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/raid1/www/Hosts/bankrupt/TCR_Public/120209.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 9, 2012, Vol. 16, No. 39 Headlines 2004 RK: Voluntary Chapter 11 Case Summary 2650 ANDJON: Voluntary Chapter 11 Case Summary 34 DAY STREET: Files for Chapter 11 Bankruptcy Protection A & L: Case Summary & 12 Largest Unsecured Creditors ABITIBIBOWATER INC: M.D. Ala. Court Rules on Twilley Lease Dispute AE BIOFUELS: Third Eye Waives Defaults Under Note Agreement ALT HOTEL: Wins Nod for FTI Consulting as Financial Advisors ALT HOTEL: Will Seek Approval of Disclosure Statement on March 5 AMERICAN AIRLINES: Needs Strong Pacific Business, WSJ Says AMERICAN APPAREL: Reports $41.4 Million Net Sales in January AMERICANWEST BANCORP: Holdco Files Competing Chapter 11 Plan ARIZONA WASH: Metro Car Files for Chapter 11 Bankruptcy ATLANTIC & PACIFIC: Confirmation Hearing Adjourned to Thursday BAYOU GROUP: Court Upholds Clawback Verdict Against Investors BELGRADE LOUNGE: Voluntary Chapter 11 Case Summary BELLMARK RECORDS: Judge Reserves Decision on Copyrights Tussle BERNARD L. MADOFF: Trustee Seeks $61-Mil. in Cornerstone Suit B.G. BAZEMORE: Case Summary & 6 Largest Unsecured Creditors BILL JOHNSON'S: Some Family Members Want Case Converted to Ch. 7 BLITZ USA: Committee Can Retain Lowenstein Sandler as Counsel BLITZ USA: Committee Has OK for FTI as Financial Advisor BLITZ USA: Committee Can Retain Womble Carlyle as Co-Counsel BLITZ USA: Can Employ Duckwall & Company as Auctioneer BRIDGEPORT CITY: Moody's Affirms 'Ba1' Tax Debt Underlying Rating BRIDGEPORT REDEVELOPMENT: Court Rejects 7th Amended Plan BROADBENT CO: Places Georgetown Plaza in Chapter 11 Bankruptcy BUFFETS INC: Tries to Skip $3MM Tax Bill, Calif. Tax Board Says CAESARS ENTERTAINMENT: Amends 1.8 Million Common Shares Offering CAPTAIN'S TABLE: Files for Chapter 11 Bankruptcy Protection CB HOLDING: Court to Consider Plan Confirmation on Feb. 23 CDC CORP: Gets $249MM Offer for Shares in Software Subsidiary CELLFOR CORP: Georgia Court Recognizes Canadian Proceeding CHESAPEAKE ENERGY: S&P Changes Outlook to Negative on Weak Prices CHESAPEAKE OILFIELD: S&P Also Revises Outlook to Negative CHINA TEL GROUP: Enters Into Consulting Agreement with NGSN CHRISTIAN BROTHERS: Committee Wants Examiner to Manage Sale CIRCUS AND ELDORADO: Moody's Rates Note Offering at '(P)Caa1' CIRCUS AND ELDORADO: S&P Assigns Prelim. 'B-' Rating to Notes CLARE AT WATER: Can Employ Deloitte FAS as Restructuring Advisor CLARE AT WATER: Panel Can Retain FTI Consulting as Fin'l Advisor COMMUNITY TOWERS: CIBC & U.S. Trustee Balk at Lack of Disclosures CONVERTED ORGANICS: Has 419.9 Million Outstanding Common Shares CYBEX INTERNATIONAL: Reaches Pact in Barnhard Liability Suit CYBEX INTERNATIONAL: Grace & White Discloses 8.6% Equity Stake DAVID 6: Case Summary & 7 Largest Unsecured Creditors DOE MOUNTAIN INVESTMENTS: Creditors File Joint Plan of Liquidation DOWLING COLLEGE: Moody's Confirms Caa1 Rating on Two Bond Series DOUGLAS PINES: Case Summary & 2 Largest Unsecured Creditors EAST HARLEM: Feb. 27 Bar Date for Proofs of Claim Set EAST HARLEM: Files Schedules of Assets and Liabilities EL PASO: Case Summary & 4 Largest Unsecured Creditors EMMIS COMMUNICATIONS: Corre Holds 2.4 Million Preferred Shares FAIRVIEW CROSSINGS: Case Summary & 4 Largest Unsecured Creditors FGIC CORP: Unsecured Creditors May Recover 6% Under Reorg. Plan FOCUS BRANDS: S&P Affirms 'B' Corporate; Outlook Now Stable FOUNTAIN POWERBOATS: Trustee Wants Case Converted to Chapter 7 FREDERICK'S OF HOLLYWOOD: NYSE Amex Accepts Plan of Compliance FRONTIER AIRLINES: Republic Prepares to Put Unit Up for Sale GALLUP CAMPER: Case Summary & 10 Largest Unsecured Creditors GELT PROPERIES: Taps Evictions Unlimited as Landlord-Tenant Rep. GELT PROPERIES: Taps Dunne Wright as Maryland Property Manager GENCORP INC: Reports $500,000 Net Income in Fourth Quarter GENTIVA HEALTH: Expects to Breach Financial Covenants This Year GEORGES MARCIANO: Wins Another Victory in the Court of Appeal GETTY PETROLEUM: Committee Taps A&M as Financial Advisors GLOBAL AVIATION: Receives Approval of First Day Motions GLOBAL AVIATION: Moody's Cuts PDR to 'D', CFR Now 'Ca' GLOBAL AVIATION: Bankruptcy Prompts S&P to Cut Corp. Rating to D HAWKER BEECHCRAFT: Hires Kirkland & Ellis for Restructuring Advice HCA INC: Holdings Posts $1.9 Billion Net Income in Fourth Quarter HCA INC: Moody's Says 'B1' Rating Unaffected by Dividend Payment HOSTESS BRANDS: Arkansas Court Stays Suit v. Interstate Brands HOUGHTON INTERNATIONAL: S&P Affirms 'B' Corporate Credit Rating IMH FINANCIAL: Inks MOU with Unitholders in Delaware Class Action INTERNATIONAL MEDIA: Taps Houlihan Lokey as Financial Advisor INTERNATIONAL MEDIA: May Pay Critical Vendor Claims Up to $125,000 INTERTAPE POLYMER: Letko Brosseau Discloses 21.7% Equity Stake INT'L RECTIFIER: Fitch Affirms Issuer Default Rating at 'BB' IRVINE SENSORS: Vectronix Buys Thermal Imaging Biz. for $10-Mil. J & J POWERSPORTS: Case Summary & 17 Largest Unsecured Creditors JARVIS ADVENTURE, INC.: Voluntary Chapter 11 Case Summary J.D. NEWTON: Voluntary Chapter 11 Case Summary JEFFERSON COUNTY, AL: Inmates Seek Stay Relief to Continue Suit JEFFERSON COUNTY: BNY Mellon Fights for Right to Sewer Money JEFFERSON COUNTY: Needs State's Assistance on Budget Gaps JESCO CONSTRUCTION: Files Schedules of Assets and Liabilities KINGSBURY CORP: Court Extends Bar Date Until March 30 LAKE TAHOE: Argonaut Dev't; R. Baker Withdraw Motion to Dismiss LAKE TAHOE: Files Fifth Amended Plan of Reorganization LAS VEGAS MONORAIL: Files Plan Disclosures for Fourth Amended Plan LAUREN JOHN PAULSON: Judge Dunn Won't Recuse Self LEVEL 3: Southeastern Asset Discloses 20.8% Equity Stake LIBBEY INC: Robeco Investment Discloses 5.5% Equity Stake LONE PINE: Moody's Assigns 'Caa2' Rating to $200-Mil. Sr. Notes LOS ANGELES DODGERS: Will Seek Nod of Plan Disclosures on Feb. 22 MANISTIQUE PAPERS: Bid Protections Hearing on Feb. 9 MARCO POLO: Committee Investigation Extended Period to Feb. 29 MASTERCARD: Moody's Says Technology Roadmap Credit Positive MEECHAM HOSPITALITY: Case Summary & 20 Largest Unsecured Creditors MERIDIAN MORTGAGE: Founder Seeks Lighter Sentence for $100MM Fraud MERITOR INC: Fitch Affirms Issuer Default Rating at 'B' MF GLOBAL: Corporate "Personhood" to be Tested in Ch. 11 Case MIG FINANCIAL: Case Summary & 6 Largest Unsecured Creditors MISS ANN: Case Summary & 5 Largest Unsecured Creditors MONACO COACH: Directed to File Status Report in Moore Lawsuit MOUNTAIN CITY: Files Chapter 11 Liquidating Plan N. BERGMAN: Case Summary & 6 Largest Unsecured Creditors NANCE PROPERTIES: Broker Can't Get Commission for Botched Sale NEW STREAM: Again Requests More Time to File Chapter 11 Plan NNN LAS COLINAS: Case Summary & Largest Creditor O.P.C.O., INC.: Case Summary & Largest Unsecured Creditor OUTBACK STORAGE: Case Summary & 3 Largest Unsecured Creditors OUTSOURCE HOLDINGS: Liquidation Plan Declared Effective PAN WESTERN: Case Summary & 20 Largest Unsecured Creditors PAPERWORKS INDUSTRIES: Cut by S&P to 'B-', Now on Watch Negative PARKWAY HOSPITAL: Chapter 7 Conversion Moots 2nd Cir. Appeal PENINSULA HOSPITAL: Can Access 1199 Funds' Cash Until Feb. 29 PINNACLE AIRLINES: Shareholders Mull Equity Committee PROVIDENT FINANCING: Fitch Affirms Jr. Sub. Securities at 'BB+' QUANTUM CORP: Paul Orlin Discloses 8.4% Equity Stake R.E. LOANS: U.S. Trustee Removes Lisa Khan from Noteholders Panel R.E. LOANS: Committee Wants Case Move from Dallas to California R.E. LOANS: Committee Has OK for Diamond McCarthy to Probe Claims R.E. LOANS: Can Employ Latham & Watkins as Special Counsel R. PONCE: Case Summary & 6 Largest Unsecured Creditors RA GLOBAL: Voluntary Chapter 11 Case Summary REAL MEX: Second-Lien Noteholders Win Auction for Assets RESIDENTIAL CAPITAL: Said to be in Talks With Cerberus on Prepack ROBERT ROOD: Court Suggests Mediation in Retirement Trust Suit ROOMSTORE INC: To Liquidate Five Stores in Houston, Texas ROTECH HEALTHCARE: Robeco Investment Discloses 5.2% Equity Stake SAAB AUTOMOBILE: U.S. Unit Plans to Seek Ch. 11 in Detroit SCHALLER'S BAKERY: Case Summary & 20 Largest Unsecured Creditors SCHOMAC GROUP: Wants to Solicit Plan Votes Through March SCOTT DEGRAFF: Probate Estate Can't Represent Deceased Debtor SEABIRD EXPLORATION: Unveils Turnaround Measures SHANDAR HOLDING: Case Summary & 5 Largest Unsecured Creditors SHREE-HARI, INC.: Voluntary Chapter 11 Case Summary SPANISH PEAKS: Concierge to Auction 3 Homes on March 2 SRE INVESTMENTS: Court Approves Mesch Clark as Attorneys SRE INVESTMENTS: Jointly Administered Under Schomac Group Case SRE INVESTMENTS: U.S. Trustee Unable to Form Committee ST. PAUL BUILDING: Case Summary & 9 Largest Unsecured Creditors ST. SIMONS: Case Summary & 20 Largest Unsecured Creditors TELLICO LANDING: Disclosure Statement Hearing Set for Feb. 15 TELLICO LANDING: Court Approves William Legg as Economist TENET HEALTHCARE: Franklin Mutual Discloses 7% Equity Stake TENSAR CORP: In Restructuring Talks After Missed Term Loan Payment TENSAR CORP: S&P Lowers Corporate Credit Rating to 'SD' TERRESTAR CORP: DISH Gets Canadian Nod for License Transfer TERRESTAR NETWORKS: Files Chapter 11 Plan Supplement TOWN CENTER: U.S. Trustee Balks at Plan Outline Adequacy TOWN CENTER: Court Denies Request to Value Property at $40 Million TRANS-LUX CORP: Henry Hackel Discloses 9.1% Equity Stake TUBE CITY: S&P Cuts Rating on $165-Mil. Sr. Term Loan to 'BB-' ULURU INC: Gets Continued Listing Standards Notice From Amex USG CORPORATION: Incurs $100 Million Net Loss in Fourth Quarter VITRO SAB: Mexican Judge Approves Debt Restructuring WASHINGTON MUTUAL: Court Trims FDIC's $129MM Claims Over Losses WATERFORD FUNDING: $1.6MM in Transfers to Humphrey Fraudulent WESTERLY HOSPITAL: S&P Cuts $8.6-Mil. Revenue Bond Rating to 'C' WILLIAMS LOVE: Court Rejects Brann's Attorney Lien Claim WINDRUSH SCHOOL: Wells Fargo Objects to Debtor's Motion to Dismiss * Federal Judge Resigns, Forms Holwell Shuster * McGlinchey Stafford Adds Two New Attorneys in Florida * Bankr. Attys. Garner and Marum Among New Sheppard Partners * Barnes & Thornburg Adds Paul Laurin in LA Office * Hodgson Russ Snags Two Lewis Brisbois Bankruptcy Pros * Recent Small-Dollar & Individual Chapter 11 Filings ********* 2004 RK: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: 2004 RK Financial Group, LP fka RK Financial Group, LP 5333 Edlen Drive Dallas, TX 75220 Bankruptcy Case No.: 12-30798 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Melissa S. Hayward, Esq. FRANKLIN SKIERSKI LOVALL HAYWARD LLP 10501 N. Central Expressway, 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 Company did not file a list of creditors together with its petition. The petition was signed by Kay Fischer, member of RK GenPar, LLC, general partner. 2650 ANDJON: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: 2650 Andjon LP dba Andjon GP, LLC 4709 Lone Star Boulevard Fort Worth, TX 76106 Bankruptcy Case No.: 12-40772 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Russell F. Nelms Debtor's Counsel: William Kelly Puls, Esq. LAW OFFICES OF W. KELLY PULS 1407 Texas Street, Suite 102 Fort Worth, TX 76102 Tel: (817) 338-1717 Fax: (817) 332-1333 E-mail: kelly.puls@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Derenda O?Brien, managing member. 34 DAY STREET: Files for Chapter 11 Bankruptcy Protection --------------------------------------------------------- Eric Convey, managing editor at Boston Business Journal, reports that real estate company 34 Day Street (Norwood) LLC has filed for Chapter 11 bankruptcy protection, listing both assets and debts of between $1 million and $10 million. The manager is listed as Arthur Tenaglia. The report says Mr. Tenaglia is listed as a creditor owed $60,000 for a "loan." The LLC is represented in the bankruptcy proceedings by lawyer Ronald W. Dunbar Jr. of Boston. A & L: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------- Debtor: A & L Partners, LLC 1401 W. Hurst Boulevard Hurst, TX 76053 Bankruptcy Case No.: 12-40777 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: D. Michael Lynn Debtor's Counsel: Joyce W. Lindauer, Esq. JOYCE W. LINDAUER, ATTORNEY AT LAW 8140 Walnut Hill Lane, Suite 301 Dallas, TX 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 E-mail: courts@joycelindauer.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The Company?s list of its 12 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/txnb12-40777.pdf The petition was signed by Abdul Latif, president. ABITIBIBOWATER INC: M.D. Ala. Court Rules on Twilley Lease Dispute ------------------------------------------------------------------ Senior District Judge W. Harold Albritton held that the effect of Bowater Alabama LLC's deemed rejection of a 1967 master lease with the Twilley family and a sublease with Cahaba Forests LLC pursuant to Section 365 of the Bankruptcy Code was to give the Twilleys the right to terminate the Master Lease, and its termination would have the effect of terminating the Sublease. Cahaba had filed a Complaint for Declaratory Judgment against the Twilleys, among other parties. Judge Albritton said all other issues in the matter are reserved for future determination. The Twilleys, a large number of family members who are all beneficiaries under a testamentary trust, own over 24,000 acres of undeveloped timberlands in counties within the Middle District of Alabama. On July 1, 1967, the land was leased by them to Kimberly-Clark Corporation, with unrestricted possession and use, including full timber rights, for a term ending on June 29, 2032. The lease contained no prohibition or restriction as to subleasing, and required no consent of the Twilleys. Bowater subsequently became lessee under the Master Lease by virtue of becoming successor-in-interest to K-C. On Feb. 10, 2000, Bowater's predecessor-in-interest subleased all but 40 acres of the property to Cahaba, under an unrestricted sublease requiring Cahaba to comply with all terms of the Master Lease, to make payments called for directly to the Twilleys, and to pay ad valorem taxes on the land. The Sublease was to terminate on the same day as the Master Lease, June 29, 2032. The Twilleys were not parties to the Sublease. The case is CAHABA FORESTS, LLC, Plaintiff, v. MARY GEORGE EAST HAY, DORIS EAST RAGSDALE, LYNDA MARIE EAST RICE WOODALL, JIMMY RAY EAST, JENNINGS FELIX EAST, JR., DONALD L. RUSH a/k/a Donald Lee Rush, NANCY R. SCOTT, a/k/a Nancy D. Rush a/k/a Nancy Rush Scott, MICHAEL D. TWILLEY, JANICE TWILLEY BRYAN, W. DAVID TWILLEY, CAROL ANN TWILLEY DEWBERRY, JAMES FLOYD CALDWELL, JOSEPHONE V. CALDWELL a/k/a Josephine Caldwell Davis, WILLIE E. CALDWELL, BETTY ANN HANSEN a/k/a Betty A. Drivere, PAMELA TWILLEY WELLBORN, and AMELIA D. TWILLEY a/k/a Amelia Dawn Twilley a/k/a Amelia Voltz a/k/a Amelia Twilley Paschal, Defendants, No. 3:11-cv-423-WHA (M.D. Ala.). A copy of the Court's Feb. 6, 2012 Memorandum Opinion and Order is available at http://is.gd/zC0hSJfrom Leagle.com. About AbitibiBowater Inc. AbitibiBowater Inc. -- http://www.abitibibowater.com/-- owns or operates 18 pulp and paper mills and 24 wood products facilities located in the United States, Canada and South Korea. Marketing its products in more than 70 countries, AbitibiBowater is also among the largest recyclers of old newspapers and magazines in North America, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, served as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acted as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, served as the Debtors' co-counsel, while Troutman Sanders LLP in New York, served as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors were Advisory Services LP, and their noticing and claims agent was Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel was Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Luc A. Despins, Esq., at Paul, Hastings, Janofsky & Walker LLP, in New York, served as counsel to the Official Committee of Unsecured Creditors. Jamie L. Edmonson, Esq., GianClaudio Finizio, Esq., and Daniel A. O'Brien, Esq., at Bayard, P.A., in Wilmington, Delaware, served as local counsel to the Creditors Committee. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represented the Chapter 15 Debtors. U.S. Bankruptcy Judge Kevin Carey handled the Chapter 11 cases of AbitibiBowater Inc. and its U.S. affiliates and the Chapter 15 case of ACI, et al. The U.S. Bankruptcy Court issued an opinion confirming AbitibiBowater's chapter 11 plan of reorganization on Nov. 22, 2010. The Debtors also obtained approval of their reorganization plan under the Canadian Companies' Creditors Arrangement Act. AbitibiBowater emerged from bankruptcy on Dec. 9, 2010. AE BIOFUELS: Third Eye Waives Defaults Under Note Agreement ----------------------------------------------------------- AE Advanced Fuels Keyes, Inc., a subsidiary of Aemetis, Inc., formerly known as AE Biofuels, Inc., entered into a Limited Waiver, Consent and Amendment No. 5 to the Note Purchase Agreement with Third Eye Capital Corporation as agent. Pursuant to the Fifth Amendment, Agent agreed to waive certain 2011 defaults, waive certain 2012 defaults, and consent to the issuance by AAKF of certain promissory notes on Jan. 6, 2012, and Jan. 9, 2012. In return for the Agent's 2011 waivers, AAKF agreed to pay Third Eye a fee of $100,000, payable in cash of $25,000 and at the option of Aemetis, either: (i) the issuance of 119,047 shares of Aemetis common stock, or (ii) by the addition to outstanding principal balance of the Notes of $75,000. On Feb. 2, 2012, AAFK exercised its right to add the $75,000 fee to the outstanding principal balance of the Note. In return for the Agent's 2012 waivers, AAKF agreed to pay Third Eye a fee of $200,000 payable in Aemetis common stock or by the addition to the outstanding principal balance of the Notes. AAKF also agreed to make a principal reduction payment on the Notes in the amount of $200,000 on Jan. 31, 2012. On Feb. 2, 2012, AAFK exercised its right to add the $200,000 fee to the outstanding principal balance of the Note. As of Jan. 24, 2012, the principal balance and all accrued and unpaid interest and fees outstanding on the Note was $5,973,750 and the accrued and unpaid Revenue Participation was $5,277,781. A full-text copy of the Limited Waiver is available for free at: http://is.gd/TGRXmE About AE Biofuels AE Biofuels, Inc. (OTC BB: AEBF) -- http://www.aebiofuels.com/-- is a biofuels company based in Cupertino, California, developing sustainable solutions to address the world's renewable energy needs. The Company is commercializing its patent-pending next- generation cellulosic ethanol technology that enables the production of biofuels from both non-food and traditional feedstocks. Its wholly-owned Universal Biofuels subsidiary built and operates a nameplate 50 million gallon per year biodiesel production facility on the east coast of India. The Company reported a net loss of $1.72 million on $1.59 million of sales for the three months ended Sept. 30, 2010, compared with a net loss of $3.78 million on $4.05 million of sales for the same period a year earlier. BDO Seidman, LLP, in San Jose, Calif., expressed substantial doubt about AE Biofuels' ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has incurred recurring losses, and has a working capital deficit and total stockholders' deficit as of December 31, 2009. The Company's balance sheet at Sept. 30, 2010, showed $20.23 million in total assets, $29.03 million in total liabilities, all current, and a stockholders' deficit of $8.80 million. The Company has not filed financial reports after filing its Form 10-Q for the quarter ended Sept. 30, 2010. ALT HOTEL: Wins Nod for FTI Consulting as Financial Advisors ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Illinois has granted ALT Hotel, LLC, permission to employ FTI Consulting, Inc., as financial advisors to the Debtor, effective as of June 21, 2011. As financial advisors to the Debtor, FTI will, among others: a. provide expert testimony, as necessary, related to valuation, interest rate, plan of reorganization fairness and feasibility; b. assist in the development or review of financial projection and benchmarking analysis; and c. provide general assistance with preparation of the plan of reorganization and disclosure statement. The Debtor has provided FTI with a postpetition retainer in the Debtor's case in the amount of $25,000, subject to continual replenishment by the Debtor, as necessary. The customary hourly rates, subject to periodic adjustments, charged by FTI professionals anticipated to be assigned to the Debtor's case are: Senior Managing Directors $780-$895 Directors / Managing Directors $560-$755 Consultants / Senior Consultants $280-$530 Administrative / Paraprofessionals $115-$230 FTI has informed the Debtor that it does not represent any interest adverse to the Debtor's estate. FTI will conduct an ongoing review of its files to ensure that no conflict or other disqualifying circumstances exist or arise during the pendency of the Debtor's case. About ALT Hotel LLC ALT Hotel, LLC's sole asset is the Allerton Hotel located in the "Magnificent Mile" area of Chicago. The Hotel is managed by Kokua Hospitality, LLC, pursuant to a Hotel Management Agreement, dated Nov. 9, 2006. Kokua is the exclusive manager and operator of the Hotel, and receives management fees for its services, with the amount of such fees directly linked to the annual performance of the Hotel. Hotel Allerton Mezz, LLC, is the sole member of ALT Hotel. ALT Hotel filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-19401) on May 5, 2011. Judge A. Benjamin Goldgar presides over the case. Neal L. Wolf, Esq., Dean C. Gramlich, Esq., and Jordan M. Litwin, Esq., at Neal Wolf & Associates, LLC, in Chicago, Illinois, serve as bankruptcy counsel to the Debtor. In its petition, the Debtor estimated $100 million to $500 million in assets and $50 million to $100 million in debts. FTI Consulting serves as the Debtor's financial advisors. Affiliate PETRA Fund REIT Corp. sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-15500) on Oct. 20, 2010. ALT HOTEL: Will Seek Approval of Disclosure Statement on March 5 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois has scheduled a hearing for March 5, 2012, at 10:00 a.m., to consider the approval of the disclosure statement filed in Alt Hotel, LLC's Chapter 11 case. As reported in the TCR on Jan. 12, 2012, ALT Hotel, LLC, submitted to the Bankruptcy Court a plan of reorganization, providing for the classification and treatment of five classes of claims against the Debtor. The five claim classes against the Debtor are: (i) Class 1 Secured Claim of the Debtor's secured lender, DiamondRock Allerton Owner, LLC; (ii) Class 2 Other Secured Claims; (iii) Class 3 General Unsecured Claims; (iv) Class 4 Equity Holder's Deficiency Claim; and (v) Class 5 Interests of the Equity Holder. Class 1, 3 and 4 claims are impaired under the Plan. The Plan provides that with respect to the Class 1 Claim: * DiamondRock will retain all of its liens and security interests in the property of the Debtor. * If and when allowed, the Class 1 Claim will be increased by all principal and interest due under the DIP Loan, which amount will be referred to as the "DIP Loan Balance." The sum of the Class 1 Allowed Secured Claim and the DIP Loan Balance, which the Debtor currently estimates to be $66,800,000, will constitute the new principal balance of DiamondRock's Secured Claim. It will bear interest at the rate of 4.625% per annum. * The foreclosure proceeding captioned "DiamondRock Allerton Owner, LLC v. Alt Hotel, LLC," designated as Case No. 10-CH- 18859 (Atkins, J.) and currently pending in the Circuit Court of Cook County, Illinois, Chancery Division, will be dismissed with prejudice. * The guaranty litigation captioned "DiamondRock Allerton Owner, LLC v. PS CDO Manager, LLC," designated as Index No. 652224/2011, is currently pending in the Supreme Court of the State of New York, County of New York, will be dismissed with prejudice. The claims asserted in the Guaranty Litigation will be released and the Guaranty will be replaced and superseded by the Amended and Restated Guaranty. Class 3 General Unsecured Claims will receive 50% of the amount of the allowed claims on the Plan Effective Date and 50% of the balance, with interest computed at the rate of 5% per annum, will be paid 180 days after the Effective Date. Class 4 Equity Holder's Deficiency Claim will be paid in installments until fully paid. It will accrue interest at the rate of 7% per annum. Class 2 Other Secured Claims and Class 5 Interests are unimpaired under the Plan. Allowed Administrative Expense Claims, Priority Claims and Duty Claims will be paid in full on the Plan Effective Date. A copy of the Debtor's Plan dated Dec. 16, 2011 is available for free at http://bankrupt.com/misc/ALTHotel_PlanDec16.PDF About ALT Hotel LLC ALT Hotel, LLC's sole asset is the Allerton Hotel located in the "Magnificent Mile" area of Chicago. The Hotel is managed by Kokua Hospitality, LLC, pursuant to a Hotel Management Agreement, dated Nov. 9, 2006. Kokua is the exclusive manager and operator of the Hotel, and receives management fees for its services, with the amount of such fees directly linked to the annual performance of the Hotel. Hotel Allerton Mezz, LLC, is the sole member of ALT Hotel. ALT Hotel filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-19401) on May 5, 2011. Judge A. Benjamin Goldgar presides over the case. Neal L. Wolf, Esq., Dean C. Gramlich, Esq., and Jordan M. Litwin, Esq., at Neal Wolf & Associates, LLC, in Chicago, Illinois, serve as bankruptcy counsel to the Debtor. In its petition, the Debtor estimated $100 million to $500 million in assets and $50 million to $100 million in debts. FTI Consulting serves as the Debtor's financial advisors. Affiliate PETRA Fund REIT Corp. sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-15500) on Oct. 20, 2010. ********* AMERICAN AIRLINES: Needs Strong Pacific Business, WSJ Says ---------------------------------------------------------- Justin Lahart, writing for The Wall Street Journal's Heard on the Street section, says airlines are in the latter stages of a wave of consolidation that may have began when AMR Corp. bought TWA out of bankruptcy in 2001. "Capacity and costs have been shed, and the number of carriers has dwindled. In the final stage, there will be only a handful of major carriers that control networks extensive enough to attract the high-paying business travelers necessary to compete profitably," Mr. Lahart wrote. "If that is where the game is headed, AMR's position if it emerges from bankruptcy as a stand-alone airline, rather than merging with another, looks weak," he said, citing that cost problems lay at the heart of its troubles. According to Mr. Lahart, AMR's ability to jettison all of its pensions is questionable, given that Delta Air Lines merely froze its plans for flight attendants and ground personnel when it restructured. The report said AMR's promise to increase revenue is hard to pull off. According to the report, Wolfe Trahan analyst Hunter Keay said AMR's major problem is that without a strong Pacific business linked to the fast-growing Asian market, it lacks the type of network needed to win back the business travelers it has lost. Mr. Lahart says buying AMR would give Delta a huge hold on the New York market, a hub in Chicago and a strong Latin American network. If regulators approved the deal -- no sure thing -- the resulting airline would surpass United Continental and become the largest airline in the world by passengers, with a globe-spanning network that could yield substantial profits. According to Mr. Lahart, the strategic benefits of AMR merging with US Airways aren't as clear, and AMR CEO Tom Horton has thrown cold water on it. US Airways' Phoenix hub would mesh well with AMR's Latin American business, and AMR's membership in the Oneworld global marketing alliance would be a plus. Most important for US Airways, a merger avoids the difficult situation of getting squeezed between United Continental and a combined Delta and AMR. But the combined airline would still lack a strong Pacific business. 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) AMERICAN APPAREL: Reports $41.4 Million Net Sales in January ------------------------------------------------------------ American Apparel, Inc., announced preliminary sales for the month ended Jan. 31, 2012. The Company reported that for the month of January total net sales increased 14% to $41.4 million. For the same period, comparable store sales increased an estimated 15% on an estimated 11% increase at retail stores and an estimated 39% increase in online sales. For the month wholesale net sales increased an estimated 21%. "I am very encouraged by the sales performance of the Company," stated Dov Charney, Chairman and CEO. "Since September 2011, we have had positive retail same store sales, and for the months of November, December and January, our imprintable wholesale sales levels have been running at record levels beyond the previous highs set for those months in 2008. Higher sales running through our three sales channels, retail, online, and imprintable wholesale allow for us to improve operational efficiencies at the factory, as well as leverage corporate costs, thereby improving prospects for our long term profitability," added Mr. Charney. A full-text copy of the press release is available at: http://is.gd/43XMmJ About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. The Wall Street Journal reports that Skadden, Arps, Slate, Meagher & Flom has been advising the company on its recent restructuring efforts alongside investment bank Rothschild Inc. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Going Concern Doubt Marcum LLP, in New York, in its audit report on American Apparel's financial statements for the year ended Dec. 31, 2010, expressed substantial doubt about the Company's ability to continue as a going concern. As of April 30, 2011, the Company had approximately $8,000,000 of cash, approximately $8,900,000 of availability for additional borrowings and $46,100,000 outstanding on the credit facility under the BofA Credit Agreement and $1,400,000 of availability for additional borrowings and $4,000,000 outstanding on the credit facility under the Bank of Montreal Credit Agreement. As May 10, 2011, the Company had approximately $5,941,000 available for borrowing under the BofA Credit Agreement and $1,481,000 available under the Bank of Montreal Credit Agreement. American Apparel reported a net loss of $86.31 million on $532.99 million of net sales for the year ended Dec. 31, 2010, compared with net income of $1.11 million on $558.77 million of net sales during the prior year. The Company also reported a net loss of $28.15 million on $389.76 million of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $67.01 million on $389.02 million of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $323.64 million in total assets, $267.51 million in total liabilities and $56.12 million in total stockholders' equity. Bankruptcy Warning The Company incurred a loss from operations of $20,942 for the nine months ended Sept. 30, 2011, compared to a loss from operations of $38,167 for the nine months ended Sept. 30, 2010. The current operating plan indicates that losses from operations will be incurred for all of fiscal 2011. Consequently, the Company may not have sufficient liquidity necessary to sustain operations for the next twelve months and this raises substantial doubt that the Company will be able to continue as a going concern. There can be no assurance that management's plan to improve its operating performance and financial position will be successful or that the Company will be able to obtain additional financing on commercially reasonable terms or at all. As a result, the Company's liquidity and ability to timely pay its obligations when due could be adversely affected. Any new financing also may be substantially dilutive to existing stockholders and may require reductions in exercise prices or other adjustments of the Company's existing warrants. Furthermore, the Company's vendors and landlords may resist renegotiation or lengthening of payment and other terms through legal action or otherwise. If the Company is not able to timely, successfully or efficiently implement the strategies that it is pursuing to improve its operating performance and financial position, obtain alternative sources of capital or otherwise meet its liquidity needs, the Company may need to voluntarily seek protection under Chapter 11 of the U.S. Bankruptcy Code. AMERICANWEST BANCORP: Holdco Files Competing Chapter 11 Plan ------------------------------------------------------------ American Bankruptcy Institute reports that Holdco Advisors LP wants to reorganize former bank holding company AmericanWest Bancorp. through a competing chapter 11 plan. About AmericanWest Bancorporation Headquartered in Spokane, Washington, AmericanWest Bancorporation (OTC BB: AWBC) -- http://www.awbank.net/-- was a bank holding company whose principal subsidiary was AmericanWest Bank, which included Far West Bank in Utah operating as an integrated division of AmericanWest Bank. AmericanWest Bank was a community bank with 58 financial centers located in Washington, Northern Idaho and Utah. AmericanWest Bancorporation filed for Chapter 11 protection (Bankr. E.D. Wash. Case No. 10-06097) on Oct. 28, 2010. The banking subsidiary was not included in the Chapter 11 filing. Christopher M. Alston, Esq., and Dillon E. Jackson, Esq., at Foster Pepper Shefelman PLLC, in Seattle, Washington, serve as bankruptcy counsel. G. Larry Engel, Esq., at Morrison & Foerster LLP, also serves as counsel. The Debtor estimated assets of $1 million to $10 million and debts of $10 million to $50 million in its Chapter 11 petition. AmericanWest Bancorporation's estimates exclude its banking unit's assets and debts. In its Form 10-Q filed with the Securities and Exchange Commission before the Petition Date, AmericanWest Bancorporation reported consolidated assets -- including its bank unit's -- of $1.536 billion and consolidated debts of $1.538 billion as of Sept. 30, 2010. In December 2010, AmericanWest completed the sale of all outstanding shares of AmericanWest Bank to a wholly owned subsidiary of SKBHC Holdings LLC, in a transaction approved by the U.S. Bankruptcy Court. ARIZONA WASH: Metro Car Files for Chapter 11 Bankruptcy ------------------------------------------------------- Phil Villarreal at Arizona Daily Star reports that Metro Car Wash has filed for Chapter 11 bankruptcy protection, listing $1.2 million in liabilities and $766,725 in assets. According to the report, owner Sean Storer said the bankruptcy is a simple restructuring that he hopes is completed within weeks. He said no employees will be laid off and he expects to repay all his debt in full. "We just need a new amortization schedule, basically," the report quotes Mr. Storer as saying. "We had some notes coming due and just needed more time. The plan is to reamortize some loans to increase our cash flow month-to-month. We're not trying to give anybody a haircut." The report says another location, at 5150 E. Speedway, is not affected by the bankruptcy because it's a separate entity. Mr. Storer said he has no plans to file for bankruptcy protection for that location. Metro Car Wash -- http://metrocarwash.com/-- provides full service car wash in Arizona. Arizona Wash Systems, Inc., doing business as Metro Car Wash, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-01225) on Jan. 23, 2012. Sally M. Darcy, Esq., at McEvoy, Daniels & Darcy P.C., in Tucson, Arizona, serves as counsel. The Debtor disclosed $766,725 in assets and $1,208,117 in liabilities as of the Chapter 11 filing. ATLANTIC & PACIFIC: Confirmation Hearing Adjourned to Thursday -------------------------------------------------------------- The hearing to consider confirmation of Great Atlantic & Pacific Tea Co.'s Chapter 11 plan of reorganization has been adjourned to Feb. 9, 2012, at 2:00 p.m. (Prevailing Eastern Time). The Plan hearing was originally scheduled for Feb. 6 and 7. Papers filed in the case indicate that the Debtors have struck separate settlements with Grocery Haulers Inc. and the trustees of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America Local 863 Pension Plan pursuant to which they would change their votes to accept the Debtors' Plan. The Debtors consent to Grocery Haulers being removed as a "Non- Affiliated Participating Employer" of, the Pathmark Stores, Inc. Pension Plan, effective Feb. 28, 2012. On May 2, 2011, Grocery Haulers terminated the employment of all of its employees who were otherwise eligible to accrue benefits under the Pathmark Pension Plan pursuant to the terms of the letter agreement dated Aug. 29, 2008 between Grocery Haulers and A&P regarding the transfer of assets and liabilities from the Local 863 Pension Plan to the Pathmark Pension Plan and a related Spinoff and Withdrawal Liability Agreement, dated Aug. 31, 2008, by and among the trustees of the Local 863 Pension Plan, A&P, and Grocery Haulers. The Debtors will not seek payment from Grocery Haulers or the Local 863 Pension Plan to fund any benefits that (a) eligible Grocery Haulers employees accrued under the Pathmark Pension Plan prior to the Benefit Cessation Date or (b) were, prior to the Benefit Cessation Date, transferred to the Pathmark Pension Plan from the Local 863 Pension Plan. Similarly neither the Debtors nor the Reorganized Debtors will seek payment from Grocery Haulers for other contributions to the Pathmark Pension Plan, any premiums under 29 U.S.C. 1306, any penalties related to such contributions or premiums, or any pension plan termination liabilities. Grocery Haulers and the Local 863 Pension Plan will not seek payment from the Debtors or the Reorganized Debtors for or with respect to any pension benefits accrued by any current or former employees of Grocery Haulers. The Debtors also struck a deal with the trustees of the UFCW Local 1262 and Employers Pension Fund wherein the Fund will withdraw its plan objection and change its Plan vote to "yes." The parties agree that Local 1262 Pension Fund's Pension Withdrawal Claim will be allowed for $13,922,966, and entitled to the enhanced treatment given to Holders of Allowed Pension Withdrawal Claims that vote to accept the Plan. The Debtors also said nothing contained in the Plan or the Confirmation Order will affect Ahold U.S.A., Inc.'s, The Stop & Shop Supermarket Company LLC's, and Giant Food LLC's rights under section 502(j) of the Bankruptcy Code. The Debtors are assuming their Modified Collective Bargaining Agreement between the Debtors and United Food and Commercial Workers International Union Local 27 as further modified by a Side Letter of Agreement, dated Jan. 31, 2012, between the parties. A UFCW Board Designee will serve on the Newco Board for the term of the Modified CBA. Lou Giraurdo is the initial UFCW Board Designee. The Company filed its bankruptcy plan on Nov. 14, 2011. The Bankruptcy Court approved the adequacy of information in the disclosure statement explaining the Plan on Dec. 20, 2011. The deadline for voting on the Plan is Jan. 24, 2012. The Plan hinges on $490 million in new debt and equity financing from a group led by Ron Burkle's Yucaipa Cos.; and $750 million in bankruptcy-exit financing, which consists of a $400 million revolving loan and $350 million term loan, the Debtors secured from a lender syndicate led by J.P. Morgan Chase & Co. and Credit Suisse AG. A&P will use the new capital and the exit financing to pay its secured lenders in full and in cash. The Plan provides that second-lien noteholders owed about $310 million would be paid in full and in cash as long as they vote in favor of the plan. Ownership interests in A&P would be canceled, and shareholders wouldn't receive any payment under the plan. Unsecured creditors will receive a pro rata share of what's left. Several objections have been filed against the Plan. U.S. trustee Tracy Hope Davis said the Plan doesn't justify the "overly broad" liability releases it provides to a wide range of parties, from the company's leaders to its investors, creditor groups, unions and others. 