Stephen K. Pond, president. EMI PUBLISHING: Moody's Assigns 'B1' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service assigned a B1 Corporate Family Rating (CFR) and a B1 Probability of Default Rating (PDR) to EMI Music Publishing ("EMI MP"). Moody's also assigned Ba3, LGD3 -- 33% ratings to the company's proposed $75 million sr secured 1st lien revolver and $1,050 million sr secured 1st lien term loan. The proposed credit facilities are being issued along with $505 million sr notes (unrated) to partially fund the acquisition of EMI MP for a total of $2.2 billion by an investor group led by Sony Corporation of America and Mubadala Development Company PJSC, as well as to refinance EMI MP's existing debt. The rating outlook is stable. Assignments: Issuer: MTL Publishing LLC and EMI Group North America Holdings Inc. -- Corporate Family Rating (CFR): Assigned B1 -- Probability of Default Rating (PDR): Assigned B1 -- $75 Million Senior Secured 1st Lien Revolver: Assigned Ba3, LGD3 -- 33% -- $1,050 Million Senior Secured 1st Lien Term Loan: Assigned Ba3, LGD3 -- 33% Outlook Actions: Issuer: MTL Publishing LLC and EMI Group North America Holdings Inc. -- Outlook is Stable RATINGS RATIONALE The B1 corporate family rating of EMI MP is forward looking and incorporates the initially high 5.7x debt-to-EBITDA ratio estimated for FYE March 2012 (pro forma for the acquisition, and including Moody's standard adjustments, or 5.2x net-debt-to- EBITDA) as well as uncertainties related to management's plan to reverse revenue declines experienced over the past few years. As a result of high debt balances, we expect free-cash flow-to-debt ratios to be in the low to mid-single digits in the first 12 months. Despite these weak financial metrics relative to the B1 rating category, we believe the company will be successful in reducing debt balances and improving debt-to-EBITDA ratios with free cash flow-to-debt greater than 6% after the first 12 months. "Supporting ratings is the company's leading global position in music publishing and its strategic importance to Sony Corporation (Baa1, negative) via its joint venture, Sony/ATV," stated Carl Salas, Moody's Vice President and Senior Analyst. "Moody's believes EMI MP's vast library, recurring annuity-like revenue streams, and largely variable expense structure should maintain EBITDA margins above 35% under most scenarios," added Salas. Recurring revenues are supported by copyrights for valuable works including "New York, New York", "Over the Rainbow", "Santa Claus is Coming to Town", and "Heard it Through the Grapevine" while almost all corporate overhead and fixed operating expenses are replaced with a variable 15% administration fee paid to Sony/ATV based on EMI MP's gross revenues minus royalties. Management indicates that it is committed to reducing debt balances with free cash flow and targets debt-to-EBITDA ratios below 4.0x to 4.5x. Moody's notes that in addition to the $790 million of equity provided primarily by Sony Corporation of America and Mubadala Development Company, the $505 million of unsecured notes are held by minority shareholders. EMI MP is expected to maintain good liquidity including more than $120 million of cash at closing and $75 million of revolver availability. The stable outlook reflects our view that growth in mechanical- digital revenues and other segments of EMI MP will offset expected declines in mechanical- physical revenues resulting in debt-to- EBITDA ratios remaining below 6.25x (including Moody's standard adjustments). Moody's believes music publishing revenues, particularly for the broadcasting related performance segment, generally track GDP and advertising demand. The outlook incorporates only modest improvement in advertising demand in the U.S. offset by potential advertising declines in Europe. We expect the company will apply free cash flow to reduce term loan balances consistent with management's target leverage. The outlook also incorporates our expectations that music entertainment will continue to be of strategic importance to Sony Corporation and with Sony/ATV and EMI MP remaining an integral piece of this strategy. Ratings could be downgraded if debt financed copyright additions and acquisitions, or competitive pressures result in the company's debt-to-EBITDA ratios being sustained above 6.25x, or if shareholder friendly actions result in strained liquidity or free cash flow-to-debt ratios falling below 1% after the first 12 months. Ratings could be upgraded if we believe overall mechanical revenues have stabilized, cash balances are maintained at forecasted levels, and debt-to-EBITDA ratios are sustained comfortably below 4.75x (including Moody's standard adjustments) with free cash flow-to-debt ratios of a minimum 6%. In addition, management would need to demonstrate a commitment to balance debt holder returns with those of its shareholders and provide assurances that the company will operate in a financially prudent manner consistent with a higher rating. MTL Publishing LLC '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 MTL Publishing LLC's core industry and believes MTL Publishing LLC '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 New York, NY, the newly formed EMI Music Publishing is the trade name for the primary issuer of new debt facilities, MTL Publishing LLC (d/b/a EMI Music Publishing in the US). EMI Group North America Holdings Inc., a US subsidiary of EMI Group International BC in the UK, is a co-issuer. As a standalone music publisher, EMI MP is the second largest in the world, with a diverse catalog including over 1.3 million music copyrights, 13 consecutive years winning Billboard Magazine Publisher of the Year, and roughly one thousand #1 rated Anglo-American song hits in the last 85 years. Revenues for the 12 months ended June 30, 2011 totaled $690 million with 47% coming from the U.S. and 53% coming from abroad (primarily Europe). On November 11, 2011, an investor group led by Sony Corporation of America and Mubadala Development Company PJSC, an investment company owned by the government of Abu Dhabi, entered into an agreement to acquire the music publishing business of EMI Group from Citigroup in a transaction valued at approximately $2.2 billion. The majority of equity ownership is held by Sony Corporation of America and Mubadala with minority shareholders including Jynwel Capital, Blackstone/GSO, and others. The transaction is subject to regulatory approval with closing expected in the second calendar quarter of 2012. EMMIS COMMUNICATIONS: Has Retired 386,850 of Preferred Shares ------------------------------------------------------------- Emmis Communications Corporation recently entered into securities purchase agreements with certain holders of its 6.25% Series A Cumulative Convertible Preferred Stock, $0.01 par value per share. Pursuant to the terms of the agreements, Emmis reacquired 25,700 shares of its Preferred Stock from those holders at an average price of $21.50 per share of Preferred Stock. The purchased shares of Preferred Stock have been cancelled and retired. As disclosed previously by Emmis, together with shares already acquired, Emmis has reacquired, cancelled and retired a total of 386,850 shares of its Preferred Stock to date. As a result of the completion of these purchases, Emmis has 2,422,320 shares of Preferred Stock issued and outstanding and 452,680 shares of Preferred Stock authorized but unissued. Pursuant to the terms of total return swaps and voting agreements entered into with certain holders of Preferred Stock, Emmis has the right to direct the vote of 1,484,679 outstanding shares Preferred Stock. In the future, Emmis may issue shares of Preferred Stock to a third party or third parties who may agree to vote their shares in accordance with the prior written instructions of Emmis. If Emmis issues 390,604 of the 452,680 authorized but unissued shares of Preferred Stock under those voting arrangements, it will have the ability to direct the vote of more than 66 2/3% of its issued and outstanding shares of Preferred Stock. Although the Board of Directors of Emmis has not made any determinations with respect to issuing additional shares of Preferred Stock or amending the terms of the Preferred Stock, if Emmis is able to direct the vote of more than 66 2/3% of its issued and outstanding shares of Preferred Stock, it may then elect to, among other things, amend various provisions applicable to the Preferred Stock, including but not limited to: (i) reducing or eliminating the liquidation preference of the Preferred Stock; (ii) removing the ability of the holders of Preferred Stock to require Emmis to repurchase all or any portion of such holders' Preferred Stock upon a change of control or certain going-private transactions; (iii) removing Emmis' obligation to pay to holders of Preferred Stock the amount of dividends in respect of their Preferred Stock that are currently accrued and unpaid; (iv) changing the designation of the Preferred Stock from "Cumulative" to "Non-Cumulative" such that dividends or distributions on the Preferred Stock will cease to accrue; (v) eliminating the rights of the holders of Preferred Stock to nominate directors to Emmis' Board of Directors as a result of arrearages in dividends; and (vi) eliminating the restrictions on Emmis' ability to pay dividends or make distributions on its common stock prior to paying accrued and unpaid dividends or distributions on Preferred Stock. Emmis may also choose to purchase or sell additional shares of its Preferred Stock in the future. In connection with those transactions, Emmis borrowed an additional $0.6 million under its Note Purchase Agreement with Zell Credit Opportunities Master Fund, L.P., dated Nov. 10, 2011. After giving effect to that borrowing, Emmis had drawn $31.9 million of the $35.0 million available to it thereunder and since it has used all four of the available draws, is no longer able to make further borrowings thereunder. About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. The Company reported a consolidated net loss of $11.54 million on $251.31 million of net revenues for the year ended Feb. 28, 2011, compared with a consolidated net loss of $118.49 million on $242.56 million of net revenues during the prior year. For the nine months ended Nov. 30, 2011, the Company reported net income attributable to common shareholders of $97.72 million on $185.08 million of net revenues, compared with a net loss attributable to common shareholders of $7.92 million on $193.24 million of net revenues for the same period during the prior year. The Company's balance sheet at Nov. 30, 2011, showed $365.70 million in total assets, $344.92 million in total liabilities,$56.38 million in series A cumulative convertible preferred stock and a $35.60 million total deficit. * * * In November 2010, Moody's Investors Service affirmed the 'Caa2' Corporate Family Rating and 'Caa3' Probability of Default rating for Emmis Communications Corporation, as well as its SGL-4 speculative grade liquidity rating. Operating performance improved with the economic recovery, but absent debt reduction with proceeds from an asset sale or equity infusion Emmis will likely breach its leverage covenant when the covenant suspension period ends for the quarter ending November 30, 2011, in Moody's opinion. Emmis' CFR and PDR incorporate expectations for a covenant breach in November 2011. Moody's considers the Company's capital structure unsustainable, and its operations in the cyclical advertising business magnify this challenge. Furthermore, Emmis relies on two markets, Los Angeles and New York, for approximately 50% of its revenue, although its ownership of stations in top markets including Chicago as well as NY and LA, support the rating. The negative outlook incorporates Moody's expectations that Emmis will not comply with its maximum leverage covenant when effective for the quarter ending Nov. 30, 2011. ENCORE PROPANE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Encore Propane, LLC 5220 Spring Valley Rd. Suite 204 Dallas, TX 75254 Bankruptcy Case No.: 12-30505 Chapter 11 Petition Date: January 28, 2012 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Vickie L. Driver, Esq. COFFIN & DRIVER, PLLC 7557 Rambler Rd., Suite 200 Dallas, TX 75231 Tel: (214) 377-4848 Fax: (214) 377-4858 E-mail: vdriver@coffindriverlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Steven McCraw, vice president. ENERGY FUTURE: Moody's Affirms 'Caa2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service changed the rating outlook for Energy Future Holdings Corp. (EFH) and its subsidiaries to negative from stable, including Texas Electric Competitive Holdings Company LLC (TCEH) which generates and markets electricity in the greater North-Texas region and is EFH's principal generator of cash flow. EFH's other subsidiary is Oncor Electric Delivery Company LLC (Oncor), an 80% owned electric transmission and distribution utility (T&D) regulated by the Public Utility Commission of Texas (PUCT). Oncor's rating outlook remains stable. The rating outlooks for Energy Future Intermediate Holding Corp (EFIH) and Energy Future Competitive Holdings (EFCH) were also changed to negative from stable. Moody's affirmed EFH's Caa2 Corporate Family Rating (CFR), Caa3 Probability of Default Rating (PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1 senior secured rating for Oncor. RATINGS RATIONALE EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed company with limited flexibility. EFH's capital structure is complex and, in our opinion, untenable which calls into question the sustainability of the business model and expected duration of the liquidity reserves. The change in rating outlook to negative from stable reflects a sustained period of low natural gas prices which will depress EFH's cash flow generating prospects and could result in further large goodwill impairments. Moody's also sees declining volumes and an increase in operating costs and capital investment needs. These higher costs and investments are influenced, in part, by increased regulatory requirements that apply primarily to EFH's coal generation assets. Moody's sees a strong correlation between the default probability of EFH, EFIH, EFCH and its primary cash flow generating subsidiary, TCEH. As a result, the primary rating drivers for EFH, EFIH and EFCH are heavily influenced by TCEH. EFH's SGL-4 Speculative Grade Liquidity rating reflects a liquidity profile which is slowly but steadily declining. In our opinion, the decline in liquidity sources will accelerate in 2012. We note that the (unused) collateral posting facility expires on December 31, 2012. The expiration of this facility exposes EFH to potential liquidity demands in a high natural gas price environment (ie., above $7.50/mcf). In October 2013, a portion of TCEH's revolver expires and there are substantial credit facility and bond maturities in 2014, 2015, 2016 and 2017. Absent a sustained improvement to natural gas commodity prices or a material expansion in market heat rates, we believe EFH's liquidity will become exhausted, possibly as early as 2014. Prospectively, ratings are unlikely to be upgraded over the near to intermediate term horizon, largely due to our expectations regarding cash flow and the complexity of the capital structure. Should natural gas commodity prices and market heat rates improve materially, and for a sustained period of time, there could be upward pressure on EFH's ratings. Over the near-term horizon, ratings are more likely to fall, and individual classes of securities have a reasonably high probability of experiencing a limited default, as Moody's defines it, based on our limited default/distressed exchange policies. Notwithstanding the ring-fence type provisions structured at Oncor, additional debt incurrence at either EFH or EFIH, secured by EFIH's equity interest of Oncor Electric Delivery Holdings Company LLC (Oncor Holdings) will likely be viewed as a form of permanent leverage for Oncor, a material credit negative. As EFH continues to migrate debt onto the non-ring-fenced intermediate subsidiary holding company of Oncor, we believe Oncor will increasingly be pressured to make upstream dividend contributions to EFIH, in part to service the secured debt obligations of EFH and EFIH, and potentially to the detriment to its own credit quality, despite the ring-fence type provisions. That said, on a stand-alone basis, today's Baa1 senior secured rating for Oncor reflects the revenue and cash flow stability associated with Oncor's T&D utility business activities. Oncor's rating and stable rating outlook are benefited by the ring-fence type provisions and the presence of the PUCT as its principal regulator. But we continue to highlight EFH's potential restructuring activities along with EFIH's and EFH's public disclosures associated with the risks of a potential breach of the ring fence under some scenarios. According to these public disclosures, only a bankruptcy judge can ultimately decide the effectiveness of the ring fence provisions. Should an event like this materialize, the ratings for Oncor could be negatively impacted. Nevertheless, we viewed Oncor's recent credit facility, expiring in 2016 as a strong, independent, third-party test of the ring fence provisions by its lenders. Although these factors continue to indicate elevated levels of event risk at Oncor when compared to other comparable regulated T&D utility companies, due to its parent's weak credit profile, the elevated event risk is not sufficient to warrant a change to Oncor's rating or rating outlook at this time. Oncor's rating outlook could be changed to negative if EFH continues to utilize EFIH's equity interest in Oncor Holdings, either directly or indirectly, as part of its ongoing restructuring activities or if EFH continues to transfer debt onto EFIH, Oncor's intermediate parent holding company. Moody's views the leverage at EFIH, which utilizes Oncor's equity value as collateral, as a form of permanent leverage for Oncor. The ratings for EFH, its subsidiaries and individual debt instruments are derived from the Caa2 CFR, with the exception of Oncor due to its ring fence type provisions. The ratings for EFH, TCEH, EFCH and EFIH's individual securities were determined using Moody's Loss Given Default (LGD) methodology. Based on EFH's Caa2 CFR and Caa3 PDR, and based strictly on the priority of claims within those entities, the LGD model would suggest a rating of Ca for EFH's and EFIH's senior secured debt securities. EFIH's Caa3 first and second lien ratings reflect the fact that the holders of these securities also benefit from their security interests of Oncor Holdings equity in Oncor. The principal methodology used in this rating was Unregulated Utilities and Power Companies published in August 2009. ENTERPRISE PRODUCTS: Moody's Lifts Jr. Sub. Note Rating From Ba1 ---------------------------------------------------------------- Moody's Investors Service upgraded Enterprise Products Operating, LLC's (EPO) senior unsecured ratings to Baa2 from Baa3. Moody's also upgraded EPO's junior subordinated notes to Baa3 from Ba1. The rating outlook remains positive. EPO is the primary operating subsidiary of Enterprise Products Partners L.P. (Enterprise) and issues substantially all of Enterprise's debt. RATINGS RATIONALE "The upgrade to Baa2 reflects Enterprise's strong execution on its large capital expansion program, growing cash flows and good leverage metrics," commented Pete Speer, Moody's Vice President. "The positive outlook points to the potential that continued execution on its organic growth projects while maintaining a strong financial profile could result in another ratings upgrade for Enterprise in 2013." Enterprise's Baa2 senior unsecured ratings reflect the benefits of its industry leading scale and the geographic and business line diversification of its operations. Its assets are highly interconnected and have direct links to key markets for the various commodity products that Enterprise processes and transports. The partnership has a straightforward corporate structure and low overall cost of capital due to its elimination of incentive distribution rights for its General Partner. Enterprise's timely equity issuances, high levels of retained distributable cash flow relative to peers, steady disposition of its equity interests in Energy Transfer Equity, LP and strong earnings growth has enabled the partnership to end 2011 with Debt/EBITDA under 4x despite growth capital expenditures in excess of $3.5 billion. In addition, the owner of the partnership's general partner, EPCO Holdings, Inc. (EPCO), has reduced its debt at a faster than expected pace, reducing the secondary debt burden on Enterprise's assets and lowering the overall family leverage metrics. Enterprise's large asset footprint has enabled it to continue to seize on producer demand for new infrastructure driven by rising natural gas liquid and oil production from development of shale and other unconventional reservoirs. Consequently the partnership's capital expenditures will remain at high levels in 2012 and into 2013. We also expect EPCO to continue to significantly reduce its debt levels over the next two years. If Enterprise continues to complete its capital projects largely within budget, achieve the forecasted fee-based earnings growth and sustain strong leverage metrics then the ratings could be upgraded to Baa1 in 2013. Debt/EBITDA, including EPCO debt, sustained at or below 4x would be supportive of an upgrade. While unlikely given current trends, a ratings downgrade is possible if Enterprise's commodity price exposure resulted in materially higher cash flow volatility than anticipated; if the partnership were to expand into activities that significantly increase its business risk; or if the capital projects experience large cost overruns and delays. Debt/EBITDA above 4.5x on a sustained basis could result in a ratings downgrade. Moody's current ratings for Enterprise Products Operating, LLC are: Enterprise Products Operating Senior Unsecured (domestic currency) Rating of Baa2 Junior Subordinate (domestic currency) Rating of Baa3 BACKED Senior Unsecured (domestic currency) Rating of Baa2 BACKED Junior Subordinate (domestic currency) Rating of Baa3 BACKED Senior Unsec. Shelf (domestic currency) Rating of (P)Baa2 BACKED Subordinate Shelf (domestic currency) Rating of (P)Baa3 The principal methodology used in rating Enterprise Products Operating, LLC was the Global Midstream Industry Methodology published in December 2010. Enterprise Products Partners L.P. is a publicly traded master limited partnership headquartered in Houston, Texas. It guarantees all the debt issued by Enterprise Products Operating LLC, its primary operating subsidiary. Enterprise's operations included natural gas gathering, processing, transportation and storage; natural gas liquids fractionation, transportation and storage; oil pipelines; offshore production platform services; transportation and storage of refined products; gathering, transportation, marketing and storage of crude oil; and petrochemical services. FIRST COMMONWEALTH: Fitch Say 'BB+' Pref. Stock on Watch Neg. ------------------------------------------------------------- Fitch Ratings has placed the Issuer Default Ratings (IDRs) of 'BBB/F2' for First Commonwealth Financial Corp. (FCF) and its lead bank subsidiary, First Commonwealth Financial Bank, on Rating Watch Negative. The Rating Watch reflects both the increased asset quality stress reported in fourth quarter 2011 (4Q'11) as well as uncertainties regarding FCF's strategic direction and capital management in view of recent and potential management changes. Fitch recently affirmed FCF's ratings on Dec. 2, 2011, citing a large and growing capital base which reduced Fitch's concern regarding negative trends in asset quality and subpar performance. Soon afterwards, the former bank president, Michael Price, replaced the former CEO, John Dolan, on an interim basis. FCF's board is currently conducting an executive search to identify a permanent replacement (or possibly to remove the current interim title). Non-performing assets (NPA) reached their high point in the cycle in 3Q'11 when they stood at 4.87% (including troubled debt restructurings [TDR]) of loans and other real estate owned (OREO). While NPAs were reduced to 3.48% at 4Q'11, this was largely done through net charge-offs (NCOs). Consequently NCOs for 4Q'11 of 3.63% of total loans now represent their high point in the cycle. The absolute level of NPAs and credit costs is less a concern than the overall trend this late in the credit cycle and when compared to similarly rated institutions. The fact that NPAs reached their high point in the cycle in 3Q'11 and NCOs followed suit in 4Q'11 suggests that management may not have a firm handle on the credit issues. The possibility that a new CEO could find further, significant, credit issues is a factor in the Rating Watch. Despite the increased credit costs noted above, the bank did report positive trends in both delinquencies and classified credits. Fitch will pay particularly close attention to these metrics as inflows into NPAs, delinquencies and classifieds would indicate that credit issues could be meaningfully worse than anticipated by the current rating. If NPA inflows, classifieds and delinquencies trend negatively and clarification of a conservative capital maintenance policy is not provided by a new CEO, the Rating Watch could be resolved with a multiple-notch downgrade. On the other hand, the Rating Watch may be resolved with an affirmation if the additional NCOs and provision expense taken in 4Q'11 finally put credit issues behind the company and the permanent CEO demonstrates a commitment to maintaining conservative capital levels. Headquartered in Indiana, PA, FCF provides a full range of financial services including commercial and retail banking via 112 branches and two loan production offices across Western and Central Pennsylvania. The majority of FCF's branches are concentrated within the greater Pittsburgh metropolitan area in Alleghany, Butler, Washington, and Westmoreland counties, with the remainder located throughout smaller more rural counties. The following ratings have been placed on Rating Watch Negative: First Commonwealth Financial Corp. -- Long-term IDR 'BBB'; -- Short-Term IDR 'F2'; -- Viability Rating 'bbb'; -- Support Floor 'NF'; -- Support '5'. First Commonwealth Bank -- Long-term IDR 'BBB'; -- Long-term Deposit 'BBB+'; -- Short-Term IDR 'F2'; -- Short-Term Deposit 'F2'; -- Viability Rating 'bbb'; -- Support Floor 'NF'; -- Support '5'. First Commonwealth Capital Trust -- Preferred stock 'BB+'. FOUR SEASONS: U.S. Trustee Asks Court to Dismiss Chapter 11 Case ---------------------------------------------------------------- Donald F. Walton, Acting United States Trustee for Region 21, asks the U.S. Bankruptcy Court for the Southern District of Florida to dismiss the Chapter 11 case of Four Seasons 66B Investments, Corp. Mr. Walton states: 1. The Debtor's only asset is its interest in a condominium unit in the Four Seasons Condominium Building in Miami, Florida, valued at $1,260,000. The condominium is encumbered by a mortgage listed as secured debt of $1,555,765. The Debtor lists no unsecured debt. 2. JP Morgan Chase holds the mortgage on the condominium, and on Aug. 12, 2011, filed a motion for stay relief which motion was granted by the Court in Order Granting Stay Relief on Sept. 7, 2011. 3. The Debtor's sole reason for filing bankruptcy was to attempt to refinance or sell the condominium before it was sold in foreclosure. That reason is now moot since JP Morgan Chase obtained stay relief to continue and complete foreclosure proceedings in state court and sale the condominium. 4. The Debtor has not filed monthly operating reports ("MORs") since March 2011, as required by Local Bankruptcy Rule 2015-1. 5. The Debtor has not paid this obligation to the United States Trustee for the second, third and fourth quarter of 2011 with estimated fees owed of $1,956. The Court continued the hearing on the dismissal motion to March 21, 2012, at 10:30 a.m. About Four Seasons Coral Gables, Florida-based Four Seasons 66B Investments, Corp, filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 10-23713) on May 19, 2010. Cesar J. Dominguez, Esq., who has an office in Miami, Florida, assists the Company in its restructuring effort. The Company estimated its assets and debts at $100,000,001 to $500,000,000. GAME TRADING: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Game Trading Technologies, Inc. fka City Language Exchange, Inc. 10957 McCormick Road Hunt Valley, MD 21031 Bankruptcy Case No.: 12-11519 Chapter 11 Petition Date: January 30, 2012 Court: United States Bankruptcy Court District of Maryland (Baltimore) Debtor's Counsel: James Edward Van Horn, Jr., Esq. MCGUIREWOODS LLP 7 St. Paul Street, Suite 1000 Baltimore, MD 21202-1671 Tel: (410) 659-4468 E-mail: jvanhorn@mcguirewoods.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mdb12-11519.pdf The petition was signed by Marc S. Weinsweig, chief restructuring officer. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Gamers Factory, Inc. 12-11522 01/30/12 GAMERS FACTORY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Gamers Factory, Inc. 10957 McCormick Road Hunt Valley, MD 21031 Bankruptcy Case No.: 12-11522 Chapter 11 Petition Date: January 30, 2012 Court: United States Bankruptcy Court District of Maryland (Baltimore) Debtor's Counsel: James Edward Van Horn, Jr., Esq. MCGUIREWOODS LLP 7 St. Paul Street, Suite 1000 Baltimore, MD 21202-1671 Tel: (410) 659-4468 E-mail: jvanhorn@mcguirewoods.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mdb12-11522.pdf The petition was signed by Marc S. Weinsweig, chief restructuring officer. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Game Trading Technologies, Inc. 12-11519 01/30/12 GENERAL MOTORS: Settles Old Environment Liabilities for $23.8MM --------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that General Motors Co. has agreed to a $23.8 million settlement to resolve old GM environmental liabilities at three superfund sites in New Jersey, Maryland and Missouri, the Department of Justice said. Meanwhile, a separate Dow Jones' Daily Bankruptcy Review News relates that General Motors Co. will start construction on a $200 million stamping plant that will create about 180 jobs in Arlington, Texas, the auto maker said, Agence France-Presse reported. 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. GENWORTH MORTGAGE: S&P Cuts Counterparty Credit Rating to 'B' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its counterparty credit and financial strength ratings (FSR) on Genworth Mortgage Insurance Corp. and its FSR on Genworth Residential Mortgage Insurance Corp. of North Carolina (collectively GMICO) to 'B' from 'BB-'. The outlook is negative. The ratings on Genworth Financial Inc. are unaffected by this action. "According to our rating definitions, an insurer rated 'B' has weak financial security characteristics. Adverse business conditions will likely impair its ability to meet financial commitments. We believe that GMICO currently fits this definition," S&P said. "We are lowering the ratings on GMICO by two notches due to two separate factors. One of the notches reflects a reassessment of GMICO's strategic importance as determined by our group methodology criteria. The second notch reflects the continued deterioration of GMICO's stand-alone credit profile. In 2009, we considered GMICO a nonstrategic entity to Genworth Financial Inc. However, we still afforded it one notch of support due to the ongoing commitment and capital support provided to the business. Management has shifted its tone regarding GMICO in recent quarterly calls, indicating GMICO does not have 'an unlimited call on capital' and requiring four 'screens' to be met prior to further capital being contributed. As a result, we have revised our view and now attribute no support to the rating," S&P said. The high level of losses in the mortgage insurance sector are occurring in an economy that is struggling to recover and that continues to exhibit significant weakness in the job and housing markets. The lack of significant improvement in payroll employment data contributed to high levels of new notices of delinquency (NODs). "Macroeconomic conditions remain unsupportive of a more rapid turnaround in the underlying fundamentals of the mortgage- insurance industry. The lack of improvement in underlying fundamentals could result in higher levels of claim incidence, lower levels of cure activity, and higher costs associated with claims settlements than expected, and ultimately call into question reserve adequacy. However, we believe this is less of an issue for GMICO than for its peers," S&P said. The current ratings contemplate continued losses through 2012 with a trajectory toward break-even operating results by the end of 2013 due to improving NOD trends. "The negative outlook on GMICO reflects the current trajectory of operating performance and the potential that adverse deviation will impair GMICO's capital position. Although new notices of delinquencies continue to decline, they would likely increase again if the economy enters another downturn and payroll employment once again declines. The elevated level of new notices and the volatility in cure activity make it difficult to foresee materially improving operating performance in the coming quarters," S&P said. "We expect favorable seasonality in the first half of 2012 to affect GMICO's operating results. However, we could lower the ratings if GMICO's future results reflect further reserve strengthening and call the company's reserve adequacy into question. More likely though, we could downgrade GMICO as a result of operating performance that isn't materially improved from 2011 performance. If the trajectory of 2012 statutory earnings at the flagship entity follows third-quarter 2011 performance (loss of $104 million), GMICO's claims-paying ability and capitalization will quickly deteriorate, as the company only held $722 million as of third-quarter 2011. At that point, it is our opinion that the regulatory forbearance that has allowed GMICO to write new business will likely be tested," S&P said. GEP MIDSTREAM: S&P Withdraws 'BB-' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB-' long-term corporate credit rating on GEP Midstream Finance Corp., a wholly owned subsidiary of Gibson Energy ULC (BB-/Stable/--), which it continues to rate. "We withdrew the rating at Gibson's request," S&P said. GLOBAL GEOPHYSICAL: S&P Raises Corporate Credit Rating to 'B+' -------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Global Geophysical Services Inc. to 'B+' from 'B'. "At the same time, we raised the issue rating on Global's $200 million unsecured notes to 'B+' (same as the corporate credit rating) from 'B'. The recovery rating on this debt issue remains unchanged at '4'," S&P said. "The upgrade reflects Global's improved operating performance and credit metrics, and our expectation that credit metrics will remain strong," said Standard & Poor's credit analyst Marc Bromberg. "The company benefited from increased capital spending by exploration and production (E&P) companies in 2011, and also from the change in its business mix to a greater portion of revenues from its higher-margined multi-client services business. Global's revenues for the last 12 months ended Sept. 30, 2011, grew 40% over the prior period, to $366 million, primarily driven by increased revenues in its international operations, and strong library late sale revenues. EBITDA for the same period almost doubled, to $221 million. As a result, credit metrics improved, with TD/EBITDA of 1.3x and EBITDA interest coverage of about 9x, compared with 1.7x and 5.2x. We expect Global should continue to benefit from business trends in 2012, with incremental revenues from new business in Latin America and the Gulf of Mexico." "The ratings on Houston-based Global Geophysical Services Inc. reflect the company's participation in the very volatile land seismic acquisition business, its limited size, and extreme cash flow volatility due to its dependence on the capital budgets of E&P companies. The ratings also incorporate our expectation that E&P companies will continue to maintain spending comparable with 2011 levels and the company's good backlog of data-acquisition projects," S&P said. "Standard & Poor's views the seismic industry as very challenging. The industry is subject to high levels of competition, revenue and earnings volatility. We categorize Global's business profile as 'weak', primarily due to its relatively small revenue base and the highly cyclical nature of the seismic industry, as companies defer or cancel projects during weaker periods. Global competes with larger, better-capitalized industry participants, including WesternGeco and CGG Veritas. We do note, however, that even during weak industry conditions in 2009 and 2010, Global did not exhibit the sharp decline in EBITDA and margins that U.S. land seismic companies historically experience, partly because the company has expanded internationally. With interest in international proprietary shoots picking up, we expect Global's margins to remain strong. The backlog for the company was $239 million as of Sept. 30, 2011," S&P said. "The outlook is stable. We expect Global to sustain improved EBITDA and maintain margins as industry conditions benefit from strong oil prices and E&P companies maintain continued elevated levels of capital spending for 2012. We expect the company to maintain leverage in the 1x area. We would lower the ratings if leverage exceeds 5x, and/or if liquidity becomes constrained. Our internal forecast indicates that even if revenues declined by 30% and gross margins contracted to 30%, leverage in 2012 would still be below 5x. We view an upgrade over the outlook period as unlikely given the inherent volatility of the seismic services market and our assessment of Global's business risk," S&P said. HAMPTON ROADS: Incurs $98 Million Net Loss in Full Year 2011 ------------------------------------------------------------ Hampton Roads Bankshares, Inc., reported a net loss of $98 million on $100.79 million of interest income for the year ended Dec. 31, 2011, compared with a net loss of $210.35 million on $122.19 million of interest income during the prior year. The Company reported a net loss of $21.18 million on $22.87 million of interest income for the quarter ended Dec. 31, 2011, compared with a net loss of $34.28 million on $28.58 million of interest income for the same quarter a year ago. "During the quarter we made tremendous progress in reducing our portfolio of problem assets and bringing down our operating costs" said Stephen P. Theobald, executive vice president and chief financial officer. "While those efforts remain in progress we now are turning our attention to growing our customer base and getting back to the business of community banking." A full-text copy of the press release is available for free at: http://is.gd/A5rNMa About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and fifteen ATMs. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company said in its Form 10-Q for the Sept. 30, 2010 quarter that due to its financial results, the substantial uncertainty throughout the U.S. banking industry, and the Written Agreement the Company and BOHR have entered into, doubts existed regarding the Company's ability to continue as a going concern through the second quarter of 2010. However, management believes this concern has been mitigated by the initial closing of the Private Placement that occurred on Sept. 30, 2010. The 2010 results did not include a going concern qualification from Yount Hyde. The Company's balance sheet at Sept. 30, 2011, showed $2.43 billion in total assets, $2.30 billion in total liabilities, and $135.67 million in total shareholders' equity. HAMPTON ROADS: Donald Price Joins as Bank's Senior Loan Officer --------------------------------------------------------------- Hampton Roads Bankshares, Inc., the holding company for The Bank of Hampton Roads and Shore Bank, announced that Donald F. Price has joined BHR as a Senior Loan Officer. Tom Mears, BHR's President of Commercial Banking and the President and CEO of Shore Bank, said, "With nearly three decades of experience originating and managing commercial loans in the Norfolk market, Don has the experience, judgment and market knowledge to make an immediate contribution as we continue to build one of the premier lending teams in the region and position the bank to drive high-quality loan growth in the coming years." Price joins BHR from Monarch Bank, where he served as President of the bank's Norfolk market for three years. Previously, he served as Executive Vice President and Commercial Loan Officer at Bank of the Commonwealth in Norfolk. Prior to that, he held a series of leadership positions at Heritage Bank & Trust, including President, over a period of 15 years. Mr. Price is active in a number of community and civic organizations in Norfolk, including the Barry Robinson Trust/Barry Robinson Center, where he is a member of the Board of Trustees and The Tidewater Business Financing Corporation, where he serves on the Board of Directors. Mr. Price has a Bachelor of Science in Business Administration from Old Dominion University. About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and fifteen ATMs. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company said in its Form 10-Q for the Sept. 30, 2010 quarter that due to its financial results, the substantial uncertainty throughout the U.S. banking industry, and the Written Agreement the Company and BOHR have entered into, doubts existed regarding the Company's ability to continue as a going concern through the second quarter of 2010. However, management believes this concern has been mitigated by the initial closing of the Private Placement that occurred on Sept. 30, 2010. The 2010 results did not include a going concern qualification from Yount Hyde. The Company's balance sheet at Sept. 30, 2011, showed $2.43 billion in total assets, $2.30 billion in total liabilities, and $135.67 million in total shareholders' equity. The Company reported a net loss of $98 million on $100.79 million in interest income for the year ended Dec. 31, 2011, compared with a net loss of $210.35 million on $122.19 million in interest income during the prior year. HANLEY WOOD: S&P Withdraws 'SD' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Washington, D.C.-based Hanley Wood LLC at the company's request. "The rating withdrawal follows our downgrade of the company to 'SD' on Jan. 17, 2012, reflecting the company's subpar debt recapitalization, which we view as tantamount to a default based on our criteria," S&P said. "As part of the recapitalization, the company reduced debt to about $80 million from $406 million as of Sept. 30, 2011, with lenders accepting roughly 20% of original par value, in addition to a majority equity stake in the company. The company's EBITDA remains at very depressed levels, largely because EBITDA from trade shows dropped 35% in 2010 and 3% in the first nine months of 2011," S&P said. HARTFORD COMPUTER: Creditors Aim to Probe Hedge Fund Lender ----------------------------------------------------------- Dow Jones' DBR Small Cap reports that creditors of Hartford Computer Group Inc. want to investigate private equity firm Delaware Street Capital, which faces accusations that it gave the Chicago electronics repair company an expensive loan that it later refused to refinance, exacerbating the company's financial problems. As reported in the Troubled Company Reporter on Jan. 25, 2012, Dow Jones' DBR Small Cap reports that shareholders who own small pieces of Illinois software company Hartford Computer Group Inc. are accusing the company's top executives and its biggest shareholder of improperly draining the hardware repair business's finances -- a scheme that put the company on a path to the bankruptcy auction. About Harford Computer Schaumburg, Illinois-based Hartford Computer Hardware Inc. and its affiliated entities are one of the leading providers of repair and installation services in North America for consumer electronics and computers. Hartford Computer Hardware operates in three complementary business lines: parts distribution and repair, depot repair, and onsite repair and installation. Products serviced include laptop and desktop computers, commercial computer systems, flat-screen television, consumer gaming units, printers, interactive whiteboards, peripherals, servers, POS devices, and other electronic devices. Hartford Computer Hardware, though all U.S. companies, operates a significant portion of their business in Markham, Ontario, Canada. Hartford Computer Hardware and three units filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Lead Case No. 11-49744) on Dec. 12, 2011. The affiliates are Hartford Computer Group Inc. (Case No. 11-49750); Hartford Computer Government Inc. (Case No. 11-49752) and Nexicore Services LLC (Case No. 11-49754). Judge Pamela S. Hollis oversees the case. John P. Sieger, Esq., Paige E. Barr, Esq., and Peter A. Siddiqui, Esq. -- john.sieger@kattenlaw.com , paige.barr@kattenlaw.com and peter.siddiqui@kattenlaw.com -- at Katten Muchin Rosenman LLP, serve as the Debtors' counsel. The Debtors' investment banker is Paragon Capital Partners, LLC; the special counsel is Thornton Grout Finnigan LLP; and the notice and claims agent is Kurtzman Carson Consultants LLC. In its petition, Hartford Computer Hardware estimated $50 million to $100 million in assets and debts. The petitions were signed by Brian Mittman, chief executive officer. Hartford Computer Hardware Inc. obtained Court permission to act as the foreign representative of the Debtors in Canada in order to seek recognition of the Chapter 11 case on the Debtors' behalf, and request the Ontario Superior Court of Justice (Commercial List) to lend assistance to the Bankruptcy Court in protecting the Debtors' property. The Debtors are selling substantially all of their assets and have scheduled a Feb. 16, 2012 auction. The Debtors have a stalking horse deal with Avnet, Inc. and Avnet International (Canada) Ltd., which have offered $35.5 million in cash for the HCG and Nexicore businesses. HCG and Nexicore may also be entitled to certain earnout consideration based on the operating income of the business in calendar years 2012 and 2013, which will be calculated based on a formula. In the event the Debtors chose to consummate a deal with another buyer, the Debtors will have to pay Avnet a $1,775,000 break-up fee, which will have administrative expense status. Avnet Inc., proposed buyer for Nexicore and HCG, is represented by Frank M. Placenti, Esq., at Squire, Sanders & Dempsey L.L.P. Delaware Street, the DIP lender, is represented in the case by Landon S. Raiford, Esq., and Michael S. Terrien, Esq., at Jenner & Block. Matthew J. Botica, Esq., and Nancy G. Everett, Esq., at Winston & Strawn LLP, argue for lenders ARG Investments, Enable Systems, Inc., MRR Venture LLC, SKM Equity Fund II, L.P. and SKM Investment Fund II. HAWKER BEECHCRAFT: Top Exec Sees Turbulence Ahead in 2012 --------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Hawker Beechcraft Corp.'s top executive said he sees "another fairly difficult year" for his company's business-jet operation amid struggles to stem losses and reduce debt. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. The Company's balance sheet at Sept. 30, 2011, showed $3.10 billion in total assets, $3.49 billion in total liabilities and a $383.20 million total deficit. * * * As reported by the Troubled Company Reporter on Sept. 16, 2011, Moody's Investors Service has lowered all the credit ratings, including the corporate family rating to Caa3 from Caa2, of Hawker Beechcraft Acquisition Company LLC. The rating outlook is negative. The downgrades reflect Hawker Beechcraft's mounting retained deficit and Moody's view that the soft economy dims chances for profitability anytime soon. Although limited near-term debt maturities exist, with the prospect of further losses Moody's views the capital structure to be unsustainable. Pronounced risk that some form of restructuring of the company's debt obligations may occur underscores the negative rating outlook. Softness in most developed economies should constrain demand for the smaller and mid-sized cabin aircraft that comprise the company's Business and General Aviation product portfolio. While management has aggressively lowered overhead and cut production costs, the revenue outlook seems weak. As of June 30, 2011, the debt to book capital ratio was 114% and the trailing 12-month EBITDA to interest ratio was 0.2x (Moody's adjusted basis). In the Dec. 5, 2011 edition of the TCR, Standard & Poor's Ratings Services lowered its ratings on Hawker Beechcraft, including the corporate credit rating to 'CCC' from 'CCC+'. "The downgrade reflects Hawker's continued poor credit protection measures and tighter liquidity resulting from declining revenues, significant (albeit improving) losses, and weak cash generation," said Standard & Poor's credit analyst Christopher DeNicolo. "We have concerns about the company's ability to maintain covenant compliance." HEALTHSPRING INC: S&P Lifts Counterparty Credit Rating From BB- --------------------------------------------------------------- Standard & Poor's Ratings Services raised its counterparty credit rating on HealthSpring Inc. to 'BBB-' from 'BB-'. "At the same time, we removed the rating from CreditWatch, where we placed it with positive implications on Oct. 24, 2011, and assigned a positive outlook. In addition, we withdrew all of our debt issue ratings on HealthSpring, as all of HealthSpring's outstanding debt was fully repaid as part of the acquisition," S&P said. "Our three-notch rating upgrade of HealthSpring, following its acquisition by Cigna Corp., is based on our designation of it as a 'strategically important' entity within the Cigna Corp. organization. Based on our group rating methodology, we allow for three notches of rating support for strategically important entities in most cases. HealthSpring will now operate as a wholly owned intermediate holding company under Cigna Corp.," S&P said "The positive outlook is based on our expectation that HealthSpring will evolve toward core status over the next two years as its operations are integrated into Cigna's organization," said Standard & Poor's credit analyst James Sung. "If we designate HealthSpring as a core entity, we would likely raise our rating on HealthSpring to the same level as that on Cigna Corp." "Conversely, failure of the Cigna group to support HealthSpring or significant and sustained earnings underperformance at HealthSpring's operations would cause us to reevaluate HealthSpring's strategically important group status and our rating on the company," S&P said. HEARUSA INC: Brower Piven Launches Investors' Class Suit -------------------------------------------------------- Brower Piven announces that a class action lawsuit has been commenced in the United States District Court for the District of New Jersey on behalf of investors who sold shares of HearUSA Inc. common stock during the period between Jan. 18, 2011 and July 31, 2011, inclusive. If you sold HearUSA common stock during the class period and would like additional information about this lawsuit and your ability to become a lead plaintiff, you may contact Brower Piven at http://www.browerpiven.com/by email at hoffman@browerpiven.com, by calling 410/415-6616, or at Brower Piven, A Professional Corporation, 1925 Old Valley Road, Stevenson, Maryland 21153. Attorneys at Brower Piven have combined experience litigating securities and class action cases of over 60 years. No class has yet been certified in the above action. Members of the Class will be represented by the lead plaintiff and counsel chosen by the lead plaintiff. If you wish to choose counsel to represent you and the Class, you must apply to be appointed lead plaintiff no later than March 19, 2012, and be selected by the Court. The lead plaintiff will direct the litigation and participate in important decisions including whether to accept a settlement and how much of a settlement to accept for the Class in the action. The lead plaintiff will be selected from among applicants claiming the largest loss from investment in the Company during the Class Period. You are not required to have sold your shares to seek damages or to serve as a Lead Plaintiff. The complaint accuses Siemens Hearing Instruments, Inc. of violations of the Securities Exchange Act of 1934 by virtue of Siemens' false statement during the Class Period that if Siemens wanted to acquire HearUSA, Inc., it could do so at no consideration to shareholders because of debts owed to Siemens by HearUSA. According to the complaint, after, Siemens was unable to acquire HearUSA for less than its fair market value and after HearUSA was driven into bankruptcy as a result of Siemens' actions, Siemens eventually acquired HearUSA in August 2011 at its market value prior to Siemens' public filings and as a result of Siemens' actions, many investors had sold HearUSA stock in the interim at significantly reduced prices. If you choose to retain counsel, you may retain Brower Piven without financial obligation or cost to you, or you may retain other counsel of your choice. You need take no action at this time to be a member of the class. About HearUSA Inc. HearUSA, Inc., which sells hearing aids in 10 states, filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 11-23341) on May 16, 2011, to sell the business for $80 million to William Demant Holdings A/S. The Debtor said that assets are $65.6 million against debt of $64.7 million as of March 31, 2010. HearUSA owes $31.3 million to Siemens Hearing Instruments Inc., the principal supplier and primary secured lender. Judge Erik P. Kimball presides over the case. Brian K. Gart, Esq., Paul Steven Singerman, Esq., and Debi Evans Galler, Esq., at Berger Singerman, P.A., represent the Debtor. The Debtor has tapped Bryan Cave LLP as special counsel; Sonenshine Partners LLC, investment banker; Development Specialist Inc., restructuring advisor ans Joseph J. Luzinski as chief restructuring officer; and AlixPartners LLC, as communications consultant. Trustee Services, Inc., serves as claims and notice agent. The Official Committee of Unsecured Creditors has been appointed in the case. Robert Paul Charbonneau, Esq., and Daniel L. Gold, Esq., at Ehrenstein Charbonneau Calderin, represent the Creditors Committee. An Official Committee of Equity Security Holders has also been appointed. Mark D. Bloom, Esq., at Greenberg Traurig P.A., in Miami, Fla., represents the Equity committee as counsel. The U.S. Bankruptcy Court approved on Aug. 17, 2011, the sale of substantially all of the assets of the Company to Audiology Distribution, LLC, a wholly owed subsidiary of Siemens Hearing Instruments, Inc., which submitted the highest and best bid for the assets in the July 29, 2011 auction pursuant to 11 U.S.C. Section 363. The purchase price is estimated to be roughly $109 million and comprised of $66.8 million in cash plus certain assumed liabilities -- which includes repayment or assumption of the $10 million DIP financing provided by the stalking horse bidder, William Demant Holdings A/S -- plus the payment of cure costs for assumed contracts, and the assumption of various liabilities of the company. On Sept. 9, 2011, the sale closed. In connection with the closing of the transactions contemplated by the Asset Purchase Agreement, on Sept. 13, 2011, the Company filed a Certificate of Amendment to its Restated Certificate of Incorporation with the Delaware Secretary of State in order to change its name to "HUSA Liquidating Corporation". The Certificate of Amendment was effective on the date of filing. HIGHLANDS AT THE RIM: Case Summary & Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Highlands at the Rim, LLC 8560 E. Shea Blvd., #130 Scottsdale, AZ 85260 Bankruptcy Case No.: 12-01474 Chapter 11 Petition Date: January 26, 2012 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Dennis M. Breen, III, Esq. BREEN & OLSON, PLC 6818 N Oracle Rd., Suite 420 Tucson, AZ 85704-4261 Tel: (520) 742-0808 E-mail: dennis@botlawfirm.com Scheduled Assets: $256,000 Scheduled Liabilities: $1,810,556 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/azb12-01474.pdf The petition was signed by Gerald R. Palmer, authorized signer of managing member, Payson Equities, LLC. HOSTESS BRANDS: Creditors Says DIP Loan Triggers Liquidation ------------------------------------------------------------ Dow Jones' Daily Bankruptcy Review reports that unsecured creditors are protesting Hostess Brands Inc.'s bid to access a $75 million bankruptcy loan, warning the deal would drive the company toward "extinction." The Debtors have said that the up to $75 million of secured DIP term loan facility and access to cash collateral are necessary to meet ongoing working capital and general business needs. The initial DIP lenders are Silver Point, Monarch Alternative Capital, LP, Gannett Peak CLO I, Ltd. and Credit Value Partners, LP. The DIP facility will mature within the first anniversary of the closing date. Milestones set by the DIP agreement include: * by no later than 14 days after the Petition Date, the Debtors must file a motion, pursuant to Section 1113 of the Bankruptcy Code with respect to the Debtors' collective bargaining agreements with the IBT and the BCT; * by no later than 45 days after the Petition Date, the Debtors must have prepared for approval bid procedures with respect to the possible sale of all or substantially all of the Debtors' assets pursuant to 111 U.S.C. Sec. 363; * by no later than July 13, 2012, the Debtors must obtain confirmation of a Chapter 11 plan; and * by no later than July 27, 2012, the plan will have become effective. 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. HUDSON TREE: Lender Wants Plan Filed by March 31 ------------------------------------------------ The Bankruptcy Court signed off on an agreed order between debtor Hudson Tree Farm, Inc., and lender AgriLand, PCA, and AgriLand, FLCA, authorizing the Debtor to use the lender's cash collateral pursuant to a two-month budget through Feb. 29, 2012. The agreed order requires the Debtor to file a plan of reorganization and disclosure statement by March 31, 2012. As adequate protection to the lender, the Debtor, among other things, was required to pay AgriLand at least $20,000 by Jan. 20 and another $20,000 by Feb. 20. As of the Petition Date, the Debtor owed the lender $2.5 million, secured by the Debtor's assets. On Dec. 8, 2011, the Debtor won interim authority to use the cash collateral. On Jan. 9, 2012, the Debtor and AgriLand entered into an agreement modifying and conditioning the automatic stay. That agreement is subject to Court approval. A copy of the Agreed Order is available at: http://bankrupt.com/misc/HUDSON About Hudson Tree Farm Bonham, Texas-based Hudson Tree Farm, Inc., dba Kennedy Arbor, has been engaged in the business of growing and selling trees. The company is formerly known as Hudson & Williams Investments, Inc. Hudson Tree Farm filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case No. 11-43633) on Dec. 5, 2011. Chief Judge Brenda T. Rhoades oversees the case. Bill F. Payne, Esq., at The Moore Law Firm, LLP, serves as the Debtor's counsel. In its schedules, the Debtor disclosed assets of $11.7 million and liabilities of $2.6 million. The petition was signed by Mark Hudson, president. Lender AgriLand is represented by: Scott A. Ritcheson, Esq. RITCHESON,LAUFFER & VINCENT, P.C. 821 Ese 323 Loop Ste 530 Tyler, TX 75701-9779 Tel: (903) 535-2900 E-mail: scottr@rllawfirm.net IMPERIAL PETROLEUM: CEO J. Ryer Leaves for "Personal Reasons" ------------------------------------------------------------- Imperial Petroleum, Inc., announced that its Board of Directors has accepted the resignation of its former CEO and President, Mr. John Ryer, effective Jan. 26, 2012. Mr. Ryer cited personal reasons for his departure. The Board has immediately begun a search for a replacement and has a few potential candidates already being reviewed. Mr. Tim Jones, CFO of Imperial Petroleum and President of e-biofuels, will act as interim-CEO and President until a replacement has been appointed. The Company announced that it has appointed Mr. Robert Willmann as a new director. Mr. Willmann is the owner and founder of State Safety and Compliance in Indianapolis, IN. As a successful business owner of eleven years, Mr. Willmann has dealt with a variety of organizational matters and management conditions including vendor relations, marketing and finance. In addition, Mr. Willmann has served as an advisor to one of the country's larger privately held Maintenance, Repair and Operations (MRO) and tooling companies for eight years. Mr. Willmann is married with three school aged children and a graduate of Indiana State University. He is active in many children's charities in the Indianapolis area, including About Special Kids and Answers for Autism of Indiana. Mr. Willmann commented, "I am pleased to join the Board of Directors at Imperial Petroleum and am looking forward to immediately contributing to the Company. I also consider it an honor and a privilege to be involved with a Company with so much growth potential." About Imperial Petroleum Headquartered in Evansville, Ind., Imperial Petroleum Inc. (OTC BB: IPMN) operates as a diversified energy and mineral mining company in the United States. Its oil and natural gas properties include the Coquille Bay field located in Plaqumines Parish, Louisiana; the Haynesville field located in Claiborne and Webster Parishes in north Louisiana; the Bastian Bay field located in Plaquemines parish, Louisiana; LulingField located in Guadalupe county, Texas; and the Shrewsbury field in Grayson County and the Claymour field in Todd County, western Kentucky. As reported by the TCR on June 24, 2011, the Company anticipates its current working capital will not be sufficient to meet its required capital expenditures and that the Company will be required to either access additional borrowings from its lender or access outside capital. Currently the Company projects it will require non-discretionary capital expenditures of approximately US$500,000 in the next fiscal year to re-establish and maintain economic levels of production at Coquille Bay. Without access to such capital for non-discretionary projects, the Company's production may be significantly curtailed or shut in and jeopardize its leases. Weaver Martin & Samyn, LLC, in Kansas City Missouri, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and is dependent upon obtaining debt financing for funds to meet its cash requirements. The Company's balance sheet at Oct. 31, 2011, showed $20.64 million in total assets, $20.02 million in total liabilities and $617,446 in total stockholders' equity. IMPERIAL SUGAR: Faces Liquidity Crunch, Works to Sell Assets ------------------------------------------------------------ Dow Jones' DBR Small Cap reports that Imperial Sugar Co.'s annual financial report highlights a severe liquidity crunch and includes the company's first going-concern warning as it attempts to rebuild its business after a 2008 fire at one of its sugar refining plants. About Imperial Sugar Sugar Land, Tex.-based Imperial Sugar Company (NASDAQ: IPSU) -- http://www.imperialsugar.com/-- is one of the largest processors and marketers of refined sugar in the United States to food manufacturers, retail grocers and foodservice distributors. The Company markets products nationally under the Imperial(R), Dixie Crystals(R) and Holly(R) brands. Imperial Sugar Company filed on Jan. 6, 2012, its annual report on Form 10-K for the fiscal year ended Sept. 30, 2010. Deloitte & Touche LLP, in Houston, Texas, expressed substantial doubt about Imperial Sugar's ability to continue as a going concern. The independent auditors noted that the Company's operating losses, pension plan contributions and capital expenditures have consumed a significant amount of the Company's liquidity. "As a result, the Company could trigger the applicability of the financial covenants and other restrictions under the credit agreement for which it will need to seek a waiver from its lenders in order to avoid an event of default under the credit agreement." The Company reported a net loss of $53.4 million on $848.0 million of net sales for fiscal 2011, compared with net income of $136.9 million on $908.0 million of net sales for fiscal 2010. Fiscal 2010 includes $278.5 million of insurance recoveries and $33.2 million of gains on derivative contracts intended to hedge 2011 raw sugar costs. The Company's balance sheet at Sept. 30, 2011, showed $490.4 million in total assets, $329.0 million in total liabilities, and stockholders' equity of $161.4 million. INNER CITY: Parent Sues Lenders to Shield IP Assets --------------------------------------------------- Hilary Russ at Bankruptcy Law360 reports that the non-debtor parent company of Inner City Media Corp. sued Inner City's senior lenders Friday in New York in an effort to protect 13 trademarks allegedly linked to a loan on which Inner City now owes about $250 million. Law360 relates that parent company Inner City Broadcasting Corp. says it owns the trademarks and is seeking a court ruling finding that the intellectual property isn't pledged to the lenders as part of their 2004 credit agreements. About Inner City Media Corp. On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit Facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. INNER CITY: Parent is Suing its Subsidiary in Trademark Dispute --------------------------------------------------------------- Dow Jones' DBR Small Cap reports that lenders, including funds managed by billionaire Ron Burkle's Yucaipa Cos., are seeking to protect 13 trademarks from being counted as collateral for a loan that has ballooned to $250 million. About Inner City On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit Facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. INOVA TECHNOLOGY: Three Directors Elected at Annual Meeting ----------------------------------------------------------- Inova Technology, Inc., held its Annual Meeting of Stockholders on Jan. 3, 2012, for which the Board of Directors solicited proxies. At the Annual Meeting, the stockholders voted on the election of Adam Radly, Paul Aunger and Alex Lightman to the Board for a 3 year term. Stockholder also voted on an amendment to increase the authorized shares from 150,000,000 to 500,000,000. About Inova Technology Based in Las Vegas, Nevada, Inova Technology, Inc. (OTC BB: INVA) -- http://www.inovatechnology.com/-- through its subsidiaries, provides information technology (IT) consulting services in the United States. It also manufactures radio frequency identification (RFID) equipment; and provides computer network solutions. The company was formerly known as Edgetech Services Inc. and changed its name to Inova Technology, Inc., in 2007. The Company reported a net loss of $3.35 million on $22.12 million of revenue for the year ended April 30, 2011, compared with a net loss of $7.06 million on $21.03 million of revenue during the prior year. The Company reported net income of $170,635 on $10.70 million of revenue for the six months ended Oct. 31, 2011, compared with net income of $1.79 million on $12.67 million of revenue for the same period a year ago. The Company's balance sheet at Oct. 31, 2011, showed $7.90 million in total assets, $17.85 million in total liabilities and a $9.95 million total stockholders' deficit. MaloneyBailey LLP, in Houston, Texas, noted that the Company incurred losses from operations for fiscal 2011 and 2010 and has a working capital deficit as of April 30, 2011. According to the independent auditors, these factors raise substantial doubt about Inova's ability to continue as a going concern. INTERNATIONAL ENERGY: Case Converted to Chapter 7 ------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Iowa has converted International Energy Holdings Corp.'s Chapter 11 bankruptcy case to one under Chapter 7, and directed the Debtor to file documents, including a schedule of unpaid debts incurred after the commencement of the Chapter 11 case; a supplemental matrix conforming to the Local Rules listing only the names and addresses of the entities listed in the "schedule of unpaid debts"; and a statement of intention with respect to retention or surrender of property securing consumer debts. Next Phase LLC requested for the conversion of the Debtors' cases, saying the Debtor continued to borrow additional funds and has failed to adequately service and maintain the property; there is substantial or continuing loss to or diminish of the estate and the absence of any reasonable likelihood of rehabilitation; and the Debtor has filed an amended Plan but it does not appear to be confirmable and in all likelihood, it will not be confirmed. About International Energy Tampa, Florida-based International Energy Holdings Corp. -- fka International CRO Holdings Corp.; The Cornerstone Brad, LLC; and Bison Renewable Energy, LLC -- filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 11-05547) on March 28, 2011. On July 6, 2011, the Court for the Middle District of Florida transferred the venue of the case to Northern District of Iowa (Bankr. N.D. Iowa Case No. 11-01593). Richard J. McIntyre, Esq., at McIntyre, Panzarella, Thanasides & Eleff, serves as the Debtor's bankruptcy counsel. The Debtor disclosed $13,154,805 in assets and $15,862,937 in liabilities as of the Chapter 11 filing. Donald F. Walton, United States Trustee for Region 21, appointed four members to the Official Committee of Unsecured Creditors. The Committee has retained A. Frank Baron, Esq., at Baron, Sar, Goodwin, Gill, & Lohr as its attorney. The Debtor has filed a Plan of Reorganization that seeks to effectuate the restructuring of the Debtor's capital structure to strengthen the balance sheet by reducing its overall indebtedness. Under the Plan, allowed claims in Class 1 Secured Tax Claims, Class 2 HCI Construction Secured Claim, Class 3 The Next Phase LLC Secured Claim and Class 4 All Other Secured Claims will be paid 30% over 6 years with simple interest of 5.25% starting Jan. 31, 2013. Allowed claims in Class 5 Green Capital LLC Unsecured Claim and Class 6 General Unsecured Claims will be paid 15% of the Allowed Claim over 6 years starting from Jan. 31, 2013. Class 7 Equity Interests will be reinstated. IRA WOOD: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Ira Wood & Sons, Inc. 3021 Harbor Road Owensboro, KY 42301 Bankruptcy Case No.: 12-40112 Chapter 11 Petition Date: January 30, 2012 Court: United States Bankruptcy Court Western District of Kentucky (Owensboro) Debtor's Counsel: Russ Wilkey, Esq. WILKEY & WILSON, P.S.C. 111 W. Second Street Owensboro, KY 42303 Tel: (270) 685-6000 Fax: (270) 683 2229 E-mail: dcwilkey@wilkeylaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/kywb12-40112.pdf The petition was signed by Phillip Wood, president. JARDEN CORP: Moody's Assigns 'Ba1' Senior Secured Credit Facility ----------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Jarden's proposed $250 million senior secured credit facility ($125 million term loan A and $125 million term loan B). At the same time, Moody's affirmed all of Jarden's other ratings (Ba3 CFR and PDR, Ba1 term loans A and B, Ba3 senior unsecured notes, B2 senior subordinated notes and SGL 1 liquidity rating). The outlook remains stable. Ratings affirmed/assessments revised: Corporate family rating at Ba3; Probability of default rating at Ba3; Term Loan A due March 2016 at Ba1 (LGD 2, 22% from 18%); Term Loan B due March 2018 at Ba1 (LGD 2, 22% from 18%); $250 million revolving credit facility due March 2016 at Ba1 (LGD 2, 22% from 18%); $300 million senior unsecured notes at Ba3 (LGD4, 59% from 51%); $293 million senior unsecured notes at Ba3 (LGD 4, 59% from 51%); $650 million senior subordinated notes to B2 (LGD5, 85% from 83%); $472 million senior subordinated notes to B2 (LGD5, 85% from 83%); and Speculative grade liquidity rating at SGL 1 Moody's subscribers can find further details in the Jarden Credit Opinion published on Moodys.com. RATING RATIONALE Proceeds from the new term loans and cash will be used to finance a $500 million accelerated share repurchase program through a tender offer announced last week. "This transaction will temporarily weaken credit metrics with adjusted debt/EBITDA increasing by about a half turn to just over 5 times from around 4.5 times," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. "Credit metrics are, however, expected to return to close to current levels over the next 12-18 months because of expected earnings growth combined with repaying the $100 million of subordinated notes due in March 2012," he noted. The company also announced that its board has decided to suspend the common stock dividend program following the January 2012 payment, which will more than offset the interest cost associated with the debt funding for the proposed share repurchase. The Ba3 Corporate Family Rating reflects the company's significant and increasing scale, its leading market position in various niche branded consumer products, diverse product portfolio, broad and expanding geographic diversification, and its strong liquidity profile. The Corporate Family Rating also reflects the acquisitive nature of the company and its propensity to increase shareholder returns despite having relatively high financial leverage at around 5 times. The rating is constrained by the continued uncertainty in discretionary consumer spending, especially for low and middle income consumers, high raw material prices and global macro-economic concerns such as the sovereign debt crisis in Europe. The rating is also limited by Jarden's relatively high exposure to Europe where less than 20% of revenue is generated. The stable outlook reflects Moody's view that Jarden will grow organically between 3-5% in the near to mid-term while maintaining EBITA margins of around 9% or better (currently 9.8%). The outlook also reflects Moody's assumption that the economic stresses in Europe will not materially impact Jarden's international businesses. Another debt financed shareholder move in 2012 could lead to a downgrade or at least a negative outlook. A material debt funded acquisition or an unexpected significant shock to the economy combined with the following credit metrics could also prompt a downgrade: 1) financial leverage sustained around 5.5 times, 2) mid single digit operating margins, or 3) low single digit free cash flow/adjusted debt. An upgrade could occur if Jarden moderates its shareholder oriented strategy and its credit metrics significantly improve from their current levels. For example, debt/EBITDA (currently over 5 times proforma assuming $400 million is issued from the add on) would need to be sustained below 4 times and EBITA margins (currently under 10%), would need to be in the double digits. The principal methodology used in rating Jarden was Moody's Global Consumer Durables 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. Jarden Corporation is a manufacturer and distributor of niche consumer products used in and around the home. The company's primary segment include Consumer Solutions (which distributes kitchen appliances, and home vacuum packaging systems), Branded Consumables (which distributes playing cards, arts and crafts, plastic cutlery and firelogs), and Outdoor solutions (which distributes a variety of outdoor leisure products under the K2, PureFishing, Coleman and Campingaz brands). The company reported net sales of approximately $6.6 billion for the twelve months ended September 30, 2011. JBS USA: Fitch Assigns 'BB-' Rating to $400-Mil. Unsec. Notes ------------------------------------------------------------- Fitch Ratings has assigned a 'BB-' rating to the proposed US$400 million unsecured notes due in 2020, to be jointly issued by JBS USA, LLC, and JBS USA Finance, Inc. The notes will be guaranteed by JBS S.A. (JBS), JBS Hungary Holdings, JBS USA Holdings, along with each of the issuers' wholly-owned U.S. restricted subsidiaries, subject to certain exceptions. The proceeds from the bonds issuance will be used by JBS, the Brazilian company, to repay its short and medium-term debt and for general corporate purposes. JBS USA and JBS USA Finance will transfer the proceeds of the issuance to JBS through intercompany loans. In conjunction with this rating action, Fitch has assigned 'BB-' local currency (LC) and foreign currency (FC) Issuer Default Ratings (IDRs) to JBS USA Finance with a Stable Rating Outlook. JBS USA Finance's FC and LC IDRs are linked to of the same ratings for JBS in accordance with Fitch's parent-subsidiary rating methodology. JBS' credit ratings reflect its strong business profile as the world's largest beef and lamb producer and second largest chicken producer. Further factored into JBS' ratings are the company's geographic and product diversity, which partially mitigates the risks of trade barriers and animal diseases. JBS' risk profile is above average due to cyclical risks associated with the meat business and the company's aggressive attitude toward growth through acquisitions. While the company's credit profile should benefit from the continued integrations and turnaround of recent acquisitions, Fitch expects that JBS' cash flows and margins will continue to be pressured by high cattle prices and elevated grain prices. Geographic and Product Diversity Enhances JBS' Business Profile: The company's business profile has been strengthened over the last years through several acquisitions in Brazil and abroad. Geographic and product diversification are important in the industry to mitigate risks related to disease, the imposition of sanitary restrictions by governments, market concentrations, as well as tariffs or quota applied regionally by some importing blocs or countries. JBS has plants in 12 Brazilian states and is the most geographically diversified player within this industry in Brazil. The company also has operations in the United States, Mexico, Argentina, Paraguay, Uruguay, Italy, and Australia. Deterioration of Operational Performance Pressures JBS' Credit Quality: During the nine first months of 2011, JBS' operational performance was weaker that Fitch's initial expectation, which is likely to pressure the company's credit quality. In September LTM, JBS' EBITDA sharply deteriorated to BRL3.1 billion, from BRL3.5 billion in 2010, contrary to Fitch's belief that the company's cash generation would expand during the year. The negative earnings were led by the underperformance of poultry businesses in the USA, strongly affected by increasing prices of grains, weak demand for meal in the U.S. and the decline in poultry product prices. As a result, JBS' EBITDA margin declined to 5.3%, in September 2011 LTM, from 6.4% in 2010. JBS has the challenge to improve its overall performance by reducing costs of the poultry business, by closing plants in order to improve the segment's capacity utilization and the capture of synergies between the other operational plants. The search for a product mix of higher value-added can also help improve the segment's results. Fitch will review JBS' ratings over the next several months. Continued underperformance during the next two quarters, compared with those that Fitch initially anticipated, could lead to a rating downgrade. Leveraged Capital Structure JBS' capital structure continues to be leveraged and has sharply deteriorated during the last 12 months ended in September 2011. The strong working capital needs have resulted in rising debt levels, which combined with a decline in EBITDA generation in the period, resulted total debt/EBITDA ratio and net debt/EBITDA ratio of 6.3 times (x) and 4.4x, respectively, compared with 4.5x and 3.3x, in 2010. These figures differ materially from Fitch's initial expectation of 3.0x net leverage for the end of 2011, which could pressure JBS' ratings. Negative Free Cash Flow; Liquidity and Debt Amortization Profile Manageable: JBS' strong expansion over the last years has led to high working capital needs that, combined with capital investments, have resulted in negative free cash flow (FCF) in the previous years. In September 2011, FCF was negative BRL788 million, largely due to about BRL1.2 billion of working capital requirements and BRL1.2 of capex. The weak operational cash flow generation during 2011 is likely to lead FCF to continue to be negative by the end of the year, which will not permit JBS to reduce its debt level. Positively, JBS' continues to present adequate financial flexibility, maturity profile and liquidity. The company has been successful on issuing long-term debt in order to lengthen its debt amortization profile. Liquidity is further supported by BRL5.6 billion of cash and marketable securities as of Sept. 30, 2011, compared with BRL.5.4 billion of short-term debt (or 28% of the total debt). The USD1,550 million in revolving credit lines at JBS USA and Pilgrim's Pride also enhances JBS' liquidity and mitigates refinancing risk. Key Rating Drivers: Rating improvement is not likely to occur as the company has great challenges to increase its cash generation capacity and improve the credit metrics. A rating downgrade could be triggered by the continued deterioration of the company's operating performance, or a large dilutive debt financed acquisition. Continued negative free cash flow (defined as cash flow from operations less capex and dividends) could also result in a negative rating action. Fitch currently rates JBS and other companies of the group as follows: JBS: -- Foreign currency IDR at 'BB-'; -- Local currency IDR at 'BB-'; -- Notes due 2016 at 'BB-'; -- National scale rating at 'A-(bra)'. JBS USA: -- Foreign currency IDR at 'BB-'; -- Local currency IDR at 'BB-'; -- Term Loan B facility due in 2018 at 'BB'. JBS USA jointly with JBS USA Finance: -- Notes due 2014 at 'BB-'; -- Notes due 2021 at 'BB-'. JBS Finance II Ltd: -- Foreign currency Issuer Default Rating (IDR) at 'BB-'; -- Local currency IDR at 'BB-'; -- Notes due 2018 at 'BB-'. The Rating Outlook for JBS, JBS USA and JBS Finance II Ltd is Stable. JEFFERSON COUNTY: Union Seeks to Move Forward With Lawsuit ---------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that the union representing employees of the Jefferson County sheriff's department wants to break the bankruptcy court's lawsuit freeze so it can continue its dispute over a money-saving policy change that scrapped pay raises for some sheriff's department workers. 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. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. KAUFMAN BROS.: Ceases Operations Amid Low Volume ------------------------------------------------ Dow Jones' DBR Small Cap reports that Kaufman Bros. LP, a small securities firm, has shut its doors as low trading volume and low volatility wreak havoc in the industry. Kaufman Bros. LP, an investment-banking and securities firm focused on the technology, media, and telecommunications and health-care sectors, ceased operations on Monday, according to a notice on its website. No other information was provided. Kaufman has joined the ranks of small Wall Street firms to close this year. Firms that have closed this year include Ticonderoga Securities LLC and WJB Capital Group Inc. LEXINGTON ROAD: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Lexington Road Properties, Inc. fka Douglas Battery Manufacturing Company 500 Battery Drive Winston-Salem, NC 27107 Bankruptcy Case No.: 12-50121 Chapter 11 Petition Date: January 27, 2012 Court: United States Bankruptcy Court Middle District of North Carolina (Winston-Salem) Debtor's Counsel: William B. Sullivan, Esq. WOMBLE CARLVLE SANDRIDQE & RICE. LLP One W. Fourth St. Winston-Salem, NC 27101 Tel: (336) 721-3600 E-mail: bankruptcy@wcsr.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the list of 14 largest unsecured creditors is available for free at http://bankrupt.com/misc/ncmb12-50121.pdf The petition was signed by Charles T. Douglas, president and chief executive officer. LI-ON MOTORS: FINRA OKs 1:5 Reverse Split of Common Stock --------------------------------------------------------- Li-on Motors Corp.'s Board of Directors approved the filing with the Secretary of State of Nevada a Certificate of Change that effected a 1:5 reverse split in the Company's outstanding common stock and a reduction of the Company's authorized common stock in the same 1:5 ratio, from 300,000,000 shares authorized to 60,000,000 authorized shares, such action to be effective upon approval for trading purposes by the Financial Industry Regulatory Authority (FINRA). This corporate action for the change in authorized and outstanding stock was permitted to be taken by the Company's Board of Directors without stockholder approval under Nevada NRS 78.207. The 1:5 reverse split with the concurrent reduction of the Company's authorized common stock in the same ratio was approved by FINRA. About Li-On Motors Las Vegas, Nev.-based Li-ion Motors Corp. was incorporated under the laws of the State of Nevada in April 2000. The Company is currently pursuing the development and marketing of electric powered vehicles and products based on the advanced lithium battery technology it has developed. Madsen & Associates, CPA's Inc., Murray, Utah, expressed substantial doubt about Li-on Motors' ability to continue as a going concern. The independent auditors noted that the Company did not have any revenue from vehicle sales in 2011, does not have cash flows to support its current operations and needs reserve to cover expenses in future periods as the Company continues to incur losses from operations. The Progressive Insurance Automotive X-Prize, competition was announced in April 2008 as a way to spur the development of clean, high-mileage vehicles, and is funded for a total of $10 million, which will be divided among three separate categories. The Company was the winner in its entry class. On Oct. 27, 2010, the Company received net proceeds of approximately $2.30 million from X-Prize and was recorded as other income in the Company's consolidated statement of operations for the year ended July 31, 2011. The Company's balance sheet at Oct. 31, 2011, showed $4.46 million in total assets, $4.69 million in total liabilities and a $230,618 total stockholders' deficiency. LOS ANGELES DODGERS: 10 Groups Move on to 2nd Round of Bidding -------------------------------------------------------------- The Wall Street Journal's Matthew Futterman reports that the Los Angeles Dodgers' financial advisers have completed the first round of bidding for the team. According to the Journal, people familiar with the process said Friday last week that bankers at Blackstone Group had approved about 10 groups of bidders who will be asked to participate in a second round of offers. According to the report, the bidders who made the second round include: * hedge-fund manager Steven Cohen, * a group led by cable investor Leo Hindery and New York financier Marc Utay, * one that includes former Los Angeles Laker Magic Johnson and former baseball executive Stan Kasten, and * another led by California developer Rick Caruso and former Dodgers manager Joe Torre. The Los Angeles Times reported that St. Louis Rams owner Stan Kroenke made it to the second round of bidding. The Associated Press says Magic Johnson's group includes Mark Walter, chief executive officer of the Guggenheim Partners financial services firm. The AP relates Dodgers owner Frank McCourt's agreement with Major League Baseball calls for him to forward up to 10 bidders to MLB for background checks, which cost each group $25,000 to cover baseball's costs. "The preliminary round of bidding has underscored the robust nature of the sales process, the significant purchase opportunity which the Dodgers represent, and the enormous value that the sale of the Dodgers, including their media assets, will generate," the Dodgers said in a statement. Dallas Mavericks owner Mark Cuban, who had expressed interest, is out of the second round. According to Yahoo! Sports, Mr. Cuban told Access Hollywood Live's Billy Bush and Kit Hoover on Monday, "It just didn't work out. I wanted to buy a baseball team; they were selling a media rights deal." "The economics got so out of control because the Dodgers' TV deal's up for bid and so there's a lot of groups coming in going, 'This TV deal's worth so much money that we're gonna pay whatever it takes to get the Dodgers.' And so they're buying the TV rights deal first and the team second," Mr. Cuban said. According to the Journal, the Dodgers received multiple bids of more than $1 billion, which would set a record for a baseball franchise. The sale is subject to Bankruptcy Court approval. The report notes Major League Baseball plans to vet all bidders that will continue to the second round. The Dodgers are hoping to complete the sale by April 30. WSJ notes Mr. McCourt is divorcing his estranged wife, Jamie, and must make a payment of $131 million to her by May 1. About Los Angeles Dodgers Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a professional Major League Baseball club in the Los Angeles metropolitan area. Frank McCourt, a Boston real-estate developer who unsuccessfully bid for the Boston Red Sox, bought the Dodgers from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for $330 million. Mr. McCourt also bought the Dodgers Stadium from Fox for $100 million. Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB Commissioner Bud Selig rejected a television deal with News Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for June 30 and July 1. Fox Sports has exclusive cable television rights for Dodgers games until the end of 2013 baseball season. Chapter 11 filings were also made for LA Real Estate LLC, an affiliated entity which owns Dodger Stadium, and three other related holding companies. The petition estimates assets of up to $500 million and debts of up to $1 billion. In its schedules, the LA Dodgers baseball club disclosed $77,963,734 in assets and $4,695,702 in liabilities. LA Real Estate LLC disclosed $161,761,883 in assets and $0 in liabilities. According to Forbes, the team is worth about $800 million, making it the third most valuable baseball team after the New York Yankees and the Boston Red Sox. Judge Kevin Gross presides over the case. Lawyers at Young, Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Public relations specialist Kekst and Company has been hired for crisis support. Covington & Burling LLP serves as special counsel. An official committee of unsecured creditors has been appointed in the case. The panel has tapped Lazard Freres & Co. as financial adviser and investment banker, and Morrison & Foerster LLP and Pinckney, Harris & Weidinger, LLC as counsel. The LA Dodgers is the 12th sports team in North America to have sought bankruptcy protection. The reorganization is being financed with a $150 million unsecured loan from the Commissioner of Major League Baseball. The loan gives the Commissioner few of the controls lenders often demanded from bankrupt companies. M&M PRECAST: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: M&M Precast, Inc. P.O. Box 562 North East, MD 21901 Bankruptcy Case No.: 12-11501 Chapter 11 Petition Date: January 30, 2012 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: Robert A. Gordon Debtor's Counsel: Curtis C. Coon, Esq. COON & COLE, LLC Suite 501 401 Washington Avenue Towson, MD 21204 Tel: (410) 244-8800 Fax: (410) 244-8801 E-mail: cccoon@ccclaw.net Scheduled Assets: $1,102,350 Scheduled Liabilities: $1,325,593 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mdb12-11501.pdf The petition was signed by Bonnie A. McNeal, president. MATERIALS SCIENCE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Materials Science Technology Inc. 222 N Tranquil Path Drive Spring, TX 77380 Bankruptcy Case No.: 12-30546 Chapter 11 Petition Date: January 26, 2012 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Karen K. Brown Debtor's Counsel: Marc Douglas Myers, Esq. ADAIR & MYERS PLLC 3120 Southwest Fwy, Suite 320 Houston, TX 77098 Tel: (713) 522-2270 Fax: (713) 522-3322 E-mail: mm@am-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txsb12-30546.pdf The petition was signed by Mark Camstra, board secretary. MEDIACOM LLC: S&P Assigns 'B-' Rating on $200-Mil. Senior Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' issue-level rating and '6' recovery rating to Mediacom LLC's proposed $200 million of senior unsecured notes due 2022. "The '6' recovery rating indicates our expectations for negligible (0%-10%) recovery in the event of a payment default. Mediacom LLC is a subsidiary of Middletown, N.Y.-based cable TV system operator Mediacom Communications Corp. (Mediacom). The company intends to use the proceeds from this note, along with borrowings under its LLC revolving credit facility, to repay its term loan D due 2017 (about $294 million outstanding as of Sept. 30, 2011). We will withdraw the ratings on the term loan D when the transaction closes. All other ratings on Mediacom, including the 'B+' corporate credit rating, remain unchanged," S&P said. "The ratings on Mediacom reflect a 'highly leveraged' financial profile, along with what we consider a 'fair' business risk profile. Our fair business risk assessment incorporates a mature core video business with modest revenue growth prospects; below- industry-average video, high-speed data (HSD), and telephony penetration; and competitive pressures on both the video customer base from direct-to-home satellite TV providers and HSD customers from telephone companies," S&P said. "Our rating also recognizes the longer term uncertainty of the impact of the over-the-top operators, such as Hulu and Netflix, on the video distribution model. Partly tempering these factors are the company's position as the leading provider of pay-TV services in its markets and expectations for limited video competition from the local telephone operators. On a consolidated basis, Mediacom, which serves about 1.1 million basic video subscribers, has $3.6 billion of outstanding debt," S&P said. Ratings List Mediacom Communications Corp. Corporate Credit Rating B+/Stable/-- New Ratings Mediacom LLC Senior Unsecured $200 mil notes due 2022 B- Recovery Rating 6 MGT CAPITAL: NYSE AMEX Accepts Plan of Compliance ------------------------------------------------- MGT Capital Investments, Inc. received notice from the staff of the NYSE Amex LLC that the Exchange had accepted the Company's plan of compliance with respect to previously disclosed non- compliance with Section 704 of the listing standards of the Exchange's Company Guide, for failure to hold an annual meeting of its stockholders during 2011 for the fiscal year ended Dec. 31, 2010. The Exchange accepted the Company's Plan with a targeted date of July 3, 2012 to regain compliance with the continued listing standards. The Company will be subject to periodic review by Exchange staff during the extension period. Failure to make progress consistent with the Plan or to regain compliance with the continued listing standards by the end of the extension period could result in the Company being delisted from the NYSE AMEX LLC. MGT Capital Investments, Inc. is a holding company comprised of MGT, the parent company, and its wholly-owned subsidiary MGT Capital Investments (U.K.) Limited. In addition we also have a controlling interest in our subsidiary, Medicsight Ltd, including its wholly owned subsidiaries. MILK HOLDING: S&P Assigns 'B' Corporate Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Eden Prairie, Minn.-based Milk Holding Corp. (Holdings) and Milk Specialties Co., a manufacturer of nutritional ingredients used in sports nutrition, health and wellness, and animal nutrition products. The outlook is stable. "For analytical purposes, we view Holdings and Milk Specialties Co. (the operating subsidiary) as one economic entity," S&P said. "At the same time, we assigned our 'B+' issue-level ratings to the company's $35 million revolving credit facility due 2016 and $125 million first-lien term loan due 2017. The recovery rating is '2', indicating our expectation for substantial (70% to 90%) recovery in the event of a payment default. In addition, we assigned our 'CCC+' issue-level rating to the company's $60 million second-lien term loan due 2018. The recovery rating is '6', indicating our expectation for negligible (0% to 10%) recovery in the event of a payment default," S&P said. "The rating reflects our view of the company's high debt leverage, narrow focus on whey-based products and significant reliance of whey supply, and adequate liquidity," said Standard & Poor's credit analyst Bea Chiem. "We understand net proceeds from the financing along with an equity contribution from the financial sponsor and management were used for the purchase of the company by HM Capital Partners, to refinance the company's existing debt outstanding, and to cover fees, expenses, and a capital expenditure reimbursement to the company," S&P said. MOHEGAN TRIBAL: S&P Assigns 'B-' Rating to Credit Facility ---------------------------------------------------------- Standard & Poor's Ratings Services assigned Uncasville, Conn.- based Mohegan Tribal Gaming Authority's (MTGA) planned new bank facility, comprising a $200 million revolving credit facility and a $275 million term loan both due March 31, 2015, its preliminary 'B-' issue-level rating. "In addition, we assigned MTGA's planned $225 million first-lien second-out term loan our preliminary 'CCC+' issue-level rating," S&P said. "Standard & Poor's does not assign recovery ratings to Native American debt issues, as there are sufficient uncertainties surrounding the exercise of creditor rights against a sovereign nation. These include (1) whether the U.S. Bankruptcy Code would apply, (2) whether a U.S. court would ultimately be the appropriate venue to settle such a matter, and (3) to what extent a creditor would be able to enforce any judgment against the sovereign nation. The notching of our issue-level ratings from our issuer credit rating on a given Native American issuer reflects the relative position of each security in the capital structure, incorporating the amount of higher ranking debt ahead of each issue. We believe first-lien lenders receive meaningful collateral value from Mohegan Sun at Pocono Downs, which is a commercial casino not located on Tribal land," S&P said. "On Jan. 25, 2012, we lowered our issuer credit rating on MTGA to 'CC' and lowered various issue-level ratings on the company's debt issues, in accordance with our exchange offer criteria. The ratings remain on CreditWatch with negative implications. The rating actions followed the company's announcement of a comprehensive refinancing plan, including a series of exchange offers related to all its outstanding notes, as well as a plan to amend and extend its bank credit facility and issue new first-lien debt. It is our view that the exchange offers and the extension of MTGA's bank facility are a de facto restructuring and, thus, are tantamount to a default according to our criteria. Upon consummation of the proposed transaction, which is subject to varying minimum thresholds of acceptance, we would lower all issue-level ratings, except for the second-lien notes and priority distribution bonds, to 'D', and the issuer credit rating to 'SD' (selective default). As soon as is possible thereafter, we will reassess MTGA's capital structure and assign new ratings based on the amount of notes successfully tendered," S&P said. "It is our preliminary expectation that, in the event the exchange succeeds, the issuer credit rating would likely be 'B-' following the consummation of the exchange transactions. We recognize that although the current proposed exchange would not be a deleveraging event, the post-exchange capital structure could eliminate, or at least substantially reduce, MTGA's debt maturities over the next few years. However, MTGA will still be highly leveraged, and our measure of its post-exchange interest coverage ratio will be weak, likely around 1.5x. In addition, MTGA faces meaningful changes in its competitive landscape over the intermediate term, which would pressure MTGA's cash flow. These include the addition of resort casinos in Massachusetts that were approved in late 2011 (although we do not expect any to open before 2015) and the possibility of full-scale casinos in New York as recently proposed by the state's governor," S&P said. Ratings List Mohegan Tribal Gaming Authority Issuer Credit Rating CC/Watch Neg/-- New Rating Mohegan Tribal Gaming Authority $200M revolv credit fac due 2015 B-(prelim) $275M term loan due 2015 B-(prelim) $225M first-lien second-out term loan CCC+(prelim) MORTGAGE GUARANTY: Moody's Cuts Sr. Unsec. Debt Rating to 'Caa2' ---------------------------------------------------------------- Moody's Investors Service has confirmed the insurance financial strength rating of Mortgage Guaranty Insurance Corporation (MGIC) at B1. The rating action follows the extension of the regulatory capital waiver by its main regulator, the Wisconsin Office of the Commissioner of Insurance (WI-OCI), through year-end 2013, and continued approval by Fannie Mae and Freddie Mac allowing MGIC to continue to write new business. Moody's has also affirmed the Ba3 rating of MGIC Indemnity Corporation (MIC), a wholly owned subsidiary of MGIC. The senior unsecured debt rating of MGIC Investment Corporation (MTG, MGIC's parent company) has been downgraded from Caa1 to Caa2 to reflect a deteriorating liquidity position. The outlook for all ratings is negative. The rating actions conclude the reviews for downgrade initiated on November 1, 2011. RATINGS RATIONALE Moody's commented that the confirmation of MGIC's B1 insurance Financial Strength Rating reflects the improved visibility about the firm's ability to write new business following the WI-OCI extension of the regulatory capital waiver through December 31, 2013; the previous waiver expired on December 31, 2011. Wisconsin is one of the 16 jurisdictions in the US where mortgage insurers have to meet state specific minimum statutory capitalization requirements to be eligible to write new business in the state. At the end of the third quarter of 2011, MGIC's statutory capital position was only $50 million above the minimum required by the WI-OCI; therefore extension of the waiver was crucial to MGIC's access to new business flows. According to the agreement with WI- OCI, MGIC has to maintain 'liquid assets' of at least $1.0 billion for the waiver to remain effective. Moody's estimates that MGIC's $6.4 billion liquid assets portfolio at the end of 2011 should remain materially in excess of the $1 billion threshold over the next two years despite some meaningful erosion due to substantial claims payment. The rating agency added that the renewal of Fannie Mae's support through December 31, 2013, allowing the group to write business in states that will not or cannot wave regulatory requirements through its MIC subsidiary is also a positive development. Freddie Mac has a similar agreement with the group that expires on December 31, 2012. At the end of the third quarter of 2011, MIC had $234 million of capital against a small net risk in force of $4 million. In connection with the strategy to use MIC as the lead insurer in certain key markets, MGIC down streamed $200 million to MIC in January 2012. The affirmation of MIC's rating reflects its strong relative credit profile and continued credit linkage to MGIC. Moody's indicated that the downgrade of MTG's senior debt rating reflects its deteriorating liquidity profile following the recent downstream of $200 million to its main insurance subsidiaries. The holding company had stand-alone assets of about $486 million at the end of 2011 and outstanding debt obligations comprised of $516 million in senior unsecured debt and $345 million junior convertible debt. Given the low likelihood of dividend payments from MGIC for the foreseeable future, Moody's believes that the company's ability to repay its debt may be compromised. The negative outlook for all outstanding ratings reflects the continued weakness in the housing markets and consequent potential for higher losses in its insured portfolio, said the rating agency. It also reflects continued uncertainty about the long term prospects for the firm and the mortgage insurance industry given the likely changes to the housing finance market and dependence on continued regulatory and counterparty waivers. These ratings have been confirmed and the outlook has been changed to negative: Mortgage Guaranty Insurance Corp - insurance financial strength rating at B1; MGIC Investment Corporation -- junior subordinated debt at Ca (hyb). This rating was affirmed: MGIC Indemnity Corporation -- insurance financial strength rating at Ba3, negative outlook. The following rating was downgraded and the outlook has been changed to negative MGIC Investment Corporation- senior unsecured rating to Caa2 from Caa1. The last rating action related to MGIC was on November 1, 2011, when Moody's downgraded Mortgage Guaranty Insurance Corp from Ba3 to B1, the senior debt rating MGIC Investment Corp's from B3 to Caa1 and the junior subordinated debt rating from Caa3 to Ca. The IFSR rating of MGIC and the senior and subordinated ratings of MGIC Investment Corp. were placed on review for downgrade at that time. The principal methodology used in this rating was Moody's Global Rating Methodology for the Mortgage Insurance Industry published in February 2007. MORTGAGE GUARANTY: S&P Cuts Issuer Credit Rating to 'CCC' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on MGIC to 'B' from 'B+' and its unsolicited issuer credit rating on MGIC Investment Corp. to 'CCC' from 'CCC+'. The outlook is negative. "According to our rating definitions an insurer rated 'B' has weak financial security characteristics. Adverse business conditions will likely impair its ability to meet financial commitments. MGIC currently fits this definition," S&P said. "High losses in the mortgage insurance sector are occurring amid an economy that is struggling to recover and that continues to exhibit significant weakness in the jobs and housing markets," said Standard & Poor's credit analyst Ron Joas. The lack of significant improvement in payroll employment contributed to high levels of new notices of delinquency (NODs). "MGIC's reported full-year 2011 operating losses of approximately $560 million (excluding realized capital gains of $143 million) significantly exceeded our operating loss estimate of approximately $370 million. Also, although NODs declined by 17% year over year, cure activity declined by 18%, and MGIC's claims incidence increased, leading to increased losses incurred year over year in the fourth quarter," S&P said. "MGIC is at significant risk of adverse reserve development. Macroeconomic conditions remain unsupportive of a more rapid turnaround in the underlying fundamentals of the mortgage insurance industry. While adverse deviation of a few percent would ordinarily not be considered significant, given the size of MGIC's existing reserves, even nominal deviations could have a significantly negative impact on MGIC's capital base. A lack of improvement in underlying market fundamentals could result in higher levels of claim incidence, lower cure activity, and higher costs associated with claims settlements than expected, which could ultimately threaten MGIC's reserve adequacy," S&P said. "Similarly, MGIC may be subject to losses as a result of disputes with certain significant counterparties. MGIC is in litigation with Countrywide, which believes it is entitled to damages of almost $700 million from loans rescinded. Furthermore, MGIC is in a contractual dispute with Freddie Mac over an interpretation that would have otherwise resulted in incurred losses $192 million higher in the fourth quarter on a year-to-date basis. MGIC does not have reserves established against these risks, given they believe they are not reasonably estimable or probable. However, they do represent a significant risk to MGIC's capital base," S&P said. "The negative outlook on MGIC reflects the current trajectory of operating performance, the impact ongoing losses are expected to have on MGIC's capital position, and the significant downside risk due to adverse development. Although new NODs continue to decline, they would likely increase again if the economy enters another recession and payroll employment once again declines. The high level of new notices and the volatility in cure activity make it difficult to foresee materially improving operating performance over the coming quarters," S&P said. "We expect operating results to be impacted by favorable seasonality in the first half of 2012. However, we could lower the ratings if the trajectory of MGIC's operating results, including any reserve adjustments or other charges, indicate operating losses will exceed $400 million for full-year 2012. Also, if industry fundamentals, such as new NODs and cure activity, provide little or no indication of significant improvement over the year, which may lead to significant losses into 2013, we could lower the ratings. In this context, MGIC's remaining capital and the regulatory forbearance they have received through 2013 could come under more pressure. If operating losses and industry fundamentals improve, providing an indication that 2013 results would be significantly better than breakeven, we could affirm the ratings," S&P said. NEFF RENTAL: Moody's Affirms 'B3' CFR; Outlook Stable ----------------------------------------------------- Moody's Investors Service affirms the B3 Corporate Family Rating (CFR) and Probability of default (PDR) for Neff Rental LLC a subsidiary of Neff Holdings LLC. Moody's also affirmed the Caa1 rating to the company's $200 million senior secured second lien notes. The rating agency does not rate the company's $150 million ABL. The rating outlook remained stable. Affirmations: Issuer: Neff Rental LLC -- Probability of Default Rating, B3 -- Corporate Family Rating, B3 -- Senior Secured Regular Bond/Debenture, Caa1; LGD changed to LGD5-72% from Caa1 LGD5-70% -- Outlook, Stable RATINGS RATIONALE The B3 CFR reflects low leverage, good EBITDA coverage weighted against its small scale and negative cash flow as Neff aggressively adds to its fleet to meet new customer demand. Its fleet age is currently older than some of its larger peers and unless the company addresses this, it could adversely affect its competitiveness over time. Looking forward, Neff's credit metrics will depend on factors including its capital expenditures, returns on the new equipment, proceeds from equipment sales, ABL usage, and cash flow generation. The B3 rating reflects the view that the company's leverage is likely to increase as it modernizes its fleet. Its near-term liquidity is adequate. The Caa1 rating on the $200 million 9.625% senior secured notes is one notch below the corporate family rating reflecting its second priority lien on all assets. The notes are guaranteed by Neff Holdings LLC, Neff LLC and are secured by a second priority security interest in substantially all of the Company's assets. The $150 million ABL, due November 13, 2015, is guaranteed by Neff Holdings LLC. and are secured by a first priority security interest in substantially all of the Company's assets. As of September 30, 2011, total availability under the Revolving Credit Facility was $60.7 million. The ABL is not rated. The stable outlook reflects the belief that the current rating will likely hold through the fleet expansion cycle and that the investments that the company is making should result in a newer fleet, improved competitiveness, and more pricing power. The outlook benefits from the expectation that there is meaningful demand for used equipment and that this demand can, in part, help the company fund its new equipment purchases. Moody's expects the company to manage its capital expenditures to maintain sufficient liquidly under its revolver so as to not trip its minimum liquidity threshold that will spring financial covenants. The rating and or outlook could be adversely affected if leverage was expected to increase to over 5 times or EBITDA coverage of interest was projected below 1.2 times, or if the company's utilization rates and return on assets was trending downwards for an extended period. The unused borrowing base availability falling below $50 million would be also be a credit negative. Negative cash flow would be considered in the context of reinvesting in the business to improve its competitive position and be compared with other factors such as pricing and utilization levels. The rating and or outlook could improve if the company's leverage was expected to fall under 5 times with free cash flow to debt of at least 5% and deemed to be sustainable and improving. We believe this metric combination captures the need to balance its re- fleeting and the resulting negative cash flow against the importance of generating positive cash flow over the longer term. Improving EBITA coverage of over 1.2 times could support a positive outlook if it was deemed to be improving further. The principal methodology used in rating NEFF was the Global Equipment and Automobile Rental Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Neff Rental LLC (NEFF) a wholly owned subsidiary of Neff Holdings LLC, headquartered in Miami, Florida, is a leading equipment rental company servicing primarily the sunbelt states. LTM revenues through September 30, 2011 totaled over $230 million. Wayzata Investment Partners, LLC purchased Neff Corp. as part of a chapter 11 restructuring in 2010. NEWPAGE CORP: Says Attack to Bonuses Harassment, Bargaining Tactic ------------------------------------------------------------------ Peg Brickley, writing for Dow Jones' Daily Bankruptcy Review, reports that the Bankruptcy Judge has scheduled an emergency hearing Wednesday Feb. 1, on NewPage Corp.'s bid to protect executives from being grilled by the investors. NewPage says its executives are in danger of being treated like pawns as second- lien investors seek to probe NewPage's plans for bonuses. DBR relates the bonuses are linked to a turnaround business plan for NewPage. According to DBR, NewPage's lawyers said the second- lien bondholders who control more than half of a $1 billion-plus chunk of debt aren't happy with the financial targets the company has set. NewPage attorneys say the group already has the information it needs, and seeks only to "harass, oppress and annoy" the company's management. By challenging the bonuses, the second-lien investors are angling for "leverage in the overall plan formulation process," the lawyers said. NewPage also owes nearly $1.8 billion on first-lien debt. 