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. BAYOU GROUP: Court Upholds Clawback Verdict Against Investors ------------------------------------------------------------- Richard Vanderford at Bankruptcy Law360 reports that U.S. District Judge Paul G. Gardephe on Monday upheld a jury verdict in a bankruptcy clawback suit against investors in Bayou Group LLC who cashed out before the public learned its hedge funds were a $450 million Ponzi scheme. Law360 relates that Judge Gardephe said several investors who withdrew more than $8 million from Bayou funds prior to its 2005 collapse had reason to believe that Bayou, which catered to institutional investors, was insolvent. That knowledge makes the withdrawals fraudulent under bankruptcy law. About Bayou Group Based in Chicago, Illinois, Bayou Group LLC operated and managed hedge funds. The hedge fund that turned out to be a Ponzi scheme and a receiver was subsequently appointed. The Company and its affiliates were sent to Chapter 11 on May 30, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-22306) to pursue recoveries for the benefit of defrauded investors. Elise Scherr Frejka, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. Joseph A. Gershman, Esq., and Robert M. Novick, Esq., at Kasowitz, Benson, Torres & Friedman, LLP, represent the Official Committee of Unsecured Creditors. Kasowitz, Benson, Torres & Friedman LLP is counsel to the Unofficial Committee of the Bayou Onshore Funds. Sonnenschein Nath & Rosenthal LLP represents certain investors. Bayou Group estimated assets and debts of more than $100 million in the Chapter 11 petition. Bayou has filed lawsuits against former investors who allegedly received fictitious profits and an inequitably large return of their principal investments. Jeff J. Marwil, Esq., at Jenner & Block, was appointed on April 28, 2006, as the federal equity receiver. The receiver commenced adversary proceedings to recover certain fraudulent transfers made by Bayou Group to investors. The Bayou fraud resulted in three guilty pleas. Daniel Marino, the head of finance, was sentence to a 20-year prison term despite his cooperation with prosecutors. James Marquez, a Bayou co-founder, was sentenced to four years and three months in prison and told to pay $6.2 million in restitution. Another founder, Samuel Israel III, was sentenced to 20 years following his guilty plea in September 2005. BELGRADE LOUNGE: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Belgrade Lounge Inc. 32 Main Street Belgrade, MT 59714 Bankruptcy Case No.: 12-60136 Chapter 11 Petition Date: February 2, 2012 Court: U.S. Bankruptcy Court District of Montana (Butte) Debtor's Counsel: James A. Patten, Esq. PATTEN, PETERMAN, BEKKEDAHL & GREEN, PLLC The Fratt Building, Suite 300 2817 2nd Avenue N Billings, MT 59101 Tel: (406) 252-8500 Fax: (406) 294-9500 E-mail: japatten@ppbglaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by William G. Auger, president. BELLMARK RECORDS: Judge Reserves Decision on Copyrights Tussle -------------------------------------------------------------- Ian Thoms at Bankruptcy Law360 reports that a Texas federal judge declined Friday to decide a decade long dispute by determining whether music producer Alvertis Isbell lost the copyrights to songs "Dazzey Duks" and "Whoomp! (There It Is)" during a bankruptcy sale to publisher DM Records Inc. In denying competing motions for summary judgment, Law360 relates, U.S. District Judge Richard A. Schell said he could not determine at this point whether the songs belonged to Isbell's recording company, Bellmark Records, when it declared bankruptcy in 1997 and its assets were sold to DM Records in 1999. As reported in the April 4, 2011 edition of the TCR, ALVERTIS ISBELL d/b/a ALVERT MUSIC, v. DM RECORDS, INC., Case No. 4:07-cv-00146 (E.D. Tex.), sought a declaratory judgment that Alvert Music is the rightful owner of two musical compositions: "Dazzey Duks" and "Whoomp! (There It Is)." The events giving rise to this suit begin with business conducted by two companies, Alvert Music and Bellmark Records, each run by Mr. Isbell. Bellmark was purportedly a record company, owning sound recordings. Alvert Music is, and has been, a music publishing company, which owns musical compositions and not sound recordings. During the early 1990's, Bellmark entered into agreements to obtain the rights to the musical compositions for "Dazzey Duks" and 50% of "Whoomp! (There It Is)" for its affiliated publishing company, which was Alvert Music. Bellmark retained for itself the two sound recordings. In 1997, DM Records secured licenses from both of Mr. Isbell's companies to exploit both the musical compositions and sound recordings at issue. In April 1997, Bellmark filed a Chapter 11 petition in the United States Bankruptcy Court for the Eastern District of Texas, which petition was later converted into a Chapter 7 petition. In October 1999, DM purchased the assets of Bellmark Records from the bankruptcy estate, including the sound recordings of the two songs at issue. Alvert Music has not sought bankruptcy protection. Since that time, DM allegedly has proceeded with regard to the two songs in a manner inconsistent with Alvert Music's ownership of the musical composition rights thereto. In 2002, Mr. Isbell filed the lawsuit in the Northern District of Texas. That court transferred the matter to E.D. Tex. court, and the magistrate judge referred it to the bankruptcy court. BERNARD L. MADOFF: Trustee Seeks $61-Mil. in Cornerstone Suit ------------------------------------------------------------- Amanda Bransford at Bankruptcy Law360 reports that the liquidating trustee for Bernard L. Madoff's assets filed an amended complaint Friday against investor Cornerstone Capital (Del) Inc. and its president seeking to claw back $61 million that the trustee says was bogus profit from the Ponzi scheme. According to trustee Irving Picard, Cornerstone, David Pulver and his wife received $61.7 in fictitious profits from their investments in Bernard L. Madoff Investment Securities LLC and were either aware or should have been aware that fraud was going on, Law360 relates. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of Feb. 8, 2012, Mr. Picard has recovered $8.7 billion for investors. A total of $325.5 million has been distributed to investors. Mr. Picard has filed 1,000 lawsuits seeking $100 billion from banks such as HSBC Holdings Plc and JPMorgan Chase & Co. The trustee has seen more than $28 billion of his claims tossed by district judges. B.G. BAZEMORE: Case Summary & 6 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: B.G. Bazemore Holdings, LLC 122 Pipemakers Circle, Suite 207 Pooler, GA 31322 Bankruptcy Case No.: 12-40268 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Southern District of Georgia (Savannah) Debtor's Counsel: C. James McCallar, Jr., Esq. MCCALLAR LAW FIRM P.O. Box 9026 Savannah, GA 31412 Tel: (912) 234-1215 Fax: (912) 236-7549 E-mail: mccallar@mccallarlawfirm.com Scheduled Assets: $1,228,000 Scheduled Liabilities: $1,638,238 The Company?s list of its six largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/gasb12-40268.pdf The petition was signed by Brent Bazemore, managing member. BILL JOHNSON'S: Some Family Members Want Case Converted to Ch. 7 ---------------------------------------------------------------- Bob McClay at KTAR.com reports that other members of Bill Johnson's family that owns Big Apple wanted the restaurant's to be in Chapter 7 bankruptcy. A hearing took place on Jan. 31, 2012, to determine the future of the restaurant, Mr. McClay notes. Phoenix, Arizona-based Bill Johnson's Restaurants, Inc., doing business as Bill Johnson's Big Apple Restaurants, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 11-22441) on Aug. 4, 2011. Shelton L. Freeman, Esq., at Deconcini Mcdonald Yetwin & Lacy PC, in Scottsdale, Arizona, serves as counsel to the Debtor. The Debtor estimated assets and debts of $1 million to $10 million. BLITZ USA: Committee Can Retain Lowenstein Sandler as Counsel ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted the Official Committee of Unsecured Creditor of Blitz U.S.A., Inc., et al., permission to retain Lowenstein Sandler PC as its bankruptcy counsel, effective as of Nov. 21, 2011. As reported in the TCR on Jan. 20, 2012, as bankruptcy counsel to the Committee, Lowenstein Sandler will: (a) provide legal advice as necessary with respect to the Committee's powers and duties as an official committee appointed under Section 1102 of the Bankruptcy Code; (b) assist the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' businesses, potential claims, and any other matters relevant to the case, to the sale of assets or to the formulation of a plan of reorganization; (c) participate in the formulation of a Plan; (d) provide legal advice as necessary with respect to any disclosure statement and Plan filed in the Chapter 11 cases and with respect to the processes for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; (e) prepare on behalf of the Committee, as necessary, applications, motions, complaints, answers, orders, agreements and other legal papers; (f) appear in Court to present necessary motions, applications, and pleadings, and otherwise protect the interests of those represented by the Committee; (g) assist the Committee in requesting the appointment of a trustee or examiner, should such action be necessary; and (h) perform other legal services as may be required and that are in the best interests of the Committee and creditors. Lowenstein Sandler's current hourly rates are: Members (principals) $435 - $895 Senior Counsel $390 - $660 Counsel $350 - $630 Associates $250 - $470 Paralegals and Assistants $145 - $245 The firm will also seek for reimbursement of expenses. To the best of the Committee's knowledge, Lowenstein Sandler is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Blitz USA Blitz U.S.A. Inc., is a Miami, Oklahoma-based manufacturer of plastic gasoline cans. The company, controlled by Kinderhook Capital Fund II LP, filed for bankruptcy protection to stanch a hemorrhage resulting from 36 product-liability lawsuits. Parent Blitz Acquisition Holdings, Inc., and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case Nos. 11-13602 thru 11-13607) on Nov. 9, 2011. The Hon. Peter J. Walsh presides over the case. Blitz USA disclosed $36,194,434 in assets and $41,428,577 in liabilities in its schedules. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, represents the Debtors in their restructuring efforts. The Debtors tapped Zolfo Cooper, LLC, as restructuring advisor; and Kurtzman Carson Consultants LLC serves as notice and claims agent. Lowenstein Sandler PC from Roseland, New Jersey, represents the Official Committee of Unsecured Creditors. The Chapter 11 case is financed with a $5 million secured loan from Bank of Oklahoma. Bank of Oklahoma, as DIP agent, is represented by Samuel S. Ory, Esq., at Frederic Dorwart Lawyers in Tulsa. BLITZ USA: Committee Has OK for FTI as Financial Advisor -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted the Official Committee of Unsecured Creditor of Blitz U.S.A., Inc., et al., permission to retain FTI Consulting, Inc., as its restructuring and financial advisor, nunc pro tunc to Nov. 29, 2011. As reported in the TCR on Jan. 19, 2012, FTI Consulting will, among other things: (a) assist with the assessment and monitoring of the Debtors' short-term cash flow, liquidity, pre-petition claim payments and operating results; (b) assist with the review of any postpetition financing; (c) assist in the review and monitoring of asset sale processes, including, but not limited to an assessment of the adequacy of the marketing process, completeness of any buyer lists, review and quantification of any bids; (d) assist the Committee in the review of financial related disclosures required by the Court, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs and Monthly Operating Reports; and (e) assist in the review of any proposed plans of reorganization and related disclosure statements. FTI Consulting will seek payment (i) for compensation on a fixed monthly basis of $75,000 per month for the first four months, in accordance with Section 328(a) of the Bankruptcy Code, and on an hourly basis thereafter, plus (ii) reimbursement of actual and necessary expenses. The firm's customary hourly rates are: Senior Managing Directors $780 - $895 Director/Managing Directors $560 - $745 Consultants/Senior Consultants $280 - $530 Administration/Associates $115 - $250 FTI Consulting assures the Committee that it does not represent any other entity having an adverse interest in connection with the Debtors' cases. About Blitz USA Blitz U.S.A. Inc., is a Miami, Oklahoma-based manufacturer of plastic gasoline cans. The company, controlled by Kinderhook Capital Fund II LP, filed for bankruptcy protection to stanch a hemorrhage resulting from 36 product-liability lawsuits. Parent Blitz Acquisition Holdings, Inc., and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case Nos. 11-13602 thru 11-13607) on Nov. 9, 2011. The Hon. Peter J. Walsh presides over the case. Blitz USA disclosed $36,194,434 in assets and $41,428,577 in liabilities in its schedules. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, represents the Debtors in their restructuring efforts. The Debtors tapped Zolfo Cooper, LLC, as restructuring advisor; and Kurtzman Carson Consultants LLC serves as notice and claims agent. Lowenstein Sandler PC from Roseland, New Jersey, represents the Official Committee of Unsecured Creditors. The Chapter 11 case is financed with a $5 million secured loan from Bank of Oklahoma. Bank of Oklahoma, as DIP agent, is represented by Samuel S. Ory, Esq., at Frederic Dorwart Lawyers in Tulsa. BLITZ USA: Committee Can Retain Womble Carlyle as Co-Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has granted the Official Committee of Unsecured Creditor of Blitz U.S.A., Inc., et al., permission to retain Womble Carlyle Sandridge & Rice, LLP, as its co-counsel, effective as of Nov. 21, 2011. As reported in the TCR on Jan. 20, 2012, according to the Committee, Womble Carlyle will work with Lowenstein Sandler PC to avoid duplication of effort. Womble Carlyle will, among other things: (a) provide legal advice as necessary with respect to the Committee's powers and duties as an official committee appointed under Section 1102 of the Bankruptcy Code; (b) assist the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' businesses, potential claims, and any other matters relevant to the case, to the sale of assets or to the formulation of a plan of reorganization; (c) participate in the formulation of a Plan; (d) provide legal advice as necessary with respect to any disclosure statement and Plan filed in the Chapter 11 cases and with respect to the processes for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; (e) prepare on behalf of the Committee, as necessary, applications, motions, complaints, answers, orders, agreements and other legal papers; (f) appear in Court to present necessary motions, applications, and pleadings, and otherwise protect the interests of those represented by the Committee; (g) assist the Committee in requesting the appointment of a trustee or examiner, should such action be necessary; and (h) perform other legal services as may be required and that are in the best interests of the Committee and creditors. Womble Carlyle's current hourly rates are: Members $315 - $650 Of counsel $300 - $500 Associates $200 - $445 Senior Counsel $350 - $375 Counsel $250 - $430 Paralegals $100 - $270 The firm will also seek reimbursement of expenses. To the best of the Committee's knowledge, Womble Carlyle is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Blitz USA Blitz U.S.A. Inc., is a Miami, Oklahoma-based manufacturer of plastic gasoline cans. The company, controlled by Kinderhook Capital Fund II LP, filed for bankruptcy protection to stanch a hemorrhage resulting from 36 product-liability lawsuits. Parent Blitz Acquisition Holdings, Inc., and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case Nos. 11-13602 thru 11-13607) on Nov. 9, 2011. The Hon. Peter J. Walsh presides over the case. Blitz USA disclosed $36,194,434 in assets and $41,428,577 in liabilities in its schedules. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, represents the Debtors in their restructuring efforts. The Debtors tapped Zolfo Cooper, LLC, as restructuring advisor; and Kurtzman Carson Consultants LLC serves as notice and claims agent. Lowenstein Sandler PC from Roseland, New Jersey, represents the Official Committee of Unsecured Creditors. The Chapter 11 case is financed with a $5 million secured loan from Bank of Oklahoma. Bank of Oklahoma, as DIP agent, is represented by Samuel S. Ory, Esq., at Frederic Dorwart Lawyers in Tulsa. BLITZ USA: Can Employ Duckwall & Company as Auctioneer ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has granted Blitz U.S.A., Inc., et al., permission to employ Duckwall & Company, Inc., as auctioneer for sale of certain property. The Debtors are authorized to compensate Duckwall in accordance with the terms of the Auction agreement; provided, however, that any advertising expenses to be paid / reimbursed to the Auctioneer will be capped at $22,500. Prior to being paid / reimbursed any Advertising Expenses, the Auctioneer will provide the Debtors, the Official Committee of Unsecured Creditors and the Office of the United States Trustee with reasonable documentation in support of the Advertising Expenses. The Committee, the Office of the UST and the Debtors will have 5 business days to review the Expense Documentation provided by the Auctioneer. If a written objection is filed to the Expense Documentation during the Expense Objection Period, the Auctioneer will not be paid / reimbursed to the objected-to Advertising Expenses absent further order of the Court allowing the objected-to Advertising Expenses, agreement by the parties that the amounts may be paid or withdrawal of the objection. A copy of the order approving the employment of Duckwall & Compay as Auctioneer is available for free at: http://bankrupt.com/misc/blitzusa.doc177.pdf As reported in the TCR on Jan. 17, 2012, upon retention, the firm will, among other things: a. conduct an auction on or before Feb. 28, 2012 on-site at the Debtor's facility; b. offer the Assets for sale by piece or by lot, or offer some or all of the assets for sale on auctioneer's Web site; and c. determine and implement appropriate advertising to sell the assets prior to an auction to potential buyers. Pursuant to the Auction Agreement, Duckwall's compensation will consist of (i) a charge of a buyer's premium of 12% of the sale price of each asset sold that will be collected by Duckwall & Company directly from the successful bidder, in addition to the purchase price bid, and (ii) reimbursement from the sale proceeds for any advertising expenses incurred in connections with the auction. Dan Duckwall, President of Duckwall & Company, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Blitz USA Blitz U.S.A. Inc., is a Miami, Oklahoma-based manufacturer of plastic gasoline cans. The company, controlled by Kinderhook Capital Fund II LP, filed for bankruptcy protection to stanch a hemorrhage resulting from 36 product-liability lawsuits. Parent Blitz Acquisition Holdings, Inc., and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case Nos. 11-13602 thru 11-13607) on Nov. 9, 2011. The Hon. Peter J. Walsh presides over the case. Blitz USA disclosed $36,194,434 in assets and $41,428,577 in liabilities in its schedules. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, represents the Debtors in their restructuring efforts. The Debtors tapped Zolfo Cooper, LLC, as restructuring advisor; and Kurtzman Carson Consultants LLC serves as notice and claims agent. Lowenstein Sandler PC from Roseland, New Jersey, represents the Official Committee of Unsecured Creditors. The Chapter 11 case is financed with a $5 million secured loan from Bank of Oklahoma. Bank of Oklahoma, as DIP agent, is represented by Samuel S. Ory, Esq., at Frederic Dorwart Lawyers in Tulsa. BRIDGEPORT CITY: Moody's Affirms 'Ba1' Tax Debt Underlying Rating ----------------------------------------------------------------- Moody's Investors Service has affirmed the Ba1 underlying rating of the City of Bridgeport's (TX) general obligation limited tax debt affecting $11.9 million in Moody's rated debt. Concurrently, Moody's removes the outlook for possible downgrade. SUMMARY RATINGS RATIONALE The Bonds are payable from the levy and collection of a continuing, direct, annual ad valorem tax, within the limits prescribed by law, on all taxable property located within the City. The affirmation of the Ba1 rating reflects the city's narrow reserves, small tax base, and elevated debt burden. Removal of the outlook for possible downgrade reflects finalized restructuring of the city's $3.0 million obligation to Compass Bank. The following detailed credit discussion is an update from our recent report published 01 December 2011. STRENGTHS * New management team with one year of demonstrated cuts in expenditures CHALLENGES * Weak financial position and narrow reserve levels * Above average debt burden * Significant reliance on economically sensitive sales tax revenues WHAT COULD MAKE THE RATING GO UP: * Significant growth and diversification in assessed valuation * Establishment of structurally balanced operations significantly bolstering reserve position WHAT COULD MAKE THE RATING GO DOWN: * Further contraction of assessed valuation * Inability to produce structurally balanced operations prolonging narrow reserve position PRINCIPAL METHODOLOGY The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. BRIDGEPORT REDEVELOPMENT: Court Rejects 7th Amended Plan -------------------------------------------------------- Chief Bankruptcy Judge Lorraine Murphy Weil denied confirmation of Bridgeport Redevelopment Inc.'s Seventh Amended Plan of Reorganization, saying the "fair and equitable" requirement of 11 U.S.C. Section 1129(b)(2) has not been met. Secured creditor Manuel Moutinho, the trustee for the Mark IV Construction Company 401k Savings Plan, objects to the Plan. Specifically, the trustee objects to the Plan's treatment of his secured claim with respect to the Debtor's property at 375 Connors Lane, Stratford, Connecticut. As a result of the Debtor's bankruptcy, 11 U.S.C. Sec. 1111(b)(1)3 provided Mr. Moutinho with the option of having its deficiency treated as an unsecured claim (i.e., treated as if Mr. Moutinho had "recourse" against the Debtor). However, Mr. Moutinho exercised an election under Section 1111(b)(2) to forego the recourse offered under Section 1111(b)(1) in favor of having its entire allowed claim treated as an allowed secured claim. The Plan proposes to treat the Secured Claim in relevant part as follows: "If this class claims to be partially unsecured in an amount greater than $50,000 and this class claims to be fully secured and makes election under Sec. 1111(b), the property will be surrendered in full satisfaction and extinguishment of any debt, both unsecured and secured pursuant to mortgage dated March 29, 2006 in the principal amount of $690,000." The Court said the Debtor may amend the Plan. A copy of the Court's Feb. 7, 2012 Brief Memorandum and Order is available at http://is.gd/xU9mHffrom Leagle.com. Bridgeport Redevelopment Inc. filed a Chapter 11 petition (Bankr. D. Conn. Case No. 10-33102) on Oct. 14, 2010. It scheduled assets of $1,024,103 and debts of $3,984,577. The petition was signed by Richard Urban, president. The Debtor is represented by: Ira B. Charmoy, Esq. Michael A. Carbone, Esq. ZELDES NEEDLE & COOPER 1000 Lafayette Blvd P.O. Box 1740 Bridgeport, CT 06601 Tel: (203) 333-9441 Fax: (203) 333-1489 E-mail: icharmoy@znclaw.com mcarbone@znclaw.com Counsel for Manuel Moutinho, Mark IV Construction Company 401(k) Savings Plan Construction Company, Inc. and Manuel Moutinho, Trustee for the Mark IV, is: Charles J. Filardi, Jr., Esq. FILARDI LAW OFFICES LLC 65 Trumbull St. New Haven, CT 06510-1031 Tel: 203-562-8388 BROADBENT CO: Places Georgetown Plaza in Chapter 11 Bankruptcy -------------------------------------------------------------- The Indianapolis Star reports that Broadbent Co. has filed a Chapter 11 bankruptcy for Georgetown Plaza at 4825-4959 W. 38th St. in Indiana. The report relates that the 111,600-square-foot strip center, anchored by Uncle Bill's Pet Center, was valued at $3.07 million in the filing. The Indianapolis developer said it faces a breach of contract and foreclosure lawsuit over the property from lender U.S. Bank NA. Over the past two years, Broadbent has been in a fight with lenders over control of many of its retail projects. 3 Other Affiliates in Chapter 11 The Indianapolis Business Journal notes that another Broadbent subsidiary, Castleton Plaza LP, which owns the Castleton Plaza strip mall along East 82nd Street in Indianapolis, filed for Chapter 11 protection. Castleton Plaza disclosed assets of nearly $7.6 million, including more than $6.8 million in real property, says Mr. Olson. German American, a secured creditor, is seeking to foreclose on the Castleton property. It claims Castleton Plaza owes nearly $8.7 million on the balance of a $9.5 million loan made in August 2000, as well as $1.1 million in interest. Additional fees bring the total to $10.1 million. Castleton Plaza filed for Chapter 11 protection (Bankr. S.D. Ind. Case No. 11-01444) in Indianapolis, Indiana, on Feb. 16, 2011. Broadbent's White River Investments LP voluntarily filed for Chapter 11 protection (Bankr. S.D. Ind. Case No. 10-15018) on Oct. 4, 2010. The Company disclosed assets of $1.4 million and liabilities of $1.3 million. Broadbent's Greenwood Point LP, which owns the Greenwood Point shopping mall, located close to Greenwod Shoppes, filed for reorganization (Bankr. S.D. Ind. Case No. 10-00569) in January 2010. Greenwood Point estimated both assets and liabilities of between $1 million and $10 million. Paul T. Deignan, Esq., at Taft Stettinius & Hollister LLP, in Indianapolis, serves as counsel to the Debtors. BUFFETS INC: Tries to Skip $3MM Tax Bill, Calif. Tax Board Says --------------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that a California tax authority accused Buffets Restaurants Holdings Inc. on Thursday of attempting to skip out on a $3 million tax bill left over from the buffet chain's previous stint in Chapter 11. In a motion filed in Delaware bankruptcy court, the state's franchise tax board asked U.S. Bankruptcy Judge Mary F. Walrath to protect its claim by vacating a prior order allowing Buffets to pay $34 million in other tax obligations with proceeds from its debtor-in-possession loan, according to Law360. 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. CAESARS ENTERTAINMENT: Amends 1.8 Million Common Shares Offering ---------------------------------------------------------------- Caesars Entertainment Corporation filed with the U.S. Securities and Exchange Commission amendment no. 4 to Form S-1 registration statement relating to the Company's offering of 1,811,313 shares of common stock. Prior to this offering, there has been no public market for the Company's common stock. The initial public offering price of the Company's common stock is expected to be between $8.00 and $10.00 per share. The Company has applied to list its common stock on the Nasdaq Global Select Market under the symbol "CZR." The listing is subject to approval of the Company's application. The Company has granted to the underwriters a 30-day option to purchase up to 271,697 additional shares from the Company at the initial public offering price less underwriting discounts and commissions. A full-text copy of the amended prospectus is available at: http://is.gd/aE1m9B About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. The Company also reported a net loss of $471.30 million on $6.66 billion of net revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $629.30 million on $6.69 billion of net revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $28.86 billion in total assets, $27.62 billion in total liabilities, $36 million in redeemable non-controlling interests, and $1.20 billion total stockholders' equity. * * * Harrah's announced its re-branding to Caesar's on mid-November 2010. Harrah's carries 'Caa3' long term corporate family and probability of default ratings, with 'positive' outlook, from Moody's Investors Service. It has a 'B-' issuer credit rating, with 'stable' outlook, from Standard & Poor's. "The 'B-' corporate credit rating reflects Caesars' very weak credit measures and our belief that prospects for a meaningful rebound in net revenues and EBITDA in 2011 do not seem promising given the current economic outlook," said Standard & Poor's credit analyst Ben Bubeck in May 2011. "While several actions taken by management have positioned the company with a moderate covenant cushion and very limited debt maturities over the next few years, Caesars' capacity to continue to fund operational and capital spending needs and meet debt service obligations relies on meaningful growth in cash flow generation over the next few years." As reported by the TCR on March 3, 2011, Moody's Investors Service upgraded Caesars Entertainment's Corporate Family ratings and Probability of Default ratings to Caa2. CET's Caa2 Corporate Family Ratings reflect very high leverage, weak interest coverage, the company's debt financed growth strategy, and Moody's view that the company's current capital structure in unsustainable in the long-term. The ratings reflect Moody's expectation that gaming demand will rebound very slowly over the next several years. However, in the absence of a material de-leveraging transaction, Moody's do not expect the company's capital structure to improve materially over the next few years. Additionally, given CEC's weak credit profile, there is a possibility that the company could again pursue transactions that will result in impairment of debt holder claims as a means to improve its capital structure. CAPTAIN'S TABLE: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------------- Rick Daysog at the Sacramento Bee reports that Captain's Table Hotel LLC filed on Feb. 2, 2012, for Chapter 11 reorganization in U.S. Bankruptcy Court in Sacramento, California, listing debts of between $10 million and $50 million. The report says the Chapter 11 filing staved off a foreclosure sale that was scheduled on Feb. 3, 2012, by the hotel's lender, Pasadena-based One West Bank. Le Rivage had been under the management of a court-appointed receiver who was put in place after the hotel's developers defaulted on their bank loan in September 2010, the report notes. The report, citing court documents, relates that Captain's Table said it owed One West Bank $30 million. Hearn Construction of Vaca-ville, which is owed $404,862, was the second largest secured creditor. Captain's Table Hotel LLC owns and operates the Le Rivage Hotel. CB HOLDING: Court to Consider Plan Confirmation on Feb. 23 ---------------------------------------------------------- Judge Mary Walrath will convene a hearing on Feb. 23, 2012, at 2:00 p.m. prevailing Eastern Time to consider confirmation of CB Holding Corp., et al.'s Modified First Amended Joint Plan of Liquidation. Interested parties may file objections to the Plan until Feb. 17, at 4:00 p.m. Any Plan objections should be in writing and set forth the particular basis for the objection. The Debtors are authorized to file and serve Plan Supplements, including the Liquidating Trust Agreement, no later than Feb. 10. All ballots for the Plan must be received by the Claims Agent by Feb. 14. The latest version of the Plan and Disclosure Statement was filed on Jan. 4. The bankruptcy court approved the Amended Disclosure Statement as containing adequate information on Jan. 5. All objections to the Disclosure Statement not otherwise withdrawn, settled or resolved were overruled. The Debtors' Plan is basically a liquidation plan. The Amended Disclosure Statement specifies that on the Effective Date, the Plan Fund will be funded by a combination of funds aggregating $1,777,000 plus any budgeted amounts not paid prior to the Effective Date. The Amended Disclosure Statement further specifies that Class 1 Senior Creditor Claims has an estimated 20% to 23% recovery on their claims; and Class 4 General Unsecured Claims, aggregating $120 million, has an estimated .01% to 1.1% recovery on their claims. It is anticipated, the Amended Disclosure Statement reveals, that approximately $1,166,000 (not including any recoveries on account of Avoidance Actions) would be available for distribution to General Unsecured Creditors in the Debtors' cases, with approximately $482,000 of that amount not shared with the Prepetition Lenders on account of the Prepetition Lenders Deficiency Claims. Copies of the Amended Plan and Disclosure Statement as well as the redline versions of these documents are available for free at: http://bankrupt.com/misc/CBHOLDING_PlanDSJan4.pdf About CB Holding New York-based CB Holding Corp. operated 20 Charlie Brown's Steakhouse, 12 Bugaboo Creek Steak House, and seven The Office Beer Bar and Grill restaurants when it filed for bankruptcy protection. The Company closed 47 locations before filing for Chapter 11. CB Holding and its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-13683) on Nov. 17, 2010. After filing for Chapter 11, CB Holding sold 20 Charlie Brown's locations for $9.5 million. The 12 remaining Bugaboo Creek stores realized $10.05 million while the seven The Office Restaurants produced $4.675 million. Joel H. Leviton, Esq., Stephen J. Gordon, Esq., Richard A. Stieglitz Jr., Esq., and Maya Peleg, Esq., at Cahill Gordon & Reindel LLP, in New York; and Mark D. Collins, Esq., Christopher M. Samis, Esq., and Tyler D. Semmelman, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, assist the Debtors in their restructuring effort. The Garden City Group, Inc., is the Debtors' notice, claims and solicitation agent. Jeffrey N. Pomerantz, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles; and Bradford J. Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. CB Holding estimated its assets at $100 million to $500 million and debts at $50 million to $100 million. At the outset of the Chapter 11 case, the lenders were owed $70.2 million. CDC CORP: Gets $249MM Offer for Shares in Software Subsidiary ------------------------------------------------------------- Dow Jones' DBR Small Cap reports that CDC Corp. has found an investor to buy its CDC Software Corp. subsidiary, a proposed $249 million sale that would leave the holding company without its most valuable operating subsidiary but able to pay off the multimillion-dollar legal judgment that forced it into bankruptcy protection. As reported in the Troubled Company Reporter on Jan. 25, 2012, CDC Software Corp. is seeking to sell two of its subsidiaries, which account for 28% of its annual revenues, to investment firm Marlin Equity Partners for $60 million and has already executed a letter of intent. Hong Kong technology developer CDC Corp. on Jan. 17, 2012, sued one of its subsidiaries to block the acquisition of two companies by a private investment firm, arguing that the sale would cause CDC Corp. shareholders to "lose substantial value, perhaps irretrievably." About CDC Corp. Based in Atlanta, CDC Corp. (Nasdaq: CHINA) -- http://www.cdccorporation.net/-- is the parent company of CDC Software (Nasdaq: CDCS). CDC Software is based dually in Shanghai, China, and Atlanta and produces enterprise software applications, IT consulting services, outsourced applications development and IT staffing. The company's owners include Asia Pacific Online Ltd., Xinhua News Agency and Evolution Capital Management. CDC Corporation, doing business as Chinadotcom, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011. James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA, in Atlanta, Georgia, serves as counsel. Moelis & Company LLC serves as its financial advisor and investment banker. Marcus A. Watson at Finley Colmer and Company serves as chief restructuring officer. The Debtor estimated assets and debts at $100 million to $500 million as of the Chapter 11 filing. CELLFOR CORP: Georgia Court Recognizes Canadian Proceeding ---------------------------------------------------------- The Hon. James E. Massey of the U.S. Bankruptcy Court for the Northern District of Georgia has recognized the Canadian bankruptcy proceedings of CellFor Corp. as a foreign main proceeding. The Court also granted a permanent injunction prohibiting U.S. creditors of CellFor Inc. and CellFor Corp. from taking possession or exercising control of the Company's assets, except as authorized by The Bowra Group, Inc., the monitor appointed by a Canadian court to oversee the company. The Court related that there was no objection to the request for recognition of the proceeding commenced by the Company in the Supreme Court of British Columbia and the Petition satisfied the requirements of section 1515 of the Bankruptcy Code. About CellFor Corp. Atlanta, Georgia-based CellFor Corp. is a Delaware corporation formed for the purpose of contracting with U.S. nurseries at which seedlings and trees developed by CellFor Inc. -- or CellFor BC -- are grown and developed. The Company also serves as a U.S. sales and marketing office for CellFor BC. CellFor BC is a privately held company constituted under the laws of Canada, having its head office in Vancouver, British Columbia. CellFor BC is in the business of research, development and commercial sales of advanced technologies relating to the cloning and genetic modification of superior conifer seedlings for the forestry industry. The objective of CellFor BC was to select, produce and sell forestry seedlings that provided better growth rates, disease resistance and wood quality. CellFor Corp. is entirely funded by CellFor BC, its sole shareholder. The Bowra Group Inc. was appointed Dec. 15, 2011, by the Supreme Court of British Columbia, Vancouver Registry, as monitor for CellFor Corp. in connection with a proceeding under the Companies' Creditors Arrangement Act R.S.C. 1985, c. C-36. As the Company's foreign representative, Bowra Group then filed a petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 11-86263) on Dec. 20, 2011, seeking recognition of the Canadian proceedings. Judge Paul W. Bonapfel presides in the Chapter 15 case. The Chapter 15 petition estimated $1 million to $10 million in assets and debts for the Company. The Monitor may be reached at THE BOWRA GROUP INC., and Bowra Group is represented in the Chapter 15 case by: W. Neal McBrayer, Esq., William A. DuPre, IV, Esq., Paul M. Alexander, Esq., and Michael A. Coots, Jr., Esq. at Miller & Martin PLLC. CHESAPEAKE ENERGY: S&P Changes Outlook to Negative on Weak Prices ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Oklahoma City-based Chesapeake Energy Corp., and on two related entities--Chesapeake Oilfield Operating LLC and Chesapeake Midstream Partners L.P. The outlooks on these three entities were revised to negative from stable. The ratings on Chesapeake reflect the company's satisfactory business position as the second-largest producer of natural gas in the U.S. (on a net basis) and as a rapidly-growing producer of oil. The rating also reflects the company's "aggressive" financial risk profile. "Chesapeake has been responsible for 30% of natural gas production growth in the U.S. over the past five years, and the company now accounts for approximately 9% of U.S. production. Yet, while advances in hydraulic fracturing and horizontal drilling techniques used to exploit shale reserves have facilitated Chesapeake's growth, the use of these techniques on an industrywide basis has contributed to significant excess supply (exacerbating the effect of a mild winter), depressing prices. Thus, the NYMEX Henry Hub spot price is currently a very low $2.53 per million British thermal units (mmBTU), compared to $4.33 one year ago. Under our most recent price deck, we assume an average price of $3.00 per mmBTU in 2012 and $3.25 in 2013 in assessing the earnings and cash flow prospects of natural gas producers," S&P said. "We believe the likelihood of persisting weak natural gas prices erodes the value of Chesapeake's massive sunk investment in gas- related operations. In response to changing market conditions, Chesapeake, like other North American exploration and production (E&P) companies, is increasing its emphasis on liquids (crude oil and natural gas liquids), pricing of which has been robust. Chesapeake has given guidance that it expects liquids production to account for 25% of its total production in 2012 and 30% in 2013, up from an estimated 16% in 2011. At current prices, liquids would account for approximately 60% of Chesapeake's revenues during the period 2012-2013, compared with an estimated 30% in 2011," S&P said. "The rating depends on Chesapeake's demonstration of further progress in expanding its liquids-related reserves and production," said Standard & Poor's credit analyst Scott Sprinzen. "The rating also depends on Chesapeake's ability to fund what will likely be a very large gap over the next two years between its operating cash flow and capital expenditures (including leasehold investments), while avoiding an increase in financial leverage." "We view maintenance of adjusted debt to EBITDA of less than 4.0x as the threshold for the company to keep its current rating," S&P said. CHESAPEAKE OILFIELD: S&P Also Revises Outlook to Negative --------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on U.S.