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 $250 million second-out debtor-in- possession term loan for NewPage. NIELSEN FINANCE: Moody's Assigns 'Ba2' Rating to New Term Loan -------------------------------------------------------------- Moody's Investors Service said that it had assigned a Ba2 rating to Nielsen Finance LLC's new US$ 1.25 billion senior secured term loan due January 2017. The proceeds will be used to repay term loans due in 2013. Existing ratings including the Corporate Family Rating (CFR) and all other debt ratings remain unchanged. The outlook is stable. Assignments: Issuer: Nielsen Finance LLC -- Senior Secured Bank Credit Facility, Assigned Ba2, 36 - LGD3 Moody's maintains these ratings on Nielsen Holdings N.V. and its following affiliates: Long-Term Corporate Family Ratings (domestic and foreign currency) of Ba3 Probability of Default rating of Ba3 Nielsen Company B.V. (The) Senior Unsecured (domestic currency) B2, 96 - LGD 6 Senior Unsecured MTN (domestic currency) (P)B2, 96 -- LGD 6 Other Short Term (domestic currency) ratings of (P)NP Nielsen Finance LLC Senior Secured Bank Credit Facility (domestic and foreign currency) Ba2, 36 - LGD3 BACKED Senior Unsecured (domestic currency) B2, 88 - LGD5 RATINGS RATIONALE Nielsen's Ba3 CFR reflects Moody's view that the company enjoys strong international business positions with high barriers to entry. In addition, it is based on Moody's expectation that the company can build on its track record to deliver continued solid revenue growth and can thus leverage its cost base, optimized over the last few years, to produce steady profit growth. In addition, Moody's expects that the company will utilize free cash flow generation mainly to reduce debt further. However, the ratings also reflect the company's still considerable leverage, the price challenges in Nielsen's `Buy' division as well as exposure, particularly in the' Watch' division to a fast moving technological environment and a more competitive landscape in faster growing markets (eg online). The company has delivered consistent revenue growth over recent years, evidencing the importance of Nielsen's services to clients through the economic cycle, notwithstanding some cycle-sensitivity in the company's `Exposition' and `Insights' businesses. In line with company guidance, Moody's expects 2011 full year revenue growth at a similar rate to that of the first nine months (6% at constant currency) as continued strong growth in developing markets offsets a more sluggish environment in some European markets. Growth trends should broadly continue into 2012, with a harsher macro-environment partly offset by the impact of new product launches (Online Campaign Ratings) and the revenue impact from the Walmart US co-operation agreement. The debt reduction from the company's IPO in early 2011 and continued Ebitda growth has resulted in improved free cash flow generation (as measured by Moody's - post capex and dividends), which has to a significant extent been used for debt reduction. As a result, Moody's expects Debt/Ebitda leverage for the full year 2011 to fall to 5x or somewhat below, in line with Moody's expectation for the Ba3 CFR. Moody's also assumes that the company will apply its discretionary free cash flows in 2012 and beyond so that it can achieve its stated deleveraging objective (annual reduction by 0.5x Net Debt/Ebitda as measured by Nielsen) with any residual cash flows potentially to be used for smaller add-on acquisitions. Rating Outlook The stable outlook is based on Moody's expectation that Nielsen will maintain its positive operating momentum and continue to grow revenues in the mid single digits in 2012 and beyond. It also reflects Moody's expectation that the company will apply discretionary cash flows mainly to debt reduction in line with its stated objective to reduce leverage and to achieve ratings improvements over time. What Could Change the Rating - Down A ratio of Debt/Ebitda (as adjusted by Moody's, without run-rate cost savings) higher than 5.0x and/or the absence of visible free cash flow generation would result in downward ratings pressure. What Could Change the Rating - Up Steady operational performance paired with de-leveraging such that Debt /Ebitda (as adjusted by Moody's) is moving towards 4.0x together with sustained meaningful free cash flow generation would likely result in positive rating pressure. Nielsen'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 Nielsen's core industry and believes Nielsen'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. NMCAH REALTY: Case Summary & 15 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: NMCAH Realty, Inc. 443 East 115th Street New York, NY 10029 Bankruptcy Case No.: 12-10330 Chapter 11 Petition Date: January 27, 2012 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Judge: James M. Peck Debtor's Counsel: Joseph M. Gitto, Esq. WASHTON & GITTO LLC 27 West Neck Road Huntington, NY 11743 Tel: (631) 659-3312 Fax: (631) 223-7818 E-mail: jgitto@washtongitto.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nysb12-10330.pdf The petition was signed by Edward J. Malloy, chairman. NORTON RETIREMENT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Norton Retirement and Assisted Living, LLC dba Whispering Pines Retirement Home c/o Ted Sanko 200 Whispering Pines Norton, KS 67654 Bankruptcy Case No.: 12-40080 Chapter 11 Petition Date: January 26, 2012 Court: United States Bankruptcy Court District of Kansas (Topeka) Judge: Janice Miller Karlin Debtor's Counsel: David P. Eron, Esq. ERON LAW OFFICE, P.A. 229 E. William, Suite 100 Wichita, KS 67202 Tel: (316) 262-5500 Fax: (316) 262-5559 E-mail: david@eronlaw.net Scheduled Assets: $82,461 Scheduled Liabilities: $2,241,165 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ksb12-40080.pdf The petition was signed by Theodore Sanko, president. OASIS PETROLEUM: S&P Raises Corporate Credit Rating to 'B+' ----------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Houston-based Oasis Petroleum Inc. to 'B+' from 'B'. The outlook is stable. "At the same time, we raised the rating on the company's senior unsecured debt to 'B' from 'B-'," S&P said. "The rating actions reflect our assessment of Oasis' improved business risk profile," said Standard & Poor's credit analyst Lawrence Wilkinson. This follows the company's announcement that it almost doubled its proved reserve base in 2011 and increased production by over 30% in the fourth quarter. "The ratings on Oasis Petroleum Inc. reflect the company's relatively small asset base and production levels, geographic concentration, aggressive growth strategy, limited operating track record, previously weak accounting control processes, and negative cash flow generation. The ratings also reflect the company's significant exposure to robust crude oil prices, its favorable cost structure, growth potential, and sizeable resource play acreage position," S&P said. "The outlook is stable, reflecting our view that the company should be able to fund its aggressive growth strategy and preserve credit protection measures at appropriate levels for the rating category. We would consider a negative rating action if the company were to materially increase its capital spending in a way that results in leverage exceeding 4.5x. An upgrade is unlikely over the near term given our assessment of the company's business risk," S&Ps said. OLD REPUBLIC: Fitch Downgrades Issuer Default Rating to 'BB' ------------------------------------------------------------ Fitch Ratings has downgraded Old Republic International Corporation's (ORI) Issuer Default Rating (IDR) to 'BB' from 'BBB' and its senior debt ratings to 'BB-' from 'BBB-'. Additionally, Fitch has downgraded ORI's insurance subsidiaries' Insurer Financial Strength (IFS) ratings to 'A-' from 'A'. All ratings remain on Watch Negative. These rating actions reflect Fitch's belief that the uncertainty surrounding the possibility of an acceleration of ORI's outstanding debt (related to potential future breach of a subsidiary collateral covenant), as well as uncertainty as to ORI's ability to fund an acceleration should one occur, is inconsistent with an investment-grade holding company rating. ORI is subject to acceleration on its debt if any of its significant subsidiaries experience bankruptcy, insolvency, rehabilitation or reorganization. In Fitch's opinion, there continues to be considerable uncertainty around ORI's ability to continue to avoid a covenant breach in light of ongoing challenges at its troubled mortgage insurance subsidiary, Republic Mortgage Insurance Company (RMIC). Since Jan. 19, 2012, RMIC has been operating under an Order of Supervision issued by its domiciliary state insurance department which allows for a deferral of 50% of claim payments during 2012. While such deferrals will slow further erosion of RMIC's regulatory capital, Fitch believes there are no assurances the runoff plan being executed will be successful, and that RMIC will not ultimately become insolvent. In the event of debt acceleration, it is unclear to Fitch if ORI could raise sufficient liquidity to payoff its debt obligations. Fitch notes that as of Sept. 30, 2011 ORI held approximately $600 million of cash at its holding company. In addition, ORI management reports that it has normal upstream dividend capacity from its property/casualty subsidiaries in 2012 of approximately $260 million. This compares to debt of $866 million. Fitch also notes that management has not yet disclosed its holding company cash levels as of year-end 2011, and that the company continues to pay its shareholder dividend, which was $170 million in 2011. The ongoing payment of the shareholder dividend further increases uncertainties with respect ORI's ability to fund a potential debt acceleration. Fitch believes ORI would likely be able to generate internal liquidity to meet a significant portion of a debt repayment. However, Fitch also believes ORI would potentially need to also rely on either an extra-ordinary dividend payment from its property/casualty subsidiaries, which would require regulatory approval, or an ability to issue new debt or equity, which may or may not be available post a covenant breach. Favorably, despite the uncertainties created by ORI's subsidiary collateral covenant, ORI's core property/casualty and title insurance businesses demonstrate strength. The property/casualty insurance operations remain the greatest driver of earnings, which showed significant improvement in 2011. The company's p/c segment reported a combined ratio of 96.9% in 2011 compared with 103% in 2010. The improvement is primarily attributable to lower reported losses on its consumer credit indemnity (CCI) product, which contributed 2.1 and 8.6 percentage points to the combined ratio in the respective years. ORI continues to actively manage claim remediation and has rescinded and denied numerous claims, for which it is the subject of litigation. ORI's title insurance operations reported continued growth in 2011 with an annual underwriting profit for the first time since 2007. While capitalization remains at an acceptable level, continued growth could lead to deterioration in risk-based capital and operating leverage. Fitch's one notch downgrade of ORI's insurance subsidiaries mainly reflects the uncertainties at the parent holding company. Fitch believes that ORI's holding company ratings are subject to above-average ratings migration over the near-to-intermediate term. Such migration could include sudden, multi-notch downgrade risk, as well as the potential for a multi-notch upgrade. The most noteworthy multi-notch downgrade risk, as reflected in the ongoing Rating Watch Negative, would be acceleration of ORI's debt obligations without sufficient liquidity to meet them. This would result in a default, and a sharp downgrade in ORI's holding company ratings. Sudden upward movement in ORI's rating would occur if management was able to fully mitigate its covenant/acceleration risk. This could be achieved by renegotiating the noted subsidiary collateral covenant, refinancing its current debt with new debt without such a covenant, or moving sufficient liquidity to the holding company to fully fund a debt acceleration. Reduction or elimination of the shareholder dividend would also be viewed favorably. Additional rating triggers that could lead to downgrades of the subsidiary IFS ratings include: -- A significant reduction in operating company capitalization below Fitch's expectations; -- Material losses on the CCI product above current expectations. Fitch has downgraded the following ratings and maintained its Rating Watch Negative: Old Republic International Corp. -- IDR to 'BB' from 'BBB'; -- $316 million 8% senior notes due May 12, 2012 to 'BB-' from 'BBB-'; -- $550 million 3.75% senior notes due March 15, 2018 to 'BB-' from 'BBB-'. Bituminous Casualty Corp. Bituminous Fire & Marine Insurance Co. Great West Casualty Co. Old Republic Insurance Co. Old Republic Lloyds of Texas Old Republic General Insurance Co. Old Republic Surety Co. Manufacturers Alliance Insurance Co. Pennsylvania Manufacturers' Association Insurance Co. Pennsylvania Manufacturers Indemnity Co. American Guaranty Title Insurance Co. Mississippi Valley Title Insurance Co. Old Republic National Title Insurance Co. -- IFS to 'A-' from 'A'. OMNICARE INC: Moody's Says 'Ba3' CFR Unaffected by FTC Complaint ---------------------------------------------------------------- Moody's Investors Service commented that the Federal Trade Commission's filing of an administrative complaint against Omnicare Inc., blocking its bid for PharMerica, has no immediate effect on the company's Ba3 Corporate Family Rating and other ratings, which remain under review for possible downgrade. Omnicare, Inc. (OCR), headquartered in Covington, Kentucky, is the leading provider of institutional pharmacy services to the long term care sector. OPEN RANGE: U.S. Objects to Unsecured Creditors' Demands -------------------------------------------------------- Amanda Bransford at Bankruptcy Law360 reports that the U.S. told U.S. Bankruptcy Judge Kevin J. Carey Friday it should not have to produce documents and witnesses requested by Open Range Communication Inc.'s unsecured creditors, arguing that the quick, informal and cooperative investigation it agreed to risks becoming a formal, open-ended and adversarial one. 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 disclosed 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. OPEN RANGE: Seeks Two-Month Extension to File Payment Plan ---------------------------------------------------------- Dow Jones' DBR Small Cap reports that Open Range Communications Inc. is seeking a two-month extension to file a creditor-payment plan as it works to wind down its business after liquidating its assets. 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 disclosed 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. PACIFIC AUTO: Case Summary & 8 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Pacific Auto Wrecking Inc. P.O. Box 206 Pacific, WA 98047 Bankruptcy Case No.: 12-40431 Chapter 11 Petition Date: January 26, 2012 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Brian D. Lynch Debtor's Counsel: Allan L. Overland, Esq. 901 South I Street, Ste 202 Tacoma, WA 98405 Tel: (253) 383-3053 Fax: (253) 383-3209 Scheduled Assets: $2,900,459 Scheduled Liabilities: $2,197,856 A list of the Company's eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb12-40431.pdf The petition was signed by Scott Haymond, president. PACKAGING DYNAMICS: S&P Affirms 'B' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Chicago- based Packaging Dynamics Corp. to stable from positive. "At the same time, we affirmed our 'B' corporate credit rating on the company, as well as our 'B' issue rating and our '4' recovery rating--indicating our expectations for an average (30% to 50%) recovery in a default scenario--on the company's $425 million senior secure notes," S&P said. "The rating on Packaging Dynamics reflects our assessment of the company's financial risk as 'aggressive' and business risk as 'weak' -- as our criteria define these terms," said Standard & Poor's credit analyst James Fielding. "Our aggressive financial risk assessment is based on our expectation that Packaging Dynamics' sales will be relatively flat over the next 12 months, possibly lagging our forecast for low 2% growth in both U.S. gross domestic product and consumer spending, and that leverage will remain at the upper end of the 4x-5x range during that period. Our 'weak' business risk assessment acknowledges the company's slowing sales in recent months and its exposure to volatile raw materials prices." "We are revising our outlook on Packaging Dynamics to stable from positive to reflect our diminished expectations for improvement in credit measures in a low-growth environment. The stable outlook reflects our expectation for steady demand for most of Packaging Dynamic's products and relatively flat pricing and input costs. We would expect our rating to hold even if revenues were to decline 5% to 10% over the next year. We would lower our rating if revenues dropped 20% or more, because we would expect this to cause leverage to climb closer to 6x EBITDA. We view an upgrade to be less likely over the next 12 months, given our relatively subdued economic forecast. However, we would raise our rating if we thought leverage would drop and be sustained below 4.5x. This could occur if the economy recovers more quickly than we currently anticipate and input costs fell significantly," S&P said. PADUCAH ATHLETIC: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Paducah Athletic Club, Inc 115 Lebanon Church Road Paducah, KY 42003 Bankruptcy Case No.: 12-50071 Chapter 11 Petition Date: January 27, 2012 Court: United States Bankruptcy Court Western District of Kentucky (Paducah) Debtor's Counsel: Scott A. Bachert, Esq. HARNED BACHERT & MCGEHEE PSC 324 E 10th St P.O. Box 1270 Bowling Green, KY 42102 Tel: (270) 782-3938 E-mail: bachert@hbmfirm.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 13 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/kywb12-50071.pdf The petition was signed by Wilma Kilcoyne, sole officer. PEP BOYS: Moody's Says B1 Unaffected by Gores Group Purchase ------------------------------------------------------------ In a comment published earlier, Moody's Investors Service stated that the announcement by Pep Boys-Manny, Moe & Jack that it has agreed to be acquired by affiliates of The Gores Group for total consideration of around $1 billion would have no immediate impact on either the B1 Corporate Family Rating or the stable outlook. "It is very early in the process, with the 45-day 'go shop' period still to be completed and shareholder approval still to be obtained," stated Moody's Senior Analyst Charlie O'Shea. "In addition, there is little visibility with respect to financing arrangements that would provide insight into the final capital structure if this transaction is in fact completed, so this is truly a very fluid situation. Finally, existing bondholders are protected by a change of control provision." The principal methodology used in rating Pep Boys was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Philadelphia, Pennsylvania, Pep Boys - Manny Moe & Jack (Pep Boys) is an automotive parts and service retailer, operating over 700 stores in 35 states and Puerto Rico. Annual revenues are approximately $2 billion. PEP BOYS: S&P Puts 'B' Corporate Credit Rating on Watch Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' corporate credit rating on Philadelphia-based Pep Boys-?Manny, Moe & Jack on CreditWatch with negative implications. The CreditWatch placement follows the announcement that The Gores Group LLC intends to acquire Pep Boys for $15 per share, or a total enterprise value of about $1 billion. The deal includes a "go shop" agreement, which allows the company to solicit, initiate, facilitate, or encourage any acquisition proposals from other prospective buyers through March 14, 2012. "In our view, the transaction could weaken Pep Boys' financial risk profile through the addition of a meaningful amount of debt," said Standard & Poor's credit analyst Brian Milligan. "As of July 30, 2011, we calculate operating lease-adjusted debt to EBITDA was 3.9x. We estimate operating lease-adjusted debt to EBITDA could increase to above 5x following the transaction, assuming 50% or more of the purchase price is funded with debt, which would be indicative of a 'highly leveraged' financial risk profile. Currently, we view the company's business risk profile as 'vulnerable' and its financial risk profile as 'aggressive,'" S&P said. "Before resolving the CreditWatch negative placement, we will meet with management to discuss the new capital structure, business strategy, and financial policies. We expect to resolve the CreditWatch listing shortly after the transaction is finalized," S&P said. PG COLLECTIONS: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: PG Collections, LLC 45 East Putnam Avenue Greenwich, CT 06830 Bankruptcy Case No.: 12-50153 Chapter 11 Petition Date: January 30, 2012 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Peter L. Ressler, Esq. GROOB RESSLER & MULQUEEN 123 York Street, Ste 1B New Haven, CT 06511-0001 Tel: (203) 777-5741 Fax: (203) 777-4206 E-mail: ressmul@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ctb12-50153.pdf The petition was signed by Michael Bonbrisco, member. PITT PENN: Taps Peckar & Abramson as Special Litigation Counsel --------------------------------------------------------------- Pitt Penn Holding Co., Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ Peckar & Abramson, P.C., as special litigation counsel. P&A's role in the case originally was focused on communications with government authorities concerning the criminal proceedings against John Mazzuto and James Margulies, two of the Debtors' former CEOs. The Debtors decided to expand the firm's role into representing the Debtors in several actions arising from certain fraudulent conduct of certain of the Debtors' pre-petition officers, directors and others. As a result of the expansion of P&A's role, the firm's monthly billing has likely exceeded the $15,000 per month cap on ordinary course professionals. P&A will continue to provide ordinary course services to the Debtors as in the past subject to the terms and conditions of the OCB procedures. However, all civil litigation-related work will be subjected to the fee application process. The Debtors assure the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The Court scheduled a Feb. 1, 2012 hearing to consider the employment application. About Industrial Enterprises Pittsburgh, Pennsylvania-based Industrial Enterprises of America, Inc., f/k/a Advanced Bio/Chem, Inc., filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-11508) on May 1, 2009. Pitt Penn Holding Co., Inc., and Pitt Penn Oil Co., LLC, each filed voluntary petitions for Chapter 11 relief (Bankr. D. Del. Case Nos. 09-11475 and 09-11476) on April 30, 2009. EMC Packaging, Inc., filed a voluntary petition for Chapter 11 relief (Bankr. D. Del. Case No. 09-11524) on May 4, 2009. Unifide Industries, LLC, and Today's Way Manufacturing LLC, each filed a voluntary petition for Chapter 11 relief (Bankr. D. Del. Case Nos. 09-11587 and 09-11586) on May 6, 2009. PPH, PPO, EMC, Unifide, and Today's Way are each subsidiaries of IEAM. The cases are jointly administered under Case No. 09-11475. Christopher D. Loizides, Esq., at Loizides, P.A., in Wilmington, Del., represents the Debtors as counsel. In its petition, Industrial Enterprises disclosed total assets of $50,476,697 and total debts of $17,853,997. Industrial Enterprises originally operated as a holding company with four wholly owned subsidiaries, PPH, EMC, Unifide, and Today's Way. PPH, through its wholly owned subsidiary, PPO, was a leading manufacturer, marketer and seller of automotive chemicals and additives. EMC's original business consisted of converting hydrofluorocarbon gases R134a and R152a into branded private label refrigerant and propellant products. Unifide was a leading marketer and seller of automotive chemicals and additives. Today's Way manufactured and packaged the products which were sold by Unifide. PMI GROUP: Committee Taps Womble Carlyle as Bankruptcy Co-Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of The PMI Group, Inc., asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain Womble Carlyle Sandridge & Rice, LLP, as bankruptcy co-counsel, nunc pro tunc to Jan. 3, 2012. As bankruptcy co-counsel, Womble Carlyle will, among others: (a) assist and advise the Committee in its discussions with the Debtor and other parties in interest regarding the overall administration of the Debtor's case; (b) represent the Committee at hearings to be held before the Court and communicating with the Committee regarding the matters heard and the issues raised as well as the decisions and considerations of the Court; and (c) assist and advise the Committee in its examination and analysis of the conduct of the Debtor's affairs. The Committee believes that Womble Carlyle is a disinterested person, and does not hold or represent an interest adverse to the Debtor's estate with respect to the matters for which Womble Carlyle is to be employed, as required by Section 3287(c) of the Bankruptcy Code. It is anticipated that the lead Womble Carlyle attorneys who will represent the Committee and their current rates are: Francis A. Monaco, Jr., Esq. $630 Kevin J. Mangan, Esq. $465 Thomas M. Horan, Esq. $360 Paraprofessionals $110-$225 About PMI Group Del.-based The PMI Group, Inc., is an insurance holding company whose stock had, until Oct. 21, 2011, been publicly-traded on the New York Stock Exchange. Through its principal regulated subsidiary, PMI Mortgage Insurance Co., and its affiliated companies, the Debtor provides residential mortgage insurance in the United States. The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13730) on Nov. 23, 2011. The Debtor had total assets of $225 million and total debts of $736 million. Stephen Smith signed the petition as chairman, chief executive officer, president and chief operating officer. The Debtor said in the filing that it does not have the financial resources to pay the outstanding principal amount of the 4.50% Convertible Senior Notes, 6.000% Senior Notes and the 6.625% Senior Notes if those amounts were to become due and payable. The Debtor is represented by James L. Patton, Esq., Pauline K. Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP. Sullivan & Cromwell, LLP, and Osborn & Maledon, P.A., serve as special counsel to the Debtor. PMI GROUP: Panel Taps Morrison & Foerster as Bankruptcy Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of The PMI Group, Inc., asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain Morrison & Foerster LLP as counsel to the Committee nunc pro tunc to Jan. 3, 2012. As bankruptcy counsel, Morrison & Foerster LLP, will, among others: a) advise the Committee in connection with its powers and duties under the Bankruptcy Code, the Bankruptcy Rules and the Local Rules; b) assist and advise the Committee in its consultation with the Debtor relative to the administration of the Debtor's case; and c) attend meeting and negotiate with the representatives of the Debtor. To the best of the Committee's knowledge, information, and belief, Morrison & Foerster does not hold or represent an interest adverse to the Debtor's estate, and is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy code and as used in Section 328(c) of the Bankruptcy Code. Morrison Foerster's principal attorneys for this representation and their current rates are: Anthony Princi,, Esq. $975 Jordan A. Wishnew, Esq. $680 James A. Newton, Esq. $445 Paraprofessionals $185-$360 About PMI Group Del.-based The PMI Group, Inc., is an insurance holding company whose stock had, until Oct. 21, 2011, been publicly-traded on the New York Stock Exchange. Through its principal regulated subsidiary, PMI Mortgage Insurance Co., and its affiliated companies, the Debtor provides residential mortgage insurance in the United States. The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13730) on Nov. 23, 2011. The Debtor had total assets of $225 million and total debts of $736 million. Stephen Smith signed the petition as chairman, chief executive officer, president and chief operating officer. The Debtor said in the filing that it does not have the financial resources to pay the outstanding principal amount of the 4.50% Convertible Senior Notes, 6.000% Senior Notes and the 6.625% Senior Notes if those amounts were to become due and payable. The Debtor is represented by James L. Patton, Esq., Pauline K. Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP. Sullivan & Cromwell, LLP, and Osborn & Maledon, P.A., serve as special counsel to the Debtor. RADIAN GUARANTY: S&P Cuts Insurer Fin'l Strength Rating to 'B' -------------------------------------------------------------- Standard & Poor's Rating Services lowered its insurer financial strength ratings on Radian Guaranty Inc., Radian Mortgage Insurance Inc., and Amerin Guaranty Corp. (collectively Radian MI) by one notch to 'B' from 'B+'. (Amerin Guaranty is now known as Radian Mortgage Assurance Inc.) "At the same time, we lowered our issuer credit rating on Radian Group Inc. to 'CCC' from 'CCC+'. The ratings on Radian Asset Assurance Inc. -- Radian Group's bond insurance subsidiary -- are unaffected by this rating action. The outlook on all Radian-related entities is negative," S&P said. "According to our rating definitions, an insurer rated 'B' has weak financial security characteristics. Adverse business conditions will likely impair its ability to meet financial commitments. We believe that Radian currently fits this definition," S&P said. "The high level of losses in the mortgage insurance sector are occurring in an economy that is struggling to recover and that continues to exhibit significant weakness in the job and housing markets. The lack of significant improvement in payroll employment levels contributed to high levels of new notices of delinquency (NODs)," S&P said. "Our rating action reflects the company's operating performance failing to meet our expectations through third-quarter 2011. The company's loan delinquency inventory, while improving throughout 2011, remained high, and NODs have not declined rapidly enough to support a recovery of earnings," S&P said. The current ratings contemplate continued losses through 2012 with a trajectory toward break-even operating results by the end of 2013 due to improving NOD trends. "The negative outlook on Radian reflects the current trajectory of operating performance; the impact ongoing losses are expected to have on Radian's capital position, and the significant downside risk due to potential adverse development. Although new notices of delinquency continue to decline, they would likely increase again if the economy enters another recession and payroll employment once again declines. The elevated level of new notices and the volatility in cure activity make it difficult to foresee materially improving operating performance in the coming quarters," S&P said. "We expect favorable seasonality in first-half 2012 to affect Radian's operating results. However, we could lower the ratings if Radian's future operating results reflect further significant reserve adjustments, which would call into question its reserve adequacy. As well, we could downgrade Radian if operating results fail to reflect material improvement from the operating results reported in 2011. To wit, if the trajectory of 2012 statutory earnings does not improve, Radian's claims-paying ability and capitalization will further deteriorate and call into question whether it can repay the debt due in 2015 and 2017. We could also lower the ratings if the company deploys its capital at the holding company beyond $350 million within the next 12 months and has less-than-adequate resources to service the debt and related expenses due in 2013 and 2015. To the extent operating losses and industry fundamentals reflect significant improvement, providing an indication that 2013 results would be significantly better than break-even, we could affirm the ratings," S&P said. RCR PLUMBING: Taps Oliva and Associates as Special Counsel ---------------------------------------------------------- RCR Plumbing and Mechanical, Inc., asks authority from the U.S. Bankruptcy Court for the Central District of California to employ Oliva and Associates, ALC, as its prepetition insurance counsel to continue to advise the Debtor with respect to insurance cover issues. The firm also may assist with broader issues as they relate to the insurance carriers, such as contractual and collateral requirements and claim handling responsibilities, as necessary. The firm will perform the required services at its customary hourly rates which currently range from $110 to $400 per hour, depending on the experience and expertise of the attorney or paralegal performing the work and will be reimbursed its actual, out-of-pocket expenses. The majority of the work will be performed by Joseph Oliva, Esq., a partner whose current hourly rate is $400. The firm has performed services for the Debtor since March 2008, and is a pre-petition creditor of the Debtor by virtue of a general unsecured claim in the approximate amount of $45,700. The firm is not waiving the claim. Mr. Oliva, a shareholder of Oliva and Associates, ALC, attests that the firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About RCR Plumbing Founded in 1977, Riverside, California-based RCR Plumbing and Mechanical Inc. is one of the largest plumbing subcontractors in the West Coast. In 1999, RCR Plumbing was acquired by American Plumbing and Mechanical Inc. On Oct. 13, 2003, AMPAM and its affiliated entities, including RCR Plumbing, filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Lead Case No. 03-55789) in San Antonio. Pursuant to a plan of reorganization, RCR Plumbing received a discharge of any liability arising from contracts completed prior to Aug. 2, 2004, the date the plan was confirmed. The plan disaggregated RCR Plumbing from AMPAM. RCR Plumbing filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-41853) on Oct. 12, 2011. RCR Plumbing blamed a weak construction market and increased insurance costs. Judge Wayne E. Johnson oversees the case. Evan D. Smiley, Esq., and Kyra E. Andrassy, Esq. at Weiland, Golden, Smiley et al., serve as the Debtor's counsel. Sidley Austin LLP as its special labor and employment counsel BSW & Associates as financial advisor. Kurtzman Carson Consultants LLC serves as noticing agent. In its petition, RCR Plumbing estimated $10 million to $50 million in assets and debts. The petition was signed by Robert C. Richey, president/CEO. The Official Committee of Unsecured Creditors tapped Venable LLP as its counsel. REAL MEX: Judge OKs Appointment of Consumer Privacy Ombudsman ------------------------------------------------------------- Martin Bricketto at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Brendan L. Shannon on Monday approved the appointment of a consumer privacy ombudsman in Real Mex Restaurants Inc.'s Chapter 11 case following U.S. trustee objections over the sale of company assets on privacy grounds. Judge Shannon issued an order directing the Office of the U.S. Trustee to appoint the ombudsman based on a joint request by the trustee and Real Mex. An auction is scheduled for Thursday, with a sale hearing to follow on Feb. 10. 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. REAL MEX: Judge Bars Creditors From Pursuing Lender Claims ---------------------------------------------------------- Dow Jones' DBR Small Cap reports that a judge declined to allow Real Mex Restaurants Inc.'s unsecured creditors to pursue litigation intended to loosen a lender group's grip on the company's assets. 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. REALTY INCOME: S&P Assigns 'BB+' $325MM Preferred Stock Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' rating to the new $325 million 6 5/8% cumulative preferred stock series F issued by Realty Income. "Our outlook on Realty Income is stable," S&P said. "The company plans to use approximately $127.5 million of the net proceeds of this offering to redeem (higher coupon) existing class D preferred stock and the remaining net proceeds to repay a portion of the borrowings outstanding under its credit facility. On Jan. 27, 2012, Realty Income had approximately $257.1 million of outstanding borrowings under its $425 million acquisition credit facility, which it primarily used to acquire properties. The company will use any remaining net proceeds for general corporate purposes," S&P said. "We expect Realty Income's portfolio to continue to support the company's debt service and fixed-charge coverage measures. We view a negative rating action as unlikely in the near term, despite the rent reductions associated with the Chapter 11 filings of tenants Buffets Holdings Inc. and Friendly's Ice Cream. This is because we expect Realty Income has more than offset this rent loss with income from accretive acquisitions completed during 2011. As a result, we expect fixed-charge coverage to remain in the current high 2x area, above the 2.6x level below, which we'd consider a one-notch downgrade. Alternatively, we would consider an upgrade if the company successfully executes on its potentially broader investment pursuits and is able to absorb current and potential future additional tenant stress within the portfolio while maintaining its modest financial profile," S&P said. Ratings List Realty Income Corp. Corporate credit rating BBB/Stable/-- RATING ASSIGNED Realty income Corp. $325 mil. cumulative pref stock series F BB+ RNFI UNLIMITED: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: RNFI Unlimited, LLC 1635 N. Greenfield Rd., #126 Mesa, AZ 85205 Bankruptcy Case No.: 12-01649 Chapter 11 Petition Date: January 30, 2012 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Dale C. Schian, Esq. SCHIAN WALKER, P.L.C. 3550 N. Central Ave. #1700 Phoenix, AZ 85012-2115 Tel: (602) 277-1501 Fax: (602) 297-9633 E-mail: ecfdocket@swazlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Ronald K. Frandsen, manager. ROCK POINTE: Status Quo on Use of DMARC Cash Until April 5 Hearing ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Washington has ordered that to maintain the status quo until entry of a final order by the Court regarding adequate protection payments is entered, all Cash Collateral in Rock Pointe Holdings Company, LLC's case will be used, expended and disbursed in accordance with such practices as the Receiver and Black Realty Management, Inc., the Receiver's Agent, have followed from after Dec. 3, 2010, in operating, managing and leasing the Property;, provided, however, that: (a) The Receiver and BRMI will pay to DMARC 2006-CD2 Corporate Center, LLC. the sum of $292,000 as adequate protection payments commencing on Dec. 15, 2011, and on or before the 15th of each month thereafter pending a final hearing and order on adequate protection; (b) the Receiver and BRMI will retain all unexpended funds not otherwise disbursed in accordance with this Second Interim Order or as required pursuant to the 543 Order (referring to the Jan. 19, 2012 Second Interim Order Excusing Compliance with 11 U.S.C. Section 543) in the operational bank account; and (c) The Receiver and BRMI are directed to pay pursuant to 11 U.S.C. Section 1930(a)(6) the U.S. Trustee's regularly occurring fee on a quarterly basis as an ordinary course expense of the Receivership case. The Court further ordered: * To the extent that any Cash Collateral should come into the Debtor's possession, Debtor will immediately deliver the same to the Receiver. * The Receiver and BRMI are authorized to maintain and use the existing pre-petition operating account at Sterling Savings under account No. XXXXX3078 for the receipt and disbursement of all prepetition and postpetition Cash Collateral. * DMARC is granted a postpetition security interest and lien in all real and personal property acquired by Debtor or the Receiver after the date of the Petition. * This Second Interim Order will remain effective until a final hearing on use of cash collateral and adequate protection payments for April 5 and 6, 2012, or further Order of the Court. DMARK claims to hold a first, valid and existing security interest in the Debtor's property and all rents, income and revenues related to the same. A copy of the Second Interim Cash Collateral Order is available for free at http://bankrupt.com/misc/rockpointe.doc80.pdf DMARC's counsel can be reached at: Christine Kosydar, Esq. John E. Glowney, Esq. STOEL RIVES LLP 900 SW 5th Avenue, Suite 2600 Portland, OR 97204 Tel: (503) 224-3380 Fax: (503) 220-2480 E-mail: cakosydar@stoel.com jeglowney@stoel.com About Rock Pointe Rock Pointe Holdings Company LLC owns the Rock Pointe Corporate Center in Spokane, Washington. The Company filed for Chapter 11 protection (Bankr. E.D. Wash. Case No.11-05811) on Dec. 2, 2011. Brett L. Wittner, Esq., at Kent & Wittner PS, represents the Debtor. The Debtor estimated both assets and debts of between $50 million and $100 million. ROCKET SOFTWARE: Moody's Assigns 'B2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service assigned a B2 corporate family rating to first time rated issuer Rocket Software Inc. Moody's also assigned B1 ratings to the company's proposed first lien debt and Caa1 ratings to the company's second lien facilities. The debt will be used to refinance existing debt and pay a $260 million dividend to shareholders. The company is owned by management and private equity firm Court Square Capital Partners. The outlook is stable. RATINGS RATIONALE Rocket Software Inc.'s B2 corporate family rating reflects the company's relatively small size (approximately $230 million in revenues, pro forma for recent acquisitions) relative to its infrastructure software peers, acquisition appetite and aggressive financial policies. The company has modest organic growth prospects and the company looks to strategic acquisitions for growth and improved market position. Although closing leverage is moderate at closing (just under 4x debt to EBITDA on a Moody's adjusted basis pro forma for the proposed equity distribution and recent acquisitions), the company is likely to increase leverage for future acquisitions or additional equity distributions. The ratings also consider the company's niche position providing infrastructure software and tools for mainframe and distributed markets, longstanding supply relationship with a major OEM supplier, and relatively high proportion of recurring revenues. The recurring nature of the company's revenue and cash generating capabilities of the business should provide a good ability to service debt even at higher than current levels. While we expect most acquisitions will be accomplished while keeping leverage well below 5x, significant debt financed acquisitions or equity distributions could result in downward rating pressure. Liquidity is very good post closing based on the company's free cash flow generating capability, an undrawn $25 million revolver and cash on hand. The following ratings were assigned: Corporate family rating: B2 Probability of default: B2 First lien senior secured revolver due 2017, B1, LGD3 35% First lien senior secured term loan due 2018, B1 LGD3 35% Second lien term loan due 2019, Caa1, LGD5 87% Ratings outlook: stable The stable ratings outlook reflects our expectation of modest organic growth, but also accommodates a moderate acquisition program. The ratings could face downward pressure if the company pursues a large debt financed acquisition or equity distribution, particularly if leverage exceeds 5.75x. Given the financial policies of the company and its relatively small scale, an upgrade is not likely in the near to medium term. The debt instrument ratings were determined using Moody's Loss Given Default Methodology and reflect the instruments relative position in the capital structure. Rocket Software Inc.'s ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Rocket Software Inc.'s core industry and believes Rocket Software Inc.'s ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Rocket Software Inc. is a provider of IT management software tools. The company, based in Newton, MA, had 2011 with pro forma revenue of approximately $230 million. ROCKIES EXPRESS: S&P Lowers Corporate Credit Rating to 'BB' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Rockies Express Pipeline LLC (REX) to 'BB' from 'BBB-'. The outlook is stable. "In addition, we assigned a recovery rating of '4' to the issue-level debt, which indicates our expectation of average (30%-50%) recovery in the event of a payment default. As of Sept. 30, 2011, REX had about $3 billion of total reported debt," S&P said. "We base the ratings downgrade on sustained compression in low natural gas basis differentials, which heightens recontracting risk primarily in 2019 and to a lesser extent in 2014, combined with somewhat aggressive financial metrics," said Standard & Poor's credit analyst William Ferara. "The recontracting risk could result in substantially lower cash flows when the vast majority of existing contracts expire in 2019 (with about 10% of capacity due in late-2014). The emergence of the Marcellus Shale, which is located very close to the same markets REX is currently serving, is diminishing the value of shipping gas west to east, although we recognize that the pipeline could reverse flows (east to west) to generate more value. We expect debt to EBITDA to remain at about 6x in the near term based on our calculation, which in our view is appropriate for the rating. Refinancing risk also exists for a $500 million debt maturity due in July 2013, likely resulting in an increase in interest expense." "We base our corporate credit rating on REX on its stand-alone credit quality. REX is a limited liability company that was established as a joint venture to build and operate a natural gas pipeline that connects the Cheyenne Hub in Colorado to Clarington, Ohio, with a capacity of 1.8 billion cubic feet per day. The three owners are Kinder Morgan Energy Partners L.P. (50%; BBB/Stable/A- 2), Sempra Energy (25%; BBB+/Stable/A-2), and ConocoPhillips (25%; A/ Watch Neg/A-1). An ownership change would not likely affect our rating on REX because we rate the company on a stand- alone basis," S&P said. "The stable outlook reflects our expectation of stable cash flows and debt leverage metrics due to existing contracts. We expect basis differentials to remain narrow, however. While the remaining contract life limits the potential that we will lower the ratings notably in the near term, we could do so over time if we become increasingly confident that the narrow basis environment will cause materially lower recontracting rates in 2019. We could also lower the ratings if debt to EBITDA is markedly above 6x on sustained basis. We could raise the rating if the basis environment notably strengthens for a sustained period and recontracting risk is perceived to be reduced and debt to EBITDA improves to about 5.5x," S&P said. ROOMSTORE INC: Seeks Approval to Replace its Bankruptcy Lender -------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that RoomStore Inc. asked the bankruptcy court to allow it to replace the loan that's funding its Chapter 11 case with a new loan that has slightly better terms, including an extra $1 million in financing. 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. FTI Consulting, Inc., serves as the Debtor's financial advisors and consultants. 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. RURAL/METRO CORP: S&P Affirms 'B' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' issue-level rating and '6' recovery rating to Scottsdale, Ariz.-based Rural/Metro's proposed $95 million senior unsecured note due 2019. "We also affirmed the 'B' corporate credit rating. We are raising our senior secured issue-level rating to 'B+' from 'B' and recovery rating to '2' from '3'. With the two acquisitions, we have revised our assumed gross enterprise value at default to $375 million from $300 million. Therefore, prospects for recovery in the event of payment default for the senior secured debt improved to substantial (70% to 90%) from meaningful (50% to 70%). The outlook is stable," S&P said. "The company intends to use the proceeds from the note, in addition to $20 million of cash equity from the financial sponsor, to fund the acquisitions of two ambulance providers located in the West," said Standard & Poor's credit analyst Rivka Gertzulin. "We expect the transaction to slightly reduce leverage on a pro forma basis," she added. "The corporate credit rating on Rural/Metro Corp. incorporates an expectation that the company will generate low-single-digit same- contract revenue growth, supplemented by recent acquisition activity. We expect EBITDA generation to expand from earnings from newly acquired operations. Still, we are expecting modest improvement from current fully adjusted leverage, which we calculate at close to 8x pro forma for the new debt, to about 7x in fiscal 2012," S&P said. "Despite the lack of visible significant competitive or reimbursement pressure in the near term, our stable rating outlook reflects our expectation that Rural/Metro will remain highly leveraged as a result of the leveraged buyout. Therefore, a higher rating is unlikely over the near to medium term, given significant debt leverage and an aggressive financial policy typical of a financial sponsor-owned company. We could lower the rating if liquidity becomes strained, i.e., the company experiences outflows of cash from operations. While unlikely, this scenario could occur if margins contract by over 500 basis points and revenue declines by over 10%, possibly because of significant cuts in reimbursement rates, and from a spike in uncompensated care or contract losses," S&P said. SAMSON INVESTMENT: Moody's Assigns 'Ba3' Corporate Family Rating ---------------------------------------------------------------- Moody's Investor Services assigned a Ba3 Corporate Family Rating (CFR) to Samson Investment Company and a B1 rating to its offering of $2.25 billion senior secured notes due 2020 and 2022. Samson Investment Company is a wholly owned subsidiary of Samson Resources Corporation (Samson). The proceeds of this inaugural offering will be used to fund a portion of the $7.2 billion acquisition of Samson by an investor group led by Kohlberg Kravis Roberts & Co. L.P. (KKR), retiring the bridge financing that funded the closing of the acquisition in December 2011. The rating outlook is stable. RATINGS RATIONALE "The acquisition of Samson will significantly increase the company's debt leverage notwithstanding the sponsor's $4.15 billion equity contribution," commented Andrew Brooks, Moody's Vice President. "Liquidity, however, appears to remain sufficiently intact to enable the company to execute on its strategy of growing its production from its unconventional oil and liquids-rich gas resource plays, a strategy which will demand timely execution on the part of management." Samson's Ba3 Corporate Family Rating reflects its standing as a moderately-sized, predominantly natural gas producer with acreage across a number of well known resource plays, but whose acquisition will recapitalize the company's balance sheet with a significantly sized debt component. A private, family owned oil and gas producer established in 1971, Samson agreed to be acquired in November 2011 for $7.2 billion by a KKR-led investor group also including Itochu Corporation, and investment firms Natural Gas Partners and Crestview Partners. The selling family retained the assets and liabilities associated with Samson's Gulf Coast and deepwater Gulf of Mexico holdings; this carve out presented certain data limitations from a period comparability perspective. At September 30, 2011, pro forma for the carve out, Samson had 2.33 tcfe (388 million boe) proved reserves (63% proved developed), 87% of which was natural gas (including natural gas liquids - NGLs). Samson's daily production averaged 108 mboe during the quarter ended September 30, 2011, approximately 88% of which was natural gas. Notwithstanding the $4.15 billion in sponsor equity funding, Samson is more highly levered following its acquisition with pro forma debt to production approximating $33,500 per boe and debt to proved developed (PD) reserves at $14 per boe, both metrics weak for a Ba3 rating. By refocusing its drilling budget, Samson intends to exploit opportunities to grow its liquids production, further improving cash margins and cash flow, ultimately generating free cash flow for debt reduction. While the shift to liquids will likely lead to higher finding and development (F&D) costs, these costs should be more than offset by higher liquids margins, maintaining Samson's leveraged full-cycle ratio in the vicinity of 2x, notwithstanding the higher interest costs to be incurred. The track into higher production, and production that is more leveraged to liquids, appears to have good visibility, enabled by a long-standing conservative management team who will remain in place, although the redirection and increased pace of capital spending entail a degree of execution risk. Given the private equity nature of Samson's new ownership and the extent of the equity investment made by the KKR group, we can appreciate that Samson's cash flows could be pressured to fund dividends and/or returns of capital to its new owners. However, the sponsors have articulated the view that cash from operations over the near term will be used to fund an increased capital spending program intended to facilitate higher liquids production, a funding strategy which we expect to see carried out. Similarly, the sponsors have not indicated a desire to further lever Samson in order to debt-finance dividends or distributions, and Moody's does not see structural deficiencies that would overtly afford equity to do so. The stable outlook is based on our expectation that Samson will execute on its plan to grow production, improving its leverage metrics on a relative basis by doing so, and that increased liquids production as a component of overall production will expand cash operating margins sufficiently to more than offset higher F&D costs and interest expense. While the extent of Samson's initial leverage on production and PD reserves would preclude an upgrade in the near term, a ratings upgrade could be considered if debt on production declined to a sustained $25,000 per boe and debt to PD reserves dropped under $8 per boe. Moreover we would expect the company's competitive cost structure to remain intact, such that a leveraged full-cycle ratio approximating 2x is maintained. Failure to consistently de-lever the company's balance sheet from year-end 2011 levels or to grow liquids production to the extent anticipated could prompt a downgrade. Payment of a dividend or cash distribution inconsistent with the sponsors' stated intent to utilize cash flow to fund its capital spending could also prompt a ratings downgrade. The B1 rating on the $2.25 billion of senior notes reflects both the overall probability of default of Samson, to which Moody's assigns a PDR of Ba3, and a loss given default of LGD5 (75%). Samson has a $2.25 billion secured borrowing base revolving credit facility, of which $1.345 billion is drawn. Its senior unsecured notes are subordinate to the senior secured credit facility's priority claim to the company's assets. The size of the potential senior secured claims relative to Samson's outstanding senior unsecured notes results in the senior notes being rated one notch beneath the Ba3 CFR under Moody's Loss Given Default Methodology. The principal methodology used in rating Samson Investment Company 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. SAMSON RESOURCES: S&P Assigns 'B+' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Tulsa, Okla.-based Samson Resources Corp. (Samson). The outlook is positive. "At the same time, we assigned a 'B' issue rating (one notch lower than the corporate credit rating) to Samson Investment Co.'s proposed $2.25 billion senior unsecured notes. We assigned a '5' recovery rating to the notes, indicating our expectation of a modest (10% to 30%) recovery in the event of a payment default," S&P said. "Proceeds from the transaction will be used to repay its bridge facility related to the acquisition of the company by its buyout sponsors (a group consisting of Kohlberg Kravis Roberts (KKR), Natural Gas Partners, Crestview Partners, and Itochu Corp.), as well as for general purposes," S&P said. "The ratings on Samson reflect its significant exposure to very weak natural gas prices, aggressive debt leverage, and its weak profitability metrics," said Standard & Poor's credit analyst Marc D. Bromberg. "The ratings also reflect the company's relative size and scale, a favorable cost structure, and sizeable resource acreage positions. Samson is owned by private equity firms Kohlberg Kravis Roberts (KKR), Natural Gas Partners, Crestview Partners, and Itochu Corp. Private equity ownership raises the risk, in our view, that Samson could adopt a more aggressive drilling program, potentially adding meaningfully to current debt, to grow reserves and production prior to a monetization of their stake." "The positive outlook reflects Samson's good prospects for liquids growth, given its spending program that will focus on oil and NGL plays, including the Bakken Shale and Granite Wash. If the company can execute successfully in these plays, by maintaining good lifting costs and mitigating downtime, we could foresee leverage trending to below 3.75x in fiscal 2013, which we consider to be appropriate for an upgrade to 'BB-'. We could lower the rating to 'B' if Samson's run-rate leverage exceeds 4.5x," S&P said. SAND SPRING: Taps Walker Truesdell as Independent Agent ------------------------------------------------------- Sand Spring Capital III, LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ: (i) Walker Truesdell Roth & Associates as independent agent of certain debtors designated as "Onshore Debtors", namely Sand Spring Capital III, LLC, CA Core Fixed Income Fund, LLC, CA High Yield Fund, LLC, CA Strategic Equity Fund, LLC and Sand Spring Capital III Master Fund, LLC; and (ii) Hobart G. Truesdell as an independent director of the Offshore Debtors, namely CA Core Fixed Income Offshore, Ltd., CA Core High Yield Offshore Fund, Ltd., CA Strategy Equity Offshore Fund, Ltd. and Sand Spring Capital III, Ltd. The Independent Fiduciaries will, among other things: a) execute, verify and file, or cause to be filed, all petitions, schedules, lists, motions, applications and other papers or documents that are required by applicable law or regulation or which the Independent Fiduciaries deem reasonable, expedient convenient necessary or proper in connection with the Chapter 11 cases; b) employ individuals and/or firms as professionals, consultants or financial advisors to the Debtors; and c) take such actions and execute and deliver such certificates, instruments, guaranties, notices and documents as may be required or which the Independent Fiduciaries may deem reasonable, advisable, expedient, convenient, necessary or proper to carry out the intent and purpose of the Bankruptcy Resolutions. WTR will be compensated based on the actual time expended by its employees on matters related to the Debtors. With respect to Mr. Tuesdell's service as Independent Director, time will be separately invoiced. Time will be billed at these hourly rates: Hobart Truesdell $375 Sharon Roth $350 Robert Kleinman $350 Other Professionals $300 Paraprofessionals $100-$150 The Independent Fiduciaries will be reimbursed for reasonable and documented out-of-pocket expenses. The Debtors assure the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Sand Spring Capital III Sand Spring Capital III, LLC, filed a Chapter 11 petition (Bankr. D. Del. Case No. 11-13393) on Oct. 25, 2011 in Delaware. Affiliates, Sand Spring Capital III, LLC, CA Core Fixed Income Fund, LLC, CA Core Fixed Income Offshore Fund, Ltd., CA High Yield Fund, LLC, CA High Yield Offshore Fund, Ltd., CA Strategic Equity Fund, LLC, CA Strategic Equity Offshore Fund, Ltd., Sand Spring Capital III, Ltd., Sand Spring Capital III Master Fund, LLC, sought Chapter 11 protection on the same day. SERVICEMASTER CO: S&P Rates $400-Mil. Sr. Unsec. Notes at 'B-' -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' senior unsecured debt rating to Memphis, Tenn.-based The ServiceMaster Co.'s proposed $400 million unsecured senior notes due 2020. "In addition, we assigned our 'B+' senior secured debt rating to the company's new $240 million tranche C revolving credit facility maturing in January 2017. The recovery rating on the unsecured notes is '5', indicating our expectation of modest recovery (10%- 30%) to noteholders in the event of a default. The recovery rating on the secured revolver is '2', indicating our expectation of substantial recovery (70%-90%)," S&P said. "We expect the new financing transactions to be leverage neutral, as proceeds from the unsecured notes will be used to redeem a portion of the outstanding 10.75% senior unsecured toggle notes due 2015. In addition, the new $240 million tranche C of the revolving credit facility extends the maturity date for a portion of the existing credit facility to 2017; the total amount of the credit facility has increased slightly to $447.6 million (was $442.5 million). The company had approximately $3.9 billion of reported debt outstanding as of Sept. 30, 2011," S&P said. "Our ratings on ServiceMaster reflect our assessment that the company has a 'highly leveraged' financial risk profile and 'fair' business risk profile. Our view of the company's business risk profile reflects the sensitivity of a majority of its businesses to a weak economy and reduced consumer spending, and its exposure to unfavorable weather in two of its key business segments. Still, ServiceMaster benefits from its business positions in its fragmented and competitive end markets, which have historically translated into good cash flow generation from a fairly diverse portfolio of services," S&P said. Ratings List The ServiceMaster Co. Corporate credit rating B/Stable/-- Ratings Assigned The ServiceMaster Co. Senior secured $240 mil. revolver tranche C due 2017 B+ Recovery rating 2 Senior unsecured $400 mil. notes due 2020 B- Recovery rating 5 SINO-FOREST: Independent Committee Releases Final Report -------------------------------------------------------- Sino-Forest Corporation disclosed that it is publicly releasing the Final Report of the Independent Committee of the Company's Board of Directors. On June 2, 2011, in response to a report issued by Muddy Waters, LLC, the Board of Directors appointed a committee of independent directors to examine the allegations in the MW Report, and report back to the Board of Directors. Prior Reports of the Independent Committee On Aug. 11, 2011, the IC delivered its First Interim Report to the Board of Directors. On Nov. 14, 2011 the IC delivered its Second Interim Report to the Board. The findings of the IC, as set out in the two reports, were described in a press release issued by the Company on Nov. 14, 2011. At the same time, redacted versions of the two reports were filed on SEDAR and posted on the Company's web site. With the delivery of its Second Interim Report to the Board, the IC believed its work was substantially complete, but indicated there remained certain further steps it intended to take as follows: (i) review the information and analysis which it had recently received from Management relating to certain relationship issues; (ii) in cooperation with Management, engage an independent valuator to conduct a valuation process with a scope and parameters acceptable to the IC; (iii) take such other steps as the IC, in its judgment, deemed advisable in the discharge of its mandate; and (iv) submit its final report and recommendations to the Board. Agreement with Noteholders to Disclose Final Report by January 31, 2012 On Jan. 12, 2012, Sino-Forest announced that holders of a majority in principal amount of its Senior Notes due 2014 and its Senior Notes due 2017 agreed to waive any defaults arising from the Company's failure to release its 2011 third quarter financial results on a timely basis. As disclosed in the Company's January 12, 2012 press release, pursuant to the waiver agreements, the Company agreed that the IC would deliver its final report and that such report would be made public by Jan. 31, 2012. Final Report of the Independent Committee Although there remain outstanding issues that have not been fully answered, in light of the Company's contractual commitment to its noteholders that the IC deliver its Final Report to the Board by Jan. 31, 2012, and the IC having concluded that that the work of the IC is now at the point of diminishing returns, the IC has delivered its Final Report to the Board. (a) Relationship Issues As described in the Final Report, while the IC has reviewed information and analysis received from Management relating to certain relationship issues, including additional information received following the Second Interim Report, for the reasons described in the Final Report the IC is not able to reach definitive conclusions regarding the relationship issues under consideration. (b) Area Verification Test of a Forest Asset Sample Subsequent to the release of the Second Interim Report, the IC requested that an independent forestry expert undertake a proof of concept exercise to determine if two compartments in particular purchase contracts could be located and quantified by such party. A "compartment" is a forestry term used to indicate an area of trees, usually contiguous. The Company retained Stewart Murray (Singapore) Pte. Ltd. ("Stewart Murray") and Indufor Asia Pacific Limited ("Indufor") as third-party consultants (collectively, the "Consultants"). The proof of concept exercise was confined to two compartments. The selection criteria limited the sample to purchased timber assets located in Yunnan province. The candidate assets were acquired prior to the allegations in the MW Report. They were listed as being held by British Virgin Island entities and not by Wholly Foreign Owned Enterprise entities. At the IC's request, the Consultants selected a shortlist of 10 possible compartments meeting the criteria above, avoiding any prospect that the sampling involved personnel from the Company. Multiple county forestry bureaus were represented in the shortlist, and the IC made the final selection of compartments to ensure more than one county forestry bureau was represented. One of the selected compartments, Compartment 11, was located in Jianchuan County, near the township of Ma-teng, within the jurisdiction of the Jianchuan County Forest Bureau. It had a stated area of 1145 mu (76.3 hectares). The second, Compartment 44, was in Heqing County, near the township of Beiya, within the jurisdiction of the Heqing County Forest Bureau. It had a stated area of 957 mu (63.8 hectares). Within the proof of concept exercise, the maps of the two compartments were provided by the Company to Indufor, which were borrowed by the contracted survey company from forestry bureaus. These showed the extent of each compartment's boundary that corresponded to those in surveys related to the purchase contracts. The Consultants then geo-referenced and digitized these boundaries, and entered them into a Geographic Information System. The Consultants located and physically inspected the two forest compartments. The inspection procedure included documenting certain qualitative characteristics of each compartment. The Consultants confirmed that the compartments were forested, but did not undertake an assessment of standing timber volume. The geo-referenced compartment boundaries were superimposed on recent high resolution satellite imagery and this allowed measurement of each compartment's forest cover. This process allowed the removal of areas lacking forest cover from the assessment of compartment net stocked area. The analysis and findings from the area verification test are limited solely to the two compartments that were the subject of the proof of concept exercise. While the Company plans to broaden its area verification to other Sino-Forest forestry assets, as described below, no extrapolation of the findings to Sino-Forest's broader forestry assets is possible or is implied. (c)Engagement of Consultants to Verify and Value Company's Forestry Assets As a proof of concept study, the area verification exercise was successful subject to the provision of maps meeting certain standards. This Consultants' engagement will now expand to include a verification and validation process of the key components that underpin forest value. The exercise will involve a highly structured process that will, over time, systematically assess the area of forest cover and merchantable volume across the Sino- Forest estate. The Company has also engaged Stewart Murray to assist the Company in compiling a full forest description and implementing a forest asset valuation framework. Stewart Murray will work in cooperation with the Company to value its forest assets as at Dec. 31, 2011. Independent Committee to Cease its Investigative Activities The Board of Directors has adopted a resolution instructing the IC to cease its investigative, review and oversight activities. Any issues that remain outstanding, as identified in the Final Report or earlier reports of the IC, will be referred to the Audit Committee or Special Restructuring Committee. Class Action Commenced Against Sino-Forest in the United States On Jan. 27, 2012, a class action was commenced against Sino-Forest and other defendants in the Supreme Court of the State of New York, U.S.A. The complaint alleges that the action is brought on behalf of persons who purchased Sino-Forest shares on the Over- the-Counter market and on behalf of non-Canadian purchasers of Sino-Forest debt securities. The quantum of damages sought is not specified in the complaint. The Company intends to vigorously defend the action. About Sino-Forest Corp. Sino-Forest Corporation -- http://www.sinoforest.com/-- is a commercial forest plantation operator in China. Its principal businesses include the ownership and management of tree plantations, the sale of standing timber and wood logs, and the complementary manufacturing of downstream engineered-wood products. Sino-Forest also holds a majority interest in Greenheart Group Limited, a Hong-Kong listed investment holding company with assets in Suriname (South America) and New Zealand and involved in sustainable harvesting, processing and sales of its logs and lumber to China and other markets around the world. Sino-Forest's common shares have been listed on the Toronto Stock Exchange under the symbol TRE since 1995. Sino-Forest disclosed mid-January 2012 that holders of a majority in principal amount of its Senior Notes due 2014 and its Senior Notes due 2017 have agreed to waive the default arising from the Company's failure to release its 2011 third quarter financial results on a timely basis. Pursuant to the waiver agreements, the Company has agreed to make the US$9.775 million interest payment on its 2016 Convertible Notes that was due on Dec. 15, 2011. The Company also has agreed to continue to pay when due interest on the Convertible Notes due 2013 and 2016 and on the Senior Notes due 2014 and 2017. SMART & FINAL: Moody's Confirms 'B3' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service confirmed the B3 corporate family rating and probability of default rating of Smart & Final Holdings Corporation. Moody's also confirmed the B3 rating of the first lien term loans, the Ba2 rating of the ABL revolving credit facility and the Caa1 rating of the second lien term loans. The outlook is positive. These rating actions conclude the review initiated on October 28, 2011. "The repayment of the principal outstanding under the CMBS credit facility through proceeds from sale leaseback transactions improves liquidity and removes the downward rating pressure caused by the looming maturity of the CMBS credit facility", Moody's Senior Analyst Mickey Chadha stated. RATINGS RATIONALE The B3 Corporate Family Rating continues to reflect Smart & Final's high leverage, regional concentration, and challenging geographic and demographic markets. The ratings also recognize the company's good liquidity, the potential benefits of the company's diversification efforts and new management initiatives. These ratings are confirmed and point estimates updated: Smart & Final Holdings Corporation Corporate Family Rating of B3; Probability of Default Rating of B3. Smart & Final Stores LLC $47 million First Lien Term Loan maturing May 2014 at B3 (LGD 3, 46% from LGD 3, 49%); $119 million First Lien Term Loan maturing May 2016 at B3 (LGD 3, 46% from LGD 3, 49%); $125 million Asset-Based Revolving Credit Facility maturing June 2016 at Ba2 (LGD 2, 17% from LGD 2, 17%); $138 million Second Lien Term Loan maturing November 2016 at Caa1 (LGD 5, 73% from LGD 5, 76%); $2 million Second Lien Term Loan maturing November 2014 at Caa1 (LGD 5, 73% from LGD 5, 76%). The positive outlook reflects Moody's view that Smart & Final's funded debt levels will not change materially and the improving economy along with new management initiatives in price optimization, cost savings and product offerings should improve operating performance over the near to medium term. The outlook also incorporates our expectation that debt/EBITDA will be sustained below 5.5 times. Ratings could be upgraded should the company maintain good liquidity and demonstrate improvements in profitability and operating margins. Quantitatively, an upgrade could be achieved if debt to EBITDA is sustained below 5.5 times and EBITA to interest sustained in excess of 1.5 times. Ratings could be downgraded if the company's liquidity deteriorates or if operating performance deteriorates as evidenced by decline in same store sales growth and profitability. Ratings could also be downgraded if the company's consolidated EBITA to interest falls below 1.25 times, or if debt/EBITDA is sustained above 6.0 times. The principal methodology used in rating Smart & Final was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Smart & Final Holdings Corp, (S&F) headquartered in Commerce, California, operates 247 non-membership warehouse club stores serving retail and commercial customers in six western states and northern Mexico under the Smart & Final and Cash & Carry banners. The company is privately held by an affiliate of Apollo Management and was acquired by Apollo in 2007. SOLYNDRA LLC: To Abandon Thousands of Contaminated Assets --------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that shortly after a television news station broadcast the dumping of glass tubes at a Solyndra LLC plant, the company is moving to abandon thousands of additional tools and solar-panel components. About Solyndra LLC Founded in 2005, Solyndra LLC is a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. In the Chapter 11 cases, the Debtors are pursuing a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors are unable to identify any such potential buyers, an orderly liquidation of the Debtors' assets for the benefit of their creditors. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Solyndra LLC. The Committee has tapped Blank Rome LLP as counsel. Solyndra is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are Evergreen Solar and start-up Spectrawatt Inc., both of which filed in August, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. SOMERSET PROPERTIES: Case Summary & 6 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Somerset Properties, L.C. 3214 North University Avenue, #615 Provo, UT 84604 Bankruptcy Case No.: 12-20923 Chapter 11 Petition Date: January 26, 2012 Court: United States Bankruptcy Court District of Utah (Salt Lake City) Judge: R. Kimball Mosier Debtor's Counsel: Alan L. Smith, Esq. 1169 East 4020 South Salt Lake City, UT 84124 Tel: (801) 262-0555 Fax: (801) 262-3009 E-mail: Alanakaed@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the list of six largest unsecured creditors is available for free at http://bankrupt.com/misc/utb12-20923.pdf The petition was signed by Gary R. Brinton, manager. SPANISH BROADCASTING: Moody's Rates 1st Lien Notes at 'Caa1' ------------------------------------------------------------ Moody's Investors Service assigned a Caa1 rating and LGD3 -- 47% assessment to Spanish Broadcasting System, Inc.'s proposed $275 million 1st Lien Senior Secured Notes. The new debt issuance and a portion of cash balances will be used to refinance existing $303 million of outstanding 1st Lien sr secured term loans which mature in June 2012. In addition, Moody's affirmed the Caa3, LGD6 -- 99% rating on the 10.75% Series B Preferred Stock, the Caa1 Corporate Family Rating (CFR) and the Caa1 Probability of Default Rating (PDR). Moody's also assigned a Speculative Grade Liquidity (SGL) Rating of SGL-3 and the rating outlook is stable. Assignments: Issuer: Spanish Broadcasting System, Inc. -- $275 million 1st Lien Senior Secured Notes: Assigned Caa1, LGD3 -- 47% -- Speculative Grade Liquidity Rating: Assigned SGL-3 Unchanged: Issuer: Spanish Broadcasting System, Inc. -- Corporate Family Rating: Affirmed Caa1 -- Probability of Default Rating: Affirmed Caa1 -- 10.75% Series B Preferred Stock ($112 million outstanding including $19.4 million of dividends): Affirmed Caa3, LGD6 ? - 99% Outlook Actions: Issuer: Spanish Broadcasting System, Inc. -- Outlook is Stable To be withdrawn upon the close of the proposed transaction: Issuer: Spanish Broadcasting System, Inc. -- $303 million outstanding 1st lien sr secured term loan B due June 2012: Caa1, LGD4 -- 50% RATINGS RATIONALE Spanish Broadcasting's Caa1 corporate family rating reflects its very high debt+preferred stock-to-EBITDA ratio of approximately 8.9x estimated for LTM December 2011 and pro forma for the transaction (including Moody's standard adjustments) or 6.4x excluding preferred stock and accrued dividends. Although still very high, leverage ratios reflect improvement from the prior year due to consolidated EBITDA growth and lower debt balances. The proposed $275 million of notes will be used to refinance its term loan B ($303 million outstanding) which matures in June 2012, and ratings assume the company is successful in this refinancing. Ratings also incorporate the potential for at least a portion of preferred shares being put to the company in October 2013 which could lead to a Voting Rights Triggering Event thereby limiting the company's ability to incur debt, make certain restricted payments, or undertake certain mergers or consolidations. The inability to incur debt presents incremental refinancing risk for the proposed notes given that resolution could potentially require the refinancing of some or all outstanding preferred shares to address the Voting Rights Triggering Event or potentially require the sale of assets. Moody's expects debt+preferred stock-to-EBITDA ratios to improve modestly by December 2012 reflecting single digit EBITDA growth. Ratings reflect ongoing media fragmentation, increasing competition in Spanish language broadcasting from existing and new competitors (e.g. News Corp.'s recently announced launch of a Spanish language network), and the cyclical nature of radio and television advertising demand evidenced by revenue declines suffered by broadcasters during the recent recession. Ratings are supported by the company's presence in large Hispanic markets and expectations for above average population and buying power growth for Hispanics in the continental US and Puerto Rico. Ratings are also supported by improved performance of the television segment and our expectations for this segment to start contributing positive EBITDA by the end of 2012 bringing overall EBITDA margins to roughly 34% (including Moody's standard adjustments). Although the company has radio and TV assets in certain of the largest MSA's, including Los Angeles and New York, ratings are constrained by its dependence on three markets for 61% of total revenues. Despite the absence of a revolver facility, liquidity is expected to be adequate over the next 12 months, and we believe the company will carry a minimum $15 million of balance sheet cash and generate roughly 2% free cash flow-to-debt ratios despite higher cash interest payments under the proposed notes. In a scenario in which the company is not able to refinance its existing credit facilities as currently proposed, liquidity would be weak given the June 2012 maturity of the Term Loan B. Beyond our 12 month liquidity horizon, the company will need to address the potential that at least a portion of its preferred shares will be put to the company at the earliest date (October 2013). The stable outlook reflects the term loan B being refinanced, as proposed, and our expectation that management will succeed in executing its plan to eliminate losses for the TV segment. The outlook also incorporates our view that the company will generate low single-digit percentage free cash flow-to-debt ratios resulting in modest improvements in net debt+preferred stock-to- EBITDA ratios over the rating horizon. Ratings could be downgraded if the company does not refinance its term loan B prior to the June 2012 maturity, as proposed, or if its TV segment continues to generate EBITDA losses leading to margin pressure. Ratings could also be downgraded if debt-to- EBITDA ratios do not improve from current levels, liquidity deteriorates, or the company no longer generates positive free cash flow. Very high leverage limits upward ratings momentum; however, ratings could be upgraded if the TV segment starts generating positive EBITDA, the company maintains adequate liquidity with low single digit free cash flow-to-debt ratios, and management provides assurances that resolution of the preferred share put will maintain debt-to-EBITDA ratios consistent with a higher rating. The principal methodology used in rating Spanish Broadcasting was the Global Broadcast Industry Methodology published in June 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. Spanish Broadcasting System, Inc., headquartered in the Coconut Grove section of Miami, FL, owns and/or operates 21 radio stations (88% of FY2010 revenue) as well as MegaTV, a television operation (12% of FY2010 revenue) with affiliation and distribution agreements throughout the continental U.S. and Puerto Rico. Both radio and television stations target Hispanic audiences. The company also operates LaMusica.com, Mega.tv and its radio station websites providing bilingual content related to Latin music, entertainment, and news. Spanish Broadcasting's Chairman, President and CEO, Raul Alarcon, Jr., owns 32.5% of the economic interest in the company and controls approximately 83% of voting power through a dual class share structure. In addition, CBS Corporation owns approximately 10.5% of the economic interest in the company with remaining shares being widely held. Revenues for the twelve months ended September 30, 2011 totaled approximately $138 million. SPANISH BROADCASTING: S&P Rates Secured First-Lien Notes at 'B-' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned Coconut Grove, Fla.- based Spanish Broadcasting System Inc.'s (SBS) proposed senior secured first-lien notes due 2017 our issue-level rating of 'B-' (at the same level as the 'B-' corporate credit rating on the company). "The recovery rating on this debt is '3', indicating our expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. The company plans to use the proceeds of the notes issuance, along with roughly $54 million of cash from its balance sheet, to refinance its existing term loan due 2012," S&P said. "In addition, we revised our recovery rating on the company's existing secured debt to '3' from '4' (indicating 30% to 50% recovery expectations), based on our revision of the emergence multiple used in our recovery analysis. The issue-level rating on this debt remains at 'B-' as per our notching criteria (issue- level ratings are not notched from the corporate credit rating for either a '3' or '4' recovery rating). We would expect to withdraw our ratings on this debt once the refinancing is completed," S&P said. "At the same time, we affirmed our 'B-' corporate credit rating on the company. The rating outlook is negative. We would revise the outlook to stable on successful completion of the proposed transaction," S&P said. "Our 'B-' rating on SBS reflects our expectation that EBITDA coverage of cash interest pro forma for the transaction would be very thin, and that discretionary cash flow would only be modestly positive in 2012 on account of higher interest expense," said Standard & Poor's credit analyst Michael Altberg. "We consider the company's business risk profile as 'vulnerable' (as per our criteria) based on the cyclicality of advertising demand, SBS's significant cash flow concentration in a few large U.S. Hispanic markets, competition from much larger rivals, and continued (albeit narrowing) losses at MegaTV. These factors more than offset the company's healthy EBITDA margins and favorable Hispanic demographic trends," S&P said. "SBS's financial risk profile is 'highly leveraged,' in our view, because of the company's high pro forma fully adjusted debt (including preferred stock and accrued dividends) to EBITDA ratio of 10.2x as of Sept 30, 2011. The 10.75% Series B preferred stock becomes putable to SBS in October 2013. We believe there is a high likelihood that, absent asset sales that allow the company to reduce leverage, it could prove difficult for the company to redeem the preferred when it is put to the company. Failure to redeem the preferred would not cross-default to the existing or new secured debt; however, it would trigger a voting rights event, which, among other things, would prevent the company from incurring additional debt. If not remedied, SBS would not be able to refinance the new proposed notes when they come due in 2017," S&P said. "SBS owns and operates 21 radio stations with significant revenue concentration in three markets -- New York, Los Angeles, and Miami -- which are highly competitive markets for Hispanic radio and general media. Key competition includes affiliates of Univision, which has significantly greater scale and resources. In addition, the company owns and operates three TV stations under its MegaTV network. MegaTV distributes programming through affiliation, programming, and local marketing agreements to non-owned TV stations and satellite operators. MegaTV has reduced, but not eliminated, its EBITDA losses. Given its growth-related investments in programming and personnel, we expect under our base-case scenario that operating losses to continue to narrow at MegaTV, but in our opinion, will most likely remain slightly negative for full-year 2012," S&P said. SUMMIT ENTERTAINMENT: Moody's Assigns 'B1' Corp. Family Rating -------------------------------------------------------------- Moody's Investors Service assigned a B1 Corporate Family Rating and B2 Probability of Default Rating to Summit Entertainment LLC, and a B1 rating to its new $500 million 4.5 year senior secured term loan. The company was acquired by Lions Gate, Entertainment Inc. ("Lionsgate") (B2 CFR on review for upgrade) on January 13, 2012, as a result of which it became a wholly owned subsidiary of Lionsgate. Summit's new term loan was funded at the close of the transaction and is non-recourse to Lionsgate (exclusive of Summit) and is secured only by the assets of Summit and its subsidiaries. Proceeds from the new term loan were used to repay the company's previous $550 million term loan (which had just over $500 million of principal outstanding), and its previous $200 million revolving facility (undrawn at the time of acquisition) was eliminated. The ratings on Summit's previous credit facilities were withdrawn as a result of the transaction. The rating outlook is stable. Assignments: Issuer: Summit Entertainment, LLC -- Corporate Family Rating, Assigned B1 -- Probability of Default Rating, Assigned B2 -- Senior Secured Bank Credit Facility, Assigned B1, LGD 3-40% Outlook Actions: Issuer: Summit Entertainment, LLC -- Outlook, Assigned Stable RATINGS RATIONALE Summit's B1 Corporate Family Rating (CFR) reflects the inherent high risk associated with new film production and its modest library of films, which is a depreciating asset. This is partially mitigated by the success of the Twilight franchise and significant expected near term cash flows from the last two sequels in the series (Breaking Dawn 1 released in November 2011 and Breaking Dawn 2 expected to release in November 2012). The rating reflects Moody's expectation that the company will apply a majority if not all of its cash flows towards debt reduction, supported by strong credit protections and mandatory cash sweeps in its term loan agreement, and we expect the company to pay down all of its debt by the end of its 4.5 year term. The company is highly dependent on cash flows from the Breaking Dawn films to be able to fully pay down the term loan, however, there is more certainty on the performance of its last Twilight film given the strong box office performance of the franchise's first four films. Based on our projections, the performance of the company's unreleased films has a marginal impact on its ability to fully repay the term loan, although if profitable these films could provide extra cushion. The terms of the credit agreement are important to the rating, since they limit leakage of cash flow generation and facilitate rapid debt reduction, reducing refinancing risk in our view. The key component is a 75% sweep of net cash flows from Breaking Dawn 1 & 2, which ensures that a majority of up-front, predictable revenues go towards debt reduction. The terms protect these significant visible cash flows from the more risky cash flows of its other unreleased films, as a result of structured asset pools which do not allow for the cash flows to be netted between different pools. Other provisions include a 50% excess cash flow sweep from all other released and unreleased films, mandatory amortization of $55 million per year (although cash flow sweep payments will be applied pro-rata towards remaining amortization payments) and a mandatory prepayment requirement which would require excess cash balances above specific thresholds to be used for debt pay down (which would capture some of the residual 25% cash from Breaking Dawn films and 50% from other films). We note that the agreement allows for some restricted payments upon 75% amortization of the loan, which increases risk to the residual debt beyond fiscal 2014. Moody's notes that expectation of significant debt pay down by the end of fiscal 2014 (March 31, 2014) and minimizing refinance risk is key to the B1 rating. Production risk is mitigated as the remaining costs for Summit's upcoming films (except for Breaking Dawn 2) will be advanced by Lionsgate, which will bear the risk of any film losses on its unreleased films. Summit would also benefit from any net profits from new films beyond its committed slate, and the downside risk of losses would again be borne by Lionsgate since the credit agreement does not allow Summit to advance cash generated by its released and 13 unreleased films towards any further new production. Since the cash flow sweep from Breaking Dawn and its released films will remain protected from any losses on its unreleased films, this reduces the impact of production risk on the company's ability to fully repay debt and minimizes refinance risk. The rating also considers the company's dependence on cash flows from Breaking Dawn as a source of liquidity. As a result of Summit's acquisition by Lionsgate, most of its cash balance was contributed towards the purchase and its $200 million revolving facility was eliminated. However, this is mitigated to a large extent by the terms under which it was acquired. Since Lionsgate will fund all upcoming films' (other than Breaking Dawn 2) production costs and prints and ads, and most of its released films are cash flow positive, we do not anticipate the company will need any additional sources of funding. In addition, its servicing agreement with Lionsgate will eliminate significant borrower overhead against film cash flows, in lieu of a variable fee which will be tied to film performance and will be capped. We believe that since this was a strategic acquisition by Lionsgate, as opposed to a private equity transaction, it is more likely to receive additional support from its parent, if needed. The stable outlook reflects a balance between the expectation of strong cash flow from the Twilight franchise and consequent debt reduction by about 75% by fiscal 2014, and an increase in risk over time with greater dependence on new film production which may result in refinancing risk or sale of the library to repay the expected relatively small amount of residual debt towards the end of its term. In Moody's view, Lionsgate may decide to repay the small remaining portion of of outstanding debt if the unreleased film pool doesn't generate profits. A rating downgrade could occur if there is credit deterioration at Lionsgate which affects it liquidity and ability to fund Summits remaining production and distribution costs, as well as Summit's revenue and EBITDA are significantly below expectations and the company is not on the projected pace for debt reduction resulting in cumulative debt amortization of materially less than 75% by the end of fiscal 2014. A rating upgrade is unlikely in the near term based on the company's revenue concentration and low visibility on the revenues in later years which bear higher risk. However, if the company pays down debt at a more rapid pace due to better than expected performance of its upcoming films, resulting in more than 85% debt amortization by the end of fiscal 2014, upward pressure on the rating could occur. Summit'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; (iii) 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 Summit's core industry and believes Summit'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. Summit Entertainment LLC, a wholly owned subsidiary of Lions Gate Entertainment Inc, is engaged in the production and distribution of motion picture films for theatrical, home entertainment, television and ancillary markets., and has a small library of films produced since 2007 which include the Twilight franchise of 5 films (one of which is yet to be released). T&B DEMOLITION: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: T&B Demolition, LLC P.O. Box 177529 Irving, TX 75017 Bankruptcy Case No.: 12-30502 Chapter 11 Petition Date: January 27, 2012 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Debtor's Counsel: Melissa S. Hayward, Esq. FRANKLIN SKIERSKI LOVALL HAYWARD LLP 10501 N. Central Expry, Suite 106 Dallas, TX 75231 Tel: (972) 755-7104 Fax: (972) 755-7114 E-mail: MHayward@FSLHlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Edward Troost, vice president. TEE INVESTMENT: Fine-Tunes First Amended Chapter 11 Plan -------------------------------------------------------- Tee Investment Company filed with the U.S. Bankruptcy Court for the District of Nevada, on Jan. 6, 2012, a First Amendment to its First Amended Plan of Reorganization. Sections 4.1(A), 4.7 and 7.1 of Debtor's First Amended Plan of Reorganization are amended to delete the existing sections entirely and replace them as follows: 4.1 Class 1 (WBCMT Secured Claim): The WBCMT Secured Claim will be treated under the Plan as follows: (A) Amount of the WBCMT Secured Claim The amount of the WBCMT Secured Claim will be the lesser of the value of the Property determined as of the Confirmation Date (the "Value as of Confirmation Date") or the WBCMT Note Balance, less all post-petition pre-confirmation payments made to WBCMT. 4.7 Class 7 (Membership Interests): All existing membership interests are canceled. Upon plan confirmation 100% of the membership interest in the Reorganized Debtor will be issued to Blackwood Canyon, LLC. 7.1 Contribution From Blackwood Canyon, LLC This Plan will be funded in part by contributions from Blackwood Canyon, LLC, a Nevada limited liability company managed by Byron Topol, the son of Nathan Topol. The following contributions will be made in cash by Blackwood Canyon, LLC: (A) The sum necessary to pay administrative fees in this case estimated at approximately $100,000. (B) The sum of $50,000 to Class 6 creditors. In addition, the claims of Lakeridge Tennis Club, Inc. ($1,603,701) and Nathan Topol ($1,389,592) agree to receive no distribution on account of their claims. (C) The sum of $300,000 to be applied towards necessary roof repairs, and other critical repairs that are immediately necessary, The total sums to fund the Plan will be deposited into a segregated trust account prior to plan confirmation, to be disbursed upon plan confirmation. A copy of the First Amendment is available for free at: http://bankrupt.com/misc/teeinvestment.doc134.pdf As reported previously in the TCR, the Bankruptcy Court, on Dec. 22, 2011, entered an amended order approving Tee Investment Company's First Amended Disclosure Statement as filed in the Debtor's bankruptcy case on Sept. 9, 2011. All objections to the Debtor's Amended Plan of Reorganization will be filed and served upon Debtor's counsel on or before Feb. 20, 2012. The Debtor will file any responsive pleading to objections to the Debtor's Amended Plan of Reorganization on or before Feb. 27, 2012. All ballots for the acceptance or rejection of Debtor's Amended Plan of Reorganization must be received by Debtor's counsel on or before March 1, 2012. The Debtor will file a ballot summary pursuant to Local Rule 3018 on or before March 2, 2012. The confirmation hearings with be conducted on March 5, 2012, at 2:00 p.m. and will continue to the morning of March 6, 2012. if necessary. As reported in the TCR on Sept. 26, 2011, the First Amended Plan provides that the amount of WBCMT 2006 - C27 Plumas Street, LLC's secured claim will be the lesser of the value of Lakeridge East Apartments, located at 6155 Plumas Street, in Reno, Nevada, determined as of the Confirmation Date or the WBCMT Note Balance. WBCMT will retain its security interest in the Property. The WBCMT Secured Claim will bear interest at the rate of 4.25% per annum from and after the Effective Date, or, in the event of objection by the Class 1 creditor, other rate as the Court will determine is appropriate after considering the evidence at the Confirmation Hearing. On or before the 15th day of each and every month, commencing on the 15th day of the next month following the Effective Date, the Debtor will distribute to WBCMT an amount equal to the normal amortized monthly payment based upon the WBCMT Interest Rate and a 30-year amortized mortgage term. The balance owed on the WBCMT Secured Claim, together with any and all accrued interest, fees and costs due thereunder, will be paid on or before 10 years following the Effective Date, or other date as may be proposed by the Debtor and approved by the court at the Confirmation Hearing. The WBCMT Note and the WBCMT Deed of Trust will remain in full force and effect. In the event of a default by the Debtor under the Plan, and in the event Debtor fails to cure the default within 15 business days after delivery of notice to the Debtor and to Debtor's counsel, WBCMT will be entitled to enforce all of the terms of the WBCMT Deed of Trust and the WBCMT Note, in addition to all rights available under Nevada law, including, without limitation, foreclosure upon the Property and the opportunity to credit bid the entire amount of the WBCMT Note at any foreclosure sale. In the event WBCMT makes a timely election under Section 1111(b) (2) of the Bankruptcy Code, and the same is allowed by the Court, then as of the WBCMT Maturity Date, the balance paid to WBCMT will be the greater of i) the balance owed on the WBCMT Secured Claim as of the WBCMT Maturity Date; or ii) the WBCMT Note Balance less the total of all payments received by WBCMT Post Petition. A full-text copy of the First Amended Disclosure Statement, dated Sept. 9, 2011, is available for free at: http://ResearchArchives.com/t/s?76fc About Tee Investment Reno, Nevada-based Tee Investment Company, Limited Partnership, dba Lakeridge Apartments, owns the property known as the Lakeridge East Apartments, 6155 Plums Street, Reno, Nevada. The Debtor filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 11-50615) on March 1, 2011. The Debtor estimated its assets and debts at $10 million to $50 million. Alan R. Smith, Esq., at the Law Offices of Alan R. Smith, in Reno, Nev., represents the Debtor as counsel. Affiliates Lakeridge Centre Office Complex, LP (Bankr. D. Nev. 10-53612), West Shore Resort Properties III, LLC (Bankr. D. Nev. 10-51101), and West Shore Resort Properties, LLC, and (Bankr. D. Nev. 10-50506) filed separate Chapter 11 petitions. Attorneys at Armstrong Teasdale represents Terrence S. Daly, the court-appointed receiver for Tee Investment Company, Limited Partnership, as counsel. THORPE INSULATION: 9th Circ. Rejects Insurer's Contract Claims -------------------------------------------------------------- Ian Thoms at Bankruptcy Law360 reports that the Ninth Circuit on Monday refused to force arbitration in a dispute over whether Thorpe Insulation Co.'s Chapter 11 reorganization plan, which established a $600 million trust for asbestos claims, breached a settlement agreement the company had previously reached with Continental Insurance Co. Deciding an issue of first impression for the circuit, a three- judge panel ruled that only bankruptcy courts have the authority to determine whether a company breached a contract while setting up a trust for asbestos claims under Section 524(g) of the Bankruptcy Code, according to Law360. About Thorpe Insulation Based in Long Beach, California, Thorpe Insulation Company supplied and distributed asbestos thermal insulation in Southern California before about 1972. The company's products included pipe and boiler insulation, asbestos cloth and insulating mud. After 1972, some of Thorpe's operations also involved asbestos and lead abatement, including repairing insulation that contained asbestos at commercial and industrial sites. On or about Dec. 17, 2004, Thorpe's lender, Pacific Funding Group LLC, sold its collateral at a foreclosure sale to Farwest Insulation Consulting owned by Eric and David Fults. Following the foreclosure, Thorpe ceased operation of its business. To date, Thorpe has been subjected to about 12,000 claims and lawsuits related to asbestos. Thorpe filed for chapter 11 protection on Oct. 15, 2007 (Bankr. C.D. Calif. Case No. 07-19271). Jeremy V. Richards, Esq., and Scotta E. McFarland, Esq., at Pachulski, Stang, Ziehl & Jones, LLP, represent the Debtor. Los Angeles-based Pacific Insulation Company was incorporated in California by Thorpe on May 23, 2000, to be its wholly owned subsidiary. On Oct. 1, 2000, Pacific transferred 100% of its shares to Thorpe in exchange for Thorpe's materials division assets. Thorpe's sole shareholders and board members, Robert W. Fults and Linda Fults, own 50.1% and 49.9% of Pacific, respectively. Pacific is a southwest commercial and industrial insulation distributor and fabricator with locations in Southern and Northern California, Arizona, and Nevada. It provides pipe, air handling, fire barrier, board and blanket insulation as well as adhesives, mastics and sealants. Pacific has never installed or sold any materials containing asbestos. It currently has 55 full-time employees. Pacific filed for chapter 11 petition on Oct. 31, 2007 (Bankr. C.D. Calif. Case No. 07-20016) due to its alleged asbestos liability and the failure of Thorpe's insurers to pay asbestos claims asserted against Thorpe. John A. Lapinski, Esq., Leslie R. Horowitz, Esq., and Stephen R. Hyam, Esq., at Clark & Trevithick represent Pacific in its restructuring efforts. On Nov. 6, 2007, Pacific's case was jointly administered under Thorpe Insulation's bankruptcy proceeding. Caplin & Drysdale, Chartered and Heller Ehrman LLP are co-counsels to the Official Committee of Unsecured Creditors. The Debtor's schedules showed $6,499,167 in total assets, and $52,438,167 in total liabilities. TOLL BROS: S&P Assigns 'BB+' Rating to $250-Mil. Senior Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' issue rating and '3' recovery rating to Toll Bros.' Finance Corp.'s proposed offering of $250 million of senior notes due 2022. "Our '3' recovery rating indicates our expectation for a meaningful (50%- 70%) recovery in the event of a default," S&P said. "The company plans to use proceeds from the offering for general corporate purposes, which may include the repayment of debt, land acquisitions, or distressed real estate investments. We expect the offering to bolster the company's holdings of unrestricted cash and marketable securities, which together totaled $1.1 billion at Oct. 31, 2011. Its indirect parent company, Toll Bros. Inc. and all of its subsidiaries that are guarantors under Toll Bros.Finance Corp's revolving credit facility, will guarantee the new notes, which will rank equally with the company's other senior unsecured obligations," S&P said. "Our ratings on Pennsylvania-based Toll Bros Finance Corp. and its parent (together Toll Bros.) largely reflect the homebuilder's satisfactory business risk profile supported by long-held and well-located landholdings and a leading market position in the luxury homebuilding segment. Despite our expectation that the U.S. housing market recovery will be weaker than we previously anticipated, we continue to hold the view that Toll Bros. is better-positioned relative to most homebuilding peers to eventually achieve sustained profitability. We continue to expect moderate top-line growth as the company opens new communities and expands its market share in the luxury housing segment. However, given our expectations for a protracted housing recovery, we don't expect Toll Bros.' key credit measures to fully recover to their stronger, predownturn levels over the next 18 to 24 months. As a result, we view the company's financial risk profile to be significant," S&P said. "Our stable outlook acknowledges the company's strong liquidity profile, which we expect will enable it to weather another year of slow sales growth while investing in new communities to develop its top line and eventually support better earnings. We would lower our rating if sales trends and profitability measures over the next 18 to 24 months do not improve materially from current levels, and debt to EBITDA appears unlikely to approach the 4x-5x range over this time frame. An upgrade is unlikely over the next 12 months because of our expectation for more muted housing recovery prospects. However, we would upgrade Toll Bros. if a more robust housing market recovery enabled Toll to achieve significant gains in profitability such that credit measures improved to levels consistent with an intermediate financial risk profile (i.e., debt-to-EBITDA in the 2x-3x range)," S&P said. Ratings List Toll Bros. Inc./Toll Bros. Finance Corp. Corporate credit rating BB+/Stable/-- RATINGS ASSIGNED Toll Bros. Finance Corp. $250 million senior notes BB+ Recovery rating 3 TRANSDIGM INC: Moody's Affirms 'B1' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service affirmed Transdigm, Inc.'s Corporate Family and Probability of Default ratings of B1 as well as the Ba2 instrument rating on the company's senior secured term loan facility. The term loan facility will be upsized by $500 million through an accordion feature to finance a portion of the company's acquisition of AmSafe Global Holdings, Inc. ("AmSafe"), a global manufacturer of seatbelts for aerospace, military and ground transportation vehicles. Moody's maintains TransDigm's SGL-1 Speculative Grade Liquidity Assessment indicating an overall very good liquidity profile. The rating outlook is stable. RATINGS RATIONALE The ratings affirmation reflects Moody's expectation that TransDigm will maintain a credit profile characteristic of the high end of the single-B rating category, despite a significant (+10%) increase to funded debt and the lower profitability levels of AmSafe relative to TransDigm's historical returns. TransDigm's liquidity position will weaken temporarily, as $250 million of the $750 million purchase price will be funded through cash on hand. However we expect that TransDigm will replenish its liquidity in relatively short order, as the company should maintain steady free cash flow generation of at least $200 million annually. The company intends to increase its existing revolving credit facility to $300 million from $245 million, supporting the very good liquidity profile. TransDigm's operating margins -- in the 44%-to- 45% range, among the highest of rated aerospace and defense companies - will likely decline modestly for a sustained period, post-closing. AmSafe's business profile has characteristics of TransDigm's typical acquisition targets. AmSafe is a leading provider of aviation seat belts in the U.S., with a strong global presence, and is a sole-source provider to a wide array of airline operators and lessors. Aftermarket is a stable and significant portion of total sales. TransDigm's long track record of integrating a diverse portfolio of specialized aerospace products and platforms into the company's value-driven strategy (price adjustments upwards, and cost-driven efficiency improvements) suggests that it could improve AmSafe's profitability over time. As well, AmSafe's large and diverse customer base across multiple commercial, general and military aerospace platforms suggests a steady sales base and aftermarket revenue stream. Key credit metrics will weaken somewhat over the near term as a result of the transaction - particularly leverage (Debt-to-EBITDA) and returns (EBITA-to-Average Assets). Moody's anticipates improvements to key credit metrics over the next 12-to-18 months - notwithstanding the incremental debt to purchase AmSafe, and the comparatively low earnings base of the target - because TransDigm's earnings and cash flow generation should continue an upward trajectory with the favorable commercial operating environment, and leverage should ultimately move down in line with the rating category (Debt to EBITDA of around 5.0 times). Any erosion to operating results as a result of performance shortfall in integration of AmSafe or a deterioration of the operating environment could pressure down TransDigm's ratings or outlook. In particular, Debt-to-EBITDA sustained above 5.5 times for a meaningful period and Free-Cash-Flow-to-Debt sustained below 2% could drive downward rating pressure. Upwards rating pressure is not anticipated at the present time. That said, any positive outlook or rating change would only occur were TransDigm to grow its earnings base such that Debt to EBITDA was sustained below 4.0 times and Retained Cash Flow to Debt was sustained above 15% in concert with absolute reduction of debt levels. The principal methodology used in rating TransDigm was the Global Aerospace and Defense Industry Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. TransDigm Inc., headquartered in Cleveland, Ohio, is a leading manufacturer of engineered aerospace components for commercial airlines, aircraft maintenance facilities, original equipment manufacturers and various agencies of the US Government. TransDigm Inc. is the wholly-owned subsidiary of TransDigm Group Incorporated. Net sales for the last 12 month period ending September 30, 2011 were approximately $1.2 billion. TRIDENT MICROSYSTEMS: U.S. Trustee Opposes 2015 Report Delays ------------------------------------------------------------- BankruptcyData.com reports that the U.S. Trustee assigned to the Trident Microsystems case filed with the U.S. Bankruptcy Court an objection to the Debtors' motion for an order granting additional time to file reports, pursuant to Federal Rule of Bankruptcy Procedure 2015.3, and granting approval of the reporting procedures proposed. The U.S. Trustee explains, "The Debtors assert in the Motion that to prepare an entity-by-entity cash flow would impose administrative burdens and expense on them . . . . However, the Debtors state that they will be able, in their Rule 2015.3 Report, to include balance sheets and income statements on an entity-by- entity basis for each of the Foreign Subsidiaries. A cash flow statement is derived from an entity's balance sheet and income statement. Therefore, if the Debtors can prepare entity-by-entity balance sheets and income statements, as they say they can, then they can prepare cash flow statements on an entity-by entity basis. There is nothing in the Motion that explains why that would not be the case." 