- based exploration and production company Chesapeake Energy to negative as the company's operating cash flow is suffering from depressed natural gas prices and S&P believes this will increase the extent of its near-term free cash flow deficit. "Based on this outlook revision for Chesapeake Energy, we are similarly affirming the corporate credit rating and revising the outlook to negative on Chesapeake Oilfield," S&P said. "The ratings on Chesapeake Oilfield reflect the company's high level of business integration with and ownership by Chesapeake Energy. Although there is no formal guarantee of debt service by parent Chesapeake Energy, we believe a high level of support is implicit, given the strategic importance of Chesapeake Oilfield to Chesapeake Energy's oil and natural gas development plans, along with Chesapeake Energy's significant investment to date, 100% ownership, management control, and shared name. Also, a service agreement between the two entities stipulates the parent's guaranteed minimum utilization of Chesapeake Oilfield. Consequently, our rating on Chesapeake Oilfield is equal to the rating on Chesapeake Energy at 'BB+' (two notches above Chesapeake Oilfield's stand-alone credit profile), and any changes in the ratings on Chesapeake Energy will likely cause the ratings on Chesapeake Oilfield to change in lock-step," S&P said. "Our stand alone credit profile (SACP) on Chesapeake Oilfield is 'bb-', reflecting our assessment of the company's 'weak' business risk profile and 'aggressive' financial risk profile, as our criteria define the terms. In accordance with our criteria, our SACP incorporates the company's close business relationship with Chesapeake Energy, but assumes no extraordinary support. Chesapeake Oilfield's business risk profile reflects its 10-year operating history (as a division within Chesapeake Energy), its position as one of the top North American land drillers, and the revenue visibility provided by having a multiyear services agreement with Chesapeake Energy. Limited customer diversity partly offset these strengths, as Chesapeake Energy accounts for well over 90% of Chesapeake Oilfield's revenues and this will likely remain the case," S&P said. "Although Chesapeake Energy has recently announced a $2.2 billion reduction in its targeted dry gas drilling expenditures in 2012, these funds will most likely be reallocated to liquids-related drilling, and therefore should not meaningfully reduce its total planned exploration and development capital. However, even if Chesapeake Energy elects to rein in capital expenditures, we would expect it to lay down third-party rigs and cut third-party oilfield services first, while continuing to use Chesapeake Oilfield's rigs and services," S&P said. CHINA TEL GROUP: Enters Into Consulting Agreement with NGSN ----------------------------------------------------------- VelaTel Global Communications, Inc., formerly known as China Tel Group, Inc., through its wholly owned subsidiary Gulfstream Capital Partners Limited, entered into an Exclusive Consulting and Technical Service Agreement with New Generation Special Technology Communications Co., Ltd. The Parties previously entered into a Business Cooperation Agreement on Oct. 21, 2011. The Business Agreement contemplates the Parties will set up an offshore joint venture, which will then set up a wholly foreign owned enterprise in the People's Republic of China to provide services to a subsidiary company of NGSN for certain telecom business that will be authorized by NGSN. Since WFOE and NGSN's Subsidiary are in the process of formation, the Parties enter into the Agreement to expedite the progress of cooperation, with the expectation that NGSN and Gulfstream will be replaced by NGSN's Subsidiary and WFOE after their respective formation and that the terms of the Agreement will be carried out by NGSN's Subsidiary and WFOE. Service fees will be in amounts mutually agreed. Unless earlier terminated or extended, the initial term of the Agreement is fifteen years from the Effective Date. Unless either Party sends a written notice of non-extension prior to expiration, the Agreement will be automatically renewed for consecutive additional terms of five years. The grounds for early termination are prevention of performance due to a force majeure for a period of six months or more, or insolvency or bankruptcy of either party which would restrict the ability of that Party to conduct its business. In the event of termination, the amount of all Service Fees already accrued will be paid within 30 days of demand. The Company will provide proof of funds for US$500,000 within 30 days of the Effective Date, and will pay as needed from those funds the amount required as registered capital for WFOE, with the first injection paid within five business days of completion of WFOE's registration to do business. The Company also commits to invest $18 million within twelve months of NGSN obtaining radio frequency spectrum licenses in 3.5 or 1.8 GHz spectrum as CAPEX and OPEX for WFOE. The actual investment intensity and schedule will comply with the Business Plan that will be jointly prepared by NGSN's Subsidiary and WFOE. A full-text copy of the Agreement is available for free at: http://is.gd/399UYd About China Tel Based in San Diego, California, and Shenzhen, China, China Tel Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/-- provides high speed wireless broadband and telecommunications infrastructure engineering and construction services. Through its controlled subsidiaries, the Company provides fixed telephony, conventional long distance, high-speed wireless broadband and telecommunications infrastructure engineering and construction services. ChinaTel is presently building, operating and deploying networks in Asia and South America: a 3.5GHz wireless broadband system in 29 cities across the People's Republic of China with and for CECT-Chinacomm Communications Co., Ltd., a PRC company that holds a license to build the high speed wireless broadband system; and a 2.5GHz wireless broadband system in cities across Peru with and for Perusat, S.A., a Peruvian company that holds a license to build high speed wireless broadband systems. Since the Company's inception until June 30, 2011, it has incurred accumulated losses of approximately $242.36 million. The Company expects to continue to incur net losses for the foreseeable future. The Company's independent accountants have expressed substantial doubt about the Company's ability to continue as a going concern in their audit report, dated April 15, 2011, for the period ended Dec. 31, 2010. As reported by the TCR on April 21, 2011, Mendoza Berger & Company, LLP, in Irvine, California, expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The independent auditors noted that the Company has incurred a net loss of $56,041,182 for the year ended Dec. 31, 2009, cumulative losses of $165,361,145 since inception, a negative working capital of $68,760,057, and a stockholders' deficit of $63,213,793. The Company reported a net loss of $66,623,130 on $955,311 of revenue for the year ended Dec. 31, 2010, compared with a net loss of $56,065,029 on $657,876 of revenue during the prior year. The Company also reported a net loss of $17.97 million on $488,476 of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $38.22 million on $729,701 of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $11.57 million in total assets, $22.22 million in total liabilities and a $10.64 million total stockholders' deficit. CHRISTIAN BROTHERS: Committee Wants Examiner to Manage Sale ----------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of The Christian Brothers' Institute and Christian Brothers of Ireland, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York to order the appointment of an examiner in the Chapter 11 cases. The Committee proposes that the examiner be given the authority to: 1. retain professionals to advise and assist in the sale of real "salable property", including counsel, brokers, and surveyors; 2. transfer title to the Salable Property to any party pursuant to Court order; 3. obtain any records of the Debtors to assist in the sale of the Salable Property; 4. access the Salable Property during business hours and upon 24 hours' notice, subject to the rights of any third party occupying the property if such party is not affiliated with the Debtors; and 5. report on the value of the salable property and any sale thereof. The Committee relates that the Debtors' primary scheduled assets consist of twenty parcels of real property, which comprise 97% of the estates' non-insurance assets. The Committee adds that the Debtors must sell their real property to satisfy creditors' claims. The Committee explains that Debtors have failed to fulfill their fiduciary duty to maximize the value of their primary assets for the benefit of creditors and are disregarding the additional harm they will inflict upon the sex abuse survivors by delaying their distributions. They have sold one property and hired brokers to sell three very minor properties. The Committee is concerned that instead of maximizing value through a properly designed sales process, the Debtors will end up liquidating their real property at fire-sale prices and thereby diminish creditors' recoveries in these cases. The Committee set a March 1, 2012 hearing at 10:00 a.m., on the requested appointment of an examiner. Objections, if any, are due Feb. 23, at 5:00 p.m. About The Christian Brothers' Institute The Christian Brothers' Institute and The Christian Brothers of Ireland filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 11-22820 and 11-22821) on April 28, 2011. Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, serves as the Debtors' bankruptcy counsel. The Christian Brothers' Institute disclosed assets of $63,418,267 and $8,484,853 in liabilities. CBOI estimated its assets at $500,000 to $1 million and debts at $1 million to $10 million. CIRCUS AND ELDORADO: Moody's Rates Note Offering at '(P)Caa1' ------------------------------------------------------------- Moody's Investors Service placed Circus and Eldorado Joint Venture's ratings under review direction uncertain following the company's announcement that it is planning on refinancing its existing $143 million senior secured mortgage notes due March 1, 2012 with $120 million second lien notes due 2020, cash on hand and $10 million equity contribution from its parent companies. At the same time, Moody's assigned a provisional (P)Caa1 rating to Circus and Eldorado's proposed note offering. The provisional ratings are subject to closure of the transaction as proposed, and Moody's review of final documentation. Upon completion of the transaction, the provisional ratings will be removed and debt instruments will be rated Caa1. Ratings placed on review direction uncertain (LGD assessments subject to change): Corporate Family Rating at Caa3 Probability of Default Rating at Caa3 $143 million senior secured mortgage notes due 2012 at Caa3 Rating assigned: $120 million proposed second lien notes due 2020 at (P)Caa1 (LGD 4, 56%) RATINGS RATIONALE The uncertain review status considers that if the proposed transaction does not close, Moody's believes there is a strong possibility that Circus and Eldorado will default -- either through a transaction that is deemed a distressed exchange or through a bankruptcy filing -- as the company's existing mortgage notes mature in less than 30 days, on March 1, 2012. At the same time, if the transaction does close as proposed, Circus and Eldorado's Corporate Family and Probability of Default ratings would likely be upgraded two notches to Caa1. The upgrade would reflect the relaxed maturity profile and modest reduction in leverage following the refinancing. Pro forma debt/EBITDA is expected to be around 6.0 times and EBIT/interest approximately 0.5 times, from 7.1 times and 0.4 times at September 30, 2011. The Caa1 rating assigned to the proposed $120 million second lien notes assumes the transaction closes as proposed and ultimately results in a decision by Moody's to upgrade Circus and Eldorado's Corporate Family Rating to Caa1. The proposed second lien notes will represent the majority of the company's pro forma debt capital structure, and as a result, would be rated the same as the company's CFR. The only other piece of debt in the company's capital structure is expected to be a $5 million first lien revolver (which can be increased to $10 million if additional commitments are received). The principal methodology used in rating Circus and Eldorado was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Circus & Eldorado Joint Venture, a 50/50 joint venture between Eldorado Limited Liability Company and Galleon, Inc., owns and operates the Silver Legacy Resort Casino in Reno, Nevada. The company generates annual net revenues of approximately $120 million. CIRCUS AND ELDORADO: S&P Assigns Prelim. 'B-' Rating to Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned Circus and Eldorado Joint Venture's (CEJV) proposed $120 million senior secured notes its preliminary 'B-' issue-level rating. "We also assigned this debt our preliminary recovery rating of '3', indicating our expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default," S&P said. "The company plans to use proceeds from the proposed notes, a portion of excess cash on the balance sheet and a proposed $10 million equity contribution, to repay its existing indebtedness. In conjunction with the transaction, the company also plans to enter into a new senior secured credit facility with borrowing capacity of up to $5 million (unrated). Borrowing capacity may be increased to $10 million if additional commitments are received. Our preliminary ratings are subject to our review of final documentation," S&P said. "Our corporate credit rating on the company remains 'CCC-' and we revised our CreditWatch implications to developing from negative," S&P said. "The CreditWatch Developing listing reflects the downside risk given near-term refinancing needs, but also reflects the upside potential should the company successfully execute the proposed transaction," said Standard & Poor's rating analyst Michael Halchak. "CEJV has less than one month to maturity of its existing approximately $143 million mortgage notes. Based on our cash flow expectations for 2012 and beyond, and incorporating the likelihood of higher interest costs given current market conditions, we believe CEJV would find it challenging to generate sufficient cash flow to support fixed charges under a refinanced capital structure containing the full current debt burden. Further, while cash balances are sizable and a portion could be used to reduce the amount of debt CEJV would need in a recapitalization, we do not believe this potential excess cash fully mitigates the refinancing risk," S&P said. "However, we believe the proposed transaction, which, in addition to the use of excess cash balances, also includes a $10 million equity contribution, increases the probability of a successful refinancing. Even incorporating the potential for a higher interest rate on the proposed notes than the current notes carry, under our performance expectations, we believe CEJV would generate sufficient cash from operations to support the proposed capital structure. Therefore, in the event of a successful close of the proposed transaction, we expect to raise our issuer credit rating to 'B-', with a stable rating outlook," S&P said. "We expect a low- to mid-single-digit decline in net revenue and EBITDA for CEJV in 2012, because we expect the company to maintain or slightly increase its market share while the Reno gaming market continues to gradually decline. Under this performance expectation, pro forma for the proposed transaction, leverage would be in the low-6x area at the end of 2012 and coverage would remain in the low- to mid-1x area. We believe CEJV will be cash flow positive in 2012," S&P said. "Over the longer term, we expect a modest increase in EBITDA in 2013 and 2014 as compared with 2012. We believe CEJV should benefit from increased visitation, because Reno is holding two major bowling tournaments (CEJV has traditionally attracted customers from those tournaments, which we expect to continue in future years) in both those years -- The USBC Open Tournament and The USBC Women's Tournament -- compared with 2012, when Reno will only host The USBC Women's Tournament," S&P said. "CEJV is a joint venture of affiliates of MGM Resorts International and Eldorado Resorts LLC. CEJV owns and operates a single property, the Silver Legacy Resort Casino in Reno. Reno's gaming revenues remain historically weak because of both increased competition from Native American casinos in Northern California over the past several years and economic weakness in more recent years. Gaming revenues, as reported by the Nevada Gaming Control Board, totaled roughly $562 million in 2010, compared with $754 million in 2007, a compound annual decline of approximately 7%. Through November 2011, gaming revenues in Reno declined about 5% from the comparable period last year," S&P said. "We will continue monitoring CEJV's progress toward addressing its upcoming debt maturity to resolve the CreditWatch. Absent a successful refinancing by March 1, 2012, we would lower our rating to 'D'. Additionally, if CEJV moves forward with a restructuring plan that would result in any debtholders being offered less than what we deem as full and timely payment under our ratings criteria, we also expect to lower our rating to 'D'," S&P said. "If CEJV can successfully execute the proposed transaction, we would raise the corporate credit rating to 'B-' as, based on our performance expectations, we believe CEJV would generate sufficient cash flow to support fixed charges under the proposed capital structure," S&P said. CLARE AT WATER: Can Employ Deloitte FAS as Restructuring Advisor ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois has granted The Clare at Water Tower permission to employ Deloitte Financial Advisory Services LLP as its restructuring advisor, retroactive to Nov. 14, 2011. As reported in the TCR on Jan. 6, 2012, Deloitte FAS will, among others: (a) advise and assist the Debtor in connection with its identification, evaluation, development, and implementation of restructuring strategies and tactics; (b) advise and assist the Debtor in its gaining an understanding of the business and financial impact of various available strategic restructuring alternatives, including evaluation of funding needs (e.g. debtor- inpossession financing sizing model); (c) advise and assist the Debtor in connection with its communications and negotiations with other parties, including, but not limited to, secured creditors, customers, suppliers, and other parties in interest; (d) advise and assist the Debtor in its financial restructuring process, including its implementation of appropriate accounting, financial reporting and operational preparations in advance of any bankruptcy proceeding; and (e) advise and assist the Debtor in its identification, evaluation and negotiation of debtor in possession financing. In addition to the financial advisory services, the Debtor requests Court approval for Deloitte FAS to provide the following additional services pursuant to the terms and conditions set forth in the Engagement Letter: (1) advise and assist the Debtor's management with its post- petition management of cash and cash flow reporting to the DIP Lender and prepetition stakeholders; (2) advise and assist Debtor's management, Debtor's legal counsel and Debtor's claims and noticing agent in preparation of the required Schedules of Assets and Liabilities, Statement of Financial Affairs and Monthly Operating Reports; and (3) advise and assist Debtor's management, Debtor's legal counsel and Debtor's investment banking advisors in responding to third-party due diligence requests, including, inter alia, potential asset sales. Deloitte FAS intends to charge for its professional services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date the services are rendered and seek reimbursement of actual and necessary out-of-pocket expenses. The positions and current hourly rates of the Deloitte FAS personnel currently expected to have primary responsibility for providing services to the Debtor are: Partners/Principals/Directors $495 to $595 Senior Managers $465 Managers $365 Senior Associates/Associates $260 Paraprofessionals $125 Louis E. Robichaux IV, Principal of Deloitte Financial Advisory Services LLP, attests that the firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About The Clare at Water Tower The Clare at Water Tower is an upscale 334-unit high-rise continuing-care retirement community in Chicago, Illinois. The project is only 42% occupied because the target population either hasn't been able to sell homes or lacks sufficient cash to make required deposits as the result declining investments following the recession. The facility is a 53-story building on land rented from Loyola University of Chicago. The facility is managed and developed by a unit of the Franciscan Sisters of Chicago, who invested more than $14 million. The project opened in December 2008. Residents must make partially refundable deposits ranging from $263,000 to $1.2 million. Monthly fees are an additional $2,700 to $5,500. The Clare filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 11-46151) on Nov. 14, 2011, after defaulting on $229 million in tax-exempt bond financing used to build the project. Judge Susan Pierson Sonderby presides over the case. Matthew M. Murphy, Esq., at DLA Piper LLP, serves as the Debtor's counsel. Houlihan Lokey Capital, Inc., as its investment banker and financial advisor. Epiq Bankruptcy Solutions serves as claims and noticing agent. In its petition, the Debtor estimated $100 million to $500 million in assets and debts. The petition was signed by Judy Amiano, president. CLARE AT WATER: Panel Can Retain FTI Consulting as Fin'l Advisor ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois has granted the Official Committee of Unsecured Creditors of The Clare at Water Tower permission to retain FTI Consulting, Inc., as financial advisor, retroactive to Dec. 9, 2011. As reported in the TCR on Jan. 16, 2012, upon retention, FTI Consulting will, among others: a. assist with the assessment and monitoring of the Debtor's short term cash flow, liquidity, and operating results; b. assist in the review of the terms of the DIP financing and use of cash collateral; and c. assist in the review of the terms of retention of the Debtor's advisor. Martin L. Cohen attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm will charge the Debtor's estates based on the hourly rates of its professionals: Personnel Rates --------- ----- Senior Managing Directors $780-$895 Directors/Managing Directors $560-$745 Consultants/Senior Consultants $280-$530 Administration/Paraprofessional $115-$230 About The Clare at Water Tower The Clare at Water Tower is an upscale 334-unit high-rise continuing-care retirement community in Chicago, Illinois. The project is only 42% occupied because the target population either hasn't been able to sell homes or lacks sufficient cash to make required deposits as the result declining investments following the recession. The facility is a 53-story building on land rented from Loyola University of Chicago. The facility is managed and developed by a unit of the Franciscan Sisters of Chicago, who invested more than $14 million. The project opened in December 2008. Residents must make partially refundable deposits ranging from $263,000 to $1.2 million. Monthly fees are an additional $2,700 to $5,500. The Clare filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 11-46151) on Nov. 14, 2011, after defaulting on $229 million in tax-exempt bond financing used to build the project. Judge Susan Pierson Sonderby presides over the case. Matthew M. Murphy, Esq., at DLA Piper LLP, serves as the Debtor's counsel. Houlihan Lokey Capital, Inc., as its investment banker and financial advisor. Epiq Bankruptcy Solutions serves as claims and noticing agent. In its petition, the Debtor estimated $100 million to $500 million in assets and debts. The petition was signed by Judy Amiano, president. COMMUNITY TOWERS: CIBC & U.S. Trustee Balk at Lack of Disclosures ----------------------------------------------------------------- CIBC, Inc., complains that the Disclosure Statement for the Joint Plan of Reorganization filed by Debtors Community Towers I, II, III and IV, LLC has "two fundamental problems". CIBC says that the first is that parts of it read like a complaint rather than a presentation of facts. The other is that the rest of it contains very little hard information that would enable a creditor to make an informed decision whether to support the Plan. CIBC is represented by: Adam A. Lewis, Esq. Kristin A. Hiensch, Esq. MORRISON & FOERSTER LLP 425 Market Street San Francisco, California 94105-2482 Tel: (415) 268-7000 Fax: (415) 268-7522 E-mail: ALewis@mofo.com KHiensch@mofo.com August B. Landis, Acting U.S. Trustee for the Northern District of California, also objects, citing that the Disclosure Statement does not contain adequate information as for creditors to make an informed decision about whether to vote for the plan. Emily S. Keller, Esq., representing the U.S. Trustee, states that it is not clear how much is owed or will be paid to Class 6 general unsecured creditors. Ms. Keller notes that it appears from the language in the Disclosure Statement that Mr. and Mrs. Feece's insider unsecured debt (Class 7) could be paid in full before other general unsecured creditors were paid in full. The U.S. Trustee also notes that the attached budget does not appear to accurately reflect payments and balances over the course of the plan. The Chapter 11 Plan Community Towers I, LLC and its debtor affiliates submitted to the U.S. Bankruptcy Court for the Northern District of California a proposed Joint Plan of Reorganization and Disclosure Statement on Dec. 23, 2011. As reported in the Troubled Company Reporter on Jan. 10, 2012, the key features of the Plan include: -- profitable operation of the Debtors' 305,000 sq. ft. office complex located at 111 West Saint John Street and 111 North Market Street, San Jose, California; -- satisfaction or disallowance of claims against the Debtors; -- success in pursuing an action against CIBC, Inc., the Debtors' lender, and the objection to the claims filed by CIBC; and -- assumption of executory contracts and unexpired leases. Pursuant to the Plan, the Reorganized Debtors will continue to lease units in the Office Complex Property and will use cash on hand and cash generated from business operations to perform its obligations under the Plan. The Debtors have projected conservative growth in lease revenue in the business plan through the Plan term. The Plan classifies 8 classes of claims against the Debtors: * The Class 1 Allowed Secured Claim of the Santa Clara County Tax Collector will be paid in full when due. * The Class 2 Allowed Secured Claim of CIBC is dependent on the resolution of the CIBC Action and the objection to the claim filed by CIBC. The Debtors have scheduled a CIBC claim for $38.9 million, while CIBC filed a secured claim for $34.1 million and an unsecured claim for $6 million. The Plan provides that CIBC will retain all liens, interests and other encumbrances affecting property of the Debtors granted in favour of CIBC prior to the Effective Date to the extent of the Allowed Secured CIBC Claim. The principal amount plus the allowed accrued interest of the Allowed Secured Claim of CIBC will be paid over 10 years from the Plan Effective Date. * Class 3 Allowed Priority Claims will be allowed in full. * Class 4 Pre-paid Rent Claims and Class 5 Lease Deposit Claims will receive, on the Effective Date, a credit in an amount equal to the allowed claim to use in the normal course of business; provided that if a Class 5 holder is entitled to a refund of any deposit pursuant to the terms of the Tenant's Lease Agreement, that refund will be paid in 12 monthly instalments. * Class 6 Allowed General Unsecured Claims will be paid in full, plus interest, in 12 monthly installments. * The Class 7 Allowed General Unsecured Claims of John and Rosalie Feece, totalling $6.6 million, will be paid over 10 years from the Effective Date with interest. * Class 8 Interests in the Debtors will remain unaltered. On and after the Plan Effective Date, John L. Fleece will serve as the Reorganized Debtors' chief executive officer. He will also manage the Reorganized Debtors' and will serve as disbursing agent. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/COMMUNITYTOWERS_DiscStmDec23.PDF About Community Towers I LLC Community Towers I LLC is a real estate investment company. Community Towers I LLC and various affiliates -- Community Towers II, LLC, Community Towers III, LLC, Community Towers IV, LLC -- filed a Chapter 11 petition (Bankr. N.D. Calif. Lead Case No. 11-58944) on Sept. 26, 2011, in San Jose, California. John Walshe Murray, Esq., at the Law Offices of Murray and Murray, in Cupertino, California, serves as counsel to the Debtor. Community Towers I disclosed $51,939,720 in assets and $39,479,784 in liabilities as of the Chapter 11 filing. CONVERTED ORGANICS: Has 419.9 Million Outstanding Common Shares --------------------------------------------------------------- Converted Organics Inc., as previously disclosed on Jan. 12, 2012, issued a senior secured convertible note, in exchange for the senior secured convertible note issued on Nov. 2, 2011, in the aggregate original principal amount of $3,474,797, which had $2,456,595 of principal outstanding on Jan. 12, 2012, immediately prior to the exchange, for a senior secured convertible note in the aggregate original principal amount of $2,456,595, as well as additional consideration. The terms of the Note are substantially identical to the terms of the Original Note. As of Feb. 6, 2012, the principal amount of the Note has declined to $2,091,403. From Jan. 31, 2012, until Feb. 6, 2012, a total of $93,941 in principal had been converted into 77 million shares of common stock. Since the issuance of the Original Note, a total of $1,758,597 in principal had been converted into 405 million shares of common stock. The Note holder is an accredited investor and the shares of common stock were issued in reliance on Section 4(2) under the Securities Act of 1933, as amended. As of Feb. 6, 2012, the Company had 419,948,403 shares of common stock outstanding. About Converted Organics Boston, Mass.-based Converted Organics Inc. utilizes innovative clean technologies to establish and operate environmentally friendly businesses. Converted Organics currently operates in three business areas, namely organic fertilizer, industrial wastewater treatment and vertical farming. The Company reported a net loss of $8.9 million on $2.8 million of revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $31.6 million on $2.8 million of revenues for the same period last year. The Company's balance sheet at Sept. 30, 2011, showed $17.2 million in total assets, $11.9 million in total liabilities, and stockholders' equity of $5.3 million. As reported in the TCR on April 7, 2011, CCR LLP, in Glastonbury, Connecticut, expressed substantial doubt about Converted Organics' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2010. The independent auditors noted that the Company has an accumulated deficit at Dec. 31, 2010, and has suffered significant net losses and negative cash flows from operations. CYBEX INTERNATIONAL: Reaches Pact in Barnhard Liability Suit ------------------------------------------------------------ Cybex International, Inc., has reached a settlement in the product liability litigation, Barnhard v. Cybex International, Inc. Pursuant to the settlement, Cybex will pay to the plaintiff, net of insurance, approximately $19,500,000, of which approximately $18,500,000 will be paid at the consummation of the settlement with the balance paid over seven years. As part of the settlement, Cybex will be released of all further liability with respect to the litigation, which will be dismissed with prejudice. Cybex will satisfy its cash obligation through available cash, its existing line of credit and additional financing, which it is in the process of arranging with its principal bank. The settlement is subject to standard closing conditions, including the execution of a definitive settlement agreement by Cybex, the plaintiff and the third party defendant. Cybex anticipates that all conditions will be satisfied and funds disbursed within the next 30 days. As previously reported, Cybex currently is subject to possible de- listing from the Nasdaq Stock Market due to its failure to comply with the Nasdaq requirements for a minimum stockholders' equity of $10,000,000, a minimum bid price for its common stock of $1.00 per share and a minimum market value of publicly held shares of $5,000,000. Cybex is analyzing the impact the settlement will have on its financial statements. However, looking forward, Cybex is confident that, once the settlement is reflected in the Company's financial statements, its stockholders' equity will exceed the $10,000,000 minimum required by Nasdaq. Cybex Chairman and CEO John Aglialoro states, "The positive financial impact of this settlement will be reflected in our Q4 results. As we move past this lawsuit, Cybex remains a healthy business and a leader in the fitness industry. We are confident of our future as we move forward with our Cybex team." Cybex anticipates announcing 2011 results on or around Feb. 16, 2012. About Cybex International Medway, Mass.-based Cybex International, Inc. (NASDAQ: CYBI) -- http://www.cybexintl.com/--is a manufacturer of exercise equipment and develops, manufactures and markets strength and cardiovascular fitness equipment products for the commercial and, to a lesser extent, consumer markets. The net loss was $454,000 on $97.1 million of net sales for the nine months ended Sept. 24, 2011, compared with a net loss of $1.1 million on $83.0 million of net sales for the nine months ended Sept. 25, 2010. The Company's balance sheet at Sept. 24, 2011, showed $87.8 million in total assets, $103.0 million in total liabilities, and a stockholders' deficit of $15.2 million. As reported in the TCR on April 8, 2011, KPMG LLP, in Pittsburgh, Pa., expressed substantial doubt about Cybex International's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2010. The independent auditors noted that a December 2010 jury verdict in a product liability suit apportions a significant amount of liability to the Company. "The Company does not have the resources to satisfy a judgment in this matter that has not been substantially reduced from the jury verdict, which raises substantial doubt about the Company's ability to continue as a going concern." CYBEX INTERNATIONAL: Grace & White Discloses 8.6% Equity Stake -------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on Feb. 4, 2012, Grace & White, Inc., disclosed that it beneficially owns 1,470,376 shares of common stock of Cybex International, Inc., representing 8.59% of the shares outstanding. As previously reported by the TCR on Jan. 31, 2003, Grace & White disclosed beneficial ownership of 940,100 shares. A full-text copy of the amended filing is available for free at http://is.gd/Ps2T9s About Cybex International Medway, Mass.-based Cybex International, Inc. (NASDAQ: CYBI) -- http://www.cybexintl.com/--is a manufacturer of exercise equipment and develops, manufactures and markets strength and cardiovascular fitness equipment products for the commercial and, to a lesser extent, consumer markets. The net loss was $454,000 on $97.1 million of net sales for the nine months ended Sept. 24, 2011, compared with a net loss of $1.1 million on $83.0 million of net sales for the nine months ended Sept. 25, 2010. The Company's balance sheet at Sept. 24, 2011, showed $87.8 million in total assets, $103.0 million in total liabilities, and a stockholders' deficit of $15.2 million. As reported in the TCR on April 8, 2011, KPMG LLP, in Pittsburgh, Pa., expressed substantial doubt about Cybex International's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2010. The independent auditors noted that a December 2010 jury verdict in a product liability suit apportions a significant amount of liability to the Company. "The Company does not have the resources to satisfy a judgment in this matter that has not been substantially reduced from the jury verdict, which raises substantial doubt about the Company's ability to continue as a going concern." DAVID 6: Case Summary & 7 Largest Unsecured Creditors ----------------------------------------------------- Debtor: The David 6 Family Ltd. Partnership fka Daoud Family Ltd. Partnership c/o Lynn M. Brimer 300 E Long Lake Road, Suite 200 Bloomfield Hills, MI 48301 Bankruptcy Case No.: 12-42333 Chapter 11 Petition Date: February 2, 2012 Court: U.S. Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Walter Shapero Debtor's Counsel: Matthew P. Taunt, Esq. CHARLES J. TAUNT & ASSOCIATES, PLLC 700 East Maple Road, Second Floor Birmingham, MI 48009 Tel: (248) 644-7800 E-mail: mtaunt@tauntlaw.com Scheduled Assets: $1,550,223 Scheduled Liabilities: $302,990 The Company's list of its seven largest unsecured creditors is available for free at http://bankrupt.com/misc/mieb12-42333.pdf The petition was signed by Tarik Daoud, general partner. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Susie Auto Sales, LLC 11-65273 10/13/11 DOE MOUNTAIN INVESTMENTS: Creditors File Joint Plan of Liquidation ------------------------------------------------------------------ Creditors C5-MFB Properties LLC and Billy L. Amick has filed a joint plan of liquidation for Doe Mountain Investments, LLC, and Doe Mountain Development Group, Inc., dated Jan. 20, 2012. Under the joint plan of liquidation, administrative claims, priority tax claims and priority non-tax claims are unimpaired and will be paid on the effective date or when the claims become allowed. The classes and treatment of claims against Doe Mountain Investments are: A. Class 1 (Claims of C5-MFB) will be paid in full on the latter of the closing date or the effective date. C5-MFB will retain its lien securing the allowed secured claims until all distributions have been made. The deficiency claim of C5-MFB is waived. B. Class 4 (Unsecured claims) will receive cash on the later of the closing date, or the effective date, or the claim becomes allowed. C. Class 5 (Claims of Equity Interests) will receive their pro rata share of the proceeds of the purchase price allocated to Doe Investments after payment of unclassified claims, C5-MFB claims and unsecured claims. Classes 2 and 3 and intentionally omitted under the plan for Doe Investments. The classes and treatment of claims against Doe Mountain Development are: A. Class 1 (Claims of C5-MFB) will be paid in full on the latter of the closing date or the effective date. C5-MFB will retain its lien securing the allowed secured claims until all distributions have been made. The deficiency claim of C5-MFB is waived. B. Class 2 (Claims of Amick) will be paid the settlement payment in full on the later of the closing date and the effective date. Amick will retain its lien securing the allowed secured claims until all distributions have been made. The deficiency claim of Amick is waived. C. Class 3 (Secured Claim of Clear Creek Construction) will receive $96,395.45 in full satisfaction of the claim on the later of the closing date and the effective date. Clear Creek will retain its lien securing the allowed secured claims until all distributions have been made. The deficiency claim of Clear Creek is waived. D. Class 4 (Unsecured claims) will receive cash will on the later of the closing date, or the effective date, or the claim becomes allowed. E. Class 5 (Claims of Equity Interests) will receive their pro rata share of the proceeds of the purchase price allocated to Doe Investments after payment of unclassified claims, C5-MFB claims and unsecured claims. C5-MFB Properties LLC is represented by: D. Allen Grumbine, Esq. WOMBLE CARLYLE SANDRIDGE & RICE LLP 550 South Main St., Suite 400 Greenville, S.C. 29603 Billy L. Amick is represented by: John A. Walker Jr. Walker & Walker P.C. Knoxville, Tennessee 37901 A copy of the Plan of Liquidation is represented by: http://bankrupt.com/misc/DOE_MOUNTAIN_ds.pdf About Doe Mountain Investments Doe Mountain Investments LLC of Greenville, South Carolina, filed for Chapter 11 bankruptcy (Bankr. D.S.C. Lead Case No. 11-05275) on Aug. 24, 2011. Randy A. Skinner, Esq., at Skinner Law Firm, LLC, serves as the Debtors' counsel. Doe Mountain Investments estimated assets at $10 million to $50 million and debts at $1 million to $10 million. Doe Mountain Investments' affiliate, Doe Mountain Development Group, Inc., filed separate Chapter 11 petitions on the same day. Doe Mountain Development posted assets of $22,001,249 and debts of $6,595,473. DOWLING COLLEGE: Moody's Confirms Caa1 Rating on Two Bond Series ---------------------------------------------------------------- Moody's Investors Service has confirmed the Caa1 rating on Dowling College's Series 1996 and 2002 bonds. The Series 2002 bonds were issued through the Town of Brookhaven Industrial Development Agency, and the Series 1996 bonds were issued through the Suffolk County Industrial Development Agency. The outlook is negative. SUMMARY RATING RATIONALE: The Caa1 rating is based on a declining enrollments, low balance sheet reserves relative to debt and operations and thin operating margins, including heavy reliance on unusually large gifts from a board member in FY 2010 and 2011 in order to balance operations. The negative outlook reflects our expectation that the College's operations will remain challenged, especially in the near term, driven by fall 2011 enrollment decline. CHALLENGES *Challenged market position evidenced by a trend of enrollment declines and weak freshman selectivity (ratio of number of admitted students to number of applications received) and matriculation rates (ratio of number of enrolled freshmen to number of admitted students). In fall 2011, Dowling enrolled 3,377 full-time equivalent (FTE) students, 15% below the fall 2010 level, at its two campuses on the southern shore of Long Island, NY. Dowling's weak freshmen selectivity (fall 2011: 78.5%) and matriculation levels (fall 2011: 18.5%) further highlight the significant amount of competition from both other local private and public universities. *Thin liquidity position with expendable financial resources covering debt by 0.13 times and operating expenses by 0.11 times in FY 2011. *Weak operating performance with consistent reliance on $2 million line of credit and on unusually high level of unrestricted gifts from the board ($4 million in both FY 2010 and FY 2011). *Undiversified revenue base with student charges accounting for the largest portion of the operating revenues (about 90% in FY 2011, excluding the $4 million gift, student charges would have represented 94% of operating revenue). STRENGTHS *Large enrollment base of 3,377 full-time equivalent students (FTE) in fall 2011 and diversified program offerings including degrees in arts, sciences, business administration, and education. *Trend of growth in net tuition per student. In FY 2011, the College generated $15,785 of net tuition per student, a 7% increase over FY 2010. Outlook The negative outlook reflects our view that operations will remain challenged in the near-term as the College responds to the enrollment declines in a competitive market environment. The negative outlook also incorporates the consistently heavy reliance on the operating line of credit and on the contributions from the board for operating cash requirements. WHAT COULD MAKE THE RATING GO UP A rating upgrade is highly unlikely in the intermediate term. In the long term, significant growth in liquidity, coupled with strengthening of operating performance and stabilization of enrollment . WHAT COULD MAKE THE RATING GO DOWN The rating could be downgraded in the event that the College does not demonstrate significant progress towards improving its student market position and at least stabilizing enrollment. In addition, borrowing without commensurate growth of financial resources, inadequate annual debt service coverage, and inability to achieve at least balanced operating performance, absent unusual levels of philanthropic support from the board, could result in a downgrade. PRINCIPAL METHODOLOGY USED The principal methodology used in this rating was U.S. Not-for- Profit Private and Public Higher Education published in August 2011. DOUGLAS PINES: Case Summary & 2 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Douglas Pines, LLC 4350 Valnorth Drive Valdosta, GA 31602 Bankruptcy Case No.: 12-70165 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Middle District of Georgia (Valdosta) Debtor's Counsel: William Orson Woodall, Esq. WOODALL AND WOODALL P.O. Box 3335 1003 Patterson Street Valdosta, GA 31604 Tel: (229) 247-1211 Fax: (229) 247-1636 E-mail: will@orsonwoodall.com Scheduled Assets: $1,343,152 Scheduled Liabilities: $1,682,593 The Company?s list of its two largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/gamb12-70165.pdf The petition was signed by James R. Hedgecock, president. EAST HARLEM: Feb. 27 Bar Date for Proofs of Claim Set ----------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has established Feb. 27, 2012, as the deadline for filing of proofs of claim in the Chapter 11 case of East Harlem Property Holdings, LP. About East Harlem East Harlem Property Holdings, LP, is a limited partnership formed in Delaware on March 13, 2007. The Debtor owns 100% of the limited liability company membership interests in 27 special purpose entities), which own, in the aggregate, approximately 1,200 residential units and 50 commercial units located within 47 buildings located in New York, New York. The Real Properties are primarily located in an area bounded by 100th Street to the south, 188th Street to the north, Pleasant Avenue to the east and Park Avenue to the west. The Debtor filed for Chapter 11 relief (Bankr. S.D.N.Y. Case No. 11-14368) on Sept. 15, 2011. Judge James M. Peck presides over the bankruptcy case. Joseph S. Maniscalco, Esq., and Jordan Pilevsky, Esq., at Lamonica Herbst & Maniscalco, LLP, in Wantagh, New York, represents the Debtor as counsel. In its schedules, the Debtor disclosed assets of $230,000,000 and liabilities of $27,807,999. The petition was signed by Linda Greenfield, vice president of Harlem Housing, LLC, sole and managing member of East Harlem GP, LLC, general partner. EAST HARLEM: Files Schedules of Assets and Liabilities ------------------------------------------------------ East Harlem Property Holdings, LP, filed with U.S. Bankruptcy Court the Southern District of New York its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $230,000,000 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $27,561,856 E. Creditors Holding Unsecured Priority Claims $16,946 F. Creditors Holding Unsecured Non-priority Claims $229,197 ----------- ----------- TOTAL $230,000,000 $27,807,999 A copy of the schedules is available free at: http://bankrupt.com/misc/eastharlem.doc47.pdf About East Harlem East Harlem Property Holdings, LP, is a limited partnership formed in Delaware on March 13, 2007. The Debtor owns 100% of the limited liability company membership interests in 27 special purpose entities), which own, in the aggregate, approximately 1,200 residential units and 50 commercial units located within 47 buildings located in New York, New York. The Real Properties are primarily located in an area bounded by 100th Street to the south, 188th Street to the north, Pleasant Avenue to the east and Park Avenue to the west. The Debtor filed for Chapter 11 relief (Bankr. S.D.N.Y. Case No. 11-14368) on Sept. 15, 2011. Judge James M. Peck presides over the bankruptcy case. Joseph S. Maniscalco, Esq., and Jordan Pilevsky, Esq., at Lamonica Herbst & Maniscalco, LLP, in Wantagh, New York, represents the Debtor as counsel. In its petition, the Debtor listed assets of between $100 million and $500 million and debts of between $10 million and $50 million. The petition was signed by Linda Greenfield, vice president of Harlem Housing, LLC, sole and managing member of East Harlem GP, LLC, general partner. EL PASO: Case Summary & 4 Largest Unsecured Creditors ----------------------------------------------------- Debtor: El Paso Four Seasons Business Park, LLC 13141 Soleen Road El Paso, TX 79938 Bankruptcy Case No.: 12-30243 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Western District of Texas (El Paso) Judge: H. Christopher Mott Debtor's Counsel: Sidney J. Diamond, Esq. DIAMOND LAW 3800 N. Mesa B-3 El Paso, TX 79902 Tel: (915) 532-3327 Fax: (915) 532-3355 E-mail: usbc@sidneydiamond.com Scheduled Assets: $7,504,874 Scheduled Liabilities: $4,426,588 The Company?s list of its four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/txwb12-30243.pdf The petition was signed by Antonio Diaz, president. EMMIS COMMUNICATIONS: Corre Holds 2.4 Million Preferred Shares -------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Corre Opportunities Fund, LP, and its affiliates disclosed that, as of Jan. 31, 2012, they beneficially own 179,850 shares of 6.25% Series A Cumulative Convertible Preferred Stock and 438,834 Common Stock of Emmis Communications Corporation representing 7.42% and 1.27% of the shares outstanding. The percentages are based on 2,422,320 Preferred Shares outstanding as of Feb. 1, 2012, and 34,446,113 shares of Common Stock deemed outstanding pursuant to Rule 13d-3(d)(1) of the Securities Exchange Act of 1934 based on 34,407,279 shares outstanding as of Jan. 4, 2012. A full-text copy of the Amended Schedule 13D is available for free at http://is.gd/PidpSG 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. FAIRVIEW CROSSINGS: Case Summary & 4 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Fairview Crossings, LLC 1402 Twin Oaks Drive P.O. Box 606 Lakewood, NJ 08701-0606 Bankruptcy Case No.: 12-12613 Chapter 11 Petition Date: February 2, 2012 Court: U.S. Bankruptcy Court District of New Jersey (Trenton) Judge: Kathryn C. Ferguson Debtor's Counsel: Timothy P. Neumann, Esq. BROEGE, NEUMANN, FISCHER & SHAVER, LLC 25 Abe Voorhees Drive Manasquan, NJ 08736 Tel: (732) 223-8484 Fax: (732) 223-2416 E-mail: tneumann@bnfsbankruptcy.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb12-12613.pdf The petition was signed by Joseph Ehrman, managing member. FGIC CORP: Unsecured Creditors May Recover 6% Under Reorg. Plan --------------------------------------------------------------- FGIC Corporation filed a Plan of Reorganization and corresponding Disclosure Statement dated Feb. 3, 2012, with the U.S. Bankruptcy Court for the Southern District of New York. On Feb. 3, 2012, the Debtor and Financial Guaranty Insurance Company executed a Plan Sponsor Agreement pursuant to which Financial Guaranty will make an $11 million Cash contribution to the Debtor and in exchange, the Debtor will assume the Amended Tax Allocation Agreement. The New York State Department of Financial Services has authorized Financial Guaranty to enter into the Plan Sponsor Agreement. The Plan designates 8 classes of claims and interests in the Debtor. Under the Plan, on the Effective Date, the Company will fund distributions to Holders of Allowed Claims in Classes 1 to 6 with its existing Cash on hand plus the Contribution Amount less certain other amounts necessary to fund the Reorganized Debtor's anticipated reasonable operating expenses after the Effective Date. In addition, Holders of Allowed General Unsecured Claims in Class 6 will receive common stock in the Reorganized Debtor. The Debtor estimates that the Cash distributions to Holders of Allowed Class 6 Claims will represent a value between 5.5% and 6% of the face value of those Claims. Under the Original Plan, those Holders were only to receive about 2% to 3% of the face value of their claims. Pursuant to the Plan, the Debtor will also cancel debt obligations in the aggregate amount of approximately $391.5 million. Copies of the Plan, Disclosure Statement and Tax Allocation Agreement are available for free at: http://bankrupt.com/misc/FGICCorp_PlanDSFeb3.pdf A hearing will be convened on March 13, 2012, to consider approval of the Disclosure Statement. Objections are due by March 6. About FGIC Corp. New York-based FGIC Corporation is a privately held insurance holding company. FGIC Corp's main business interest lies in the holdings of the bond insurer Financial Guaranty Insurance Company -- http://www.fgic.com/-- and it depends on dividend payments by FGIC for sustaining its operations. FGIC had stopped paying dividends to parent FGIC Corp. since January 2008. FGIC Corp. filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-14215) on Aug. 3, 2010. The bond insurer subsidiary did not file for bankruptcy. Paul M. Basta, Esq., Brian S. Lennon, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to the Debtor. Garden City Group, Inc., is the Debtor's claims and noticing agent. The Official Committee of Unsecured Creditors tapped David Capucilli, Esq., at Morrison & Foerster LLP, in New York as its counsel. The Debtor disclosed $11,539,834 in assets and $391,555,568 in liabilities as of the Petition Date. FOCUS BRANDS: S&P Affirms 'B' Corporate; Outlook Now Stable ----------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Atlanta- based Focus Brands Inc. to stable from positive. "At the same time, we affirmed the 'B' corporate credit rating," S&P said. "We are also assigning a preliminary 'B' issue-level rating and a preliminary '3' recovery rating to the company's proposed first- lien credit facilities, and a preliminary 'CCC+' issue-level rating and a preliminary '6' recovery rating to the second-lien facility," S&P said. "The outlook revision reflects our opinion that the upgrade potential is deferred in the next several years because of the additional debt that the company is using to fund the dividend payment," said Standard & Poor's credit analyst Andy Sookram. He added, "As a result, we see the company maintaining leverage in the 6x area and funds from operations (FFO) to debt of about 7%, levels which we see as appropriate for the ratings, given our view of the business risk profile." "The stable outlook incorporates our view that while earnings will likely remain flat, the company will use a meaningful portion of cash flows for debt reduction, resulting in better credit protection in the next year. We see EBITDA margins remaining at about 41.8%, but leverage improving to 6.1x from 6.3x on a pro forma basis for the dividend payment. In addition, FFO to debt should improve slightly to 7% from 6.5x, still at thin levels," S&P said. "We could lower the ratings if EBITDA margins decline to about 38%, which could occur from a run-up in commodity costs or heightened competitive pressures, leading to leverage in the high- 6x area on a sustained basis. While we do not anticipate raising the ratings in the near term, the change could result from greater increases than we expect in same-store sales and more meaningful debt reduction, with leverage staying under 5.5x and FFO to debt in excess of 12% to 15%," S&P said. FOUNTAIN POWERBOATS: Trustee Wants Case Converted to Chapter 7 -------------------------------------------------------------- U.S. Trustee Donald Walton asked the bankruptcy court on Feb. 3, 2012, to dismiss Fountain Powerboats' Chapter 11 bankruptcy case or, in the alternative, appoint a Chapter 11 trustee. According to the report, the motion questioned whether Ronald Glass, who had been appointed the temporary receiver in North Carolina, had the jurisdiction to file the Chapter 11 petitions. The report says a North Carolina Business Court judge appointed Mr. Glass a temporary receiver last October in First Capital's case against Fountain Powerboats and other defendants. First Capital is seeking $61.04 million in damages from Fountain Powerboats and other entities for the "borrower defendants'" breach of loan agreements. The report relates that Mr. Walton, in court papers, said Mr. Glass did not seek or receive permission from the North Carolina court to file the Chapter 11 petitions, and after the petition was filed the North Carolina court said it no longer had jurisdiction over Fountain and the other entities in the case. Mr. Walton asked for an evidentiary hearing on his motion for Feb. 21, 2012, the day the court scheduled a hearing for another motion to dismiss the Chapter 11 petitions, which was filed by Joseph Wortley. As reported by the Troubled Company Reporter on Feb. 1, 2012, Fountain Powerboats filed for Chapter 11 bankruptcy protection, listing more than $53 million in liabilities and less than $50,000 in assets. Liberty Associates bought Fountain Powerboats from Reggie Fountain after it went bankrupt the first time in 2009. Fountain Powerboat Industries, Inc., Fountain Powerboats, Inc., Fountain Dealers' Factory Superstore, Inc., and Baja By Fountain, Inc., first filed separate Chapter 11 petitions (Bankr. E.D.N.C. Case Nos. 09-07132, 09-07133, 09-07134 and 09-07135) on Aug. 24, 2009. On Jan. 29, 2010, the Debtors and Liberty Associates L.C. filed their First Amended Joint Plan of Reorganization. On Feb. 11, 2010, the Court entered an order confirming the First Amended Joint Plan of Reorganization. FREDERICK'S OF HOLLYWOOD: NYSE Amex Accepts Plan of Compliance -------------------------------------------------------------- Frederick's of Hollywood Group Inc. disclosed that the NYSE Amex LLC has accepted the Company's plan to regain compliance with certain continued listing standards as set forth in Part 10 of the Exchange's Company Guide by May 30, 2013 and will continue to list the Company's common stock on the NYSE Amex during the extension period. As previously announced, on Nov. 30, 2011, the Company received a notice from the Exchange indicating that the Company was not in compliance with (a) Section 1003(a)(i) of the Company Guide, resulting from shareholders' equity at July 30, 2011 of less than $2 million and losses from continuing operations and/or net losses in two of its three most recent fiscal years and (b) Section 1003(a)(ii) of the Company Guide with shareholders' equity of less than $4 million and losses from continuing operations and/or net losses in three of its four most recent fiscal years. The Company was afforded the opportunity to submit a plan to regain compliance and on Jan. 6, 2012 presented its plan to the Exchange. On Feb. 3, 2012, the Exchange notified the Company that it had accepted the Company's plan of compliance and granted the Company an extension until May 30, 2013 to evidence compliance with Sections 1003(a)(i) and (ii) of the Company Guide. The Company will be subject to periodic review by the 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 Exchange initiating delisting proceedings pursuant to Section 1009 of the Company Guide. The Company's "FOH" trading symbol will continue to bear the extension ".BC" to denote non-compliance until the Company regains compliance with the Exchange's continued listing requirements. About Frederick's of Hollywood Frederick's of Hollywood Group Inc. -- http://www.fredericks.com/ -- through its subsidiaries, sells women's intimate apparel, swimwear and related products under its proprietary Frederick's of Hollywood? brand through 122 specialty retail stores, a world- famous catalog and an online shop. FRONTIER AIRLINES: Republic Prepares to Put Unit Up for Sale ------------------------------------------------------------ Dow Jones' Daily Bankruptcy Review reports that another airline is readying itself for sale, as Republic Airways Holdings Inc. prepares to make the pitch that its loss-making Frontier Airlines unit is a good investment. About Frontier Airlines Based in Denver, Colorado, Frontier Airlines -- http://www.frontierairlines.com/-- is the second-largest jet service carrier at Denver International Airport. Frontier Airlines Holdings, Inc. and its affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represented the Debtors in their restructuring efforts. Togul, Segal & Segal LLP was the Debtors' Conflicts Counsel, Faegre & Benson LLP was the Debtors' Special Counsel, and Kekst and Company was the Debtors' Communications Advisors. In June 2009, Republic Airways Holdings offered to acquire the Debtors' assets for $108 million. In July 2009, Southwest Airlines countered with a $113.6 million bid. In August 2009, Republic won the bidding, paying $109 million and assuming about $1 billion of debt and aircraft-lease obligations. In September 2009, the Bankruptcy Court confirmed the Company's Plan of Reorganization which was premised on the Republic deal. Republic closed the deal in October 2009. Frontier Airlines became a wholly owned subsidiary of Indianapolis-based Republic, along with Chautauqua Airlines, Lynx Aviation, Republic Airlines and Shuttle America. GALLUP CAMPER: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Gallup Camper Sales, Inc. 2702 E. Historic Highway 66 Gallup, NM 87301 Bankruptcy Case No.: 12-10376 Chapter 11 Petition Date: February 2, 2012 Court: U.S. Bankruptcy Court District of New Mexico (Albuquerque) Judge: Robert H. Jacobvitz Debtor's Counsel: P. Diane Webb, Esq. DIANE WEBB ATTORNEY AT LAW, P.C. P.O. Box 30456 Albuquerque, NM 87190-0456 Tel: (505) 243-0600 E-mail: diwebb@swcp.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its 10 largest unsecured creditors is available for free at: http://bankrupt.com/misc/nmb12-10376.pdf The petition was signed by George Pollock, president. GELT PROPERIES: Taps Evictions Unlimited as Landlord-Tenant Rep. ---------------------------------------------------------------- Gelt Properies, LLC, et al., ask the U.S. Bankruptcy Court for the Eastern District of Pennsylvania for permission to employ Evictions Unlimited as special counsel to represent the Debtors in the landlord-tenant matters. The hourly rates of the firm's personnel are: Legal Fees $350 Court Costs Price Varies Landlord-Tenant Officer $175 (if necessary) Court costs may vary based upon the amount owed, $83 if the amount owed is $2,000 or less, and $105 if the amount owed is between $2001 and $10,000 and $127 if the amount owed is over $10,000. f the tenant does not leave after court date, it is possible that the landlord-tanant officer may be called into to effectuate a lock-out of the tenant. If it is required, there will be an additional fee of $175 which includes sheriff fees of $130. To the best of the Debtors' knowledge, special counsel has no connection with any creditor or any party-in-interest or their respective attorneys in the case. About Gelt Properties Based in Huntington Valley, Pennsylvania, Gelt Properties, LLC, and affiliate Gelt Financial Corporation borrow money from traditional lenders and make loans to commercial borrowers. They also acquire and manage real estate. Gelt Properties and Gelt Financial filed for (Bankr. E.D. Pa. Case Nos. 11-15826 and 11- 15826) on July 25, 2011. Judge Magdeline D. Coleman presides over the cases. Albert A. Ciardi, III, Esq., Jennifer E. Cranston, Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., in Philadelphia, Pa., serve as the Debtors' bankruptcy counsel. The petitions were signed by Uri Shoham, the Debtors' chief financial officer. The Debtors' other professionals include: Eisenberg, Gold & Cettei P.C. as its special counsel to provide proper legal counsel to the Debtors with regard to defending against certain actions, Cohen and Forman as their special counsel to advise them upon all matters which may arise or which may be incident to the bankruptcy proceedings. Gelt Properties disclosed $4,727,090 in assets and $4,842,792 in liabilities as of the Chapter 11 filing. Its affiliate, Gelt Financial, has filed its schedules disclosing $20,340,725 in assets and $17,050,558 in liabilities as of the Chapter 11 filing. On Sept. 15, 2011, a committee of unsecured creditors was appointed. Schoff McCabe, P.C. represents the Committee. Craig Howe, CPA, and Howe, Keller & Hunter, P.C., serve as the Committee's accountants. GELT PROPERIES: Taps Dunne Wright as Maryland Property Manager -------------------------------------------------------------- Gelt Properies, LLC, et al., ask the U.S. Bankruptcy Court for the Eastern District of Pennsylvania for permission to employ Dunne Wright Services, LLC as property manager. The Debtors require the services of Dunne Wright to manage property located in (inner-city) Baltimore, Maryland at 4001 Main Street, Baltimore, Maryland, in relation to: a. collecting delinquent rents and eviction procedures; b. property improvements and maintenance; c. construction management; d. contracting of professional services; e. negotiating and executing all leases, extensions, renewals, or other contracts or agreement, on behalf of the Debtors; and f. other general function. Dunne Wright will perform management services for the Debtors with compensation of 8% of gross rental amount received on all leases or rental agreements with respect to the property. To the best of the Debtors' knowledge, Dunne Wright has no connection with any creditor or any party-in-interest or their respective attorneys in the case. About Gelt Properties Based in Huntington Valley, Pennsylvania, Gelt Properties, LLC, and affiliate Gelt Financial Corporation borrow money from traditional lenders and make loans to commercial borrowers. They also acquire and manage real estate. Gelt Properties and Gelt Financial filed for (Bankr. E.D. Pa. Case Nos. 11-15826 and 11- 15826) on July 25, 2011. Judge Magdeline D. Coleman presides over the cases. Albert A. Ciardi, III, Esq., Jennifer E. Cranston, Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., in Philadelphia, Pa., serve as the Debtors' bankruptcy counsel. The petitions were signed by Uri Shoham, the Debtors' chief financial officer. The Debtors' other professionals include: Eisenberg, Gold & Cettei P.C. as its special counsel to provide proper legal counsel to the Debtors with regard to defending against certain actions, Cohen and Forman as their special counsel to advise them upon all matters which may arise or which may be incident to the bankruptcy proceedings. Gelt Properties disclosed $4,727,090 in assets and $4,842,792 in liabilities as of the Chapter 11 filing. Its affiliate, Gelt Financial, has filed its schedules disclosing $20,340,725 in assets and $17,050,558 in liabilities as of the Chapter 11 filing. On Sept. 15, 2011, a committee of unsecured creditors was appointed. Schoff McCabe, P.C. represents the Committee. Craig Howe, CPA, and Howe, Keller & Hunter, P.C., serve as the Committee's accountants. GENCORP INC: Reports $500,000 Net Income in Fourth Quarter ---------------------------------------------------------- GenCorp Inc. reported net income of $500,000 on $252.20 million of net sales for the three months ended Nov. 30, 2011, compared with a net loss of $600,000 on $226.30 million of net sales for the same period during the prior year. The Company reported net income of $2.90 million on $918.10 million of net sales for the year ended Nov. 30, 2011, compared with net income of $6.80 million on $857.90 million of net sales during the prior year. GenCorp Inc.'s balance sheet as of Nov. 30, 2011, showed $939.50 million in total assets, $1.14 billion in total liabilities, $4.40 million in redeemable common stock, and a $211.60 million total shareholders' deficit. "We are very pleased to report continued improvement in our core operating results," said Scott J. Seymour, GenCorp Inc. President and CEO, and President, Aerojet - General Corporation. "We will remain focused in 2012 on delivering excellent performance to our customers, driving efficiencies across our operations, and creating value through the expansion of our business." A full-text copy of the press release is available for free at: http://is.gd/tp122e About GenCorp Inc. Rancho Cordova, Calif.-based GenCorp Inc. (NYSE: GY) -- http://www.GenCorp.com/-- is a manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the re-zoning, entitlement, sale, and leasing of the Company's excess real estate assets. * * * Standard & Poor's in February 2011 has raised its corporate credit rating on GenCorp Inc. to 'B' from 'B-'. S&P also raised its rating on the company's first-lien secured debt to 'BB-' from 'B+' and on the subordinated debt to 'CCC+' from 'CCC'. The recovery rating on the first-lien secured debt remains unchanged at '1', and the recovery rating on the subordinated debt remains unchanged at '6'. The outlook is stable. "We are raising its ratings on GenCorp by one notch to reflect the company's improved liquidity position," said Standard & Poor's credit analyst Lisa Jenkins. "The ratings on GenCorp reflect its highly leveraged capital structure, weak financial performance, limited diversity, and modest scale of operations compared with competitors. Offsetting these challenges to some extent is the company's good niche positions in aerospace propulsion and solid backlog. S&P characterize GenCorp Inc.'s business profile as weak and its financial profile as highly leveraged." As reported by the TCR on May 24, 2011, Moody's Investors Service upgraded the corporate family and probability of default ratings of GenCorp Inc. to B1 from B2. The upgrade reflects the Company's steady improvement to operating results, as a leading niche supplier of solid and liquid rocket propulsion systems to prime defense contractors. Operating margins have grown to above 11% (inclusive of Moody's standard adjustments) in the most recent twelve-month period, resulting from growth in defense programs that GenCorp supplies (THAAD, Aegis, PAC-3) and good cost controls. GenCorp's funded backlog has grown steadily over several years, and is now about 90% of sales. The level of backlog provides good forward revenue visibility and compares favorably with other defense suppliers. GENTIVA HEALTH: Expects to Breach Financial Covenants This Year --------------------------------------------------------------- Dow Jones' DBR Small Cap reports that Gentiva Health Services Inc. said it now expects the impact of an unfavorable Medicare ruling to push it out of compliance with its financial covenant ratios this year, a prediction it offered as it also reported its fourth- quarter profit slumped 71% from a year earlier. About Gentiva Health Gentiva Health Services, Inc. is the largest provider of home health and hospice services in the United States based on revenue. Total net revenues for the quarter ended Oct. 3, 2010, was $449.7 million, compared with $227.4 million in the 2010 third quarter. Loss from continuing operations was $479.7 million for the third quarter of 2011, compared with income of $8.1 million in the third quarter of 2010. * * * As reported in the Troubled Company Reporter on Jan. 31, 2012, Standard & Poor's Ratings Services said its 'B-' rating on Atlanta, Ga.-based home health provider Gentiva Health Service Inc. remains on CreditWatch, where it was initially placed with negative implications Nov. 3, 2011. GEORGES MARCIANO: Wins Another Victory in the Court of Appeal ------------------------------------------------------------- The co-founder of GuessJeans, Georges Marciano, has won another victory in his Quebec "iron arm" over the seizure of his assets and the recognition of the involuntary US bankruptcy declared against him without having the opportunity to present a defence. In a judgment rendered last Friday, the Quebec Court of Appeal acknowledged the businessman and the interested third parties' arguments and dismissed the demands of appellants (PricewaterhouseCoopers, American trustee David Gottlieb and former employees of Georges Marciano) to enforce major seizures carried out in Old Montreal in September 2011?while waiting for the Court of Appeal to pronounce itself on the judgment declaring them illegal. On December 8, the Honourable Justice Schrager, of the Superior Court of Quebec, deemed the seizures illegal (money, property, artworks, luxury cars, jewels, etc.) and cancelled them. The Court of Appeal did not uphold the appellants' arguments concerning the "urgency" of their requests and the fact that the cancellation of the seizures caused them an irreparable prejudice." On the contrary, we must note that many of the assets in question are hardly likely to evaporate" wrote the Court, in French, in its decision. PricewaterhouseCoopers has yet to reimburse the significant sums of money seized last September, despite having been ordered to do so on Dec. 8, 2011. US trustee David Gottlieb might also be convicted for contempt of court for his own refusal to abide by Justice Schrager's judgment. The US trustee now maintains that the Quebec courts have no jurisdiction to sentence him for contempt of court. This matter will be debated before Justice Schrager on February 15 at the Montreal courthouse. Review of the facts In 2009, Georges Marciano, now established in Old Montreal, was sentenced by an American court to pay moral and punitive damages of over $260 million to seven former employees, based solely on the proceedings he initiated against them, without having the opportunity to present a full defence. The Honorable Justice Schrager's decision specified that moral and punitive damages of over $260 million would be deemed excessive under Quebec and Canadian law. Even though the said judgments for damages are under appeal, the former employees obtained a US judgment in December 2010 to force Marciano into bankruptcy and took steps to have this judgment recognized in Canada in order to seize his assets. In September 2011, the Superior Court of Quebec authorized a drastic seizure of Georges Marciano's assets. The seizures, which were requested by the American trustee and PricewaterhouseCoopers, were granted in secret, through a special procedure where Mr.Marciano was neither present nor represented. On Dec. 8, 2011, Justice Schrager cancelled the rulings of September 2011 and declared the seizures illegal. In his decision, Justice Schrager ordered the US Trustee Gottlieb and PricewaterhouseCoopers to return all assets seized to Mr. Marciano and the third parties involved. According to Justice Schrager, the attorneys for the former employees, the US trustee and PricewaterhouseCoopers had not fully and adequately revealed the existence of essential facts, including pending appeals in the United States. About Georges Marciano Georges Marciano is the co-founder of the apparel company Guess?, Inc. and an investor in various companies and real estate ventures. Three of the five former employees of Mr. Marciano, who won a $370 million libel judgment against him in July 2009, filed an involuntary chapter 11 bankruptcy petition (Bankr. C.D. Calif. Case No. 09-39630) against the Guess? Inc. co-founder on Oct. 27 2009. Mr. Marciano challenged the involuntary petition for 14 months, and Judge Victoria S. Kaufman entered an order for relief against Mr. Marciano on Dec. 29, 2010. GETTY PETROLEUM: Committee Taps A&M as Financial Advisors --------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Getty Petroleum Marketing Inc., et al., asks the U.S. Bankruptcy Court for the Southern District of New York for permission to retain the consulting firm Alvarez & Marsal North America, LLC as its financial advisors. Alvarez & Marsal will be, among other things: a) assisting with the evaluation, analysis and investigation of avoidance actions, including fraudulent transfers relating to or involving LUKOIL Americas Corporation, LUKOIL North America LLC, and their respective affiliates and subsidiaries and any of the Debtors or their respective affiliates; b) assisting with a review of the Debtors' cost/benefit evaluations with respect to the assumption or rejection of executory contracts and unexpired leases; and c) assisting with a review of the business model, operations, liquidity situation, properties, assets and liabilities, financial condition and prospects of the Debtors. Under the terms upon which the Committee proposes: 1) A&M will apply to the Court for allowances of compensation and reimbursement of expenses for its financial advisory support services; 2) A&M will seek compensation on a fixed monthly basis of $75,000 per month during the pendency of these proceedings and a back end fee equal to 1% of the aggregate amount of all litigation recoveries by or on behalf of the Debtors or their estates that inure to the benefit the holders of unsecured claims; provided that the sum of the Monthly Fees and the Back End Fee will not exceed $2 million dollars, (unless the case exceeds 24 months, in which case said cap will not apply) plus reimbursement of actual and necessary expenses incurred by A&M. 3) On a monthly basis, A&M will provide a Monthly Fee Statement that lists only the hours expended at a summarized level, including the total number of hours worked by professional and the total number of hours spent by task category. Upon submission of the final fee application, A&M will provide an explanation of the type of work performed for each task category. The Debtors will have no obligation to indemnify A&M for any claim or expense that is either (i) judicially determined (the determination having become final) to have arisen primarily from A&M's bad faith, gross negligence or willful misconduct, or (ii) settled prior to a judicial determination as to A&M's bad faith, gross negligence or willful misconduct but determined by this Court To the best of the Committee's knowledge, A&M is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Getty Petroleum A remnant of J. Paul Getty's oil empire, Getty Petroleum Marketing markets gasolines, hydraulic fluids, and lubricating oils through a network of gas stations owned and operated by franchise holders. A former subsidiary of Russian oil giant LUKOIL, the company operates in the Mid-Atlantic and Northeastern US states. Getty Petroleum Marketing's primary asset is the more than 800 gas stations in the Mid-Atlantic states which are located on properties owned by Getty Realty. After scaling back the company's operations to cut debt, in 2011 LUKOIL sold Getty Petroleum Marketing to investment firm Cambridge Petroleum Holding for an undisclosed price. Getty Petroleum and three affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case Nos. 11-15606 to 11-15609) on Dec. 5, 2011. Judge Shelley C. Chapman presides over the case. John H. Bae, Esq., at Greenberg Traurig, LLP, serves as the Debtors' counsel. Getty Petroleum estimated $50 million to $100 million in assets and debts. The petition was signed by Bjorn Q. Aaserod, chief executive officer and chairman of the board. The Official Committee of Unsecured Creditors is represented by Wilmer Cutler Pickering Hale and Dorr LLP. GLOBAL AVIATION: Receives Approval of First Day Motions ------------------------------------------------------- Global Aviation Holdings Inc. received approval of all critical motions at its "first-day" hearing in the United States Bankruptcy Court for the Eastern District of New York (Brooklyn) presided over by the Honorable Chief Judge Carla E. Craig. Requests included covering its obligations to employees and customers, business operations, tax matters, cash management, fuel procurement and insurance. To ensure the Company continues to operate without interruption, the Court has approved all requests, including the Company's requests to access cash collateral and continue to use its current cash management systems, which will support the other approved requests including the continuation of existing employee salary and benefit programs and ongoing payments to vendors and suppliers. "The approval of our first day motions allows us to focus on our restructuring efforts," said Robert Binns, Chairman and Chief Executive Officer of Global. "Our hope is to move through this process as quickly and efficiently as possible. Approval of these first day motions is the foundation upon which we will build as we eliminate excess aircraft and reduce costs to compete effectively in today's marketplace," continued Binns. Global and certain of its affiliates commenced cases to reorganize under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Eastern District of New York (Brooklyn) on Feb. 5, 2012. The chapter 11 cases are being jointly administered under case number 12-40783 and are being presided over by the Honorable Chief Judge Carla E. Craig. About Global Aviation Global Aviation Holdings Inc., based in Peachtree City, Ga., is the parent company of North American Airlines and World Airways. Global is the largest commercial provider of charter air transportation for the U.S. military, and a major provider of worldwide commercial global passenger and cargo air transportation services. North American Airlines, founded in 1989 and based in Jamaica, N.Y., operates passenger charter flights using B757-200ER and B767-300ER aircraft. World Airways, founded in 1948 and based in Peachtree City, Ga., operates cargo and passenger charter flights using B747-400 and MD-11 aircraft. Global Aviation, along with affiliates, filed Chapter 11 petitions (Bankr. E.D.N.Y. Case No. 12-40783) on Feb. 5, 2012. Global's lead counsel in connection with the restructuring is Kirkland & Ellis LLP and its financial advisor is Rothschild. Kurtzman Carson Consultants LLC is the claims agent. The Debtors disclosed $589.8 million in assets and $493.2 million in liabilities as of Dec. 31, 2011 GLOBAL AVIATION: Moody's Cuts PDR to 'D', CFR Now 'Ca' ------------------------------------------------------ Moody's Investors Service downgraded the Probability of Default and Corporate Family ratings of Global Aviation Holdings, Inc. to D and Ca, respectively, upon the filing for bankruptcy in the Eastern District of New York by the company and certain of its subsidiaries, including its two main operating subsidiaries, World Airways and North American Airlines. Moody's also lowered its ratings on the company's $145 million of 14% senior secured notes due August, 2013 to Caa3 from Caa1. Moody's will withdraw all of its ratings assigned to GAH. Issuer: Global Aviation Holdings, Inc Downgrades: -- Probability of Default Rating, Downgraded to D from Caa3 -- Corporate Family Rating, Downgraded to Ca from Caa3 -- Senior Secured Regular Bond/Debenture Aug 15, 2013, Downgraded to Caa3 from Caa1: Loss Given Default Assessments: -- Senior Secured Regular Bond/Debenture Aug 15, 2013, a range of LGD2, 20 % from a range of LGD2, 21 % Outlook Actions: -- Changed To Stable From Rating Under Review RATINGS RATIONALE The company plans to use the bankruptcy process to achieve a competitive cost and debt capital structure. The combination of lower demand since the recent withdrawals or reductions of troops from Iraq and Afghanistan, lower rates from the Air Mobility Command and overcapacity in the market for commercial air freight have restricted the company's cash flow generation. GAH intends to utilize the reorganization process to achieve a lower labor cost structure and right-size its fleet of leased aircraft to its expected level of future demand. The principal methodology used in rating Global Aviation Holdings was the Global Business & Consumer Service Industry 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. Global Aviation Holdings, Inc. through its subsidiaries, World Airways, Inc. and North American Airlines, Inc., provides non- scheduled passenger and cargo air transportation services to the Department of Defense's Air Mobility Command, as well as commercial and charter air transportation. GLOBAL AVIATION: Bankruptcy Prompts S&P to Cut Corp. Rating