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. TRUMAN LANDSCAPER: Involuntary Chapter 11 Case Dismissed -------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Tennessee dismissed the involuntary Chapter 11 case of The Trumann Landscaper Inc. due the petitioner's failure to appear in court scheduled hearings. Leslie D. Coffey filed an involuntary Chapter 11 petition ((Bankr. E.D. Tennessee Case No. 11-15051) against The Trumann Landscaper Inc. on Sept. 13, 2011. TULSI LODGING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Tulsi Lodging LLC aka Knights Inn 15319 Eastex Freeway Houston, TX 77396 Bankruptcy Case No.: 12-30603 Chapter 11 Petition Date: January 27, 2012 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: David R. Jones Debtor's Counsel: Leonard H Simon, Esq. PENDERGRAFT & SIMON L.L.P. 2777 Allen Parkway, Ste 800 Houston, TX 77019 Tel: (713) 737-8207 Fax: (832) 202-2810 E-mail: lsimon@pendergraftsimon.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the list of 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/txsb12-30603.pdf The petition was signed by Daxa B. Patel, member-manager. TWCC HOLDING: S&P Affirms 'B+' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services revised its 'B+' rating outlook on Atlanta, Ga.-based cable network company TWCC Holding Corp., parent of The Weather Channel, to stable from positive. "We affirmed the 'B+' corporate credit rating and all related issue- level ratings on the company's debt," S&P said. "The outlook change reflects our view that upgrade potential is deferred over at least the near term, given management changes and lack of clarity regarding financial policy," explained Standard & Poor's credit analyst Deborah Kinzer. "Although the company has reduced leverage through EBITDA growth over the past year, the company has not repaid any debt other than its mandatory term loan amortization. With the recent change in the company's leadership (a new chairman and CEO was named), we are less certain that the company will reduce and maintain leverage consistently below our leverage threshold of 5.5x for TWCC to attain a 'BB-' rating," S&P said. "Our rating on TWCC Holding Corp. reflects the company's high debt leverage, business concentration, and limited growth potential because of its almost full penetration of cable TV households. Although TWCC has a good EBITDA margin and a solid position in 24- hour local weather reporting on TV and through interactive and mobile media, its heavy debt burden limits rating upside, in our view. We regard TWCC's business risk profile as 'fair' (based on our criteria), because of The Weather Channel's broad distribution and high EBITDA margin, notwithstanding its concentration in commodity content -- weather forecasting -- and competition with other weather information providers. TWCC's fairly strong cash flow generating ability underpins our view that the company has an 'aggressive' financial risk profile, despite its high debt leverage," S&P said. "TWCC (The Weather Channel Companies) is the category leader in providing weather information on TV and the Internet. It reaches about 100 million cable and satellite TV households, which limits its growth potential because of almost full penetration of cable TV households. The company has relatively well-developed online and mobile businesses, and its weather.com Web site, a top-20 site by traffic, is accessible by both computer and mobile phone. Nevertheless, absent unusual weather events, its average audience ratings are unlikely to increase, and this represents another obstacle to revenue growth. The company is undiversified in that it is active only in weather programming and, hence, is subject to revenue volatility if audience ratings or Web site unique users drop. The company faces competition from local broadcast second- digital channels focused on weather information. We view the company as having a good brand franchise, but a very narrowly based business," S&P said. TWCC has a good EBITDA margin compared with many of its cable network peers'. Growth of ad revenue, which comprises about half of total revenue, is subject to general economic conditions and fluctuations in viewership depending on the occurrence of major weather events. Also, affiliate fee growth could slow, as large affiliate fee hikes could be more difficult to obtain because of the cable channel's full subscriber penetration. Moreover, despite the channel's relatively low subscriber rates at present, a crowded field of other networks is demanding higher affiliate fees, and multichannel service operators could resist significant rate hikes by The Weather Channel. In addition, we see the risk that increased investment in quasi-entertainment programming, in an effort to diversify its content, could result in a loss of strategic focus and viewers," S&P said. UNITED RETAIL: Avenue Brand Owners in Ch. 11 to Sell to Versa ------------------------------------------------------------- United Retail Group, owner of the Avenue brand of women's fashion apparel and a subsidiary of Redcats USA, initiated Chapter 11 proceedings (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Wednesday to sell the business to Versa Capital Management for $83.5 million. United Retail, which filed for Chapter 11 with affiliates, is pursuing a sale process under Section 363 of the Bankruptcy Code, under which the sale to Versa Capital will be subject to higher and better offers at an auction. Dawn Robertson, CEO of United Retail, said, "Avenue is a great brand with a unique position in women's specialty apparel and we are in the process of turning the company around. With today's filing, we are seeking relief from disproportionately high costs for many of our leases that were signed prior to the recession. Through Chapter 11 relief and a lease renegotiation process, the turnaround of Avenue can continue, enabling the business to emerge stronger, with fewer liabilities, and with better store profitability." "We have financing in place and hope to complete the process as quickly as possible while protecting our customers, employees and suppliers every step of the way." Judge Stuart M. Bernstein presides over the case. The judge is scheduled to go over the Company's requests at a hearing set for Thursday morning. The Company's legal advisor is Kirkland & Ellis LLP; its financial advisor is Peter J. Solomon Company; and its restructuring advisor is AlixPartners. Donlin Recano & Company Inc. is the administrative agent. Versa Capital's legal advisor is Sullivan & Cromwell LLP. Versa's Going Concern Offer United Retail Group has entered into an asset purchase agreement with an entity controlled by Versa Capital Management, which it intends to submit to the Court to serve as the "stalking horse" bid for a Court-supervised auction of the business. Versa Capital, a private equity firm with significant experience in revitalizing retail operations, has agreed to buy the company's assets through the bankruptcy process for cash and the assumption of certain liabilities. Versa Capital has agreed to operate Avenue as a going concern while keeping the majority of Avenue stores open. The Company has filed motions to maintain critical vendor relationships and payments, as well as motions to honor gift cards and the Avenue loyalty reward program. The Debtors say that the Versa deal will protect over 4,000 jobs and ensure maximum creditor recoveries. The terms of the Versa transaction are as follows: * Acquired Assets: Versa will acquire substantially all of the Debtors' inventory, the Troy, Ohio distribution facility and leases for at least 300 of the Debtors' 433 stores; * Versa Cash Payments: Versa will pay (a) DIP financing up to $15 million (plus an additional $1.85 million if certain letters of credit for workers' compensation are drawn), (b) wind-down costs for Avenue's estates up to $2 million, (c) $500,000 to holders of unsecured claims, (d) administrative and priority claims up to $11.1 million, (e) Redcats Asia Ltd. for trade payables up to $2.2 million and (f) certain liabilities after closing (including accounts payable that are 503(b)(9) claims) up to $4.7 million; * Versa Fund Guaranty: Versa will commit to capitalize the acquisition vehicle with $13 million at closing and will guaranty payment obligations of the acquisition vehicle under the APA, up to $35 million; * Letters of Credit: Versa is obligated to replace or cash collateralize merchandise letters of credit; and * Redcats USA Cash Payment: Redcats USA will pay Versa $20 million in cash, prorated beginning at closing with respect to the number of leases assumed at closing (for example, if 200 leases are assumed at closing, Redcats USA would make a payment of $13,333,333 at closing). The sale process is expected to enable a sale of the business to Versa Capital or to another potential bidder approved by the Court. The Company currently anticipates completing the sale process in an expedited timeframe. Versa Capital Management, Inc. -- http://www.versa.com/-- is private equity investment firm with $950 million of committed capital focused on control investments in special situations involving middle market companies in a wide variety of industries throughout the United States. Prepetition Capital Structure Rochelle Park, New Jersey-based United Retail disclosed assets of $117.2 million and debt of $67.3 million. It said that substantial assets are in Indianapolis, Indiana, New York, New York, Rochelle Park, New Jersey and Troy, Ohio. Avenue has a current unsecured balance of $48.5 million to Redcats USA as of November 22, 2011, for funding provided for Avenue's operational expenses. After Redcats stopped funding Avenue's operations on an unsecured basis, Avenue owed Redcats $9.5 million for loans provided on a second-lien secured basis. Avenue owes $11.5 million in letters of credit provided by Wells Fargo under a revolving asset-backed loan facility from Wells Fargo. The Redcats ABL Facility is secured by, among other things, a first lien on certain current assets of Redcats USA and its subsidiaries, including Avenue's accounts receivable, inventory, other payment intangibles and instruments. The list of secured creditors shows that Wells Fargo has a total secured claim of $22.2 million. The amounts due to Wells Fargo will be rolled into Avenue's proposed $40 million debtor in possession revolving credit facility with Wells Fargo. As of the Petition Date, Avenue owes trade vendors approximately $23.1 million, approximately $5.8 million of which is entitled to priority under section 503(b)(9) of the Bankruptcy Code. $40 Million DIP Financing To provide liquidity during the restructuring process, United Retail Group has arranged a $40 million Debtor-in-Possession facility from its existing revolving credit lender, Wells Fargo, to provide sufficient working capital for Avenue to continue to operate the business as usual. The DIP Facility will provide $36 million in initial availability (after accounting for reserves) to finance the Debtors' operations throughout these chapter 11 cases. The Debtors seek to utilize up to $25 million in availability on an interim basis, of which $8 million will be used for cash borrowing and $14 million will be used to open new LOCs or replace LOCs utilized by the Debtors under the Redcats ABL Facility. The Debtors expect to pay $6 million to employees within the 30-day period following the Chapter 11 filing. For the first 30 days following the Chapter 11 filing, the Debtors expect cash receipts aggregating $23 million and cash disbursements totaling $31 million. 100 Underperforming Stores The Debtors have asked for court approval to continue paying product vendors and employees as part of ordinary course business. The DIP financing will provide ample liquidity to enable a sale transaction to be consummated. The Company has sought customary relief from the bankruptcy court to protect its employees, customers and suppliers during the sale process, including motions to allow Avenue to continue on a go- forward basis to pay suppliers under normal terms for goods and services; to pay its employees in the usual manner and to continue without disruption their primary benefits; and to continue customer programs including its gift card, merchandise return, loyalty and other programs. Notwithstanding the Chapter 11 filing by the owners, Avenue's operations, including its 433 stores and its e-commerce site -- http://www.avenue.com/-- are open and serving customers, according to a company statement. The Company has 42 stores located in New York. Retail store sales account for 85% of Avenue's total sales, representing approximately $276.9 million in sales for the year ended Dec. 31, 2011. But Avenue said in court filings that it has determined that roughly 100 of its leased stores are chronically underperforming due to either the location and competitive landscape of the store or because such stores are currently subject to unfavorable lease terms. These leases, most of which are long term, include above- market rent or certain restrictions (i.e., restrictions on conducting going-out-of-business sales) that limit Avenue's flexibility to adjust its lease portfolio as the market changes. "Indeed, Avenue already began closing 14 stores with near-term lease expirations," the Debtors said in court filings. Avenue intends to use the tools available in Chapter 11 to identify for rejection the leases that are burdensome to its estates or secure meaningful economic concessions from landlords to rationalize its lease portfolio, in both cases in consultation with Versa or any other prospective purchaser of Avenue's business. Road to Bankruptcy Avenue employs roughly 4,422 employees, roughly 294 of which are located at Avenue's corporate headquarters in Rochelle Park, New Jersey or at the Troy Distribution Facility. Roughly 4,128 associates work in Avenue's stores, 1,244 of which work on a fulltime basis and the remainder of which work on a part-time basis. Roughly 45 store associates are covered by collective bargaining agreements. For the year ended Dec. 31, 2011, Avenue generated $300.6 million in sales and negative $28.1 million in EBITDA, as compared to sales and EBITDA for the year ended Dec. 31, 2010 of $313 million and negative $7 million, respectively. The decrease in performance placed a significant strain on Avenue's liquidity. Ms. Robertson, who joined Avenue as CEO in September 2010, said in a court filing that Avenue is a strong brand with a loyal customer base within the growing U.S. But she said that Avenue has experienced operating losses driven by sales declines in retail stores that have not been offset by growth in the online business. Ms. Robertson added, "Avenue's financial difficulties have been exacerbated by adverse economic conditions and a number of largely unsuccessful changes in product pricing and marketing, as well as a burdensome lease portfolio. Beginning with the hiring of a new, highly experienced management team in the second half of 2011, Avenue has instituted a turnaround plan centered around new brand positioning, pricing, product, merchandising and marketing initiatives, as well as rationalizing the company's lease portfolio. Given the lead time required to implement merchandising decisions and receive private label products into inventory, however, Avenue will not begin to see the financial impact of these new initiatives until Spring 2012 at the earliest." Ms. Robertson said that although Redcats USA initially acquired Avenue to strengthen its position in the plus size market, Avenue was never fully integrated into, and is not core to, the Redcats USA business platform. Accordingly, Redcats USA directed Avenue to explore strategic alternatives, including independent third party financing and a sale of the division. United Retail recently reconstituted a new Board with members Alan B. Miller, senior counsel and former senior partner, Weil, Gotshal, & Manges, and Alan Cohen, chairman of Abacus Advisors. Redcats Not Part of Ch. 11 Multi-channel and web-driven home-shopping retailer Redcats USA is not of the Chapter 11 filing. Brands in Redcats' portfolio include AVENUE, Woman Within, Jessica London, Roaman's, KingSize, and BrylaneHome sold on OneStopPlus.com, The Sportsman's Guide and TGW.com - The Golf Warehouse. John Heaney, Executive Vice President of Redcats USA, said, "We are happy to have found a buyer and are confident in Versa's plan to continue re-energizing the Avenue brand. This sale was part of a strategic decision by Redcats USA to focus its business online moving forward, and we are pleased to have found a company that can continue the turn-around process we envisioned from the beginning." To contact Avenue: Ketchum Mac McNeer Tel: (312) 228-6872 E-mail: mac.mcneer@ketchum.com To contact Redcats USA: SUNSHINE SACHS Jesse Derris Tel: (212) 691-2800 E-mail: derris@sunshinesachs.com UNITED RETAIL: Case Summary & 50 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: United Retail Group, Inc. 365 West Passaic Street Rochelle Park, NJ 07662 Bankruptcy Case No.: 12-10405 Debtor-affiliate that filed separate Chapter 11 petition: Debtor Case No. ------ -------- Venue Gift Cards, Inc. 12-10406 United Distribution Services, Inc. 12-10407 United Retail Holding Corporation 12-10408 United Retail Incorporated 12-10409 United Retail Logistics Operations 12-10410 Incorporated Type of Business: United Retail Group, Inc., operates as a specialty retailer of apparel, shoes, and jewelry and accessories. Web Site: http://www.avenue.com/ Chapter 11 Petition Date: Feb. 1, 2012 Court: U.S. Bankruptcy Court Southern District of New York Judge: Stuart M. Bernstein Debtors' Counsel: Paul M. Basta, Esq. Marc Kieselstein, P.C. Nicole L. Greenblatt, Esq. Benjamin J. Steele, Esq. KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, NY 10022-4611 Tel: (212) 446-4800 E-mail: paul.basta@kirkland.com marc.kieselstein@kirkland.com nicole.greenblatt@kirkland.com benjamin.steele@kirkland.com Debtors' Financial Advisor: PETER J. SOLOMON COMPANY Debtors' Restructuring Advisor: ALIXPARTNERS Debtors' Claims and Noticing Agent: DONLIN, RECANO AND COMPANY, INC. Versa Capital's Legal Advisor: SULLIVAN & CROMWELL LLP Total Assets: $117.2 million Total Liabilities: $67.3 million The petition was signed by Dawn Robertson, chief executive officer. United Retail Group, Inc.'s List of Its 50 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Valentine USA Inc. Trade Claim $1,951,846 148 West 37th Street 14th Floor New York, NY 10018 LF Centennial Pte Ltd Trade Claim $1,916,747 10 Raeburn Park 03-08 Block A. Singapore, 88702 Porta Asiatica Enterprise Trade Claim $1,249,505 Room 109 Building #10, No. 652 Changshou Road Shanghai, China Vanity Fair Brands LP Trade Claim $793,006 PO Box 75647 Charlotte, NC 28275 Garmex International Trade Clam $777,303 Corp The Cit Group Factoring, Inc. P.O. Box 1036 Charlotte, NC 28201 Tel: 011-94-74-721209 Fax: 011-94-74-721209 Shuasia Footwear Trade Claim $644,434 Guan Yao Town Nanhai Dist.Lu Plaza No 25 Su Xian Road 2 Wing Yip St. Fo Shan City, China Dolce Vita Intimates LLC Trade Claim $514,597 FCC LLC DBA First Capital P.O. Box 43382 Cincinnati, OH 45264-3382 Tanzara International Trade Claim $337,738 1407 Broadway Suite 1616 New York, NY 10018 Gennaro Inc Trade Claim $317,561 1725 Pontiac Avenue Cranston, RI 02920 Moda Shoe Ltd Trade Claim $317,435 Tower 6, Suite 3810, 38/F The Gateway Harbour City 9 Canton Rd. Tst, Kowloon, Hong Kong Gelmart Industries Inc Trade Claim $309,637 Rosenthal & Rosenthal, Inc. P.O. Box 88926 Chicago, Il 60695 Ultra Uluslar Arasi Tic V Trade Claim $299,997 Tekstil San \.A\. S Ikitelli Caddesi Imsan Sanayi Sitesi Midtown Station Dblok 5 34660ik NY Ikitelli Istanbul, Turkey Susan Lawrence Trade Claim $288,992 Wells Fargo Bank N.A. P.O. Box 403058 Atlanta, GA 30384 Leg Apparel LLC Trade Claim $240,662 Dreamwear Inc Trade Claim $239,705 Acme McCrary Corp Trade Claim $215,362 Fantasia World Inc Trade Claim $214,595 Hi Tech Textile LLC Trade Claim $213,370 Lanco Apparel Trade Claim $206,932 Maidenform Inc d/b/a Trade Claim $205,500 Trueform Advanced Direct, Inc. Trade Claim $198,626 The 1721 Group LLC Trade Claim $194,337 Union Apparel Group Ltd Trade Claim $180,919 One Step Up Ltd Trade Claim $178,982 ASC Group Trade Claim $160,044 WR 9000 Corp Trade Claim $157,963 Sasha Handbags Inc Trade Claim $146,561 Accutime Watch Corp Trade Claim $145,281 Penbrooke Swimsuits Inc Trade Claim $141,905 Simply Swim LLC Trade Claim $141,769 Sarina Accessories LLC Trade Claim $139,789 Soho Apparel Ltd Trade Claim $131,360 Brant Screen Craft Trade Claim $129,372 Expressions Lingerie Trade Claim $127,028 Mastership Int?l Ltd Trade Claim $111,290 Tanya Creations Inc Trade Claim $110,868 IBM Trade Claim $107,637 Choice Well Int?l Limited Trade Claim $105,708 Mikey NYC Trade Claim $104,019 CP International Corp Trade Claim $103,134 Lincoln Waste Solutions, Utility Claim $91,937 LLC GMA ACC d/b/a Trade Claim $90,892 Capelli NY Kline America Inc Shipping Claim $85,859 Ballet Jewels LLC Trade Claim $84,775 International Intimates Trade Claim $82,575 NY Style Trade Claim $79,780 Timeless Fashion Trade Claim $76,647 Barganza Inc Trade Claim $65,149 Starwarner Inc Trade Claim $63,392 Miami (Ohio) County Tax Claim $60,931 Treasurer UNIVISION COMMUNICATION: S&P Keeps 'B+' Rating on Secured Notes --------------------------------------------------------------- Standard & Poor's Ratings Services' ratings on New York City-based Univision Communication Inc.'s senior secured notes due 2019 remain unchanged following the company's $600 million add-on, bringing the aggregate amount of the issue to $1.2 billion. "Our issue-level rating on the notes remains at 'B+' (one notch higher than the 'B' corporate credit rating on the company) and the recovery rating remains at '2', indicating our expectation of substantial (70% to 90%) recovery for noteholders in the event of a payment default. The net proceeds of the new notes will be used to repay a portion of the company's non-extended senior secured term loan," S&P said. "The corporate credit rating on Univision is 'B' and the rating outlook is stable. The 'B' rating reflects the company's steep debt leverage and weak interest coverage due to its 2007 leveraged buyout, advertising pricing that is not commensurate with its audience share, and weak trends in radio advertising. We expect Univision to able to maintain adequate liquidity, supplemented by positive discretionary cash flow, despite leverage remaining very high. We believe that leverage will decline only slightly, into the 11x to 12x range, over the next couple of years," S&P said. Ratings List Univision Communications Inc. Corporate Credit Rating B/Stable/-- New Rating Univision Communications Inc. $1.2B sr secd nts due 2019 B+ Recovery Rating 2 US SECURITY: S&P Keeps 'B' $345-Mil. Term Loan B Rating ------------------------------------------------------- Standard & Poor's Ratings Services' ratings on U.S. Security Associates Holdings Inc.'s first-lien term loan B due 2017 remain unchanged following a $40 million add-on to the loan, bringing the aggregate dollar amount to $345 million. "The issue-level rating on the loan remains at 'B' (at the same level as the 'B' corporate credit rating on the company) and the recovery rating remains at '3', indicating our expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default," S&P said. "The corporate credit rating on U.S. Security is 'B' and the rating outlook is stable. The rating reflects the company's position as a relatively small player in the highly competitive contract security officer industry. It also reflects the company's high leverage, which increased to the high-5x area from around 3.0x following its recent leveraged buyout transaction," S&P said. Ratings List U.S. Security Associates Holdings Inc. Corporate Credit Rating B/Stable/-- $345M first-lien term loan B due 2017 B Recovery Rating 3 VALEANT PHARMA: Moody's Lowers Sr. Sec. Debt Rating to 'Ba1' ------------------------------------------------------------ Moody's Investors Service lowered the senior secured debt rating of Valeant Pharmaceuticals International, Inc. ("Valeant") to Ba1 from Baa3 while assigning a Ba1 rating to Valeant's new senior secured Term Loan B. At the same time, Moody's affirmed other ratings of Valeant including the Ba3 Corporate Family Rating, Ba3 Probability of Default Rating and B1 senior unsecured rating. Proceeds of the new term loan are to reduce revolver borrowings and for general corporate purposes including acquisitions. The rating outlook remains negative. Ratings assigned: Valeant Pharmaceuticals International, Inc. (parent) Ba1 (LGD 2, 16%) senior secured term loan B of $500 million due 2019 Ratings lowered: Valeant Pharmaceuticals International, Inc. (parent) Senior secured revolving credit facility of $275 million expiring 2016 to Ba1 (LGD 2, 16%) from Baa3 (LGD 2, 13%) Senior secured term loan A of $1.725 billion due 2016 to Ba1 (LGD 2, 16%) from Baa3 (LGD 2, 13%) Senior secured delayed draw term loan of $500 million due 2016 to Ba1 (LGD 2, 16%) from Baa3 (LGD2, 13%) Ratings affirmed: Valeant Pharmaceuticals International, Inc. (parent) Ba3 Corporate Family Rating Ba3 Probability of Default Rating SGL-1 Speculative Grade Liquidity Rating Ratings affirmed with LGD point estimate changes: Valeant Pharmaceuticals International (subsidiary) B1 (LGD 5, 71%) senior unsecured notes of $916 million due 2016 from B1 (LGD 4, 69%) B1 (LGD 5, 71%) senior unsecured notes of $500 million due 2017 from B1 (LGD 4, 69%) B1 (LGD 5, 71%) senior unsecured notes of $945 million due 2018 from B1 (LGD 4, 69%) B1 (LGD 5, 71%) senior unsecured notes of $690 million due 2020 from B1 (LGD 4, 69%) B1 (LGD 5, 71%) senior unsecured notes of $650 million due 2021 from B1 (LGD 4, 69%) B1 (LGD 5, 71%) senior unsecured notes of $550 million notes due 2022 from B1 (LGD 4, 69%) RATINGS RATIONALE "Incremental financial leverage for future acquisitions represents a continuation of Valeant's aggressive financial policies," stated Michael Levesque, Moody's Senior Vice President. Valeant's Ba3 Corporate Family Rating reflects its moderately high pro forma leverage of approximately 4 times including management's acquisition synergy targets. The Ba3 rating also reflects the risks associated with Valeant's aggressive acquisition strategy including rapid capital structure changes, integration risks and reliance on future synergies. Valeant's ratings remain supported by its good size and scale, a high level of product and geographic diversity, and the lack of any major patent cliffs relative to other pharmaceutical companies. Further, Moody's expects good free cash flow generation to continue, but that acquisitions will remain a priority use of cash flow. The Ba1 rating on the new senior secured Term Loan B and the downgrade of existing senior secured credit facilities reflects the rising proportion of senior debt in the capital structure and higher loss given default (LGD) and expected loss rates for Valeant's secured debt. The Ba1 rating on Valeant's senior secured credit facilities reflects a one-notch override to the Baa3 outcome produced by the LGD methodology to reflect Moody's expectation that Valeant's secured debt will continue to rise over time and become a larger proportion of its overall debt. The expected loss on Valeant's senior unsecured bonds is also increasing as the result of incremental senior secured debt, but the new expected loss rate still remains within Moody's ranges for a B1 rating. Additional secured debt could result in a downgrade of Valeant's senior unsecured bonds, even if the Corporate Family Rating remains unchanged. The negative rating outlook primarily reflects the potential for a rating downgrade if Valeant's M&A strategy results in higher financial leverage. Valeant's ratings could be downgraded if Moody's believes debt/EBITDA will be sustained above 4.0 times or if other risk factors emerge, such as litigation. Conversely, Valeant's ratings could be upgraded if Moody's believes debt/EBITDA will be sustained below 3.5 times while maintaining good organic growth rates. The principal methodology used in rating Valeant was Moody's Global Pharmaceutical Rating Methodology, published in October 2009. Headquartered in Mississauga, Ontario, Valeant Pharmaceuticals International, Inc. [NYSE: VRX] is a global specialty pharmaceutical company formed from the merger of Biovail Corporation and Valeant Pharmaceuticals International. Total reported revenues for the twelve months ended September 30, 2011 were approximately $2.3 billion. VALEANT PHARMA: S&P Cuts Senior Unsecured Debt Rating to 'BB-' -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB-' issue-level rating and a '1' recovery rating to Mississauga, Ontario-based Valeant Pharmaceuticals International Inc.'s proposed $500 million term loan B due 2019. Proceeds from the term loan B will be used to replenish its fully drawn revolver and to put cash on the balance sheet. "At the same time, we revised the unsecured recovery rating to '5', from '4' because of the higher amount of secured debt following issuance of the proposed term loan B. Following the revision of the recovery rating, we lowered the issue-level rating on the company's senior unsecured debt to 'BB-', from 'BB'," S&P said. "Our BB/Stable/-- rating on Valeant reflects our view that the company will maintain a 'significant' financial risk profile. Despite expected acquisition activity, we believe the company will only commit to acquisitions that do not result in leverage that is sustained above 4x, in line with that stated financial policy. Its 'fair' business risk profile indicates the potential for integration issues given the high level of acquisition activity," S&P said. Rating List Valeant Pharmaceuticals International Inc. Corporate Credit Rating BB/Stable/-- Rating Assigned Proposed $500 mil. term loan B due 2019 BBB- Recovery rating 1 Rating Revised To From Senior unsecured debt BB- BB Recovery rating 5 4 WIMBERLY ASSOCIATES: Case Summary & 9 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Wimberly Associates, General Partnership 150 Towerview Court Cary, NC 27513 Bankruptcy Case No.: 12-00649 Chapter 11 Petition Date: January 26, 2012 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Debtor's Counsel: Jason L. Hendren, Esq. HENDREN & MALONE, PLLC 4600 Marriott Drive, Suite 150 Raleigh, NC 27612 Tel: (919) 573-1422 Fax: (919) 420-0475 E-mail: aspangler@hendrenmalone.com Scheduled Assets: $4,559,484 Scheduled Liabilities: $2,089,670 A list of the Company's nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb12-00649.pdf The petition was signed by Glenn Futrell, partner. WINDSOR QUALITY: S&P Affirms 'B+' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services revised the rating outlook on U.S.-based Windsor Quality Food Co. Ltd. to negative from stable. "At the same time, we affirmed our ratings on the company, including the 'B+' corporate credit rating," S&P said. "In addition, we affirmed the 'BB-' issue-level ratings on Windsor's revolving credit and term loan facilities. The recovery rating remains '2', indicating our expectation for substantial (70%-90%) recovery for lenders in the event of a payment default," S&P said. "The outlook revision reflects our concern that Windsor will not be able to maintain at least a 15% cushion on its total leverage financial covenant during the next 12 months," said Standard & Poor's credit analyst Bea Chiem. "Although the company was in compliance with its covenants through the first nine months of 2011 and maintained at least a 15% cushion, we believe that the covenant cushion level will tighten beginning in first-quarter 2012 because of the company's weaker- than-expected operating performance and recent announcement of a plant shutdown. We expect that the company was in compliance with its covenants at calendar year-end December 2011. Through the first nine months of 2011 ended Oct. 1, 2011, adjusted EBITDA was roughly 20% below plan and net sales underperformed by about 2.5%. The EBITDA shortfall was mostly because of high commodity costs, weaker volumes, and elevated production costs at the company's Oakland, Miss. plant. In addition, the company's total leverage covenant will become more restrictive in 2012, with step-downs to 4.5x in the first quarter of 2012 from 4.75x at year-end 2011 and 4.25x in the third quarter of 2012. As a result, we believe that if operating performance and leverage, as measured by total debt to EBITDA, do not improve in 2012, the covenant cushion could fall below 15% during the year," S&P said. WM. BOLTHOUSE: S&P Affirms 'B' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Wm. Bolthouse Farms Inc. to stable from negative. "At the same time, we affirmed our 'B' corporate credit rating on the company," S&P said. "We also raised the issue ratings on Bolthouse's revolving credit facility and first-lien term loan to 'B+' from 'B'. We revised the recovery rating to '2' from '3', which indicates our expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. We also affirmed our 'CCC+' issue rating on Bolthouse's second-lien term loan. The recovery rating remains '6', which indicates our expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default," S&P said. "The outlook revision reflects Bolthouse's substantially expanded cushion under its bank financial covenants, due to improved operating performance and first-lien term loan prepayments," said Standard & Poor's credit analyst Jeffrey Burian. "These factors also contributed to our improved recovery expectations for the company's first-lien debt. We now consider the company's liquidity to be 'adequate,'" S&P said. "Our ratings on Bolthouse reflect our view that the company's business risk profile is 'vulnerable' and its financial risk profile is '"aggressive', as defined in our criteria. Key credit factors we considered in our assessment of Bolthouse's business profile include the company's narrow business focus on carrots and super-premium natural beverage categories, as well as its participation in the highly competitive vegetable, beverage, and salad dressing markets. We believe the company benefits from good market positions within its primary niche markets and its recognized brand name," S&P said. "The stable outlook reflects our anticipation that the company will maintain adequate liquidity and not increase leverage substantially above 5.0x. We could consider an upgrade if Bolthouse's operating cash flow increases and it achieves and sustains strengthened credit measures, including a reduction in leverage to less than 4.0x and an increase in the ratio of FFO to total debt to a range of 15% to 20%. We estimate an upgrade could occur in a scenario of midteens percentage sales growth, gross margin (excluding depreciation and amortization) increasing by 300 basis points or more, and total debt remaining near its current level. Although less likely in the near term, we could consider a downgrade if the company's financial policies become more aggressive, if leverage increases significantly, if operating performance deteriorates substantially, or if liquidity becomes constrained," S&P said. WPCS INTERNATIONAL: Obtains $12 Million Loan from Sovereign Bank ---------------------------------------------------------------- WPCS International Incorporated has obtained a new $12 million bank credit facility, which replaces the Company's existing credit facility that expired on Nov. 30, 2011. The new credit facility is with Sovereign Bank, a subsidiary of Santander Group, one of the largest banks in the world. The new banking line is for a $12 million three-year revolving credit facility. Griffin Financial Group LLC, based in King of Prussia, Pennsylvania, acted as the exclusive financial advisor and investment banker for this transaction. Joseph Heater, Chief Financial Officer of WPCS, commented, "We are pleased to announce the successful completion of this new bank credit facility with Sovereign Bank. As WPCS continues to execute on its strategic development plans, this line of credit provides an additional source of liquidity for our current working capital requirements. We appreciate the confidence that Sovereign Bank has demonstrated in our company and believe that this new bank credit facility will serve as a solid foundation for our future growth." The loan commitment will expire on Jan. 26, 2015. The interest rate applicable to revolving loans under the Credit Agreement is at LIBOR plus an interest margin initially of 2.75%, which interest margin could be reduced to 2.25% in the future based on the Company's Fixed Charge Coverage Ratio on a trailing 12 month basis. The Company paid a loan commitment fee of $60,000 and will pay a monthly unused commitment fee during the term of the Credit Agreement of 0.375%. In addition, the Company will pay Sovereign a collateral monitoring fee of $1,000 per month during the term of the Credit Agreement and 2.25% per annum on the face amount of each letter of credit issued by Sovereign. A full-text copy of the Loan and Security Agreement is available for free at http://is.gd/KD9INk About WPCS International Exton, Pennsylvania-based WPCS International Incorporated provides design-build engineering services that focus on the implementation requirements of communications infrastructure. The Company provides its engineering capabilities including wireless communication, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. The Company's balance sheet at Oct. 31, 2011, showed $51.88 million in total assets, $27.17 million in total liabilities and $24.70 million in total equity. As reported by the TCR on Dec. 8, 2011, WPCS International and its United Stated based subsidiaries, previously entered into a loan agreement, dated April 10, 2007, as extended, modified and amended several times, with Bank of America, N.A. The Company is seeking alternative debt financing and has conducted discussions with other senior lenders to replace the Loan Agreement. The Company may not be successful in obtaining alternative debt financing or additional financing sources may not be available on acceptable terms. If the Company is required to repay the Loan Agreement, the Company has sufficient working capital to repay the outstanding borrowings. WPCS INTERNATIONAL: Ends Merger Talks with Multiband ---------------------------------------------------- WPCS International Incorporated received notification from Multiband that it will not pursue the acquisition of WPCS at the present time. The $250,000 break up fee in escrow will be disbursed to WPCS accordingly. In addition, the WPCS directors will be meeting to discuss the termination of the strategic alternatives process that has been underway for over one year. Andrew Hidalgo, Chief Executive Officer of WPCS, commented, "We remain on friendly terms with Multiband and recognize that they are a significant shareholder that wants to support our growth and success as a company. We will continue to work on mutually beneficial business development opportunities together." About WPCS International Exton, Pennsylvania-based WPCS International Incorporated provides design-build engineering services that focus on the implementation requirements of communications infrastructure. The Company provides its engineering capabilities including wireless communication, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. The Company's balance sheet at Oct. 31, 2011, showed $51.88 million in total assets, $27.17 million in total liabilities and $24.70 million in total equity. As reported by the TCR on Dec. 8, 2011, WPCS International and its United Stated based subsidiaries, previously entered into a loan agreement, dated April 10, 2007, as extended, modified and amended several times, with Bank of America, N.A. The Company is seeking alternative debt financing and has conducted discussions with other senior lenders to replace the Loan Agreement. The Company may not be successful in obtaining alternative debt financing or additional financing sources may not be available on acceptable terms. If the Company is required to repay the Loan Agreement, the Company has sufficient working capital to repay the outstanding borrowings. * Weil Survey Says Distress in Retail, Media Sectors Expected ------------------------------------------------------------- More than 30% of respondents of a recent Weil Gotshal survey expect distress in the retail (34.90% of respondents) and media/communications/publishing (30.90% of respondents) sectors, and least in the insurance, personnel services (both 3.40% of respondents) and automotive (0% of respondents). The respondents polled also expect 2012 to look much the same as 2011. January's annual Weil Restructuring Outlook Survey, a 10-question survey in which over 150 restructuring professionals participated this year, was geared towards drawing out how the restructuring market viewed the global economic outlook for 2012. A copy of Weil's article is available at http://is.gd/qzjnFV * Richards Kibbe's Nastasi Joins Fulbright & Jaworski as Partner ---------------------------------------------------------------- A senior bankruptcy lawyer has joined the international law firm of Fulbright & Jaworski L.L.P. Ancela R. Nastasi, previously with Richards Kibbe & Orbe, joins Fulbright as the head of the New York office's Bankruptcy and Insolvency practice group. Her extensive experience includes prominent roles in complex restructuring and chapter 11 cases, including insolvency and bankruptcy related litigation and transactions. Nastasi represents lenders, investors, debtors, chapter 11 trustees and creditors in matters involving myriad industries, including financial services, telecommunications, manufacturing, hospitality and real estate. "Ancela is an accomplished bankruptcy lawyer with an exceptional reputation," said Steven B. Pfeiffer, the Chair of Fulbright's Executive Committee. "Her experience complements our solid team of bankruptcy and insolvency lawyers who offer services to clients in a vast range of industries." Nastasi focuses on working with her clients to devise innovative and effective solutions in complex transactions and matters. "Ancela is accomplished in developing, maintaining and enhancing critical business relationships," said Louis R. Strubeck, the Chair of the firm's global Bankruptcy and Insolvency practice group. "We are confident that she will be instrumental in expanding and enhancing our practice's footprint, not just in the New York market, but nationally and internationally as well." Nastasi, an Adjunct Professor at New York Law School and frequent lecturer on restructuring and the chapter 11 process, said the Bankruptcy and Insolvency practice group's distinguished reputation nationwide was a major consideration in her decision to join the firm. "Fulbright's bankruptcy practice is staffed with nationally- renowned partners who are leaders in their field," Nastasi said. "The practice is poised to increase its capabilities here in New York, and I am eager to be part of such an impressive team." Nastasi received her J.D. from the University of Pennsylvania Law School in 1989 and her diploma in accounting and finance, with merit, from the London School of Economics. She earned her B.S. in mathematics, magna cum laude and phi beta kappa, from Vanderbilt University. "We are pleased to have Ancela join the New York office and to having her take on a leading role within the practice group," said Linda L. Addison, Partner-in-Charge of Fulbright's New York office. Fulbright & Jaworski L.L.P. Founded in 1919, Fulbright & Jaworski L.L.P. is a leading full- service international law firm, with nearly 900 lawyers in 17 locations in Austin, Beijing, Dallas, Denver, Dubai, Hong Kong, Houston, London, Los Angeles, Minneapolis, Munich, New York, Pittsburgh-Southpointe, Riyadh, San Antonio, St. Louis and Washington, D.C. Fulbright provides a full range of legal services to clients worldwide. * Macey's J. Umentum Wins Paralegal of the Quarter Award -------------------------------------------------------- The votes are in and it looks like the newest recipient of 722 Redemption Funding's Paralegal of the Quarter award is Jolene Umentum of the Macey Bankruptcy Law office in Milwaukee. This is an honor that the firm's experienced group of bankruptcy attorneys say she has more than earned. The 722 Redemption Funding award recognizes the top performing paralegal from bankruptcy firms nationwide. Umentum is being honored for her commitment to upholding the core values of the Macey Bankruptcy Law practice, which 722 Redemption Funding took notice of. Her hard work, diligence and professionalism exemplify the pride and dedication that the firm upholds. The award came as no surprise to bankruptcy attorney Hannah J. Yancy, who calls Umentum "an integral part" of the team. "Jolene Umentum has been with Macey Bankruptcy Law for over two years now," Yancy said. "She is extremely proactive and handles clients in the most polite and professional manner. When she sees problems, she takes them head-on." Macey Bankruptcy Law offers its sincerest congratulations to Umentum for her achievement and pledges to maintain the same high standards and level of dedication throughout all its offices nationwide. About Macey Bankruptcy Law Macey Bankruptcy Law is a service of Macey & Aleman. The firm has been representing consumer debtors in bankruptcy cases since 1994. Through tireless hard work, dedication to customer service and commitment to fair and reasonable fees, Macey Bankruptcy law has been able to help thousands of hardworking Americans get the debt relief they need. * McKool Smith Launches Whistleblower Litigation Practice --------------------------------------------------------- McKool Smith, one of America's leading trial firms, announced the joining of prominent qui tam litigators Brent Rushforth and Stuart Rennert. The expansion marks the launch of the firm's whistleblower litigation practice, which focuses on representing individuals and companies who blow the whistle on fraud committed against the government. Both Rushforth and Rennert are based in McKool Smith's Washington, DC, office. They will be joined by experienced qui tam litigators, including Senior Counsel Doreen Klein and associate David Schiefelbein, who are based in the firm's New York office. Mr. Rushforth served as Deputy General Counsel of the United Stated Department of Defense, and is a former Chairman of the Center for Law in the Public Interest (Los Angeles). Mr. Rennert has focused his practice for more than a decade on representing whistleblowers and governmental entities in high stakes False Claims Act litigation, and has successfully tried such cases to verdict. Previous to that, he served for three years in the United States Department of Justice, helping lead a team of lawyers in the United States' civil RICO enforcement action against the cigarette industry. "Brent Rushforth and Stuart Rennert are remarkable attorneys with an impressive track record in qui tam matters, and decades of experience handling commercial litigation and government investigations," said Co-founder and Chairman Mike McKool. "Their talents and expertise will be extremely valuable to our clients as we launch our whistleblower litigation practice, and continue to expand our white collar and commercial litigation capabilities. "McKool Smith is a serious trial firm," said Brent Rushforth. "The firm is formidable on both the plaintiff and defense side, and has a history of litigating against financial institutions. This provides an ideal platform to build our whistleblower litigation practice." "McKool Smith has a national reputation for securing big wins in high-profile litigation," added Stuart Rennert. "We look forward to joining such a distinguished group of trial lawyers." With more than 170 litigators across offices in California, New York, Texas, and Washington, DC, McKool Smith has established a reputation as one of America's leading trial firms. The firm has won more National Law Journal and VerdictSearch "Top 100 Verdicts" over the last five years than any other law firm. McKool Smith represents leading clients across a broad range of practice areas, including complex commercial litigation, intellectual property, bankruptcy, and white collar defense. * Ex-Prosecutor Joins McDonald Hopkins' White Collar Crime Group ---------------------------------------------------------------- Bruce E. Reinhart, a nationally recognized trial attorney and distinguished former federal prosecutor, has joined the West Palm Beach and Miami offices of McDonald Hopkins LLC as a Member in the business advisory and advocacy law firm's White Collar Crime, Antitrust, and Securities Litigation Practice. As both a prosecutor and criminal defense lawyer, Reinhart has practiced throughout the United States, handling all aspects of federal criminal litigation and investigations. Reinhart has handled more than 100 federal grand jury investigations, such as complex financial crimes, health care fraud, tax fraud, violent crimes, narcotics, and public corruption. He has tried more than 50 cases in federal courts including numerous white collar crime cases. Reinhart's extensive experience includes having served as an Assistant United States Attorney in the Southern District of Florida for more than 11 years, as senior policy advisor to the undersecretary for enforcement at the U.S. Treasury Department, and as a trial attorney in the Public Integrity Section of the U.S. Department of Justice in Washington, D.C. Since 2008, Reinhart has been in private practice providing white collar and complex civil litigation strategies for a variety of businesses, executives and nonprofit entities around the country. He has also represented individuals and corporations in asset forfeiture proceedings, including, in one case, successfully reacquiring over $1 million in property for a Fortune 500 company. In 2008, Reinhart obtained an acquittal for a medical doctor accused of multiple counts of health care fraud. In addition to representing clients in criminal matters, he also has represented clients in state and federal regulatory enforcement actions, including SEC, FTC, and HHS Office of Inspector General investigations. At McDonald Hopkins, Reinhart is working with a highly skilled legal team of former federal prosecutors, independent counsel, SEC counsel, and state prosecutors. "The need for experienced and effective white collar criminal representation continues to be substantial," said Edmund W. (Ned) Searby, chair of the Practice, which focuses on white collar criminal defense and complex civil litigation. "Bruce Reinhart is an outstanding addition to our firm because his impressive background further strengthens our team at a time when the regulatory and criminal enforcement environment is increasingly aggressive." Searby is also a former federal prosecutor who worked on nationally publicized cases involving B.C.C.I., Chicago organized crime, and the Office of the Independent Counsel. Reinhart is among nine attorneys who have joined McDonald Hopkins in South Florida in recent months. The 80-year-old firm, which opened a Miami office in April 2011, has had an office in West Palm Beach since 2004. John T. Metzger, managing member of the firm's West Palm Beach office, said "We are so excited that Bruce will be based in our West Palm Beach office while representing clients throughout the South and Central Florida markets." The Miami office of McDonald Hopkins is led by Raquel (Rocky) A. Rodriguez, who worked on some of the most complex and urgent issues facing the state of Florida when she served as general counsel to former Governor Jeb Bush. Reinhart earned a J.D. from the University of Pennsylvania Law School, cum laude and a B.S.E, cum laude from Princeton University. He is AV rated as preeminent by Martindale-Hubbell. Bruce E. Reinhart -- breinhart@mcdonaldhopkins.com About McDonald Hopkins McDonald Hopkins is a business advisory and advocacy law firm focused on business law, litigation, business restructuring and bankruptcy, intellectual property, healthcare, and estate planning. The firm has offices in Chicago, Cleveland, Columbus, Detroit, Miami and West Palm Beach. The president of McDonald Hopkins is Carl J. Grassi. * Gross, Polowy & Orlans Opens in Amherst, New York --------------------------------------------------- Veteran legal professionals Adam Gross, Amy Polowy and Linda Orlans have joined together as partners to establish Gross, Polowy & Orlans, LLC. Gross, Polowy & Orlans is a law firm specializing in residential mortgage services, including home retention, legal compliance, foreclosure, settlement services, title curative, bankruptcy, appellate and related real estate matters. The law firm opened an office and is now operational in suburban Buffalo, New York, with over 65 attorneys and support staff. The firm also has immediate plans to establish an office on Long Island. "We are fully committed to our core values of quality and accurate legal work and outstanding service to our clients, the communities where we live, and to the homeowners in New York," said Adam Gross. "This is what our clients and the courts expect. Having known both Linda and Amy for more than 15 years, I cannot imagine higher quality individuals to have as founding partners to establish a law firm with to achieve the goal of exceeding all client expectations. We are extremely proud that with our commitment to these values, we have established the firm's foundation with the finest professionals." * Asset Management Firms Stalking European Distressed Debt ---------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that the euro-zone crisis has encouraged some of the biggest firms of the asset management industry -- Kohlberg Kravis Roberts & Co., Pacific Investment Management Co., and GLG Partners -- to tell investors that this is the right time to put money into the distressed debt of Europe companies. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In Re Robert Mclees Bankr. D. Ariz. Case No. 12-01307 Chapter 11 Petition filed January 24, 2012 In Re Tribute Aviation LLC Bankr. D. Ariz. Case No. 12-01311 Chapter 11 Petition filed January 24, 2012 See http://bankrupt.com/misc/azb12-01311.pdf represented by: Chris D. Barski, Esq. Barski Drake PLC E-mail: cbarski@barskidrake.com In Re Stephen Wade Bankr. C.D. Calif. Case No. 12-12571 Chapter 11 Petition filed January 24, 2012 In Re Teresa Avants Bankr. C.D. Calif. Case No. 12-11776 Chapter 11 Petition filed January 24, 2012 In Re Edzer Philippe Mina Philippe Bankr. D. Conn. Case No. 12-50117 Chapter 11 Petition filed January 24, 2012 In Re Bush Millwork Specialties, Inc. Bankr. N.D. Ga. Case No. 12-51639 Chapter 11 Petition filed January 24, 2012 See http://bankrupt.com/misc/ganb12-51639.pdf represented by: Samuel D. Hicks, Esq. Hicks,Casey & Foster, P.C. E-mail: sam.hicks@hickscasey.com In Re Fuel Barons, Inc. dba Ozofire dba Surefire Bankr. N.D. Ga. Case No. 12-51650 Chapter 11 Petition filed January 24, 2012 See http://bankrupt.com/misc/ganb12-51650.pdf represented by: Gregory D. Ellis, Esq. Lamberth, Cifelli, Stokes, Ellis & Nason In Re 15690 Condo South Harlem, LLC Bankr. N.D. Ill. Case No. 12-02327 Chapter 11 Petition filed January 24, 2012 See http://bankrupt.com/misc/ilnb12-02327.pdf represented by: Chester H. Foster, Jr., Esq. Foster & Smith E-mail: chf@fostersmithlaw.com In Re Dexter Tucker Kimberly Tucker Bankr. D. Md. Case No. 12-11108 Chapter 11 Petition filed January 24, 2012 In Re Jesus Gutierrez Bankr. D. Nev. Case No. 12-10728 Chapter 11 Petition filed January 24, 2012 In Re 268 West Broadway, LLC Bankr. S.D.N.Y. Case No. 12-10284 Chapter 11 Petition filed January 24, 2012 See http://bankrupt.com/misc/nysb12-10284.pdf represented by: James E. Iniguez, Esq. E-mail: jei@jeilaw.com In Re New Villa Corp. Bankr. S.D.N.Y. Case No. 12-22133 Chapter 11 Petition filed January 24, 2012 filed pro se See http://bankrupt.com/misc/nysb12-22133.pdf In Re Reeds Auto Truck, LLC aka Reds Auto Truck & Fleet, LLC Bankr. W.D. N.Y. Case No. 12-10174 Chapter 11 Petition filed January 24, 2012 See http://bankrupt.com/misc/nywb12-10174.pdf represented by: Robert B. Gleichenhaus, Esq. Gleichenhaus, Marchese & Weishaar, P.C. E-mail: RBG_GMF@hotmail.com In Re Advanced Life Support Ambulance, Inc. Bankr. E.D. Pa. Case No. 12-10597 Chapter 11 Petition filed January 24, 2012 See http://bankrupt.com/misc/paeb12-10597.pdf represented by: Robert Neil Braverman, Esq. Law Office of Robert Braverman, LLC E-mail: robert@bravermanlaw.com In Re BKB Community Development Corporation Bankr. E.D. Pa. Case No. 12-10613 Chapter 11 Petition filed January 24, 2012 See http://bankrupt.com/misc/paeb12-10613.pdf represented by: Sharon N. Harvey, Esq. Harper & Paul E-mail: sharonh60@aol.com In Re Marvet Emara Bankr. E.D. Tenn. Case No. 12-30259 Chapter 11 Petition filed January 24, 2012 In Re Hector Angel Bankr. M.D. Tenn. Case No. 12-00648 Chapter 11 Petition filed January 24, 2012 In Re Arthur Keeney Bankr. S.D. Ala. Case No. 12-00265 Chapter 11 Petition filed January 25, 2012 In Re Arthur Tillotson Bankr. D. Ariz. Case No. 12-01375 Chapter 11 Petition filed January 25, 2012 In Re Arnold Sandlow Bankr. C.D. Calif. Case No. 12-12722 Chapter 11 Petition filed January 25, 2012 In Re Adolphus Ajawara Bankr. N.D. Calif. Case No. 12-50567 Chapter 11 Petition filed January 25, 2012 In Re Cristina Rivera Bankr. N.D. Calif. Case No. 12-40709 Chapter 11 Petition filed January 25, 2012 In Re Carly Catucci Bankr. S.D. Calif. Case No. 12-00850 Chapter 11 Petition filed January 25, 2012 In Re William Ponto Bankr. S.D. Calif. Case No. 12-00871 Chapter 11 Petition filed January 25, 2012 In Re Sonshine Deliverance Church aka It's All About Him Ministry Bankr. D. Colo. Case No. 12-11255 Chapter 11 Petition filed January 25, 2012 See http://bankrupt.com/misc/cob12-11255p.pdf See http://bankrupt.com/misc/cob12-11255c.pdf represented by: Jeffrey S. Brinen, Esq. E-mail: jsb@kutnerlaw.com In Re Hecfer Corporation Bankr. S.D. Fla. Case No. 12-11856 Chapter 11 Petition filed January 25, 2012 See http://bankrupt.com/misc/flsb12-11856.pdf represented by: Alex Jimenez Labora, Esq. In Re Ivonne Garcia Bankr. S.D. Fla. Case No. 12-11839 Chapter 11 Petition filed January 25, 2012 In Re Wayne Taylor Bankr. N.D. Ill. Case No. 12-80224 Chapter 11 Petition filed January 25, 2012 In Re W & P Enterprises, Inc. Bankr. D. Md. Case No. 12-11183 Chapter 11 Petition filed January 25, 2012 See http://bankrupt.com/misc/mdb12-11183.pdf represented by: Richard M. McGill, Esq. Law Offices of Richard M. McGill E-mail: mcgillrm@aol.com In Re 133 Mulberry Street Restaurant LLC Bankr. S.D.N.Y. Case No. 12-10297 Chapter 11 Petition filed January 25, 2012 See http://bankrupt.com/misc/nysb12-10297.pdf represented by: J. Ted Donovan, Esq. Goldberg Weprin Finkel Goldstein LLP E-mail: TDonovan@GWFGlaw.com In Re Perfect Security Corp. Bankr. D. Puerto Rico Case No. 12-00417 Chapter 11 Petition filed January 25, 2012 See http://bankrupt.com/misc/prb12-00417.pdf represented by: Gerardo L. Santiago Puig, Esq. E-mail: gsantiagopuig@yahoo.com In Re Mervin Coleman Bankr. M.D. Tenn. Case No. 12-00684 Chapter 11 Petition filed January 25, 2012 In Re Webb Container Corporation Bankr. S.D. Texas Case No. 12-30524 Chapter 11 Petition filed January 25, 2012 See http://bankrupt.com/misc/txsb12-30524.pdf represented by: Nelson M. Jones, III, Esq. E-mail: njoneslawfirm@aol.com In Re Barry Sides Bankr. S.D. Ala. Case No. 12-00281 Chapter 11 Petition filed January 26, 2012 In Re Centrepoint Holdings, LLC Bankr. D. Ariz. Case No. 12-01452 Chapter 11 Petition filed January 26, 2012 See http://bankrupt.com/misc/azb12-01452.pdf represented by: Dale C. Schian, Esq. Schian Walker, P.L.C. E-mail: ecfdocket@swazlaw.com In Re Alexander Park Development Company, Inc. Bankr. C.D. Calif. Case No. 12-10783 Chapter 11 Petition filed January 26, 2012 See http://bankrupt.com/misc/cacb12-10783.pdf represented by: Ron Bender, Esq. E-mail: rb@lnbyb.com In Re Quincy Smith Bankr. C.D. Calif. Case No. 12-12772 Chapter 11 Petition filed January 26, 2012 In Re Yousif Halloum Bankr. E.D. Calif. Case No. 12-21477 Chapter 11 Petition filed January 26, 2012 In Re Joseph Moris Bankr. S.D. Calif. Case No. 12-00907 Chapter 11 Petition filed January 26, 2012 In Re Gail & Danny Enterprises, Inc. dba Wave Financial Partners fka Wave Financial Partners, Inc. Bankr. D. Colo. Case No. 12-11325 Chapter 11 Petition filed January 26, 2012 See http://bankrupt.com/misc/cob12-11325p.pdf See http://bankrupt.com/misc/cob12-11325c.pdf represented by: Duncan E. Barber, Esq. E-mail: dbarber@bsblawyers.com In Re Larry Addington Bankr. E.D. Ky. Case No. 12-10029 Chapter 11 Petition filed January 26, 2012 In Re John Reed Bankr. D. Nev. Case No. 12-50171 Chapter 11 Petition filed January 26, 2012 In Re Thurman Kemp Bankr. D. Nev. Case No. 12-10868 Chapter 11 Petition filed January 26, 2012 In Re Decar Creation & Manufacturing Company Inc. Bankr. S.D.N.Y. Case No. 12-10303 Chapter 11 Petition filed January 26, 2012 filed pro se See http://bankrupt.com/misc/nysb12-10303.pdf In Re Staff Contracting and Maintenance Corp. Bankr. S.D.N.Y. Case No. 12-22148 Chapter 11 Petition filed January 26, 2012 See http://bankrupt.com/misc/nysb12-22148.pdf represented by: Jonathan S. Pasternak, Esq. Rattet Pasternak, LLP E-mail: jsp@rattetlaw.com In Re Carlos Orellana Hernandez Bankr. D. Ore. Case No. 12-30487 Chapter 11 Petition filed January 26, 2012 In Re Lili Enterprises, LLC Bankr. W.D. Tenn. Case No. 12-20849 Chapter 11 Petition filed January 26, 2012 See http://bankrupt.com/misc/tnwb12-20849.pdf represented by: Paul A. Robinson, Jr., Esq. E-mail: problaw9@yahoo.com In Re Simple Pleasures Flowerbulbs & Perennials, Inc. Bankr. E.D. Va. Case No. 12-70305 Chapter 11 Petition filed January 26, 2012 See http://bankrupt.com/misc/vaeb12-70305.pdf represented by: Dennis T. Lewandowski, Esq. Kaufman & Canoles, P. C. E-mail: dtlewand@kaufcan.com In Re JW Construction, Co. dba Winterbourne Landscape Bankr. W.D. Wash. Case No. 12-10668 Chapter 11 Petition filed January 26, 2012 See http://bankrupt.com/misc/wawb12-10668.pdf represented by: Darrel Carter, Esq. CBG Law Group PLLC E-mail: Darrel@cbglaw.com In Re Victor Timmerman Bankr. W.D. Wash. Case No. 12-10643 Chapter 11 Petition filed January 26, 2012 In Re Shirley Morgan Bankr. N.D. Ala. Case No. 12-40155 Chapter 11 Petition filed January 27, 2012 In Re Hodges Chapel, LLC Bankr. S.D. Ala. Case No. 12-00289 Chapter 11 Petition filed January 27, 2012 See http://bankrupt.com/misc/alsb12-00289.pdf represented by: Michael B. Smith, Esq. E-mail: smi067@aol.com In Re The Donald Wilton Hill F.L.P., L.L.P. Bankr. D. Ariz. Case No. 12-01539 Chapter 11 Petition filed January 27, 2012 See http://bankrupt.com/misc/azb12-01539.pdf represented by: John F. Battaile, Esq. Altfeld & Battaile P.C. E-mail: jfbattaile@abazlaw.com In Re Gretchen Durgan Bankr. C.D. Calif. Case No. 12-10871 Chapter 11 Petition filed January 27, 2012 In Re Nicky Michaels Bankr. C.D. Calif. Case No. 12-12106 Chapter 11 Petition filed January 27, 2012 In Re Thomas Robinson Bankr. E.D. Calif. Case No. 12-90245 Chapter 11 Petition filed January 27, 2012 In Re Jeffrey Kockos Bankr. N.D. Calif. Case No. 12-30270 Chapter 11 Petition filed January 27, 2012 In Re Rosalinda Wilbor Bankr. N.D. Calif. Case No. 12-10212 Chapter 11 Petition filed January 27, 2012 In Re Petroleum Marketing Analysis, Inc. dba Aura Oil & Lamp Creations dba Aura Creations Bankr. S.D. Fla. Case No. 12-12164 Chapter 11 Petition filed January 27, 2012 See http://bankrupt.com/misc/flsb12-12164.pdf represented by: Angelo A. Gasparri, Esq. E-mail: angelo@drlclaw.com In Re Wilma Kilcoyne Bankr. W.D. Ky. Case No. 12-50069 Chapter 11 Petition filed January 27, 2012 In Re Wilmart, Inc. Bankr. W.D. Ky. Case No. 12-50068 Chapter 11 Petition filed January 27, 2012 See http://bankrupt.com/misc/kywb12-50068.pdf represented by: Scott A. Bachert, Esq. E-mail: bachert@hbmfirm.com In Re Fanny Dela Cruz Bankr. E.D. Mich. Case No. 12-41754 Chapter 11 Petition filed January 27, 2012 In Re Alamo Investors, LLC Bankr. W.D. Mich. Case No. 12-00613 Chapter 11 Petition filed January 27, 2012 See http://bankrupt.com/misc/miwb12-00613.pdf represented by: Steven L. Rayman, Esq. Rayman & Knight E-mail: courtmail@raymanstone.com In Re Stewbor Ventures, LLC Bankr. W.D. Mich. Case No. 12-00614 Chapter 11 Petition filed January 27, 2012 See http://bankrupt.com/misc/miwb12-00614.pdf represented by: Steven L. Rayman, Esq. Rayman & Knight E-mail: courtmail@raymanstone.com In Re EAC Group, LLC ta Dunkin Donuts Bankr. D. N.J. Case No. 12-11954 Chapter 11 Petition filed January 27, 2012 See http://bankrupt.com/misc/njb12-11954.pdf represented by: Peter Broege, Esq. Broege, Neumann, Fischer & Shaver E-mail: pbroege@bnfsbankruptcy.com In Re Paul Anthonys Ristorante Bankr. E.D.N.Y. Case No. 12-70398 Chapter 11 Petition filed January 27, 2012 In Re Paul Bain Bankr. W.D. Tenn. Case No. 12-10257 Chapter 11 Petition filed January 27, 2012 In Re Quintessential Chocolates Co., Inc. Bankr. W.D. Texas Case No. 12-50241 Chapter 11 Petition filed January 27, 2012 See http://bankrupt.com/misc/txwb12-50241.pdf represented by: William R. Davis, Jr, Esq. Langley & Banack, Inc. E-mail: wrdavis@langleybanack.com In Re Domingo Abarquez Bankr. C.D. Calif. Case No. 12-13118 Chapter 11 Petition filed January 28, 2012 In Re Kale Consulting Firm, LLC Bankr. D. S.C. Case No. 12-00490 Chapter 11 Petition filed January 28, 2012 See http://bankrupt.com/misc/scb12-00490.pdf represented by: Robert A. Pohl, Esq. Stodghill Law Firm Chartered E-mail: rpohl@stodghill-law.com In Re Centrepoint Development Opportunity Fund Limited Partnership Bankr. D. Ariz. Case No. 12-01624 Chapter 11 Petition filed January 30, 2012 See http://bankrupt.com/misc/azb12-01624.pdf represented by: Dale C. Schian, Esq. Schian Walker, P.L.C. E-mail: ecfdocket@swazlaw.com In Re Centrepointe Development Carter Evans Investment Fund Limited Partnership Bankr. D. Ariz. Case No. 12-01627 Chapter 11 Petition filed January 30, 2012 See http://bankrupt.com/misc/azb12-01627.pdf represented by: Dale C. Schian, Esq. Schian Walker, P.L.C. E-mail: ecfdocket@swazlaw.com In Re RNFI Unlimited, LLC Bankr. D. Ariz. Case No. 12-01648 Chapter 11 Petition filed January 30, 2012 See http://bankrupt.com/misc/azb12-01648.pdf represented by: Dale C. Schian, Esq. Schian Walker, P.L.C. E-mail: ecfdocket@swazlaw.com In Re Inter-Continental Services Corp. Bankr. C.D. Calif. Case No. 12-10887 Chapter 11 Petition filed January 30, 2012 See http://bankrupt.com/misc/cacb12-10887.pdf represented by: Jeffrey A. Cancilla, Esq. E-mail: j.cancilla@hotmail.com In Re Kevin Hepler Bankr. C.D. Calif. Case No. 12-11126 Chapter 11 Petition filed January 29, 2012 In Re Morgen Thruston Bankr. D. Ariz. Case No. 12-01617 Chapter 11 Petition filed January 30, 2012 In Re Alejandro Passarelli Bankr. C.D. Calif. Case No. 12-13263 Chapter 11 Petition filed January 30, 2012 In Re Manpreet Puni Bankr. C.D. Calif. Case No. 12-11199 Chapter 11 Petition filed January 30, 2012 In Re Carothers Construction, Inc. Bankr. E.D. Calif. Case No. 12-21712 Chapter 11 Petition filed January 30, 2012 filed pro se See http://bankrupt.com/misc/caeb12-21712.pdf In Re Murphy Moving & Storage, Inc. Bankr. D. Conn. Case No. 12-30182 Chapter 11 Petition filed January 30, 2012 See http://bankrupt.com/misc/ctb12-30182.pdf represented by: Peter L. Ressler, Esq. Groob Ressler & Mulqueen E-mail: ressmul@yahoo.com In Re Zbigniew Maniecki Bankr. M.D. Fla. Case No. 12-01235 Chapter 11 Petition filed January 30, 2012 In Re North American Safety Products, Inc. Bankr. N.D. Ill. Case No. 12-03168 Chapter 11 Petition filed January 30, 2012 See http://bankrupt.com/misc/ilnb12-03168.pdf represented by: Robert R. Benjamin, Esq. Golan & Christie, LLP E-mail: rrbenjamin@golanchristie.com In Re Verndale Custom Homes, Inc. Bankr. D. Minn. Case No. 12-60087 Chapter 11 Petition filed January 30, 2012 See http://bankrupt.com/misc/mnb12-60087.pdf represented by: Kip M. Kaler, Esq. Kaler Doeling Law Office E-mail: kipkaler@earthlink.net In Re Mark Tipton Bankr. E.D. N.C. Case No. 12-00703 Chapter 11 Petition filed January 30, 2012 In Re William Johns Bankr. D. N.M. Case No. 12-10325 Chapter 11 Petition filed January 30, 2012 In Re Peter Pascarelli Bankr. E.D. Pa. Case No. 12-10790 Chapter 11 Petition filed January 30, 2012 In Re Adelfa Grullon Bankr. D. R.I. Case No. 12-10253 Chapter 11 Petition filed January 30, 2012 In Re Juan Frias Bankr. S.D. Texas Case No. 12-30620 Chapter 11 Petition filed January 30, 2012 In Re Tidewater Gutter Services LLC dba Caretree Gutter Guard dba Carefree Gutter Systems Bankr. E.D. Va. Case No. 12-50138 Chapter 11 Petition filed January 30, 2012 See http://bankrupt.com/misc/vaeb12-50138.pdf represented by: Joseph T. Liberatore, Esq. Crowley, Liberatore, Ryan & Brogan, P.C. E-mail: jliberatore@clrbfirm.com ********* 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. 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