to D ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating and issue rating on Global Aviation Holdings Inc.'s senior secured notes to 'D' from 'CCC-'. The ratings had been on CreditWatch, where they were initially placed with developing implications on Sept. 19, 2011. "We subsequently revised the CreditWatch implications to negative on Dec. 9, 2011, mainly based on our concerns about the company's liquidity," S&P said. "The recovery rating on the first-lien debt remains '3', indicating our expectation that lenders will receive meaningful (50%-70%) recovery in the event of a payment default," S&P said. "The 'D' ratings reflect Global's Chapter 11 bankruptcy filing on Feb. 5, 2012. In early December 2011 we downgraded Global to 'CCC- ' from 'CCC' and revised the CreditWatch implications to negative because of our concerns about the company's liquidity," said Standard & Poor's credit analyst Lisa Jenkins. "At the time, we said we believed the company could default, absent some type of liquidity-enhancing transaction." "Global has been experiencing significant earnings pressures over the past year. High debt leverage and substantial debt service requirements made Global especially vulnerable to this. Despite efforts to reduce costs, improve internal operating efficiencies, and address covenant issues, the company's liquidity position deteriorated significantly. At the time of our last rating action, we stated that the depressed state of commercial air cargo and the likelihood of reduced demand from the military could lead to a liquidity squeeze at the company, which had no bank lines and was totally dependent on internally generated cash flow for liquidity," S&P said. HAWKER BEECHCRAFT: Hires Kirkland & Ellis for Restructuring Advice ------------------------------------------------------------------ Jet maker Hawker Beechcraft Inc., on Tuesday said it has hired restructuring veteran Robert S. "Steve" Miller as its chief executive. Mike Spector, Erik Holm and Nathan Hodge, writing for The Wall Street Journal, report that people familiar with the matter said Hawker also has hired bankruptcy and restructuring lawyers at Kirkland & Ellis LLP. Based in Wichita, Kansas, Hawker doesn't plan to rush into a bankruptcy filing, a person familiar with the matter said, according to the report. A Hawker spokeswoman didn't immediately respond to a request for comment about the lawyers' hiring. Hawker Beechcraft is also being advised by Perella Weinberg Partners, the report notes. Mr. Miller is currently chairman of American International Group Inc. He has had a long career spanning the automotive, steel and waste-management industries, including stints at Delphi Corp. HCA INC: Holdings Posts $1.9 Billion Net Income in Fourth Quarter ----------------------------------------------------------------- HCA Holdings, Inc., reported net income attributable to HCA of $1.93 billion on $7.76 billion of revenue for the fourth quarter ended Dec. 31, 2011, compared with net income attributable to HCA of $283 million on $7.16 billion of revenue for the same period a year ago. The Company reported net income attributable to HCA of $2.46 billion on $29.68 billion of revenue for the year ended Dec. 31, 2011, compared with net income attributable to HCA Holdings, Inc., of $1.20 billion on $28.03 billion of revenue during the prior year. HCA Holdings' balance sheet as of Dec. 31, 2011, showed $26.89 billion in total assets, $33.91 billion in total liabilities, and a $7.01 billion in total deficit. "The Company had a strong performance in the quarter and for 2011, showing substantial growth in a number of key areas," said Richard M. Bracken, Chairman and Chief Executive Officer. "We saw continued and favorable growth in patient volumes, advancement in our clinical quality agenda, the acquisition of complementary assets in key markets and efficient operation of our facilities. We believe we are well positioned as we enter 2012." A full-text copy of the press release is available at: http://is.gd/vxN2Ii About HCA Inc. Headquartered in Nashville, Tennessee, HCA is the nation's largest acute care hospital company with 162 hospitals and 104 freestanding surgery centers (including eight hospitals and eight freestanding surgery centers that are accounted for using the equity method) as of Sept. 30, 2010. For the 12 months ended Sept. 30, 2010, the company recognized revenue in excess of $30 billion. * * * In May 2011, Moody's Investors Service upgraded the Corporate Family and Probability of Default Ratings of HCA Inc. (HCA) to B1 from B2. "The upgrade of HCA's rating reflects the considerable progress the company has made in improving financial metrics and managing the company's maturity profile since the November 2006 LBO," said Dean Diaz, a Moody's Senior Credit Officer. "While the funding of distributions to shareholders at the end of 2010 increased debt levels, the growth in EBITDA and debt repayment since the LBO have improved leverage metrics considerably from the high levels seen just after the company went private," continued Diaz. As reported by the Troubled Company Reporter on March 14, 2011, Moody's Investors Service commented that the completion of the IPO by HCA Holdings, Inc., has no immediate impact on the company's B2 Corporate Family Rating. The outlook for the ratings remains positive. While Moody's believes that the completion of the IPO is a credit positive since proceeds are expected to be used to repay outstanding debt, the estimated $2.6 billion of proceeds to the company won't meaningfully reduce HCA's $28.2 billion debt load. In the March 16, 2011, edition of the TCR, Fitch Ratings has upgraded its ratings for HCA Inc. and HCA Holdings Inc., including the companies' Issuer Default Ratings which were upgraded to 'B+' from 'B'. The Rating Outlook is revised to Stable from Positive. The ratings apply to approximately $28.2 billion in debt outstanding at Dec. 31, 2010. Fitch noted that HCA has made significant progress in reducing debt leverage since it was taken private in 2006 in a LBO which added $17 billion to the company's debt balance; at Dec. 31, 2006, immediately post the LBO, debt-to- EBITDA was 6.7x. Most of the reduction in debt leverage over the past four years was accomplished through growth in EBITDA, which Fitch calculates has expanded by $1.7 billion or 40% to $5.9 billion for 2010 versus $4.2 billion in 2006. Although the company did not undertake a significant organizational restructuring post the LBO, management has nevertheless been successful in growing EBITDA and significantly expanding discretionary free cash flow (FCF). Fitch believes this was accomplished through various operational initiatives, including expansion of profitable service lines and the divestiture of some under performing hospitals, as well as the generally resilient operating trend of the for-profit hospital industry during the recent economic recession despite the pressure of increased levels of uncompensated care and generally weak organic patient volume trends. HCA INC: Moody's Says 'B1' Rating Unaffected by Dividend Payment ---------------------------------------------------------------- Moody's Investors Service commented that HCA Inc.'s (HCA) announcement that it will pay a special dividend of $2.00 per share, or about $1.0 billion in aggregate, has a modest negative impact on the company's credit profile. That said, it has no immediate impact on the ratings of the company, including the B1 Corporate Family and Probability of Default Ratings. The principal methodology used in rating HCA was the Global Healthcare Service Provider Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Nashville, Tennessee, HCA is the nation's largest acute care hospital company with 163 hospitals owned and operated by its subsidiaries as of December 31, 2011. For the year ended December 31, 2011, the company recognized revenue in excess of $29 billion, net of the provision for doubtful accounts. HOSTESS BRANDS: Arkansas Court Stays Suit v. Interstate Brands -------------------------------------------------------------- District Judge J. Leon Holmes stayed the lawsuit, CORA HALVORSON, Plaintiff, v. INTERSTATE BRANDS CORPORATION, Defendant, No. 4:12CV00017 JLH (E.D. Ark.), pending resolution of or relief from IBC's bankruptcy proceeding, pursuant to a Feb. 2, 2012 Order available at http://is.gd/sPqvBufrom Leagle.com. Interstate Brands Corporation is represented by Russell A. Gunter, Esq. -- rgunter@cgwg.com -- at Cross, Gunter, Witherspoon & Galchus, P.C., in the lawsuit. 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. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. HOUGHTON INTERNATIONAL: S&P Affirms 'B' Corporate Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'B' corporate credit and issue-level ratings, on Valley Forge, Pa.-based Houghton International Inc. (Houghton). "At the same time, we revised our recovery rating on the company's debt to '3' from '4', indicating our expectation for a meaningful (50% to 70%) recovery in the event of a payment default. The outlook is stable," S&P said. "The ratings on Houghton reflect the company's participation in the highly competitive metalworking fluids industry, exposure to cyclical end markets, volatile raw material cost base, private equity ownership, and our expectation of highly leveraged financial measures, which include 2012 funds from operations (FFO) to total adjusted debt of roughly 10% to 12%," said Standard & Poor's credit analyst Seamus Ryan. "The company's leading market share position, the essential nature of its products, and good geographic and customer diversity partially offset these factors. We characterize Houghton's business risk profile as 'weak' and its financial risk profile as 'highly leveraged,'" S&P said. "The stable outlook reflects our expectation that Houghton will maintain profitability and generate sufficient cash flow to achieve FFO to total debt of about 12% over the next 12-18 months, despite somewhat weak demand," S&P said. "Based on our scenario forecasts, we could raise the ratings if revenues grow at a slightly faster pace than the economy, and if the company's gross margin increases by about 150 basis points. As a result, we would expect FFO to adjusted debt to approach 15% on a sustainable basis. Such a scenario could develop from better- than-expected economic conditions in Europe and North America, along with stable raw material costs and continued reduction in production costs. To consider a higher rating, we would also need further insight into the company's very aggressive financial policies, including future acquisition plans," S&P said. "While we consider this scenario less likely, we could lower the ratings if sustained deterioration in economic conditions in Europe and North America lead to volume and price declines such that revenue decreases by roughly 10% and gross margin decreases by more than 200 basis points. This could result in FFO to adjusted debt approaching 5%. We could also lower the ratings if Houghton's financial policy decisions result in increased debt leverage," S&P said. IMH FINANCIAL: Inks MOU with Unitholders in Delaware Class Action ----------------------------------------------------------------- IMH Financial Corporation reached a tentative settlement in principle to resolve all claims asserted by the plaintiffs in the putative class action lawsuit captioned In re IMH Secured Loan Fund Unitholders Litigation, pending in the Court of Chancery in the State of Delaware against IMH, certain affiliated and predecessor entities, and certain former and current officers and directors of IMH, other than the claims of one plaintiff. The tentative settlement in principle, memorialized in a Memorandum of Understanding, is subject to certain class certification conditions, confirmatory discovery and final court approval. The MOU contemplates a full release and settlement of all claims, other than the claims of the one non-settling plaintiff, against IMH and the other defendants in connection with the claims made in the Litigation. These are some of the key elements of the tentative settlement: * IMH will offer $20.0 million of 4% five-year subordinated notes to members of the Class in exchange for 2,493,765 shares of IMH common stock at an exchange rate of $8.02 per share * IMH will offer to Class members that are accredited investors $10.0 million of convertible notes with the same economic terms as the convertible notes previously issued to NWRA Ventures I, LLC * IMH will deposit $1.645 million in cash into a settlement escrow account (less $300,000 to be held in a reserve escrow account that is available for use by IMH to fund its defense costs for other unresolved litigation) which will be distributed (after payment of notice and administration costs and any amounts awarded by the Court for attorneys' fees and expense) to Class members in proportion to the number of IMH shares held by them as of June 23, 2010 * IMH will enact certain agreed upon corporate governance enhancements, including the appointment of two independent directors to the IMH board of directors upon satisfaction of certain conditions (but in no event prior to Dec. 31, 2012) and the establishment of a five-person investor advisory committee (which may not be dissolved until such time as IMH has established a seven-member board of directors with at least a majority of independent directors) * provides additional restrictions on the future sale or redemption of IMH common stock held by certain IMH executive officers * IMH has vigorously denied, and continues to vigorously deny, that it has committed any violation of law or engaged in any of the wrongful acts that were alleged in the Litigation, but believes it is in the best interests of IMH and its stockholders to eliminate the burden and expense of further litigation and to put the claims that were or could have been asserted to rest. There can be no assurance that the court will approve the tentative settlement in principle. Further, the judicial process to ultimately settle this action is estimated to take a minimum of six to nine months or longer. If not approved, the tentative settlement as outlined in the MOU may be terminated and IMH will continue to vigorously defend this action. About IMH Financial Scottsdale, Ariz.-based IMH Financial Corporation was formed from the conversion of IMH Secured Loan Fund, LLC, or the Fund, a Delaware limited liability company, on June 18, 2010. The conversion was effected following a consent solicitation process pursuant to which approval was obtained from a majority of the members of the Fund to effect the Conversion Transactions and involved (i) the conversion of the Fund from a Delaware limited liability company into a Delaware corporation named IMH Financial Corporation, and (ii) the acquisition by the Company of all of the outstanding shares of the manager of the Fund Investors Mortgage Holdings Inc., or the Manager, as well as all of the outstanding membership interests of a related entity, IMH Holdings LLC, or Holdings on June 18, 2010. The Company is a commercial real estate lender based in the southwest United States with over 12 years of experience in many facets of the real estate investment process, including origination, underwriting, documentation, servicing, construction, enforcement, development, marketing, and disposition. The Company focuses on a niche segment of the real estate market that it believes is underserved by community, regional and national banks: high yield, short-term, senior secured real estate mortgage loans. The intense level of underwriting analysis required in this segment necessitates personnel and expertise that many community banks lack, yet the requisite localized market knowledge of the underwriting process and the size of the loans the Company seeks often precludes the regional and community banks from efficiently entering this market. "Given the current state of the real estate and credit markets, we believe the realization of full recovery of the cost basis in our assets is unlikely to occur in a reasonable time frame and may not occur at all, and we may be required to liquidate portions of our assets for liquidity purposes at a price significantly below the initial cost basis or potentially below current carrying values. If we are not able to liquidate a sufficient portion of our assets or access credit under the credit facility currently under negotiation, there may be substantial doubt about our ability to continue as a going concern. Nevertheless, we believe that our cash and cash equivalents, coupled with liquidity derived from the credit facility currently under negotiation and the disposition of certain of the loans and real estate held for sale, will allow us to fund current operations over the next 12 months," the Company said in its Form 10-Q for the quarter ended Sept. 30, 2010. As reported by the TCR on April 20, 2011, BDO USA, LLP, in Phoenix, Arizona, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and is not currently generating sufficient cash flows to sustain operations The Company reported a net loss of $117.04 million on $3.75 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of $74.47 million on $22.52 million of total revenue during the prior year. The Company also reported a net loss of $25.24 million on $2.85 million of total revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $65.56 million on $2.78 million of total revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $249.51 million in total assets, $74.04 million in total liabilities, and $175.47 million in total stockholders' equity. INTERNATIONAL MEDIA: Taps Houlihan Lokey as Financial Advisor ------------------------------------------------------------- International Media Group Inc. et al., ask the U.S. Bankruptcy Court for the District of Delaware for authorization to employ Houlihan Lokey Capital, Inc., as financial advisor and investment banker for the Debtors, nunc pro tunc to the Petition Date. As financial advisor and investment banker for the Debtors, Houlihan Lokey will assist the Debtors in the formulation, evaluation, and implementation of a sale of substantially all of their assets. Specifically, Houlihan Lokey, will, among others: a) assist the Company in the development, preparation and distribution of selected information, including, without limitation, one or more disclosure documents, offering memoranda, confidential information memoranda and other materials in a effort to create interest in and to consummate any Transactions; b) solicit and evaluate indications of interest and proposals regarding any Transactions from current or potential equity investors, acquirers or strategic partners; and c) assist the Company with the development, structuring, negotiation and implementation of any Transactions, including participating as a non-binding representative of the Company in negotiations with creditors and other parties involved in any Transactions. Upon the closing of each Transaction, Houlihan Lokey will earn, and the Company will thereupon pay immediately and directly from the gross proceeds of the Transaction, as a cost of the Transaction, a cash fee based upon Aggregate Gross Consideration, calculated as follows: (a) for AGC up to $45 million, $450,000, plus (b) for AGC greater than $45 million, 1.0% of the AGC greater than $45 million. The firm will also receive reimbursement for reasonable out-of-pocket expenses in connection with the services provided. The Debtors also agree to indemnify and hold harmless Houlihan Lokey and its affiliates, and their respective past, present and future directors, officers, shareholders, partners, members, employees, agents, representatives, advisors, subcontractors, and controlling persons related to, arising out of, or in connection with the retention of Houlihan Lokey by the Debtors. To the best of the Debtors' knowledge, information, and belief, Houlihan Lokey is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About International Media Group International Media Group Inc. and its affiliates operate television station KSCI-TV (Channel 18) Long Beach, California; KUAN-LP (Channel 48) Poway, California; and KIKU-TV (Channel 19) Honolulu, Hawaii. KSCI, KUAN and KIKU focus primarily on the large Asian markets of Southern California and Hawaii and offer programming in six (6) main languages -- (i) Chinese; (ii) Korean; (iii) Tagalog (Filipino); (iv) Vietnamese; (v) English; and (vi) Japanese. The Television Stations' programming is a mix of locally produced original news, entertainment, and talk shows, purchased or syndicated foreign language programming, and paid programming comprised principally of infomercials, per-inquiry and direct response television advertisements. KHAI Inc. owns all of the equity of KHLS Inc., which holds the FCC license for KIKU-TV (Channel 19). KSCI Inc. owns all of the equity of KHAI and of KSLS Inc., which holds the FCC license for KSCI-TV (Channel 18) and KUANLP (Channel 48). International Media Group Inc. owns all of the equity of KSCI. AMG Intermediate LLC owns all of the equity of IMG, and AsianMedia Group LLC owns all of the equity of AMG. Non-debtor AsianMedia Investors I L.P. owns all of the equity of AsianMedia. International Media Group and six affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-10140) on Jan. 9, 2012, with the intent to sell their business as a going concern under 11 U.S.C. Sec. 363(a). NRJ TV II LLC, an entity owned by the first lien lender, will be the stalking horse bidder. As of Jan. 9, 2012, the Debtors owe $77.3 million on a first lien debt, including $67 million on a term-loan. Fortress Credit Corp. serves as agent. Unless outbid at the auction, the pre-petition lenders will acquire the assets in exchange for a credit bid of $45 million, will assume certain liabilities, and fund a "carve-out". An auction and sale hearing is contemplated to be held in March. Judge Mary F. Walrath oversees the Debtors' cases. International Media Group tapped Houlihan Lokey Capital, Inc., in October to market the assets. Houlihan will continue marketing the assets post-petition. William E. Chipman, Jr., Esq., and Mark D. Olivere, Esq., at Cousins Chipman & Brown, LLC, in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. The Debtors' claims agent is Epiq Bankruptcy Solutions LLC. In its petition, International Media Group estimated $100 million to $500 million in assets and debts. The petition was signed by Dennis J. Davis, chief restructuring officer. INTERNATIONAL MEDIA: May Pay Critical Vendor Claims Up to $125,000 ------------------------------------------------------------------ Judge Mary Walrath authorized International Media Group, Inc., et al., to pay certain pre-bankruptcy claims of their critical vendors in the ordinary course of business up to an aggregate of $125,000. The Debtors are to undertake efforts to cause each Critical Vendor to enter into a trade agreement with them, which shall provide, among other things, (i) the net estimated amount of the Critical Vendor claim, and (ii) the Critical Vendor's agreement to provide goods and/or services to the Debtors based on the parties' agreed terms. About International Media Group International Media Group Inc. and its affiliates operate television station KSCI-TV (Channel 18) Long Beach, California; KUAN-LP (Channel 48) Poway, California; and KIKU-TV (Channel 19) Honolulu, Hawaii. KSCI, KUAN and KIKU focus primarily on the large Asian markets of Southern California and Hawaii and offer programming in six (6) main languages -- (i) Chinese; (ii) Korean; (iii) Tagalog (Filipino); (iv) Vietnamese; (v) English; and (vi) Japanese. The Television Stations' programming is a mix of locally produced original news, entertainment, and talk shows, purchased or syndicated foreign language programming, and paid programming comprised principally of infomercials, per-inquiry and direct response television advertisements. KHAI Inc. owns all of the equity of KHLS Inc., which holds the FCC license for KIKU-TV (Channel 19). KSCI Inc. owns all of the equity of KHAI and of KSLS Inc., which holds the FCC license for KSCI-TV (Channel 18) and KUANLP (Channel 48). International Media Group Inc. owns all of the equity of KSCI. AMG Intermediate LLC owns all of the equity of IMG, and AsianMedia Group LLC owns all of the equity of AMG. Non-debtor AsianMedia Investors I L.P. owns all of the equity of AsianMedia. International Media Group and six affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-10140) on Jan. 9, 2012, with the intent to sell their business as a going concern under 11 U.S.C. Sec. 363(a). NRJ TV II LLC, an entity owned by the first lien lender, will be the stalking horse bidder. As of Jan. 9, 2012, the Debtors owe $77.3 million on a first lien debt, including $67 million on a term-loan. Fortress Credit Corp. serves as agent. Unless outbid at the auction, the prepetition lenders will acquire the assets in exchange for a credit bid of $45 million, will assume certain liabilities, and fund a "carve-out". An auction and sale hearing is contemplated to be held in March. Judge Mary F. Walrath oversees the Debtors' cases. International Media Group tapped Houlihan Lokey Capital, Inc., in October to market the assets. Houlihan will continue marketing the assets postpetition. William E. Chipman, Jr., Esq. and Mark D. Olivere, Esq. at Cousins Chipman & Brown, LLC, in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. The Debtors' claims agent is Epiq Bankruptcy Solutions LLC. In its petition, International Media Group estimated $100 million to $500 million in assets and debts. The petition was signed by Dennis J. Davis, chief restructuring officer. INTERTAPE POLYMER: Letko Brosseau Discloses 21.7% Equity Stake -------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Letko, Brosseau & Ass. Inc. disclosed that, as of Dec. 31, 2011, it beneficially owns 12,798,950 shares of common stock of Intertape Polymer Group Inc. representing 21.71% of the shares outstanding. A full-text copy of the filing is available at http://is.gd/5PgsGm About Intertape Polymer Group Intertape Polymer Group Inc. (TSX:ITP) (NYSE:ITP) develops and manufactures specialized polyolefin plastic and paper based packaging products and complementary packaging systems for industrial and retail use. Headquartered in Montreal, Quebec and Sarasota/Bradenton, Florida, the Company employs approximately 2,100 employees with operations in 17 locations, including 13 manufacturing facilities in North America and one in Europe. The Company reported a net loss of US$56.44 million on US$720.51 million of sales for the year ended Dec. 31, 2010, compared with a net loss of US$14.39 million on US$615.46 million during the prior year. The Company's balance sheet at Sept. 30, 2011, showed US$466 million in total assets, US$318.14 million in total liabilities and US$147.86 million in shareholders' equity. * * * In August 2010, Moody's Investors Service revised the rating outlook on Intertape Polymer Group Inc. to negative from stable and affirmed the B2 Corporate Family Rating. Moody's also affirmed the SGL-3 speculative grade liquidity rating and instrument ratings. Moody's said the B2 Corporate Family Rating reflects Intertape's narrow operating margins, lack of pricing power, largely commoditized product line and reliance on cyclical end markets, such as industrial, building and construction segments. Intertape is operating in a fragmented and highly competitive industry. The presence of large competitors with significant financial resources restricts Intertape's ability to recover raw material increases from customers and constrains the rating. In July 2010, Standard & Poor's Ratings Services revised its outlook on Intertape Polymer Group to positive from negative and affirmed its ratings, including its 'CCC+' corporate credit rating, on the Company and its subsidiary IntertapePolymer U.S. Inc. "The outlook revision reflects some improvement in the company's liquidity position and S&P's expectation that the improvement to the financial profile will continue into the next several quarters," said Standard & Poor's credit analyst Paul Kurias. INT'L RECTIFIER: Fitch Affirms Issuer Default Rating at 'BB' ------------------------------------------------------------ Fitch Ratings has affirmed International Rectifier Corp.'s (IR) (NYSE: IRF) Issuer Default Rating (IDR) at 'BB'. The company currently has no outstanding public debt or bank credit facility. The Rating Outlook is Stable. Despite current end market demand headwinds, Fitch believes the company's long-term organic revenue growth prospects remain solid, driven by increasing power management penetration. After 31.4% top line growth for the fiscal year ended June 30, 2011, Fitch anticipates revenues will decline in the high single to low double digits in fiscal 2012. General weakness throughout Europe across all end markets, an ongoing indirect channel inventory correction, and soft demand for computers and appliances markets will more than offset modest strength in high-reliability productions for commercial aerospace markets and rapid adoption of high-performance servers. Nonetheless, the supply chain is closer to achieving more normalized inventory levels, which Fitch believes drive could result in positive sequential revenue growth for IR in the first half of calendar year 2012. Weakened demand and inventory correction, as well as buffer inventory added in anticipation of the company's enterprise resource planning (ERP) system implementation should constrain factory utilization rates to less than optimal levels for the year. Utilization rates in the mid 90s exiting fiscal 2011 will remain in the 70s and below level for the current quarter, which will be a drag on gross margins. Still Fitch anticipates gross margins will remain at or above 35% for the year and range from 35% to 40% through the intermediate term. Fitch estimates free cash flow will be flat to modestly negative for fiscal 2012, driven by lower profitability and higher investments associated with the ERP system implementation. Nonetheless, the ERP investment should drive profit margin expansion beyond fiscal 2012. Capital spending levels should return to the company's longer-term target of 10% of revenues or below. In conjunction with planned manufacturing facilities consolidation, free cash flow should remain modestly positive through fiscal 2014. The rating and Outlook continue to be supported by IR's: i) technology leadership and resultant leading share in a number of power management markets; ii) addressable market growth driven by long-term secular trends of increased electronics content and demand for energy efficiency; and iii) meaningful customer and geographic diversification, including a strong presence in China and other faster growth regions. Ratings concerns continue to center on the company's: i) volatile historical free cash flow; ii) substantial structural investments in research and development (R&D) and capital spending; and iii); small revenue base in its sole focus on the discrete power management market, which includes several participants with greater scale and financial flexibility. Fitch believes positive rating actions could result over the intermediate term from more consistently positive annual free cash flow, likely from solid organic revenue growth and structurally lower investment requirements, which Fitch believes could be achieved through increased outsourcing. Negative rating actions could result from: -- Lower than industry-level top-line growth, suggesting a weakening of the company's technology leadership position. -- Consistently negative free cash flow likely driven by sustained profitability erosion or meaningfully higher investment levels to counter competitive pressures. As of Dec. 31, 2011, Fitch believes IR's liquidity was sufficient and supported by nearly $386.8 million of cash, cash equivalents and short-term investments. IR has no revolving credit facility. Fitch expects annual free cash flow to range from slightly negative to modestly positive over the intermediate term, driven by the company's small revenue base and relatively fixed investment requirements. The company has no public debt and Fitch has no expectations for near-term debt issuance. Nonetheless, depending upon uses of proceeds, Fitch believes IR can issue debt in line with historical amounts of approximately $500 million-$750 million without negatively affecting the IDR or outlook. This would equate to total leverage (total debt to operating EBITDA) of 3x-4x. IRVINE SENSORS: Vectronix Buys Thermal Imaging Biz. for $10-Mil. ---------------------------------------------------------------- Pursuant to the terms of the Asset Purchase Agreement dated Oct. 17, 2011, between ISC8 Inc. (formerly known as Irvine Sensors Corporation) and Vectronix Inc., Vectronix acquired substantially all of the Company's assets used or held for use in connection with, necessary for or relating to the Company's thermal imaging Business. These assets include the equipment and some limited intellectual property that is used by the thermal imaging Business to manufacture its products. At the closing of this asset purchase, Vectronix paid $9,148,839 in cash to the Company and $1,500,000 in cash into escrow, and agreed to forgive the Company's $340,250 liability payable to Optics 1, Inc., an affiliate of Vectronix. Subject to the satisfaction of certain thresholds, Vectronix is also obligated over the five year period following the closing to pay commissions to the Company for core engines and certain existing products of the Business sold by Vectronix or its commercial business units. About Irvine Sensors Headquartered in Costa Mesa, Calif., Irvine Sensors Corporation (OTC BB: IRSN) -- http://www.irvine-sensors.com/-- is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating said products. Irvine Sensors also conducts research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications. The Company reported a net loss of $15.76 million on $14.09 million of total revenues for the fiscal year ended Oct. 2, 2011, compared with a net loss of $11.15 million on $11.71 million of total revenues for the fiscal year ended Oct. 3, 2010. The Company's balance sheet at Oct. 2, 2011, showed $10.58 million in total assets, $29.29 million in total liabilities, and a $18.71 million total stockholders' deficit. J & J POWERSPORTS: Case Summary & 17 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: J & J Powersports, Inc. 2700 West Airport Drive Faribault, MN 55021 Bankruptcy Case No.: 12-30599 Chapter 11 Petition Date: February 3, 2012 Court: U.S. Bankruptcy Court District of Minnesota (St Paul) Judge: Robert J. Kressel Debtor's Counsel: Jamie R. Pierce, Esq. HINSHAW & CULBERTSON LLP 333 South Seventh Street, Suite 2000 Minneapolis, MN 55402 Tel: (612) 333-3434 E-mail: jpierce@hinshawlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its 17 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/mnb12-30599.pdf The petition was signed by Joseph L. Portinga, president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Jacob Portinga 12-30563 02/01/12 JARVIS ADVENTURE, INC.: Voluntary Chapter 11 Case Summary --------------------------------------------------------- Debtor: The Jarvis Adventure, Inc. 14435 FM 2920 Tomball, TX 77377 Bankruptcy Case No.: 12-31011 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Southern District of Texas (Houston) Judge: David R. Jones Debtor's Counsel: Andrew Haut, Esq. MIDDAGH & LANE, P.L.L.C. 12946 Dairy Ashford Sugar Land, TX 77478 Tel: (713) 459-9278 Fax: (713) 634-2638 E-mail: ahaut@andrewhautlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by John D. Jarvis, Jr., sole manager. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- The Jarvis Adventure Building, LLC 12-31005 02/06/12 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 J.D. NEWTON: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: J.D. Newton Investment Corporation dba Knights Inn 15310 T C Jester Boulevard Houston, TX 77068-2043 Bankruptcy Case No.: 12-30881 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Southern District of Texas (Houston) Judge: Karen K. Brown Debtor's Counsel: Margaret Maxwell McClure, Esq. LAW OFFICE OF MARGARET M. MCCLURE 909 Fannin, Suite 3810 Houston, TX 77010 Tel: (713) 659-1333 Fax: (713) 658-0334 E-mail: margaret@mmmcclurelaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Debra P. Newton, president. JEFFERSON COUNTY, AL: Inmates Seek Stay Relief to Continue Suit --------------------------------------------------------------- Katy Stech, writing for Dow Jones' Daily Bankruptcy Review, reports that a handful of inmates who sued Jefferson County, Ala., Sheriff Mike Hale in August over their allegedly poor living conditions want the county's bankruptcy judge to lift the automatic stay in the county's bankruptcy case. "The overcrowded conditions at the jail are a threat to the general public of Jefferson County and the State of Alabama," Alabama attorney H. Doug Redd, Esq., urged Judge Thomas Bennett in court papers, according to DBR. "Unless this automatic stay is lifted to allow plaintiffs to pursue their claims, the loss of human life is inevitable." DBR notes the overcrowding lawsuit was brought by several inmates who were arrested for falling behind on child support payments and violating probation, Mr. Redd said in court papers. At the time that it was filed, the lawsuit claimed that Birmingham's jail was designed to handle 600 inmates but housed more than 1,700 inmates. 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. JEFFERSON COUNTY: BNY Mellon Fights for Right to Sewer Money ------------------------------------------------------------ Lisa Uhlman at Bankruptcy Law360 reports that the Bank of New York Mellon Corp., which is indenture trustee for $3.6 billion in sewer warrants issued by Jefferson County, Ala., sued the bankrupt county Sunday seeking a ruling that it's entitled to receive all system revenues outside operating expenses. The bank wants a declaration that capital expenditures, fees and expenses related to professionals that are not connected to the insolvent sewer system are not considered necessary operating expenses, according to Law360. 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. JEFFERSON COUNTY: Needs State's Assistance on Budget Gaps --------------------------------------------------------- Thomson Reuters News & Insight reports that Alabama's Jefferson County said it needs state help to fix chronic and crippling budget gaps that could block a resolution of the county's landmark $4.23 billion bankruptcy case. "I am confident the sewer debt crisis will be successfully resolved," the report quotes David Carrington, president of the Jefferson County Commission as saying. "But without a general fund fix, I am just as confident the county's general funds revenues are not secure enough to support a plan to exit Chapter 9." The report relates that legislators last year refused to reauthorize the tax on people who work in regional business center Birmingham and elsewhere in Jefferson County. The report notes that the occupational tax had generated $60 million a year for Jefferson County, which has since cut staff by hundreds, shut county buildings, and reduced policing, road maintenance and other services as part of nearly $100 million in budget reductions. The report adds that the county now faces an additional $40 million shortfall in revenue. According to the report, Jefferson County officials also want lawmakers to give them more discretion over spending by easing restrictions on about a third of the county's current $217 million of revenue. So-called earmarks cover a third of the current county budget. Creditors such as JPMorgan Chase have opposed the bankruptcy filing, and a federal judge has yet to rule on whether or not the county is eligible for Chapter 9 federal bankruptcy protection. 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. JESCO CONSTRUCTION: Files Schedules of Assets and Liabilities ------------------------------------------------------------- JESCO Construction Corp. filed U.S. Bankruptcy Court the Southern District of Mississippi its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $100,000,000 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $14,662,901 ----------- ----------- TOTAL $100,000,000 $14,662,901 A copy of the Schedules is available for free at: http://bankrupt.com/misc/jescoconstruction.doc33.pdf Headquartered in Wiggins, Mississippi, Jesco Construction Corp., a Delaware Corporation, specializes in disaster response and was part of the Hurricane Katrina cleanup. It filed for Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50014) on Jan. 5, 2012. Judge Katharine M. Samson presides over the case. Craig M. Geno, Esq., at Harris Jernigan & Geno, PLLC, serves as the Debtor's counsel. In its petition, the Debtor estimated $100 million to $500 million in assets and $10 million to $50 million in debts. KINGSBURY CORP: Court Extends Bar Date Until March 30 ----------------------------------------------------- The Bankruptcy Court has scheduled March 30, 2012, as the deadline for creditors of Kingsbury Corp. to file their proofs of claim against the Debtor. About Kingsbury Corp. Kingsbury Corp. -- http://www.kingsburycorp.com/-- makes and assembles machine systems. Kingsbury Corporation and affiliate Ventura Industries, LLC, filed Chapter 11 petition (Bankr. D. N.H. Case Nos. 11-13671 and 11-13687) on Sept. 30, 2011. Jennifer Rood, Esq., and Robert J. Keach, Esq., at Berstein, Shur, Sawyer & Nelson, serve as counsel to the Debtors. Donnelly Penman & Partners serves as its investment banker. In its schedules, the Debtor disclosed $10,134,679 in assets, and $24,534,973 in liabilities as of the petition date. William K. Harrington, the U.S. Trustee for Region 1, appointed five members to serve on the Official Committee of Unsecured Creditors of Kingsbury Corporation. LAKE TAHOE: Argonaut Dev't; R. Baker Withdraw Motion to Dismiss --------------------------------------------------------------- Argonaut Development Co., etc., et al., and Rihard H. Baker, M.D., etc., et al., have withdrawn their motion to dismiss the Chapter 11 case of Lake Tahoe Development Co., LLC. As reported in the TCR on Jan. 30, 2012, Creditors Argonaut Develoment Co., etc., et al., (classified as Class 2(n) under the Fourth Amended Plan of Reorganization of Lake Tahoe Development Co., LLC, and Richard H. Baker, M.D., etc., et al. (classified as Class 2(l) under the Plan) asked the U.S. Bankruptcy Court for the Eastern District of California to dismiss the Debtor's Chapter 11 case. The Creditors stated: 1. The Plan is objectionable to Creditors in that it purports to re-impose a stay against Creditors' rights to foreclose on real property after Creditors moved for and received relief from stay. Beyond Creditors' particular objection, the Debtor's Chapter 11 case is mired in a seemingly endless effort by the Debtor to avoid the reality that it cannot confirm a feasible plan. 2. Since the case was filed on Oct. 5, 2009, relief from stay has been granted to multiple secured creditors, including the Creditors herein, to foreclose on nearly half of the separate parcels that comprised Debtor's original "project". According to the Creditors, no point is served in continuing the case. 3. The Debtor's Second Supplemental Brief in support of the Plan reflects that the viability of the Plan depends on the success of 13 appeals by the Debtor to the El Dorado County Assessor regarding taxes on its 13 remaining parcels. The assessment appeals hearing, scheduled for March 22 and 23, 2012, is 2 months after the next hearing on the Plan. 4. The Debtor's schedule for the payment of its property taxes over 5 years, which Debtor asserts has been approved by El Dorado County, provides for Debtor's payment to El Dorado County on Jan. 31, 2012, of $261,339. 5. If the Court is not inclined to dismiss the Debtor's Chapter 11 case outright, the Creditors suggest that the hearing on its motion be continued to a date in February 2012, to see whether Debtor makes any payment to El Dorado County by Jan. 31. Conditioned upon proof that Debtor has made the required payment to El Dorado County on Jan. 31, then in the alternative, the Creditors suggest that the hearing on this Motion be continued to April 2012, to consider the results of the Debtor's assessment appeals scheduled for March 22 and 23. About Lake Tahoe Development Based in Zepher Cove, Nevada, Lake Tahoe Development Co., LLC, is a real estate development company with substantial expertise in the real estate land entitlement and permitting areas in the unique geographic location of South Lake. Its principal, Randy Lane, who is the sole owner of Mountain Ventures, LLC, which is the managing member of the Debtor, has resided and developed real estate in South Lake Tahoe since 1976. The Company owns an interest in two separate real estate development projects. The first project owned exclusively by the Debtor is a large, mixed use, condominium, 19 hotel and retail space development comprised of 29 separate real estate parcels with multiple lien holders holding liens against various parcels located at the California/Nevada state line on Highway 50, South Lake Tahoe, California. The second is property owned by the Debtor located at 1259 Emerald Bay Road, South Lake Tahoe, CA (the "Gateway Project"), which is separate and apart from the Project, 24 and is being developed by Danny Freeman pursuant to a development agreement. The Company filed for Chapter 11 protection on Oct. 5, 2009 (Bankr. E.D. Calif. Case no. 09-41579). Daniel L. Egan, Esq., Megan A. Lewis, Esq., and Jason G. Cinq-Mars, Esq., at Wilke, Fleury, Hoffelt, Gould & Birney, LLP, serve as counsel to the Debtor. The Debtor estimated assets at $100 million and $500 million, and debts at $50 million and $100 million in its Chapter 11 petition. LAKE TAHOE: Files Fifth Amended Plan of Reorganization ------------------------------------------------------ Lake Tahoe Development Co., LLC, has filed with the U.S. Bankruptcy Court for the Eastern District of California a Fifth Amended Plan of Reorganization dated Jan. 31, 2012. The Plan provides for 23 classes of secured claims; 3 classes of unsecured claims; and 1 class of equity security holders. Unsecured creditors holding allowed claims will receive distributions from unencumbered cash and from sale proceeds in excess of amounts necessary to pay secured claims. The Plan also provides for payment of administrative and priority claims on the Effective Date of the Plan. Equity Interests will be canceled on the Effective Date. A full-text copy of the Fifth Amended Plan is available for free at http://bankrupt.com/misc/laketahoe.doc507.pdf As reported by the Troubled Company Reporter on July 21, 2011, the Bankruptcy Court approved the disclosure statement describing Lake Tahoe Development's Third Amended Plan dated June 24, 2011. About Lake Tahoe Development Based in Zepher Cove, Nevada, Lake Tahoe Development Co., LLC, is a real estate development company with substantial expertise in the real estate land entitlement and permitting areas in the unique geographic location of South Lake. Its principal, Randy Lane, who is the sole owner of Mountain Ventures, LLC, which is the managing member of the Debtor, has resided and developed real estate in South Lake Tahoe since 1976. The Company owns an interest in two separate real estate development projects. The first project owned exclusively by the Debtor is a large, mixed use, condominium, 19 hotel and retail space development comprised of 29 separate real estate parcels with multiple lien holders holding liens against various parcels located at the California/Nevada state line on Highway 50, South Lake Tahoe, California. The second is property owned by the Debtor located at 1259 Emerald Bay Road, South Lake Tahoe, CA (the "Gateway Project"), which is separate and apart from the Project, 24 and is being developed by Danny Freeman pursuant to a development agreement. The Company filed for Chapter 11 protection (Bankr. E.D. Calif. Case no. 09-41579) on Oct. 5, 2009. Daniel L. Egan, Esq., Megan A. Lewis, Esq., and Steven J. Williamson, Esq., at Wilke, Fleury, Hoffelt, Gould & Birney, LLP, in Sacramento, Calif., serve as counsel to the Debtor. The Debtor estimated assets at $100 million and $500 million, and debts at $50 million and $100 million in its Chapter 11 petition. LAS VEGAS MONORAIL: Files Plan Disclosures for Fourth Amended Plan ------------------------------------------------------------------ Las Vegas Monorail Company filed on Feb. 2, 2012, a proposed disclosure statement to accompany its Fourth Amended Plan of Reorganization with the U.S. Bankruptcy Court for the District of Nevada. Under the Third Amended Plan, the Debtor proposed issuing approximately $40 million in face amount of debt in satisfaction of the 1st Tier Bonds, through three debt instruments -- the Cash Pay Bond, the CapEx Bond, and the Capital Appreciation Bond. As reported in the TCR on Nov. 22, 2011, the Bankruptcy Court denied confirmation of the Third Amended Plan, finding that is was not feasible within the meaning of Section 1129(a)(11) of the Bankruptcy Code. Specifically, the Court determined that the Third Amended Plan proposed paying "too much debt to allow LVMC to meet its long-term capital needs" and that the Debtor's "cash flow simply cannot service and amortize $40 million of debt bearing a blended annual interest rate of approximately 9.5%." In summary, the Fourth Amended Plan provides the following changes in treatment from the Third Amended Plan: i. The 1st Tier Bondholders will receive two debt instruments - - the Cash Pay A Bonds in the sum of $10,000,000 with interest at 5 1/2% due on June 30, 2019, and the Cash Pay B Bonds in the sum of $3,000,000 with interest beginning at 3% until Dec. 31, 2015, and at the rate of 5 1/2% thereafter until it matures on June 30, 2055 (with the total interest on the Cash Pay B Bonds reduced by the fees paid to the two Special Directors referenced in subsection vi below). ii. Both the Cash Pay A Bonds and Cash Pay B Bonds will be secured by the Assets of the Reorganized LVMC, including Net Project Revenues, with the Cash Pay B Bonds being junior to the Cash Pay A Bonds. iii. It is not a requirement of the Plan that either of the Bonds be treated as tax-exempt for federal tax purposes. iv. A Variable Rate Component (the "VRC") for the Cash Pay B Bonds consisting of 50% of the Reorganized LVMC's Net Project Revenues after the funding of the Capital Expenditure Reserve Fund and the other items detailed in Section 5.4.5 of the Plan, subject to the receipt by the Reorganized LVMC of an IRS private letter ruling that the VRC does not adversely affect the status of Reorganized LVMC as a Section 501(c)(4) corporation and an opinion of counsel that the VRC does not impair Reorganized LVMC's non- profit status. v. Prior to confirmation of the Plan, the Debtor's Board of Directors will adopt a Capital Expenditure Forecast through 2055 and Reorganized LVMC will contribute Net Project Revenues into a Capital Expenditure Reserve Account necessary to fund the Capital Expenditure Forecast, after payment of O&M and debt service and subject to the payments pursuant to Section 5.4.5 of the Plan. vi. The Holders of the Bonds will retain the right to select 2 directors (the "Special Directors") to the Reorganized LVMC's Board of Directors. The fees for the Special Directors will be deducted and paid from the interest accrued and paid on the Cash Pay B Bonds. The initial annual fee for each of the Special Directors will be $30,000. vii. The amount to be paid to Allowed General Unsecured Creditors increases from $150,000 to $300,000. Depending upon the allowance of the Claim by the State of Nevada for attorneys' fees and costs, it appears that the dividend to Holders of Allowed General Unsecured Claims will range from approximately 60% to 100%. viii. The waterfall of payments as set forth in Section 5.4.5 of the Plan now provides for a reduction of the General Reserve Fund from $2 million to $500,000, and limitations on the reimbursement of professionals retained by the Majority 1st Tier Bondholders intended to prioritize in part the funding of the Capital Expenditure Forecast. As set forth in the Debtor's Post-Effective Date Projected Financial Projections, LVMC believes that projected revenues are sufficient to both meet its CapEx needs through 2028, and make all payment required on the Cash Pay A Bonds, including the final payment by June 30, 2019, and pay all interest accruals and the principal payment on the Cash Pay B Bonds. With regard to the Cash Pay B Bonds, the principal balance remains $3,000,000, and given the Cash position of Reorganized LVMC from the Effective Date, it can meet all payments due through June 30, 2019, on the Bonds and after payment of the Cash Pay A Bonds in full on June 30, 2019, will at all times be able to pay the annual interest payments of $165,000 (or $105,000 after deducting the fees to be paid to the Special Directors) and to the satisfy the Cash Pay B Bond principal amount whether due prior to or on the Cash Pay B Bonds Maturity Date in 2055. In addition, upon payment in full of the Cash Pay A Bonds, the Cash Pay B Bonds will remain secured by a first lien on all of the assets of Reorganized LVMC, including the Capital Expenditure Reserve Fund, so that if there is a termination of the Monorail or a default under the Cash Pay B Bonds, there will be adequate assets to pay the $3,000,000 principal balance of the Cash Pay B Bonds. Impaired Classes of Claims in Class 3 (General Unsecured Claims), Class 4(a) (1st Tier Bond Secured Claims), Class 4B (Ambac Surety Bond Secured Claims), Class 4C (Ambac Insurance Secured Claim), Class 5A (1st Tier Bond Unsecured Claims), Class 5B (Ambac Surety Bond Unsecured Claims), Class 5C (Ambac Insurance Unsecured Claim), and Class 8 (Director Claims) are entitled to vote. The Debtor is soliciting votes from Holders of these Claims. The following Classes of Creditors will not vote on the Plan: (a) Holders of certain Impaired Claims in Class 1 (Other Priority Claims) and Class 2 (Other Secured Claims) are unimpaired and will not vote. (b) Certain Impaired Classes of Claims will not receive or retain anything on account of their Claims. As such, they will be deemed to have voted against the Plan without the need for them to cast votes or receive voting ballots. This includes Class 6 (Second Tier Bond Claims), Class 7 (Third Tier Bond Claims) and Class 9 (Subordinated Claims). Holders General Unsecured Claims (Class 3), with estimated amount of claims of $495,000, will receive their Pro Rata Share of $300,000 in full satisfaction of their Allowed General Unsecured Claims. The payment will be made in Cash by reorganized LVMC in 12 equal monthly installments without interest. A copy of the proposed Disclosure Statement for the Fourth Amended Plan is available for free at: http://bankrupt.com/misc/lasvegasmonorail.doc1032.pdf About Las Vegas Monorail Las Vegas, Nevada-based Las Vegas Monorail Company, organized by the State of Nevada in 2000 as a nonprofit corporation, owns and manages the Las Vegas Monorail. The Monorail is a seven-stop, elevated train system that travels along a 3.9-mile route near the Las Vegas Strip. LVMC has contracted with Bombardier Transit Corporation to operate the Monorail. Though it benefits from its tax-exempt status due to being a nonprofit entity, LVMC claims to be the first privately-owned public transportation system in the nation to be funded solely by fares and advertising. LVMC says it receives no governmental financial support or subsidies. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-10464) on Jan. 13, 2010. Gerald M. Gordon, Esq., William M. Noall, Esq., and Gabriel A. Hamm, Esq., at Gordon Silver, assist the Company in its restructuring effort. Alvarez & Marsal North America, LLC, is the Debtor's financial advisor. Stradling Yocca Carlson & Rauth is the Debtor's special bond counsel. Jones Vargas is the Debtor's special corporate counsel. The Company disclosed $395,959,764 in assets and $769,515,450 in liabilities as of the Petition Date. In April 2010, bondholder Ambac Assurance Corp. lost in its bid to halt the bankruptcy after U.S. Bankruptcy Judge Bruce A. Markell ruled that Monorail isn't a municipality and is therefore entitled to reorganize in Chapter 11. U.S. District Judge James Mahan in Reno upheld the ruling in October 2010. LAUREN JOHN PAULSON: Judge Dunn Won't Recuse Self ------------------------------------------------- Bankruptcy Judge Randall L. Dunn denied a motion by Lauren John Paulson, the sole and managing member of Huber-Wheeler Crossing LLC, asking the judge to recuse himself from the lawsuit, Lauren John Paulson, v. Matt Arbaugh, Amy Mitchell, and Craig Russillo, Adv. Proc. No. 11-03309 (Bankr. D. Ore.), for alleged gross judicial misconduct. Judge Dunn said the Recusal Motion "does not establish bias to require my recusal from presiding over the adversary proceeding." Mr. Paulson has asserted that Judge Dunn's "pure heart, empty head" comment at a May 7, 2010 hearing on Ms. Mitchell's motion for authority to settle Mr. Paulson's Predatory Lending Lawsuit with Fairway Commercial Mortgage Corporation, Huber-Wheeler's lender, reflected a personal bias against Mr. Paulson. Judge Dunn explained the phrase "pure heart, empty head" is a legal term of art that refers to a defense of subjective, as opposed to objective, "good faith." "In essence, it means that a defendant is arguing 'I meant well and did not know better,' as a means of excusing acts or behavior which might otherwise lead to legal culpability. . . . It is not a personal comment on someone's mental capability, only her alleged lack of knowledge that a particular action could implicate a legal consequence. As such, it cannot be considered a basis to establish bias," Judge Dunn said. Judge Dunn also denied Mr. Paulson's Motion for A Visiting Out of District Judge, which asserts that Mr. Paulson cannot get a fair hearing from any sitting judge, state or federal, within the State of Oregon. "Because the allegations contained in the Visiting Judge Motion are not appropriate for my review, I deny the Visiting Judge Motion without prejudice to Mr. Paulson's ability to assert alleged judicial misconduct in any other appropriate forum," Judge Dunn held. Judge Dunn noted that Mr. Paulson has filed a complaint of misconduct with the Ninth Circuit Court of Appeals. "It is the Ninth Circuit which must determine whether I have engaged in gross judicial misconduct," Judge Dunn said. A copy of Judge Dunn's Feb. 7, 2012 Memorandum Decision is available at http://is.gd/QQjnVVfrom Leagle.com. About Lauren John Paulson Lauren John Paulson, based in Aloha, Oregon, is the sole and managing member of Huber-Wheeler Crossing LLC. Mr. Paulson filed for Chapter 11 bankruptcy (Bankr. D. Ore. Case No. 09-32439) on April 8, 2009. In his bankruptcy petition, the Debtor scheduled $1,036,875 in assets and $426,285 in debts. Judge Randall L. Dunn presides over the case. Matthew A. Arbaugh, Esq. -- matt@fieldjerger.com -- at Field Jerger LLP, served as the Debtor's bankruptcy counsel. He later resigned in 2010 and Mr. Paulson proceeded pro se. Lender Fairway Commercial Mortgage Corporation foreclosed on three parcels of real property owned by Huber-Wheeler, and by a fourth parcel of real property owned by the Lauren Paulson Trust after Mr. Paulson failed to sell the assets. On Nov. 25, 2009, on Mr. Paulson's motion, the case was converted from chapter 11 to chapter 7. Amy Mitchell was appointed as the chapter 7 trustee. LEVEL 3: Southeastern Asset Discloses 20.8% Equity Stake -------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on Feb. 6, 2012, Southeastern Asset Management, Inc., and its affiliates disclosed they beneficially own 44,150,956 shares of common stock of Level 3 Communications, Inc., representing 20.8% of the shares outstanding. As previously reported by the TCR on Nov. 15, 2011, Southeastern Asset disclosed beneficial ownership of 44,526,452 shares. A full-text copy of the amended filing is available at http://is.gd/HvGBXG About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. The Company's balance sheet at Sept. 30, 2011, showed $9.25 billion in total assets, $9.77 billion in total liabilities and a $523 million total stockholders' deficit. Level 3 Communications carries a 'Caa1' corporate family rating, and 'Caa2' probability of default rating, with negative outlook from Moody's, a 'B-' issuer default rating from Fitch, and 'B-' long term issuer credit ratings from Standard & Poor's. LIBBEY INC: Robeco Investment Discloses 5.5% Equity Stake --------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Robeco Investment Management, Inc., disclosed that, as of Dec. 31, 2011, it beneficially owns 1,099,060 shares of common stock of Libbey Inc. representing 5.54% of the shares outstanding. A full-text copy of the filing is available at http://is.gd/8m1EWa About Libbey Inc. Based in Toledo, Ohio, since 1888, Libbey, Inc., operates glass tableware manufacturing plants in the United States in Louisiana and Ohio, as well as in Mexico, China, Portugal and the Netherlands. Libbey supplies tabletop products to foodservice, retail, industrial and business-to-business customers in over 100 countries. The Company's balance sheet at Sept. 30, 2011, showed $788.32 million in total assets, $733.68 million in total liabilities and $54.64 million in total shareholders' equity. * * * On Oct. 28, 2009, Libbey restructured a portion of its debt by exchanging the old 16% Senior Subordinated Secured Payment-in- Kind Notes due December 2011 of subsidiary Libbey Glass Inc., having an outstanding principal amount as of October 28, 2009, of $160.9 million for (i) $80.4 million principal amount of new Senior Subordinated Secured Payment-in-Kind Notes due 2021 of Libbey Glass, and (ii) 933,145 shares of common stock and warrants exercisable for 3,466,856 shares of common stock of Libbey Inc. On Feb. 8, 2010, Libbey used the proceeds of a $400.0 million debt offering of 10.0% Senior Secured Notes due 2015 of Libbey Glass Inc., as well as cash on hand, to (i) repurchase the $306.0 million then outstanding Floating Rate Senior Secured Notes due 2011 of Libbey Glass, (ii) repay the $80.4 million New PIK Notes and (iii) pay related fees and expenses. Concurrent with the closing of the offering of the Senior Secured Notes, Libbey entered into an amended and restated $110 million Asset Based Loan facility which, among other terms, extended the maturity date to 2014. As reported by the TCR on Aug. 9, 2011, Standard & Poor's Ratings Services raised its corporate and senior secured debt ratings on Toledo, Ohio-based Libbey Inc. to 'B+' from 'B'. The rating outlook is stable. "The upgrade and stable outlook reflect our belief that Libbey will sustain its improved profitability and credit measures and maintain its adequate liquidity position," said Standard & Poor's credit analyst Rick Joy. LONE PINE: Moody's Assigns 'Caa2' Rating to $200-Mil. Sr. Notes --------------------------------------------------------------- Moody's Investors Service assigned a Caa2 rating to Lone Pine Resources Inc's (Lone Pine) proposed US$200 million senior unsecured notes issue. Moody's also assigned Lone Pine a B3 Corporate Family Rating (CFR) and Probability of Default Rating (PDR), as well as an SGL-3 Speculative Grade Liquidity rating. The rating outlook is stable. This is the first time that Moody's has rated Lone Pine. "The B3 CFR primarily reflects Lone Pine's small scale in terms of proved developed reserves and production and that its oil production, which will drive much of its cash flow, is concentrated in a single field," said Terry Marshall, Moody's Senior Vice President. "However, the B3 rating also recognizes the company's solid leverage on production, interest coverage and leveraged full-cycle ratio, and that Lone Pine's oil production will grow significantly over the next 12 to 18 months." Assignments: Issuer: Lone Pine Resources Canada Ltd. -- Senior Unsecured Regular Bond/Debenture, Assigned a range of 83 - LGD5 to Caa2 -- Senior Unsecured Regular Bond/Debenture, Assigned a range of 83 - LGD5 to Caa2 Issuer: Lone Pine Resources Inc. -- Probability of Default Rating, Assigned B3 -- Speculative Grade Liquidity Rating, Assigned SGL-3 -- Corporate Family Rating, Assigned B3 RATINGS RATIONALE Lone Pine's liquidity is adequate. Pro-forma for the notes issuance Moody's expects that Lone Pine will have approximately C$250 million available under its C$375 million borrowing base revolver (2016 maturity) and minimal cash. In 2012, we expect that Lone Pine will generate negative free cash flow of about US$30 million, which will be funded under the revolver. Lone Pine has one financial covenant under its revolver (total debt to consolidated EBITDA of 4:1), compliance with which should be achievable through 2012. There are no debt maturities until 2017. Alternate liquidity is limited given that substantially all of the company's assets are pledged under the revolver. The US$200 million senior unsecured notes are rated two notches below the B3 CFR due to the existence in the capital structure of the prior-ranking C$375 million borrowing base revolver. The stable outlook considers Lone Pine's growing oil production, overall low leverage, and strong interest coverage. The rating could be upgraded if the company successfully develops its oil asset, maintains the leveraged full-cycle ratio above 2.0x, increases its diversification and increases its production towards 25,000 boe/d. The rating could be downgraded if it appears that expected negative free cash flow in 2012 and 2013 strains the company's liquidity. The rating could also be downgraded if the company's leveraged full-cycle ratio appears likely to decline below 1.0x and is likely to remain there, and E&P debt to proved developed reserves appears likely to rise above US$12/boe. The principal methodology used in rating Lone Pine was the Global Independent Exploration and Production Industry Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Lone Pine is a Calgary, Alberta based exploration and production company with about 15,000 barrels of oil equivalent (boe) of production and proved developed and total proved reserves of 36 million and 67 million boe, respectively. LOS ANGELES DODGERS: Will Seek Nod of Plan Disclosures on Feb. 22 ----------------------------------------------------------------- The hearing to consider the disclosure statement filed in the Chapter 11 case of Los Angeles Dodgers LLC, is scheduled for Feb. 22, 2012, at 10:00 a.m. Objections are due by Feb. 15, 2012. As reported in the TCR on Jan. 24, 2012, the Debtors filed with the U.S. Bankruptcy Court for the District of Delaware their Joint Plan of Reorganization under Chapter 11. The Plan resolves fully the financial challenges confronting the Dodgers that precipitated the filing by the Debtors of the Chapter 11 cases through a sale of all of the equity of the Dodgers, which will result in a change in ownership of the team. As a result of the intended sale and the related reorganization of the Debtors, the plan contemplates that all creditor claims will be satisfied in full either through their assumption by the reorganized debtors or by the payment of cash from proceeds from the sale of the Dodgers. The club stated, "The Dodgers are fully committed to maximizing the value of the debtors' estates. The Dodgers are not only a storied franchise with truly global appeal, but also present the attractive potential for strong cash flow and significant value enhancement. The combination of these unique attributes is helping to drive significant interest from potential bidders in the Dodger sale process. The Dodgers expect to identify the highest and best bid prior to the Confirmation Hearing, which is anticipated to be in April." Implementation of the Plan of Reorganization will include the consummation of a sale transaction on or promptly following the effective date of the Plan. The Debtors expect the Effective Date will occur on or before April 30, 2012. 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. MANISTIQUE PAPERS: Bid Protections Hearing on Feb. 9 ---------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will hold a hearing on Feb. 9, 2012, to approve any stalking horse protections for the stalking horse purchaser. As reported in the Troubled Company Reporter of Dec. 27, 2011, the Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware authorized Manistique Papers, Inc., to sell some or all of the assets in an auction. A hearing will be held on Jan. 26, 2012, at 2:30 p.m. (ET) to approve any stalking horse protections for a stalking horse purchaser. Objections to the assumption or assignment of an executory contract based on the provision of adequate assurance of future performance by the assignee must be raised before the sale hearing. As reported in the Troubled Company Reporter on Dec. 21, 2011, the Court authorized the auction of the business on Feb. 22. No buyer is yet under contract. About Manistique Papers Manistique Papers Inc. operates a landfill in Manistique, Michigan, whereby residuals resulting from paper production are deposited. It owns a 125,000 ton-a-year plant making specialty papers from recycled fiber. Manistique Papers filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-12562) on Aug. 12, 2011. Godfrey & Kahn, S.C. represents the Debtor in its restructuring effort. Morris, Nichols, Arsht & Tunnell LLP serves as its Delaware bankruptcy co-counsel. Vector Consulting, L.L.C., serves as its financial advisor. Baker Tilly Virchow Krause, LLC, serves as its accountant. The Official Committee of Unsecured Creditors appointed in the case is represented by Lowenstein Sandler PC as lead counsel and Ashby & Geddes, P.A., as Delaware counsel. J.H. Cohn LLC serves as the panel's financial advisor. Manistique Papers disclosed $19,688,471 in assets and $24,633,664 in liabilities as of the Chapter 11 filing. MARCO POLO: Committee Investigation Extended Period to Feb. 29 -------------------------------------------------------------- Marco Polo Seatrade B.V. and its debtor affiliates seek to enter into a stipulation with the Official Committee of Unsecured Creditors and The Royal Bank of Scotland Plc for an extension of the Committee's "investigation period" through Feb. 29, 2012. The Final DIP Loan Order entered by the U.S. Bankruptcy Court for the Southern District of New York provided the Committee with an initial 60-day Investigation Period from Oct. 3 to Dec. 3, 2011. By an earlier agreement by the parties, the Investigation Period was extended to Feb. 1, 2012. The parties now wish to continue the extension of the Investigation Period through Feb. 29, 2012, to have time to address certain issues germane to the Investigation Period. About Marco Polo Marco Polo Seatrade B.V. operates an international commercial vessel management company that specializes in providing commercial and technical vessel management services to third parties. Founded in 2005, the Company mainly operates under the name of Seaarland Shipping Management and maintains corporate headquarters in Amsterdam, the Netherlands. The primary assets consist of six tankers that are regularly employed in international trade, and call upon ports worldwide. Marco Polo and three affiliated entities filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29, 2011. The other affiliates are Seaarland Shipping Management B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V. Marco Polo is the sole owner of Seaarland, which in turn is the sole owner of Cargoship, and also holds a 5% stake in Magellano. The remaining 95% stake in Magellano is owned by Amsterdam-based Poule B.V., while another Amsterdam company, Falm International Holding B.V. is the sole owner of Marco Polo. Falm and Poule didn't file bankruptcy petitions. The filings were prompted after lender Credit Agricole Corporate & Investment Bank seized one ship on July 21, 2011, and was on the cusp of seizing two more on July 29. The arrest of the vessel was authorized by the U.K. Admiralty Court. Credit Agricole also attached a bank account with almost US$1.8 million on July 29. The Chapter 11 filing precluded the seizure of the two other vessels. The cases are before Judge James M. Peck. Evan D. Flaschen, Esq., Robert G. Burns, Esq., and Andrew J. Schoulder, Esq., at Bracewell & Giuliani LLP, serve as the Debtors' bankruptcy counsel. Kurtzman Carson Consultants LLC serves as notice and claims agent. The petition noted that the Debtors' assets and debts are both more than US$100 million and less than US$500 million. Tracy Hope Davis, United States Trustee for Region 2, appointed three members to serve on the Official Committee of Unsecured Creditors. The Committee has retained Blank Rome LLP as its attorney. Secured lender Credit Agricole Corporate and Investment Bank is represented by Alfred E. Yudes, Jr., Esq., and Jane Freeberg Sarma, Esq., at Watson, Farley & Williams (New York) LLP. MASTERCARD: Moody's Says Technology Roadmap Credit Positive ----------------------------------------------------------- Moody's Investors Service said MasterCard's roadmap to enable the next generation of electronic payment systems, including migration from the legacy magnetic stripe to EMV chip payment cards, is credit positive, though it does not affect VeriFone's Ba3 Corporate Family Rating and stable outlook. The principal methodology used in rating VeriFone was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in San Jose, California, VeriFone is a leading provider of point of sale payment systems, solutions and services. MEECHAM HOSPITALITY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Meecham Hospitality, LLC 2100 Estes Park Drive Southlake, TX 76092 Bankruptcy Case No.: 12-40594 Chapter 11 Petition Date: February 2, 2012 Court: U.S. Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Russell F. Nelms Debtor's Counsel: Clayton D. Ketter, Esq. PHILLIPS MURRAH P.C. 101 N. Robinson, 13th Floor Oklahoma City, OK 73102 Tel: (405) 606-4792 Fax: (405) 235-4133 E-mail: cdketter@phillipsmurrah.com Scheduled Assets: $9,263,354 Scheduled Liabilities: $14,829,882 The Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/txnb12-40594.pdf The petition was signed by Roger Pate. MERIDIAN MORTGAGE: Founder Seeks Lighter Sentence for $100MM Fraud ------------------------------------------------------------------ Lisa Uhlman at Bankruptcy Law360 reports that the bankrupt founder of Meridian Mortgage Investors, who copped to stealing $100 million in an investment fraud scheme, asked a judge for leniency Friday, saying the scheme was the result of desperation and not intentional. According to Law360, Frederick Darren Berg said in a sentencing memorandum that he began Meridian as a legitimate business and that he was forced into perpetrating the fraud as a result of the economy turning sour. About Meridian Mortgage In November 2010, a federal grand jury in Seattle has indicted Frederick Darren Berg on 12 counts of wire fraud, money laundering and bankruptcy fraud in connection with the demise of his Meridian Group of investment funds. Prosecutors believe Mr. Berg took in more than $280 million, with the losses attributed to the ponzi scheme estimated to be approximately $100 million. Hundreds of victims have lost money in the scheme between 2001 and 2010. Mr. Berg commenced a personal Chapter 11 case on July 27, 2010 (Bankr. W.D. Wash. Case No. 10-18668), estimating assets of more than $10 million and liabilities between $1 million and $10 million. The filing came after lawyers for one group of investors, armed with a court order and accompanied by sheriff's deputies, began seizing personal possessions at Mr. Berg's Mercer Island home and downtown Seattle condo. Diana K. Carey, trustee for F. Darren Berg's estate, filed on Jan. 27, 2011 voluntary Chapter 11 petitions for Mortgage Investors Fund I LLC (Bankr. W.D. Wash. Case No. 11-10830) estimating assets of up to $50,000 and debts of up to $50,000,000, and Meridian Mortgage Investors Fund III LLC (Case No. 11-10833), estimating up to $50,000 in assets and up to $100,000,000 in liabilities. Michael J. Gearin, Esq., at K&L Gates LLP, in Seattle, serves as counsel to the Debtors. Creditors filed an involuntary Chapter 11 petition for Meridian Mortgage Investors Fund II LLC (Bankr. W.D. Wash. Case No. 10- 17976) on July 9, 2010. The petitioners are represented by Jane E. Pearson, Esq., at Foster Pepper PLLC, in Seattle. Creditors filed involuntary Chapter 11 petitions for Meridian Mortgage Investors Fund VIII, LLC (Bankr. W.D. Was. Case No. 10- 17958) and Meridian Mortgage Investors Fund V, LLC (Bankr. W.D. Wash. Case No. 10-17952) on July 9, 2010. The petitioners are represented by John T. Mellen, Esq., at Keller Rohrback LLP, in Seattle, and Cynthia A. Kuno, Esq., at Hanson Baker Ludlow Drumheller PS, in Bellevue. MERITOR INC: Fitch Affirms Issuer Default Rating at 'B' ------------------------------------------------------- Fitch Ratings has affirmed the 'B' Issuer Default Rating (IDR) and the various issue ratings of Meritor, Inc. (MTOR) and revised the company's Rating Outlook to Positive from Stable. MTOR's ratings apply to a $441 million secured revolving credit facility and $1.1 billion of senior unsecured notes. The revision of the Rating Outlook to Positive is driven by Fitch's expectations of further strengthening in MTOR's credit profile over the medium term as end market demand solidifies, margins grow on stronger pricing and improved manufacturing efficiencies, and leverage declines on higher EBITDA and lower debt. Demand in all three of the company's core segments, Commercial Truck, Industrial and Asia Pacific, and Aftermarket and Trailer, will be supported by global economic growth, although weakness in Europe will negatively affect near term demand in that region. MTOR's defense-related business is also expected to rebound over the next year, as production of the U.S. military's Family of Medium Tactical Vehicles (FMTV) program continues to ramp up with a new primary contractor. Despite the improving business conditions, however, free cash flow is likely to be weighed down by higher pension contributions and relatively heavy capital spending, although Fitch expects full-year free cash flow to be positive in fiscal 2012. During fiscal 2011, MTOR completed the sale of its remaining Light Vehicle Systems (LVS) operations. In the past, the LVS business had put significant pressure on MTOR's profitability, and Fitch expects the company's margins to generally improve now that it is fully focused on the commercial truck and industrial markets. Although the LVS divestiture is expected to be a long-term positive for MTOR's credit profile, Fitch notes that commercial truck and industrial demand tends to be much more volatile than auto demand, as evidenced by the 67% decline in North American commercial truck production that was seen between 2006 and 2009. Western European commercial truck production declined 64% between 2008 and 2009. As such, Fitch notes that there is likely to be a greater level of volatility in MTOR's operating profile through the economic cycle, which will require the company to maintain sufficient liquidity access to maintain its financial flexibility in a downturn. MTOR's liquidity position at Dec. 31, 2011 was relatively strong and included $211 million in cash and cash equivalents. Liquidity is bolstered further by access to a $441 million secured revolving credit facility and an accounts receivable securitization facility with up to $125 million in availability, depending on the level of eligible receivables. Combined with Fitch's expectation for modestly positive free cash flow in 2012 and proceeds from non- core asset sales, MTOR is projected to have sufficient liquidity to repay its $84 million debt maturity that comes due in March, while still providing enough financial flexibility following the debt payment to meet the company's operational needs if global demand trends weaken significantly later this year. Free cash flow in the 12 months ended Dec. 31, 2011, was negative $16 million, as heavy working capital usage tied to volume growth drove operating cash flow down to $95 million, while capital spending rose to $111 million as the company invested in efficiency and growth initiatives. As noted earlier, Fitch expects MTOR to produce positive free cash flow in fiscal 2012, however, as margins grow on improved pricing and the company gains further traction on manufacturing efficiencies. In particular, premium costs tied to capacity shortages that were incurred in fiscal 2011 are expected to decline significantly going forward, as recently completed facility and equipment investments come on line. Margins also should be supported in fiscal 2012 by increased FMTV business, which tends to carry relatively strong margins. Nonetheless, free cash flow will remain under pressure from capital spending that will be roughly flat with the fiscal 2011 level and higher required contributions to the company's pension plans. Relatively high prices for raw materials, particularly steel, could also put some pressure free cash flow, although this will be mitigated by revised cost recovery mechanisms that the company finished enacting with its commercial truck customers during the first fiscal quarter of 2012. As of Dec. 31, 2011, the face value of MTOR's balance sheet debt stood at $1.1 billion, about flat with the year-earlier period, although higher EBITDA resulted in stronger credit protection metrics. Fitch's calculation of leverage (balance sheet debt/Fitch-calculated EBITDA) was 4.0 times (x) at Dec. 31, 2011, down from 5.7x at Dec. 31, 2010, as Fitch-calculated EBITDA grew 43% to $278 million from $194 million. EBITDA interest coverage also strengthened over the period, rising to 3.0x from 1.8x. Fitch notes that its calculation of EBITDA differs from the MTOR's 'Adjusted EBITDA' calculation primarily in that Fitch's figures do not include equity in earnings of affiliates, while MTOR includes those earnings in its adjusted calculation. Equity in earnings of affiliates totaled $72 million in the 12 months ended Dec. 31, 2011. Fitch expects credit metrics to continue strengthening through fiscal 2012, as the company retires its $84 million note maturity and EBITDA increases. Fitch projects that leverage could fall below 3.0x by the end of fiscal 2012 if global economic conditions remain positive. In addition to its balance sheet debt, MTOR has several off-balance sheet factoring and securitization programs that it utilizes. As of Sept. 30, 2011, MTOR had utilized $279 million of off-balance sheet program availability, of which $271 million was through committed facilities with banks. MTOR's pension plans are substantially underfunded. As of Sept. 30, 2011, the company's global plans were 71% funded, with a shortfall of $557 million. In the U.S., however, the company's pensions were only 63% funded, with a projected benefit obligation that exceeded the value of plan assets by $455 million. The substantial underfunded position of the company's pension plans remains a risk, as low interest rates and the company's election to utilize the funding relief provided by the Pension Relief Act of 2010 in the U.S. will translate to significantly higher required cash contribution levels over the next several years. In fiscal 2011, MTOR contributed $35 million to its global plans (including $4 million tied to the pensions of discontinued operations), of which only $5 million was contributed to the U.S. plans. For fiscal 2012, the company has projected that contributions to its global plans will rise to $75 million, and contributions in fiscal 2013 will increase further as the company makes catch up payments to offset the pension relief deferrals taken in fiscal 2011 and 2012. Over the longer term, a rise in interest rates would help to reduce MTOR's pension contribution requirements, although there would be a lag of over one year before any increase would result in a decline in required contributions. Volatility in raw materials prices is an inherent risk in MTOR's business. Although the company has traditionally passed these costs through to its customers, there historically has been a lag of up to one year before the company's prices adjusted, which resulted in near-term margin pressure when materials prices were rising. With the significant rise in materials prices over the past year, MTOR entered into temporary agreements with many of its customers to adjust pricing on a more frequent basis. During the first quarter of fiscal 2012, the company completed the transition of its commercial truck agreements to revised escalator mechanisms that essentially made last year's temporary agreements permanent. This change will result in more-frequent pricing adjustments based on changes in raw materials costs, which will help to mitigate margin pressure arising from rapid increases raw materials costs. The rating of 'BB/RR1' on MTOR's secured credit facilities reflects their substantial collateral coverage and outstanding recovery prospects, in the 90% to 100% range, in a distressed scenario. Collateral for the revolver includes hard assets, accounts receivable, intellectual property and investments in certain subsidiaries. As of Sept. 30, 2011, MTOR valued the assets backing the facility at $671 million. The rating of 'B- /RR5' on the company's unsecured notes reflects Fitch's expectation that recoveries on the notes would be below average, in the 10% to 30% range, in distressed scenario. The lower level of expected recovery for the unsecured debt is due to the substantial amount of higher-priority secured debt in the MTOR's capital structure, including the potential for a full draw on both the secured revolver and the U.S. accounts receivable securitization facility. MTOR's ratings could be upgraded in the intermediate term if market conditions remain stable and continued revenue and margin growth lead to increased free cash flow stronger credit protection metrics. Fitch could undertake a negative action on MTOR if market conditions deteriorate significantly, resulting in a meaningful erosion of the company's liquidity and a substantial weakening of its credit profile. Fitch has affirmed the following ratings on MTOR: -- IDR at 'B'; -- Secured credit facility rating at 'BB/RR1'; -- Senior unsecured rating at 'B-/RR5'. The Rating Outlook is revised to Positive from Stable. MF GLOBAL: Corporate "Personhood" to be Tested in Ch. 11 Case ------------------------------------------------------------- The legal principle of "corporations are 'persons'" is set to be tested in the current MF Global bankruptcy case after a former MF Global client, Adam Furgatch of Hawaii, filed a motion in Federal Bankruptcy Court that asks the Court to treat MF Global Holdings, Ltd. as a "person" instead of a corporation. The filing asserts that because the U.S. Supreme Court has ruled that a corporation such as MF Global Holdings is a "person", then MF Global, Inc. -- the subsidiary brokerage whose customers are still missing at least $1.2 billion in segregated funds -- is a "child" of the MF Global Holdings "parent company." The filing then cites specific statutes in the Bankruptcy Code that mandates that a child's support claims shall have super-priority status over all other unsecured creditors. "The Chapter 11 bankruptcy laws apply equally to corporations and individuals," said Mr. Furgatch in a pre-filing interview. "If, instead of a corporation, the MF Global Brokerage is treated as the Child Person of the Parent Company Person, then the statute on priority status for unsecured creditors' claims is unambiguous. It's right there in U.S.C. Title 11, Section 507. Spousal and child support obligations come first, before all other creditors' claims." Mr. Furgatch therefore concludes that "If corporations are persons, JP Morgan Chase and all other unsecured creditors will just have to get in line...the Child comes first." The motion also asks the bankruptcy judge to order the "Parent Company Person" trustee, Mr. Louis Freeh, to immediately release from the parent company's declared $41 Billion in assets, all child support funds necessary to restore the stricken, injured "Brokerage Child Person" to wholeness and health. The motion cites Bankruptcy Code statutes that support the judge's power to grant this request for immediate release of trustee- controlled assets. The child support funds being asked for include the reported $1.2 Billion in customer segregated funds that have yet to be returned to the ex-MF Global Brokerage customers. Mr. Furgatch is currently missing at least 30% of his pre-bankruptcy MF Global account funds. The federal judge presiding in the case, Martin Glenn, is expected to promptly consider the motion and make a ruling. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on December 19, 2011. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MIG FINANCIAL: Case Summary & 6 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Mig Financial Group II, LLC 1001 Cross Timbers, Suite 2110 Flower Mound, TX 75028 Bankruptcy Case No.: 12-40250 Chapter 11 Petition Date: February 3, 2012 Court: U.S. Bankruptcy Court Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtor's Counsel: Donna R. Hernandez, Esq. LAW OFFICE OF DONNA HERNANDEZ 610 Parker Square Flower Mound, TX 75028 Tel: (972) 539-0090 Fax: (972) 539-1464 E-mail: dhernandez@morris-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its six largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/txeb12-40250.pdf MISS ANN: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------ Debtor: Miss Ann Charters, LLC c/o Frank Schroff 900 Monroe Bay Circle Colonial Beach, VA 22443-4024 Bankruptcy Case No.: 12-10717 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Robert G. Mayer Debtor's Counsel: Thomas J. Stanton, Esq. STANTON & ASSOCIATES, P.C. 221 South Fayette Street Alexandria, VA 22314 Tel: (703) 299-4445 Fax: (703) 299-4473 E-mail: tstanton@us.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 The Company?s list of its five largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/vaeb12-10717.pdf The petition was signed by Frank Schroff, member-manager. MONACO COACH: Directed to File Status Report in Moore Lawsuit ------------------------------------------------------------- Magistrate Judge Sharon L. Ovington directed Monaco Coach Corporation to file a status report regarding the bankruptcy case on or before Feb. 17, 2012, and every six months thereafter. On April 21, 2009, the Court Ordered a lawsuit against Monaco Coach stayed after the company advised the Court of its bankruptcy filing. To date, the Court has not received any information as to the status of the bankruptcy proceedings, Judge Ovington said in a Feb. 3, 2012 Order available at http://is.gd/kRYLrvfrom Leagle.com. The case is BONNIE MOORE, et al., Plaintiffs, v. MONACO COACH CORPORATION, Defendant, Case No. 3:08cv00356 (S.D. Ohio). About Monaco Coach Monaco Coach Corporation, a national manufacturer of motorized and towable recreational vehicles, ranked as the number one producer of diesel-powered motorhomes. Headquartered in Coburg, Oregon, with manufacturing facilities in Oregon and Indiana, the Company offered a variety of RVs, from entry-level priced towables to custom-made luxury models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie, and R-Vision brand names. The Company operated motorhome-only resorts in California, Florida, Nevada and Michigan. Monaco Coach was listed on the Pink Sheets under the symbol "MCOAQ". Monaco Coach and its affiliates filed for Chapter 11 (Bankr. D. Del. Lead Case No. 09-10750) on March 5, 2009. As of Sept. 27, 2008, the Company had $442.1 million in total assets and $208.8 million in total liabilities. Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, served as the Debtors' counsel. Dennis A. Meloro, Esq., Diane E. Vuocolo, Esq., Donald J. Detweiler, Esq., Kevin Finger, Esq., Monica Loftin Townsend, Esq., and Sean Bezark, Esq., at Greenberg Traurig, LLP, represented the official committee of unsecured creditors. Omni Management Group LLC served as the Debtors' claims, balloting, noticing and administrative agent. In July 2009, the Bankruptcy Court converted Monaco's Chapter 11 bankruptcy cases to proceedings under Chapter 7 of the Bankruptcy Code. The Debtor lost access to cash collateral securing its obligations to its lenders. Monaco Coach, now known as MCC, closed sales of its luxury motorhome resort and core manufacturing assets on June 4, 2009. In June 2009, Navistar International Corporation, through its wholly owned subsidiary Workhorse International Holding Company, completed the acquisition of Monaco Coach's five manufacturing facilities, intellectual property and trademarks and certain inventory for $45 million. Navistar funded the purchase price with cash on hand. MOUNTAIN CITY: Files Chapter 11 Liquidating Plan ------------------------------------------------ Mountain City Meat Co., Inc., filed with the Bankruptcy Court its Liquidating Chapter 11 Plan of Reorganization dated Jan. 11, 2012. The Plan is in a form of settlement with holders of 20 Day Vendor Claims and holders of Unsecured Claims. Although the Debtor initiated the Chapter 11 Case on Sept. 24, 2011, creditors holding claims on account of goods delivered to the Debtor within 20 days prior to the Petition Date, filed an involuntary Chapter 7 case against the Debtor on Aug. 11, 2011. The Debtor estimates that the amount of 503(b)(9) Claims will be over $4.3 million if the Involuntary Petition Date is used as the date of the commencement of the case, whereas the amount of 503(b)(9) Claims will likely be $0 if the Voluntary Petition Date is used. Under the Plan, the Debtor is conditionally consenting to the Involuntary Petition Date as the Petition Date. However, holders of 20 Day Vendor Claims may not be paid in full. Instead, they will receive, up to the full amount of their claims: (i) an amount equal to 75% of the first $1,100,000 of unencumbered funds of the estate, less the substantial contribution claim of the Petitioning Creditors, provided, however, that the Unencumbered Funds must total at least $1,000,000; (ii) 100% of the Unencumbered Funds in excess of $1,100,000, if any; and (iii) 50% of any Net Litigation Recoveries. The other 25% of the first $1,100,000 of Unencumbered Funds will be distributed to the Post-Confirmation Committee for investigation and litigation of certain causes of action of the Debtor's estate that will be assigned to the Post-Confirmation Committee. The Debtor has analyzed the value of continuing to contest the Involuntary Case and other possible means of providing recovery to its Creditors and believes that the Plan, if confirmed, provides the most efficient and practical means of recovery for creditors. The Debtor maintains the settlement provides Holders of 20 Day Vendor Claims greater recoveries than they would receive if the Involuntary Petition is dismissed, and it provides Holders of General Unsecured Claims with a right to receive more than they would if an order for relief is entered in the Involuntary Case. A full-text copy of the Disclosure Statement explaining the Liquidating Plan is available at: http://bankrupt.com/misc/MOUNTAIN_CITY_DS.pdf About Mountain City Meat Denver, Colorado-based Mountain City Meat Co., Inc. -- http://www.mountaincitymeat.com/-- is one of the largest portion control beef processors in the United States. Through its headquarters and manufacturing facility in Denver, and its second manufacturing facility in Nashville, Tennessee, Mountain City supplies high quality ground beef and portion control steak cuts through several channels, including retail stores, chain restaurants and broadline food service distributors. On Aug. 9, 2011, Mountain City's board of directors appointed BGA Management LLC d/b/a Alliance Management, through its agent, Alex G. Smith as the company's Chief Restructuring Officer until the need for a CRO no longer existed. Immediately after appointing Alliance as CRO, the Board resigned. On Aug. 11, 2011, Mountain City's secured lender, Fifth Third Bank commenced a receivership action against the company in Denver District Court. At 5:00 p.m. that same day, the Denver District Court appointed Alliance as receiver for Mountain City's personal property and related operations. However, minutes before the receivership order, certain putative unsecured creditors -- Orleans International, Inc., National Beef Packing, Inc. and XL Four Star Beef, Inc. -- commenced an involuntary Chapter 7 bankruptcy petition (Bankr. D. Colo. Case No. 11-29209) against Mountain City. The Involuntary Chapter 7 petition was filed as a result of, among other reasons, the Debtor (a) ordering and not paying for in excess of $2,400,000 of meat inventory from the Petitioning Creditors; and (b) issuing checks to the Petitioning Creditors for a portion of the inventory, which checks were refused for payment by Fifth Third Bank. The Debtor sought dismissal of the Involuntary Petition on the grounds that it was filed in bad faith because the Petitioning Creditors were motivated solely by their desire to preserve their claims under Section 503(b)((9) of the Bankruptcy Code to have that portion of their claims related to goods sold to the Debtor within 20 days prior to the filing treated as an administrative expense. In the Involuntary Case, the Secured Lender obtained two interim orders annulling the automatic stay to allow the receiver to keep control of the Debtor. Mountain City filed a voluntary Chapter 11 petition (Bankr. D. Colo. Case No. 11-32656) on Sept. 24, 2011. Judge Howard R. Tallman presides over the case. Michael J. Pankow, Esq., Daniel J. Garfield, Esq., Heather B. Schell, Esq., at Brownstein Hyatt Farber Schreck, LLP, represent the Debtors as counsel. The Debtor estimated up to $50 million in assets and debts. Attorneys for the Petitioning Creditors are John B. Wasserman, Esq., at Sender & Wasserman, P.C., and Howard S. Sher, Esq., and Michele L. Walton, Esq., at Jacob & Weingarten, P.C. Fifth Third is represented in the case by James T. Markus, Esq., and John F. Young, Esq., at Markus Williams Young & Zimmermann LLC. An official committee of unsecured creditors has been appointed in the case. The panel is represented by Harold G. Morris, Jr., Esq., and John C. Smiley, Esq., at Lindquist & Vennum PLLP. N. BERGMAN: Case Summary & 6 Largest Unsecured Creditors -------------------------------------------------------- Debtor: N. Bergman Insurance Trust 1247 E. 13th Street Brooklyn, NY 11230 Bankruptcy Case No.: 12-40822 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Jerome Feller Debtor's Counsel: Mark A. Frankel, Esq. BACKENROTH FRANKEL & KRINSKY, LLP 489 Fifth Avenue, 28th Floor New York, NY 10017 Tel: (212) 593-1100 Fax: (212) 644-0544 E-mail: mfrankel@bfklaw.com Scheduled Assets: $3,500,000 Scheduled Liabilities: $1,993,000 The Company?s list of its six largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nyeb12-40822.pdf The petition was signed by Jacob Herbst, trustee. NANCE PROPERTIES: Broker Can't Get Commission for Botched Sale -------------------------------------------------------------- Bankruptcy Judge J. Rich Leonard denied a broker's request for commission from a sale deal that never materialized. Nance Properties Inc. hired Richard A. O'Bey and Eastern Carolina Properties Inc. to sell certain properties. The Debtor proposed to pay the firm commissions equal to 4% of the gross sales price of the property. On June 6, 2011, ECP procured an agreement with H. Brooks Barwick, III for the purchase and sale of the Debtor's businesses located in Swansboro, North Carolina, and Richlands, North Carolina, together with nearly all of the associated business assets for $1,200,000. The Debtor asked the Court to approve the private sale free and clear of all liens. Following the objection of secured lender First-Citizens Bank & Trust Company, the Court denied the motion on the grounds that the proposed sale did not satisfy the requirements of 11 U.S.C. Sec. 363(f). On Dec. 8, 2011, ECP sought compensation, stating that "[b]ased on the contract sales price of $1.2 million and the 4% commission, [ECP] is owed a sales commission for procuring a ready, willing and able buyer in the sum of $48,000." The Bankruptcy Administrator and the Debtor objected, arguing that ECP is not entitled to receive commission from the attempted sale of the property, and therefore, the application for compensation must be denied. ECP argues that the right to receive the commission attached when it provided "a ready, willing, and able buyer at a price acceptable to the parties intending to engage in the transaction . . . and but for the actions of the debtor and the decision of this Court, ECP . . . provided all services as required of it in the [listing] agreement." The Court held that the denial of the sale "was in no way a breach by the debtor; it was simply the intervening application of law that applied to the transaction." A copy of the Court's Feb. 6 Order is available at http://is.gd/1TbJT5from Leagle.com. Swansboro, North Carolina-based Nance Properties Inc. owns and operates Valvoline stations and car wash facilities. It filed for Chapter 11 bankruptcy (Bankr. E.D.N.C. Case No. 11-06197) on Aug. 12, 2011. Judge J. Rich Leonard presides over the case. Trawick H. Stubbs, Jr., Esq. -- efile@stubbsperdue.com -- at Stubbs & Perdue, P.A., serves as the Debtor's counsel. It scheduled assets of $1,253,102 and liabilities of $2,880,122. The petition was signed by Joseph R. Nance, president. NEW STREAM: Again Requests More Time to File Chapter 11 Plan ------------------------------------------------------------ Dow Jones' Daily Bankruptcy Review reports that New Stream Secured Capital Inc. is asking a judge to extend, for the fifth time, control of its bankruptcy as it works to finalize its restructuring plan. About New Stream New Stream is an inter-related group of companies that collectively comprise an investment fund, headquartered in Ridgefield, Connecticut. Founded in 2002, New Stream focuses on providing non-traded private debt to the insurance, real estate and commercial finance sectors. On March 7, 2011, when New Stream was still soliciting votes on the Chapter 11 plan, certain investors filed a petition (Bankr. D. Del. Lead Case No. 11-10690) seeking to force three New Stream funds -- New Stream Secured Capital Fund (U.S.) LLC, New Stream Secured Capital Fund P1 (Cayman), Ltd. and New Stream Secured Capital Fund K1 (Cayman), Ltd. -- to Chapter 11 bankruptcy. The petitioning investors in the New Stream investment enterprise say they are collectively owed over $90 million, representing roughly 28% of the approximately $320 million owed to all U.S. and Cayman investors. The Petitioners are represented by (i) Joseph H. Huston, Jr., Esq., Maria Aprile Sawczuk, Esq., Meghan A. Cashman, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, and Beth Stern Fleming, Esq., at Stevens & Lee, P.C., in Philadelphia, Pennsylvania, and Nicholas F. Kajon, Esq., David M. Green, Esq., and Constantine Pourakis, Esq., at Stevens & Lee, P.C., in New York, (ii) Edward Toptani, Esq., at Toptani Law Offices, in New York, and (iii) John M Bradham, Esq., and David Hartheimer, Esq., at Mazzeo Song & Bradham LLP, in New York. New Stream Secured Capital, Inc., and three affiliates (New Stream Insurance, LLC, New Stream Capital, LLC, and New Stream Secured Capital, L.P.) filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 11-10753) on March 13, 2011, with a proposed prepackaged Chapter 11 plan. Kurt F. Gwynne, Esq., J. Cory Falgowski, Esq., Michael J. Venditto, Esq., and Scott M Esterbrook, Esq., at Reed Smith LLP, serve as the Debtors' bankruptcy counsel. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. NSSC, Inc., estimated its assets and debts at up to $50,000. NSC estimated its assets at $100,000 to $500,000 and debts at $50,000 to $100,000. NSI estimated its assets at $100 million to $500 million and debts at $50 million to $100 million. NSSC, LP, estimated its assets and debts at $500 million to $1 billion. NSI's insurance portfolio is being sold for $184.35 million as part of the Chapter 11 plan. The aggregate indebtedness secured by the investment portfolio of NSSC is $688,412,974. NSI owes $81,573,376 to certain account classes under a Bermuda fund. The Official Committee of Unsecured Creditors proposes to hire Kurtzman Carson Consultants LLC as its communications agent; Houlihan Lokey Howard & Zukin Capital, Inc., as its financial advisor and investment banker; and Zolfo Cooper, LLC, as its forensic accountants and litigation support consultants. New Stream completed a sale of its assets on June 3. New Stream sold the portfolio of life-insurance policies to an affiliate of McKinsey & Co. for $127.5 million. There were no competing bids at auction. NNN LAS COLINAS: Case Summary & Largest Creditor ------------------------------------------------ Debtor: NNN Las Colinas Highlands 24, LLC 476 Main Street Old Saybrook, CT 06475 Bankruptcy Case No.: 12-30262 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court District of Connecticut (New Haven) Judge: Lorraine Murphy Weil Debtor's Counsel: Peter L. Ressler, Esq. GROOB RESSLER & MULQUEEN, PC 123 York Street, Suite 1B New Haven, CT 06511-0001 Tel: (203) 777-5741 Fax: (203) 777-4206 E-mail: ressmul@yahoo.com Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Anthony C. Bowser, member. Affiliate that simultaneously filed separate Chapter 11 petition: Debtor Case No. ------ -------- NNN Las Colinas Highlands 25, LLC 12-30260 Assets $0 to $50,000 Debts: $10,000,001 to $50,000,000 NNN Las Colinas Highlands 24?s list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ PNC Bank, NA -- $30,500,000 10851 Mastin, Suite 300 Overland Park, KS 66210 NNN Las Colinas Highlands 25?s list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ PNC Bank, NA -- $30,500,000 10851 Mastin, Suite 300 Overland Park, KS 66210 O.P.C.O., INC.: Case Summary & Largest Unsecured Creditor --------------------------------------------------------- Debtor: O.P.C.O., Inc. 4432 Cave Spring Road Rome, GA 30161 Bankruptcy Case No.: 12-40349 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Northern District of Georgia (Rome) Judge: Paul W. Bonapfel Debtor's Counsel: George M. Geeslin, Esq. Eight Piedmont Center, Suite 550 3525 Piedmont Road, N.E. Atlanta, GA 30305-1565 Tel: (404) 841-3464 Fax: (404) 816-1108 E-mail: geeslingm@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The petition was signed by James P. Jones, III, president. The Company?s list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Floyd County Tax Commissioner Property Tax $3,658 P.O. Box 26 Rome, GA 30162 OUTBACK STORAGE: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Outback Storage, LLC P.O. Box 1688 Dawsonville, GA 30534 Bankruptcy Case No.: 12-20420 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Northern District of Georgia (Gainesville) Debtor's Counsel: Charles N. Kelley, Jr., Esq. CUMMINGS & KELLEY PC P.O. Box 2758 Gainesville, GA 30503-2758 Tel: (770) 531-0007 Fax: (678) 866-2360 E-mail: ckelley@cummingskelley.com Scheduled Assets: $2,073,063 Scheduled Liabilities: $2,122,500 The Company?s list of its three largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ganb12-20420.pdf The petition was signed by Troy L. Ledbetter, manager. OUTSOURCE HOLDINGS: Liquidation Plan Declared Effective ------------------------------------------------------- The First Amended Plan of Liquidation of Outsource Holdings, Inc. was declared effective on Jan. 11, 2012. Conditions to the effectiveness of the Plan have been satisfied. The Plan was successfully confirmed on Dec. 22, 2011. The Plan provides for the orderly liquidation of the Debtor's assets by the Plan Administrator. Brent Burrows is appointed as Plan Administrator. Any Claim arising out of the rejection of an Executory Contract pursuant to the Confirmation Order or prior order of the Bankruptcy Court must be filed with the Court no later than 30 days after the Plan Effective Date. The Confirmation Order provides that Keefe, Bruyette & Woods, Inc. holds an Allowed Claim against the Debtor, that KBW will receive treatment under Class 1 of the Plan on account of its Allowed Claim, and that KBW will not be required to file any further claim for rejection damages due to contract rejection. Requests for payment of Administrative Claims must be filed no later than 45 days after the Plan Effective Date. Professionals seeking compensation for services or reimbursement of expenses must file a formal application for final allowance no later than 60 days after the Plan Effective Date. As reported by The Troubled Company Reporter on Dec. 1, 2011, yhe amount of funds that will be available for distribution to creditors under the Plan will depend on various unknown factors, such as the total amount of administrative claims, the amount ultimately collected pursuant to the Acquisition Agreement and the amount of expenses that will be incurred to administer the Plan. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/OUTSOURCEHOLDINGS_ds.pdf About Outsource Holdings Lubbock, Texas-based Outsource Holdings, Inc.'s only significant asset was its ownership of all of the outstanding capital stock of Jefferson Bank, which is a state bank with five branch locations in the Dallas/Fort Worth metroplex. Outsource Holdings filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 11-41938) on April 3, 2011. Jeff P. Prostok, Esq., at Forshey & Prostok, L.L.P., in Fort Worth, Tex., serves as Outsource Holdings' bankruptcy counsel. The Debtor also tapped Commerce Street Capital, LLP, as investment banker and financial advisor, Fenimore, Kay, Harrison & Ford, LLP as special transaction and regulatory counsel. The Debtor disclosed $10,571,121 in assets and $13,887,431 in liabilities as of the Chapter 11 filing. Anthony J. Pacchia was appointed as Chapter 11 examiner in the Debtor's case. The examiner tapped Cole, Schotz, Meisel, Forman & Leonard, P.A., as counsel and Traxi, LLC, as financial advisors. No creditors' committee has been appointed in the case. PAN WESTERN: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Pan Western Corporation 4910 Donovan Way, Suite A N. Las Vegas, NV 89081 Bankruptcy Case No.: 12-11333 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce T. Beesley Debtor's Counsel: David J. Winterton, Esq. DAVID J. WINTERTON & ASSOC., LTD. 211 N. Buffalo Drive #A Las Vegas, NV 89145 Tel: (702) 363-0317 Fax: (702) 363-1630 E-mail: david@davidwinterton.com Scheduled Assets: $1,950,000 Scheduled Liabilities: $17,292,837 The Company?s list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nvb12-11333.pdf The petition was signed by Mitchell Truman. PAPERWORKS INDUSTRIES: Cut by S&P to 'B-', Now on Watch Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Philadelphia-based PaperWorks Industries Holding Corp. to 'B-' from 'B'. "At the same time, we lowered the issue-level rating on the company's senior secured term loan to 'B-' (the same as the corporate credit rating) from 'B'. The recovery rating on the senior secured term loan is '3', indicating our expectation of meaningful recovery (50% to 70%) for investors in the event of a default. In addition, all ratings were placed on CreditWatch with negative implications," S&P said. "The downgrade and CreditWatch listing reflect our revised assessment of PaperWorks' liquidity to 'less than adequate' from 'adequate' as a result of the increased likelihood that the company may need to address compliance with its covenants in the near-term," S&P said. "We believe that sluggish demand for the company's paperboard products along with cost pressures contributed to weaker-than- expected cash flow and a deterioration in covenant cushion with the potential for a covenant breach," said Standard & Poor's credit analyst Tobias Crabtree. "Previously, our ratings incorporated that the company would be able to improve its cushion with regards to its covenants to 15% following its July 2011 refinancing transaction. Financial maintenance covenants include maximum leverage, minimum EBITDA, minimum fixed-charge coverage, and maximum capital expenditures covenants," S&P said. Private-equity owned PaperWorks operates within the highly competitive and fragmented paperboard folding carton market where it faces several significantly larger and diversified competitors. "In resolving the CreditWatch listing, Standard & Poor's expects to meet with PaperWorks' new management team, following the recent departure of its CEO and CFO, to discuss its plans to address potential covenant compliance issues and to review its near-term operating and financial strategies. Ratings could be lowered if our view of the company's liquidity were to be revised to 'weak' from 'less than adequate,' such as in the case that the company was unable to obtain near-term covenant relief," S&P said. PARKWAY HOSPITAL: Chapter 7 Conversion Moots 2nd Cir. Appeal ------------------------------------------------------------ The U.S. Court of Appeals for the Second Circuit affirmed the District Court's dismissal of The Parkway Hospital's complaint against the Commissioner of the New York State Department of Health, the Public Health Council of the State of New York and various members of the Committee on the Establishment of Health Care Facilities over the revocation of its operating certificate and the hospital's closure. Parkway was a private, for-profit hospital in Forest Hills, New York. In 2005, Parkway voluntarily filed for Chapter 11 bankruptcy, and in January 2007 learned that, pursuant to Chapter 63, Part E, Section 31 of New York State Laws of 2005 c/k/a the "Enabling Legislation," the state intended to revoke Parkway's operating certificate and slated it for closure by June 30, 2008. After learning that it was to be closed, Parkway brought several actions in state court and in the bankruptcy court challenging its closure which delayed the closure until November 2008. Parkway discontinued its state court action and in August 2009 brought a federal action. Parkway's federal action alleges that the defendants violated its rights to procedural and substantive due process and effected an uncompensated taking. The procedural due process claim asserts that Parkway was not provided notice or opportunity to be heard prior to the revocation of its operating certificate. Parkway claims that the defendants "wholly rejected" and disregarded evidence that Parkway had secured financing and would emerge from bankruptcy, and that the closure determination was conducted in secret without Parkway having notice and an opportunity to be heard. In August 2010, because Parkway defaulted on its plan of reorganization, Parkway's chapter 11 bankruptcy was converted by the bankruptcy court into a liquidation proceeding under chapter 7 of the federal Bankruptcy Code. In its bankruptcy filings, Parkway admits that it lacks funds to cover administrative expenses and that it has more than $90 million of unpaid debts. According to the Second Circuit, there is no indication that Parkway has the wherewithal to emerge from bankruptcy and operate a hospital. Parkway can no longer obtain any legally cognizable benefit from the declaratory and injunctive relief it seeks. The case before the appeals court is, THE PARKWAY HOSPITAL, Plaintiff-Appellant, v. NIRAV R. SHAH, AS COMMISSIONER OF THE NEW YORK STATE DEPARTMENT OF HEALTH, PUBLIC HEALTH COUNCIL OF THE STATE OF NEW YORK, SUSAN REGAN, MICHAEL FASSLER, HOWARD FENSTERMAN, HERBERT FRIEDMAN, ELLEN RAUTENBERG, PETER ROBINSON, AND FRANK SERBAROLI, AS MEMBERS OF THE COMMITTEE ON ESTABLISHMENT OF HEALTH CARE FACILITIES, Defendants-Appellees, No. 10-3057-cv (2nd Cir.). The panel consists of Circuit Judges Ralph K. Winter, Peter W. Hall, and Denny Chin. A copy of the Second Circuit's Feb. 6, 2012 Summary Order is available at http://is.gd/SFfusXfrom Leagle.com. About Parkway Hospital The Parkway Hospital Inc. operated a 251-bed proprietary, acute care community hospital located in Forest Hills, New York. The Company filed for chapter 11 protection on July 1, 2005 (Bankr. S.D.N.Y. Case No. 05-14876). Timothy W. Walsh, Esq., at DLA Piper Rudnick Gray Cary US LLP, represented the Debtor in its restructuring efforts. The Trumbull Group, nka Wells Fargo Trumbull, served as the Debtor's claims agent. Alston & Bird LLP served as substitute bankruptcy counsel to the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $28,859,000 in total assets and $47,566,000 in total debts. PENINSULA HOSPITAL: Can Access 1199 Funds' Cash Until Feb. 29 ------------------------------------------------------------- The Hon. Elizabeth S. Stong of the U.S. Bankruptcy Court for the Eastern District of New York, in a seventh interim order, authorized Peninsula Hospital Center, et al., to use cash collateral of 1199 SEIU National Benefit Fund for Health and Human Services Employees, 1199SEIU Health Care Employees Pension Fund, League/1199SEIU Training and Upgrading Fund, 1199SEIU Employer Child Care Fund, and League/1199SEIU Health Care Industry Job Security Fund -- 1199 Funds -- until February 29, 2012. The Court ordered that: (a) The Debtors will pay $341,769.25 to the 1199 Funds on or before February 29, 2012; (b) The balance of the amounts owed to the 1199 Funds for the post-petition period due January 31, 2012, will be treated as an allowed administrative expense claim of the 1199 Funds; and (c) The Debtors will be authorized on consent to use the Cash Collateral of the 1199 Funds and Revival commencing February 2, 2012, through and including February 29, 2012. About Peninsula Hospital Wayne S. Dodakian, Vinod Sinha, and Shannon Gerardi filed an involuntary Chapter 11 bankruptcy protection against Peninsula Hospital Center -- http://www.peninsulahospital.org/-- (Bankr. E.D.N.Y. Case No. 11-47056) on Aug. 16, 2011. Judge Elizabeth S. Stong presides over the case. Marilyn Cowhey Macron, Esq., at Macron & Cowhey, represents the petitioners. Peninsula Hospital Center and Peninsula General Nursing Home Corp., employed Alvarez & Marsal Healthcare Industry Group, LLC, as financial advisors. The Hospital employed Abrams Fensterman, et al., as their attorneys. Nixon Peabody serves as their special counsel; GCG, Inc., serves as claims and noticing agent. Judge Stong appointed Daniel T. McMurray at Focus Management Group as patient care ombudsman. Neubert, Pepe & Monteith P.C. serves as PCO's counsel. Richard J. McCord, Esq., has been appointed by the Court as examiner in the Debtors' cases. He is tasked to conduct an investigation of the Debtors' relationship and transactions with Revival Home Health Care, Revival Acquisitions Group LLC, Revival Funding Co. LLC, and any affiliates. Certilman Balin, & Hyman, LLP, which counts Mr. McCord as one of the firm's members, serves as counsel for the Examiner. CBIZ Accounting, Tax & Advisory of New York, LLC and CBIZ, Inc., serve as financial advisors for the Official Committee of Unsecured Creditors. Robert M. Hirsh, Esq., at Arent Fox LLP, in New York, N.Y., represents the Committee as counsel. PINNACLE AIRLINES: Shareholders Mull Equity Committee ----------------------------------------------------- Wayne Risher at the Commercial Appeal reports that a group advocates immediate appointment of directors with full voting rights to represent shareholders and to promptly begin formation of an equity committee in the event Pinnacle Airlines Inc. filed for Chapter 11 bankruptcy. According to the report, the group is created by investor Wayne King, and Ithaca, N.Y., hedge fund manager Ryan Morris. The group is holding 5.29% of Pinnacle's common stock. The report says Pinnacle officials have said a bankruptcy filing may be their best option if negotiations don't work out with unions, vendors, lenders, major airline partners and other constituents. About Pinnacle Airlines Corp. Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. The Company reported $8.81 million on $938.05 million of total operating revenue for the nine months ended Sept. 30, 2011, compared with net income of $17.02 million on $729.13 million of total operating revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. PROVIDENT FINANCING: Fitch Affirms Jr. Sub. Securities at 'BB+' --------------------------------------------------------------- Fitch Ratings has affirmed Unum Group Inc.'s (NYSE: UNM) holding company ratings, including the senior debt rating at 'BBB', as well as the Insurer Financial Strength (IFS) ratings of all domestic operating subsidiaries at 'A'. The affirmation follows a review of UNM's fourth quarter and full year 2011 earnings. UNM announced that it was discontinuing the sale of group long-term care products and moving the business to a closed block status. As part of the restructure, the company incurred a deferred acquisition cost (DAC) impairment of $290 million and a reserve strengthening charge of $574 million, for a total after-tax restructuring charge of $561 million. Additionally, the company incurred a pre-tax reserve strengthening charge of $184 million related to its closed block individual disability business. Fitch believes UNM's core run-rate profitability continues to support the current rating level. Operating margins in UNM's U.S. disability business have held up better than Fitch's expectations, and they have been better than those of peers. While Unum U.K. results have shown deterioration over the past two years, the company has taken steps to improve results going forward. At year-end 2011, reserves related to closed-block business represented over 45% of UNM's total net reserves. With respect to the individual disability business, the company had previously taken a $111 million reserve strengthening charge in 2004 when it was moved to a closed block status. Fitch believes any further reserve strengthening charges in the near term would reflect poorly on the company's actuarial reserving methodology and risk management practices. UNM's financial leverage was 23% at year-end 2011. Fitch considers the company's debt service capacity as being adequate for the rating level and expects run-rate, GAAP earnings based interest coverage to remain near 11x in 2012. Holding company liquidity totaled $756 million at year-end 2011, down from approximately $1 billion at year-end 2010. The key rating triggers that could lead to an upgrade include: -- Improved general economic conditions including a growth in employment, salaries and disposable income which enable UNM to achieve its long-term target of 5%-8% annual earnings growth on its core operations. -- GAAP earnings-based interest coverage over 12x-14x and statutory maximum allowable dividend coverage of interest expense at 8x. -- U.S. risk-based capital ratio above 400% and run-rate financial leverage below 20%. Key rating triggers that could lead to a downgrade include: -- Deterioration in financial results that includes an increase in the U.S. group disability benefit ratio over 87%; GAAP earnings-based interest coverage falling below 8x and statutory maximum allowable dividend interest expense coverage falling below 4x. -- Any additional reserve strengthening charges in the near term; -- Holding company cash falls below management's target of approximately 1x fixed charges (interest expense plus common stock dividend), or roughly $250 million. -- U.S. risk-based capital ratio below 350% and an increase in financial leverage above 25%. Fitch affirms the following ratings with a Stable Outlook: Unum Group Inc. -- Issuer Default Rating (IDR) at 'BBB+'; -- 7.125% senior notes due Sept. 30, 2016 at 'BBB'; -- 7% senior notes due July 15, 2018 at 'BBB'; -- 5.625% senior notes due 2020 at 'BBB'; -- 7.25% senior notes due March 15, 2028 at 'BBB'; -- 6.75% senior notes due Dec. 15, 2028 at 'BBB'; -- 7.375% senior notes due June 15, 2032 at 'BBB'. Provident Financing Trust I -- 7.405% junior subordinated capital securities at 'BB+'. UnumProvident Finance Company plc, -- 6.85% senior notes due Nov. 15, 2015 at 'BBB'. Unum Group members: Unum Life Insurance Company of America Provident Life & Accident Insurance Company Provident Life and Casualty Insurance Company The Paul Revere Life Insurance Company The Paul Revere Variable Annuity Insurance Company First Unum Life Insurance Company Colonial Life & Accident Insurance Company -- IFS at 'A'. QUANTUM CORP: Paul Orlin Discloses 8.4% Equity Stake ---------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Paul E. Orlin and his affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 19,675,198 shares of common stock of Quantum Corporation representing 8.42% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/JoAojA About Quantum Corp. Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive. Quantum provides a comprehensive, integrated range of disk, tape, and software solutions supported by a world-class sales and service organization. The Company's balance sheet at Sept. 30, 2011, showed $394.19 million in total assets, $443.32 million in total liabilities and a $49.13 million total stockholders' deficit. * * * In January 2011, Moody's Investors Service upgraded Quantum Corporation's Corporate Family and Probability of Default ratings to B2 from B3 and revised the ratings on the senior secured debt obligations to Ba3 from B1. The rating outlook is positive. The upgrade of the CFR to B2 reflects Quantum's improved operating performance, which stems from strong customer adoption and growth of its higher margin branded disk-based systems and software products, which Moody's expects to continue in FY12. In March 2011, Standard & Poor's Ratings Services raised its corporate credit rating on storage manufacturer Quantum Corp. to 'B' from 'B-'. The outlook is stable. "The upgrade reflects that the company has posted four sequential quarters of sustained EBITDA generation, despite ongoing declines in its core tape business and the absence of an EMC licensing arrangement," said Standard & Poor's credit analyst Lucy Patricola. In addition, debt/EBITDA has been stable for the last four quarters at about 4x and reduced from 2009 levels, primarily reflecting application of free cash flow to debt reduction. R.E. LOANS: U.S. Trustee Removes Lisa Khan from Noteholders Panel ----------------------------------------------------------------- William T. Neary, the United States Trustee for Region 6, pursuant to 11 U.S.C. Sec. 1102(a) and (b), removed Lisa Khan from the the list of Official Committee of Note Holders appointed in the Chapter 11 cases of R.E. Loans, LLC, et al. The Second Amended Official Committee of Note Holders are now comprised of: 1. Pearl L. Tom Tom Enterprise GP 3744 Grove Avenue Palo Alto, CA 94303 Tel: (650) 494-3871 Fax: (650) 494-3871 E-mail: pearltom17@hotmail.com 2. Sherratt Reicher 3200 Danvielle Blvd., Suite 200 Alamo, CA 94507 Tel: (925) 314-0914 E-mail: sreicher@hudsonco.com 3. Linda Reilly Patrick and Linda Reilly, Trustees 30503 Palomares Road Castro Valley, CA 94552 Tel: (510) 581-6224 E-mail: linda.reilly@sbcglobal.net 4. Barbara Hamrick 749 Superior Avenue San Leandro, CA 94577 Tel: (510) 914-0650 Fax: (510) 562-5551 E-mail: hamrick.barbara@yahoo.com 5. Gene Rapp North American Financial Corp. 23950 Mission Blvd. Tel: (510) 504-9085 Fax: (510) 582-4921 E-mail: generapp@aol.com 6. Steve Fong 1030 Shoreline Drive San Mateo, CA 94404 Tel: (650) 888-8480 E-mail: steve.fong@fong.com 8. Edwin Blue Edwin and Gertrude M. Blue, Trustees 87 Flood Circle Atherton, CA 94027-2108 Tel: (650) 323-7309 Fax: (650) 325-9871 E-mail: edwinblue@aol.com 8. Allan Cone Pensco Trust FBO P.O. Box 2370 Mendocino, CA 95460 Tel: (707) 953-0257 Fax: (707) 829-2411 9. Eliott Abrams Law Offices of Eliott Abrams 2033 North Main Street, Suite 750 Walnut Creek, CA 94596-3774 Tel: (925) 947-1333 Fax: (925) 210-1224 E-mail: elliot@aebramslaw.com eabrams@pacbell.net 10. Dixon Collins Collins Development Co. 259 Leaf Court Angels Camp, CA 95222 Tel: 209-736-2236 Fax: 209-736-2231 E-mail: calldixon@comcast.net 11. Ron Nahas, Ex Officio Ronald and Mary Trust 3697 Mt. Diablo Blvd., Suite 250 Lafayette, CA 94549 Tel: (925) 254-8800 Fax: (925) 254-8860 E-mail: rnahas@rafnah.com About R.E. Loans R.E. Loans, LLC, was, for many years, in the business of providing financing to home builders and developers of real property. R.E. Future LLC and Capital Salvage own the real property obtained following foreclosure proceedings initiated by R.E. Loans against its borrowers. R.E. Loans is the sole shareholder of Capital Salvage and the sole member of R.E. Future. B-4 Partners LLC is the sole member of R.E. Loans. As a result of the multiple defaults by R.E. Loans' borrowers, R.E. Loans has transitioned from being a lender to becoming a property management company. Lafayette, California-based R.E. Loans, R.E. Future and Capital Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge Barbara J. Houser presides over the case. Stutman, Treister & Glatt Professional Corporation, in Los Angeles, and Gardere, Wynne Sewell LLP, in Dallas, represent the Debtors as counsel. James A. Weissenborn at Mackinac serves as R.E. Loans' chief restructuring officer. The Debtors tapped Hines Smith Carder as their litigation and outside general counsel. The Debtors tapped Alixpartners, LLP as noticing agent, and Latham & Watkins LLP as special counsel in real estate matters. R.E. Loans disclosed $713,622,015 in assets and $886,002,786 in liabilities as of the Chapter 11 filing. Akin Gump Strauss Hauer & Feld LLP, in Dallas, represents the Official Committee of Note Holders as counsel. R.E. LOANS: Committee Wants Case Move from Dallas to California --------------------------------------------------------------- The Official Committee of Note Holders appointed in the Chapter 11 cases of R.E. Loans, LLC, et al., requests the U.S. Bankruptcy Court for the Northern District of Texas to transfer venue of the Debtors' cases to the U.S. Bankruptcy Court for the Northern District of California, Oakland Division. In support thereof, the Committee respectfully states as follows: 1. The overwhelming majority of the Debtors' creditors reside in northern California. 2. The Debtors have never operated in North Texas and they don't actively hold assets there. The sole connection to this district is that the Debtors' prepetition secured lender perfected its liens on certain notes pledged by the Debtors as security by taking possession of those notes and storing them in a vault in Dallas. 3. The Debtors commenced the Chapter 11 cases in Dallas because the prepetition secured lender, Wells Fargo Capital Finance, LLC, conditioned its willingness to extend post-petition financing on the cases not being filed in Northern California. 4. To permit the cases to remain in Dallas based on no more connection to the venue than the presence of the lender's collateral in a downtown vault is an abuse of the venue statutes, and should not be countenanced by the Court. A hearing on this matter has been requested on March 6, 2012, at 9:15 a.m. About R.E. Loans R.E. Loans, LLC, was, for many years, in the business of providing financing to home builders and developers of real property. R.E. Future LLC and Capital Salvage own the real property obtained following foreclosure proceedings initiated by R.E. Loans against its borrowers. R.E. Loans is the sole shareholder of Capital Salvage and the sole member of R.E. Future. B-4 Partners LLC is the sole member of R.E. Loans. As a result of the multiple defaults by R.E. Loans' borrowers, R.E. Loans has transitioned from being a lender to becoming a property management company. Lafayette, California-based R.E. Loans, R.E. Future and Capital Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge Barbara J. Houser presides over the case. Stutman, Treister & Glatt Professional Corporation, in Los Angeles, and Gardere, Wynne Sewell LLP, in Dallas, represent the Debtors as counsel. James A. Weissenborn at Mackinac serves as R.E. Loans' chief restructuring officer. The Debtors tapped Hines Smith Carder as their litigation and outside general counsel. The Debtors tapped Alixpartners, LLP as noticing agent, and Latham & Watkins LLP as special counsel in real estate matters. R.E. Loans disclosed $713,622,015 in assets and $886,002,786 in liabilities as of the Chapter 11 filing. Akin Gump Strauss Hauer & Feld LLP, in Dallas, represents the Official Committee of Note Holders as counsel. R.E. LOANS: Committee Has OK for Diamond McCarthy to Probe Claims ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas has entered an agreed order authorizing the Official Committee of Note Holders to employ Diamond McCarthy LLP as special counsel. As reported in the TCR on Dec. 16, 2011, Diamond McCarthy will conduct a preliminary investigation of, and prepare a written report regarding, potential claims and causes of action the estates may hold against third parties, including any claims against Wells Fargo Capital Finance, LLC, claims against former insiders and professionals of the Debtors, and claims under Chapter 5 of the Bankruptcy Code. The retention will primarily consist of two components: 1) Investigation. Diamond McCarthy will conduct a preliminary investigation, including discovery pursuant to Bankruptcy Rule 2004, and prepare a written report regarding the estates' potential Litigation Claims. Diamond McCarthy will present the written report to the Committee by Feb. 10, 2012. 2) Prosecution. Based upon the written report, the Committee, in consultation with its advisors, will determine which Litigation Claims to pursue, and the compensation to be paid to Diamond McCarthy or other counsel in connection therewith. Diamond McCarthy will likely enter into a joint prosecution agreement with Bonnett, Fairbourn, Friedman & Balint, P.C., lead counsel for the plaintiffs in the class action suit against certain Debtor entities, related entities and third parties. Diamond McCarthy will complete its investigation and written report at no charge to the estates, predicated on the expectation that the Committee and Diamond McCarthy will subsequently agree on terms of a contingent fee arrangement for Diamond McCarthy to represent the Committee in prosecuting the Litigation Claims. Any such contingent fee arrangement will be the subject of a separate application for approval by the Court. Failing that, Diamond McCarthy will be entitled to seek compensation for services rendered and reimbursement of actual expenses incurred based upon its standard hourly rates. In either case, the compensation to be paid to Diamond McCarthy will be paid solely from the proceeds, if any, of Litigation Claims. Diamond McCarthy's standard hourly rates range from $350 to $675 for partners, $225 to $350 for associates, and $150 to $180 for paralegals. Eric D. Madden, a partner at Diamond McCarthy, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About R.E. Loans R.E. Loans, LLC, was, for many years, in the business of providing financing to home builders and developers of real property. R.E. Future LLC and Capital Salvage own the real property obtained following foreclosure proceedings initiated by R.E. Loans against its borrowers. R.E. Loans is the sole shareholder of Capital Salvage and the sole member of R.E. Future. B-4 Partners LLC is the sole member of R.E. Loans. As a result of the multiple defaults by R.E. Loans' borrowers, R.E. Loans has transitioned from being a lender to becoming a property management company. Lafayette, California-based R.E. Loans, R.E. Future and Capital Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge Barbara J. Houser presides over the case. Stutman, Treister & Glatt Professional Corporation, in Los Angeles, and Gardere, Wynne Sewell LLP, in Dallas, represent the Debtors as counsel. James A. Weissenborn at Mackinac serves as R.E. Loans' chief restructuring officer. The Debtors tapped Hines Smith Carder as their litigation and outside general counsel. The Debtors tapped Alixpartners, LLP as noticing agent, and Latham & Watkins LLP as special counsel in real estate matters. R.E. Loans disclosed $713,622,015 in assets and $886,002,786 in liabilities as of the Chapter 11 filing. Akin Gump Strauss Hauer & Feld LLP, in Dallas, represents the Official Committee of Note Holders as counsel. R.E. LOANS: Can Employ Latham & Watkins as Special Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas has authorized R.E. Loans, LLC, et al., to employ Latham & Watkins LLP as Special Counsel, nun pro tunc to Nov. 23, 2011. As reported in the TCR on Jan. 9, 2012, Latham will provide advice to and represent the Debtors, as requested by the Debtors, in connection with specific real estate development and land use matters regarding the Debtors' loan and foreclosure proceedings against the Rancho Las Flores property in San Bernardino County, California (including providing such advice concerning the bankruptcy and state court litigation arising therefrom), and such other matters as may be requested by the Debtors and agreed to by Latham. During the period prior to the Petition Date, Latham received compensation in the aggregate amount of $8,144.92 from R.E. Loans for prepetition services rendered to R.E. Loans. The payments to Latham by R.E. Loans during the 12 months immediately prior the Petition Date were made in the ordinary course of business of R.E. Loans and Latham for services provided by Latham. The Debtors do not owe Latham any amounts relating to services rendered prior to the Petition Date. Compensation will be payable to Latham on an hourly basis, plus reimbursement of actual, necessary expenses and other charges incurred by the firm. Currently, Latham's billing rates applicable to this matter will range from $295 per hour to $1,210 per hour, depending upon the seniority and expertise of the attorney involved. The billing rates applicable to and negotiated for this matter of the lead Partner, Christopher W. Garrett, and the lead Associate, Jeffrey P. Carlin, are currently $810 and $600 per hour, respectively. Paralegal and other, non-attorney professional time will be billed at rates from $95 per hour to $575 per hour. The billing rate applicable to and negotiated for this matter of Project Analyst Cliff Williams is currently $350 per hour. In addition, Latham will receive a $30,000 refundable general retainer paid by the Debtors for services to be rendered and expenses to be incurred in connection with the Debtors' real estate and land use matters (including providing such advice concerning the bankruptcy and state court litigation arising therefrom) during the course of the bankruptcy proceedings. Christopher W. Garrett, a partner of Latham and a member of Latham's Environment, Land, and Resources Department, attests that the firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About R.E. Loans R.E. Loans LLC was, for many years, in the business of providing financing to home builders and developers of real property. R.E. Future LLC and Capital Salvage own the real property obtained following foreclosure proceedings initiated by R.E. Loans against its borrowers. R.E. Loans is the sole shareholder of Capital Salvage and the sole member of R.E. Future. B-4 Partners LLC is the sole member of R.E. Loans. As a result of the multiple defaults by R.E. Loans' borrowers, R.E. Loans has transitioned from being a lender to becoming a property management company. Lafayette, California-based R.E. Loans, R.E. Future and Capital Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge Barbara J. Houser presides over the case. Stutman, Treister & Glatt Professional Corporation, in Los Angeles, and Gardere, Wynne Sewell LLP, in Dallas, represent the Debtors as counsel. James A. Weissenborn at Mackinac serves as R.E. Loans' chief restructuring officer. The Debtors tapped Hines Smith Carder as their litigation and outside general counsel. The Debtors tapped Alixpartners, LLP as noticing agent, and Latham & Watkins LLP as special counsel in real estate matters. R.E. Loans disclosed $713,622,015 in assets and $886,002,786 in liabilities as of the Chapter 11 filing. Akin Gump Strauss Hauer & Feld LLP, in Dallas, represents the Official Committee of Note Holders as counsel. R. PONCE: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------ Debtor: R. Ponce Holdings, LLC 8641 Old Bee Caves Road Austin, TX 78735 Bankruptcy Case No.: 12-10221 Chapter 11 Petition Date: February 4, 2012 Court: U.S. Bankruptcy Court Western District of Texas (Austin) Judge: Craig A. Gargotta Debtor's Counsel: Barbara M. Barron, Esq. BARRON & NEWBURGER, P.C. 1212 Guadalupe, Suite 104 Austin, TX 78701 Tel: (512) 476-9103 Fax: (512) 476-9253 E-mail: bbarron@bnpclaw.com - and ? Stephen W. Sather, Esq. BARRON & NEWBURGER, P.C. 1212 Guadalupe, Suite 104 Austin, TX 78701 Tel: (512) 476-9103 Ext. 220 Fax: (512) 476-9253 E-mail: ssather@bnpclaw.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The Company?s list of its six largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/txwb12-10221.pdf The petition was signed by Richard Ponce, Jr., president. RA GLOBAL: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: RA Global Holdings, Inc. fka Zust Bachmeier International Air Cargo, Inc. 1412 Main Street, Suite 1800 Dallas, TX 75202 Bankruptcy Case No.: 12-30799 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: James C. Lanshe, Esq. JAMES C. LANSHE, PLLC 1412 Main Street, Suite 1800 Dallas, TX 75202 Tel: (214) 522-6692 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by George E. Burch, III, president. REAL MEX: Second-Lien Noteholders Win Auction for Assets -------------------------------------------------------- Real Mex Restaurants, Inc. said its board has approved a bid to acquire virtually all assets of the Company and its subsidiaries from a newly created entity associated with certain of the Company's noteholders including affiliates of Tennenbaum Capital Partners, Z Capital Partners and J.P. Morgan Investment Management. A sale hearing is scheduled for February 10 at which the Bankruptcy Court will be asked to approve the bid, which was submitted in accordance with auction procedures previously approved by the Court. Court approval and satisfaction of various other conditions would clear the way for the purchaser to close the sale within approximately 30 days after the sale hearing. Following the sale the Real Mex restaurants and food production facility will operate outside of Chapter 11 with a substantially improved balance sheet. Real Mex has been operating its restaurants and food production subsidiary as usual while working to improve its capital structure under Chapter 11. The noteholders include investors that were in the Company's pre-petition capital structure. "We remain confident in our turnaround plans and are looking forward to putting this challenging but necessary process behind us," said Real Mex Chairman & CEO David Goronkin. "We are close to accomplishing our objectives in the Chapter 11 process and have the right teams in place to move our brands and company forward. A stronger financial foundation will allow us to accomplish this more quickly." Real Mex's decision to restructure was driven by high debt, certain above-market rents and a weak economic environment, particularly in California where most of its restaurants are located. General Electric Capital Corp. has been providing the Company with DIP financing during the restructuring process. 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. RESIDENTIAL CAPITAL: Said to be in Talks With Cerberus on Prepack ----------------------------------------------------------------- Bloomberg News reports that people with knowledge of the matter, who declined to be identified because the discussions are private, said Residential Capital Inc. and its financial advisers are talking to buyout firms including Fortress Investment Group LLC and Cerberus Capital Management LP about the option of selling itself through a pre-packaged Chapter 11 filing. Mary Childs, writing for Bloomberg News, reports that credit- default swaps on Rescap jumped 13.3 percentage points after the report to a mid-price of 54.8% upfront as of 1:16 p.m. on Feb. 8 in New York, according to broker Phoenix Partners Group. According to Bloomberg, that means the upfront cost to protect $10 million of ResCap bonds from default for five years jumped to $5.48 million from $4.15 million before the report. The initial costs are in addition to $500,000 annually. Sources told Bloomberg that parent Ally Financial, ResCap and their advisors aim to craft a plan for the unit by the end of March, before ResCap encounters financing and liquidity deadlines. About ResCap Residential Capital LLC is a wholly owned subsidiary of GMAC Mortgage Group, LLC, which is a wholly owned subsidiary of Ally Financial Inc. Through its core originations and servicing business, ResCap originates, purchases, and services residential mortgage loans. As of Sept. 30, 2011, ResCap had a total servicing book of $389.4 billion, making it the fifth largest servicer in the U.S. Ally Financial, formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3% stake. Private equity firm Cerberus Capital Management LP keeps 14.9%, while General Motors Co. owns 6.7%. GMAC has tapped Goldman Sachs Group Inc. and Citigroup Inc. to advise on a range of issues, including strategic alternatives for the mortgage business and repayment of taxpayer funds. The Company's balance sheet at June 30, 2011, showed $178.88 billion in total assets and $158.46 billion in total liabilities. Advisors on Board The Wall Street Journal reported in November that people familiar with the situation said Ally has hired Kirkland & Ellis and investment bank Evercore Partners Inc. on a possible restructuring of ResCap. WSJ also noted ResCap brought in a new adviser, Centerview Partners LLP, to consider its options. Centerview's new restructuring practice is led by former Miller Buckfire & Co. bankers Samuel Greene and Marc Puntus. Roughly $2.3 billion of ResCap debt is scheduled to come due in 2011, 2012 and 2013. ResCap has $623 million of cash and cash equivalents as of Sept. 30, 2011. Ratings Cut, Fitch Warns of Covenant Breach In November 2011, Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on ResCap to 'CCC' from 'B+'; and Fitch Ratings cut its Long-term Issuer Default Rating on Rescap to 'CCC' from 'B'. In December 2011, Dominion Bond Rating Service affirmed its Issuer and Long-Term Debt ratings of ResCap at "C". S&P also lowered its rating on ResCap's junior subordinated and senior unsecured debt to 'CC' from 'B-'. S&P indicated Ally may not continue to support ResCap with debt financing or additional equity. Fitch cited the deteriorating year-to-date operating performance, magnified by a $442 million net loss reported in its third fiscal quarter; significant reduction in the tangible net worth covenant cushion; and uncertainty regarding future capital/financial support from Ally. Fitch said ResCap is close to violating the $250 million minimum tangible net worth covenant -- it posted $331 million in 3Q'11, from $772 million in 2Q'11 and $846 million at Dec. 31, 2010 -- required under its credit facilities and servicing agreement with a GSE. Fitch believes that if ResCap were to violate this covenant, it would require Ally to either inject capital or consider restructuring/bankruptcy of ResCap. This view is not informed by any specific knowledge of any restructuring/bankruptcy plans. Fitch believes that a potential restructuring or bankruptcy filing by ResCap would not have any direct implication on Ally, as the two entities are structurally and legally separate. ROBERT ROOD: Court Suggests Mediation in Retirement Trust Suit -------------------------------------------------------------- In the lawsuit, GARY A. ROSEN, TRUSTEE SOUTHERN MANAGEMENT CORPORATION RETIREMENT TRUST, Plaintiffs, v. ROBERT F. ROOD, et al., Defendants, Adv. Proc. No. 09-0188PM (Bankr. D. Md.), trial is set for June 19-21, 2012. To facilitate trial, Bankruptcy Judge Paul Mannes directed the parties to meet and prepare a stipulation of facts as they can agree to by March 7, 2012. In the course of their discussion, the parties are instructed by March 7, 2012, to agree and file a scheduling order as well as a statement as to whether they think there is anything to be gained by the court holding a final pre-trial conference in May. Judge Mannes also suggested that the parties enter mediation to save large amount of time and money. A copy of the Court's Feb. 5, 2012 Memorandum is available at http://is.gd/lXMhUefrom Leagle.com. About Robert Rood IV Robert F. Rood IV and his various corporate entities filed for Chapter 7 bankruptcy (Bankr. D. Md. Lead Case No. 08-17199) in 2008. Those related entities are The Source LLC, Blue Horseshoe Portfolio Services LLC, Level One Capital Partners LLC, Blue Horseshoe Capital LLC, Mattehorn Financial LLC, Level One Capital Partners. Southern Management Corporation Retirement Trust in May 2008 sued Mr. Rood, Blue Horseshoe and Level One in the Circuit Court for Montgomery County, seeking the appointment of a receiver. SMCRT had learned that Rood et al. were commingling and misusing SMCRT loan proceeds for personal gain. Mr. Rood filed for Chapter 7 on the day before a hearing in the Circuit Court regarding the appointment of a permanent receiver and the granting of a preliminary injunction. After Rood's bankruptcy filing, the Circuit Court took no further action as to him but entered an Order appointing Thomas Murphy, Esq., as receiver, together with an Order enjoining the Debtor Entities from misappropriating funds and dissipating assets. Mr. Rood acting pro se filed a second bankruptcy case, this time under Chapter 11 (Bankr. S.D. Fla. Case No. 10-18984) on April 7, 2010. The case was transferred to the Maryland Bankruptcy Court (Bankr. D. Md. Case No. 10-22378), and consolidated with Mr. Rood's existing Chapter 7 case. While Rood thereafter sought to dismiss the Chapter 11 case, the court converted it to a case under Chapter 7 on Aug. 31, 2010. Mr. Rood filed a Chapter 11 case on behalf of Kore (Bankr. D. Nev. 10-_____) on April 7, 2010. That case was transferred to Maryland (Bankr. D. Md. Case No. 10-19436) and converted to a case under Chapter 7 on motion of the U.S. Trustee on Aug. 23, 2010. ROOMSTORE INC: To Liquidate Five Stores in Houston, Texas --------------------------------------------------------- Your Houston News reports that RoomStore has announced it is launching bankruptcy liquidation sales at all five of its stores in the Houston area. The Houston-area locations participating in the massive inventory sell-off sales include: * Stafford: 12626 Fountain Lake Circle, (281) 491-6100 * Webster: 20750 Gulf Freeway, (281) 557-8333 * Humble: 19300 Highway 59 North, Suite B1, (281) 446-6595 * Spring: 25415 IH-45 North, Suite A, (281) 419-0087 * Houston: Store and Clearance Center, 1009 Brittmore Road, (713) 365-9463 The report says RoomStore will be selling off the entire inventory in five super-sized locations during the liquidation sales. 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. ROTECH HEALTHCARE: Robeco Investment Discloses 5.2% Equity Stake ---------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Robeco Investment Management, Inc., disclosed that, as of Dec. 31, 2011, it beneficially owns 1,343,256 shares of common stock of Rotech Healthcare Inc. representing 5.19% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/oi7C7b About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $4.20 million on $496.42 million of net revenue for the year ended Dec. 31, 2010, compared with a net loss of $21.08 million on $479.87 million of net revenue during the prior year. The Company reported a net loss of $6.31 million on $366.75 million of net revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $598,000 on $372.65 million of net revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $281.71 million in total assets, $567.63 million in total liabilities, $2.95 million in Series A convertible redeemable preferred stock, and a $288.87 million total stockholders' deficiency. * * * In October 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Rotech Healthcare to 'B-' from 'CCC'. The outlook is positive. In the March 22, 2011, edition of the TCR, Standard & Poor's Ratings Services said that it raised its corporate credit rating to 'B' from 'B-' on Orlando, Fla.-based Rotech Healthcare Inc., following the completion of the company's $290 million second-lien senior secured notes offering. "The ratings on Rotech Healthcare Inc. reflect the company's weak business risk profile, incorporating Rotech's exposure to Medicare reimbursement reductions for its products and services," said Standard & Poor's credit analyst Jesse Juliano. The rating also reflects the company's highly leveraged financial risk profile. As previously reported by the TCR on Jan. 13, 2012, Moody's Investors Service lowered Rotech Healthcare Inc.'s Corporate Family rating ("CFR") to B3 from B2 as a consequence of weakening liquidity and worse than expected operating performance in 2011 alongside only modest expectations for improvement in 2012. The downgrade to B3 incorporates Moody's concerns regarding the decline in Rotech's cash balance due to significant working capital usage during 2011 and lower than expected growth in EBITDA. SAAB AUTOMOBILE: U.S. Unit Plans to Seek Ch. 11 in Detroit ---------------------------------------------------------- Patrick Fitzgerald, writing for Dow Jones' Daily Bankruptcy Review, reports that Saab Cars North America said it will file for Chapter 11 protection in Michigan. According to DBR, Tim Colbeck, president of Saab Cars North America, said it would be very expensive for the company to administer its case in Delaware. On Monday, DBR relates, Saab Cars filed papers in Delaware Bankruptcy Court providing some additional details about its plans to wind down its business and the events that triggered the bankruptcy filing by its dealers. The company said it was preparing to file for bankruptcy in Detroit after failing to resolve a dispute with lender Ally Financial Inc. over the rights to some 900 vehicles. Ally and Saab were once owned by General Motors Co. Saab Cars owes Ally Financial $61.1 million, according to the auto-finance company's lawyers. DBR relates that in December, following the bankruptcy filing of Saab Cars' parent, Saab Automobile AB, Ally moved to take possession of the vehicles, which were then sitting at ports in Newark, N.J.; Savannah, Ga.; and Ventura, Calif. Hearings over Ally's bid to take possession of the cars had been scheduled to start Feb. 1. That deadline prompted Saab Cars to prepare its voluntary bankruptcy filing. However, before it could do so, some of its dealerships sought to push the company into bankruptcy proceedings in Wilmington. DBR relates Saab said the dealers' filings was made in Delaware because one of the dealers' lawyers, Eric Snyder, Esq., said it was more convenient to travel by train between Wilmington and New York City than to fly to Detroit. DBR reports the dealers' bankruptcy lawyer, Leonard A. Bellavia, Esq., said in an e-mail that Wilmington is the correct venue for the bankruptcy proceedings. "Saab is incorporated in Delaware and many of the parties and counsel are from the east coast so it is unlikely Saab will win this motion," Mr. Bellavia said. Judge Christopher Sontchi has scheduled an initial hearing on the case for Wednesday in Wilmington. A hearing on Saab Cars' bid to move the case to Michigan is slated for March 2. About Saab Cars North America More than 40 U.S.-based Saab dealerships have signed an involuntary chapter 11 bankruptcy petition for Saab Cars North America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30, 2012. The petitioners, represented by Wilk Auslander LLP, assert claims totaling $1.2 million on account of "unpaid warranty and incentive reimbursement and related obligations" and/or "parts and warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia Gentile & Associates, in New York, signed the Chapter 11 petition on behalf of the dealers. The dealers want the vehicle inventory and the parts business to be sold, free of liens from Ally Financial Inc. and Caterpillar Inc., and "to have an appropriate forum to address the claims of the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg News. Saab Cars N.A. is the U.S. sales and distribution unit of Swedish car maker Saab Automobile AB. Saab Cars N.A. named in December an outside administrator, McTevia & Associates, to run the company as part of a plan to avoid immediate liquidation following its parent company's bankruptcy filing. Saab Automobile AB is a Swedish car manufacturer owned by Dutch automobile manufacturer Swedish Automobile NV, formerly Spyker Cars NV. Saab Automobile AB, Saab Automobile Tools AB and Saab Powertain AB filed for bankruptcy on Dec. 19, 2011, after running out of cash. Dow Jones' Daily Bankruptcy Review reports that Saab Cars North America said it will file for Chapter 11 protection in Michigan, a move that comes a little more than a week after some of its dealerships sought to push the Swedish auto maker's U.S. unit into bankruptcy proceedings in Delaware. According to a separate Daily Bankruptcy Review, the receivers in charge of Swedish car maker Saab Automobile's bankruptcy have received some bids for the company's estate, one of which is from Chinese car maker Zhejiang Youngman Lotus Automobile Co. SCHALLER'S BAKERY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Schaller's Bakery, Inc. 826 Highland Avenue Greensburg, PA 15601 Bankruptcy Case No.: 12-20559 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Richard W. Schimizzi, Esq. SCHIMIZZI LAW ASSOCIATES 35 West Pittsburgh Street Greensburg, PA 15601 Tel: (724) 838-9722 Fax: (724) 837-7868 E-mail: schimizzilaw@yahoo.com Estimated Assets: $0 to $50,000 Estimated Debts: $100,001 to $500,000 The Company?s list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/pawb12-20559.pdf The petition was signed by Warren Eric Schaller, president. SCHOMAC GROUP: Wants to Solicit Plan Votes Through March -------------------------------------------------------- The Schomac Group, Inc., et al., ask the U.S. Bankruptcy Court for the District of Arizona to extend the exclusive period to accept acceptances for their Joint Plan of Reorganization through the conclusion of the plan confirmation hearing, which under the present circumstances will not be held until at least mid-March 2012. The Plan and accompanying Disclosure Statement were filed by the Debtors on Dec. 6, 2011. Due to the Court's busy docket and winter holidays, the hearing on the Joint Disclosure Statement is scheduled for Feb. 7. The Debtors' exclusive plan solicitation period, on the other hand, terminates on Feb. 6. The Jan. 6, 2012 edition of the Troubled Company Reporter reported that the Plan contemplates the continued operation of the business entities, including the marketing of properties, which will allow the Debtors to pay creditors. The Debtors' secured debt will be restructured in a manner where payment obligations do not outstrip the income from the project. The Plan will be funded by future operations of the Debtors' businesses, including the sale of properties, as well as by the dividend income from the Debtors' OP Units in CubeSmart. The Debtors also have commitments from related non-debtor entities and the individual equity-holder of the Debtors to fund plan payments, to the extent the Debtors' revenues are insufficient. A copy of the Joint Disclosure Statement is available at no charge at: http://bankrupt.com/misc/schomac.doc96.pdf The Court is set to consider the Debtors' exclusive solicitation period extension request on Feb. 7. About The Schomac Group Tucson, Arizona-based The Schomac Group, Inc.'s primary business is to act as a holding company for its various subsidiaries, which are actively involved in diverse segments of the real estate industry. Schomac's sole shareholders are two trusts controlled by W. Michael Schoff. Schomac previously managed a portfolio of approximately 200 self-storage facilities, 72 of which were sponsored and managed by Schomac with TEDCO, Inc., being a substantial investor. Schomac also sponsored and managed a portfolio of apartment complexes, including the management of roughly 40 apartment complexes, as many as 16 of which were owned by Schomac over time. TEDCO's primary business is to act as a holding company for its various subsidiaries, which are actively involved in diverse segments of the real estate industry. TEDCO's sole shareholder is W. Michael Schoff. SRE Investments, LP owns eleven residential lots of roughly 5 acres each in Saguaro Ranch, a subdivision located in the Tortolita Mountains in Marana, Pima County, Arizona. SRE is 75.921% owed by Schomac. NSS RV Central Limited Partnership owns the real estate known as RV Central, a recreational vehicle and self storage facility located at 6260 North Travel Center Drive in Marana, Pima County, Arizona. NSS RV is 100% owned by Schomac. Schomac Group and TEDCO filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case Nos. 11-22717 and 11-22720) on Aug. 9, 2011. In its schedules, Schomac Group disclosed $48,929,897 in total assets and $34,583,005 in total liabilities. Judge Eileen W. Hollowell presides over the cases. SCOTT DEGRAFF: Probate Estate Can't Represent Deceased Debtor ------------------------------------------------------------- Bankruptcy Judge A. Bruce Campbell denied the request of a deceased debtor's brother to step in the debtor's place, opting instead to dismiss the Chapter 11 case. Scott Alan DeGraff filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 11-33233) on Sept. 30, 2011. He died Nov. 24, 2011. His brother, Steven L. DeGraff, acting as personal representative of the probate estate, filed a Suggestion of Death and Motion for Substitution of Parties. Steven asked to be substituted for his brother not just as "debtor" but as "debtor-in-possession" for his brother's bankruptcy estate. Steven was appointed on Dec. 16, 2011, by the Probate Court in the 9th Judicial District for Colorado (Pitkin County) as the personal representative of the Debtor's probate estate. The United States Trustee said the case should continue as a Chapter 11 because of the pending recovery action against D&R. D&R's Aspen Retirement Plan LLC, a defendant in an 11 U.S.C. Sec. 547 recovery adversary proceeding commenced by the Debtor, urged the Court to dismiss the case. D&R, whose interest is served by dismissal of the case, relies on the Advisory Committee Note to Rule 1016, which indicates that if the debtor dies in a Chapter 11 reorganization, the likelihood is that the case will be dismissed. Other creditors argue that the case should continue in a Chapter 11 because it is in their best interest to do so. The preference recovery action commenced by the Debtor is the primary source for creditor repayment. If the Chapter 11 case is dismissed, the adversary case would be dismissed also. None, however, addressed whether a probate estate can act as the fiduciary for a bankruptcy estate and whether any statute provides authority for such a "substitution." Judge Campbell notes Rule 1016 suggests that when a chapter 11 debtor dies, the case may be continued in Chapter 11 "if further administration is possible and in the best interest of the parties" and does not address whether a personal representative for the deceased debtor may act as the debtor-in-possession, the fiduciary of a bankruptcy estate. "Having reviewed the Bankruptcy Code, case law and the cases cited in the papers of the parties, this Court concludes that a probate estate may not act as debtor-in-possession in the Chapter 11 case of a deceased debtor," Judge Campbell said, citing In re Erickson, 183 B.R. 189 (Bankr.D.Minn.1995). The judge said a Chapter 11 case of a deceased debtor who is debtor-in-possession can continue in Chapter 11 only if a trustee is appointed. "There is no authority for this Court to appoint a trustee sua sponte. Such request must be brought on by the motion of a party in interest. This Court's Order directed to the UST and parties in interest stopped short of inviting them to file a motion for appointment of a trustee, if it was their view the case should be continued in Chapter 11. Notwithstanding that suggestion, no motion has been filed. Thus, continuance in Chapter 11 without a Chapter 11 trustee is not 'possible,'" Judge Campbell said. A copy of the Court's Feb. 2, 2012 Order is available at http://is.gd/RP5AAcfrom Leagle.com. SEABIRD EXPLORATION: Unveils Turnaround Measures ------------------------------------------------ Dow Jones' Daily Bankruptcy Review reports that SeaBird Exploration PLC has a substantial task ahead to pay down its debt and improve its vessel utilization rate to 80% from 60%, Chairman Henrik Christensen told Dow Jones after the company issued a profit warning and announced its chief executive will step down immediately. SeaBird Exploration PLC is a global provider of marine solutions for seabed acquisition of 3D/4C/4D multimode seismic data with OBN operations, marine 2D and 3D seismic data, and associated products and services to the oil and gas industry. SeaBird specializes in high quality operations within the high end of the source vessel and 2D market, as well as in the shallow water 2D/3D market. Main focus for the company is proprietary seismic surveys (contract seismic). Main success criteria for the company are an unrelenting focus on Health, Safety, Security, Environment and Quality (HSSEQ), combined with efficient collection of high quality seismic data. SHANDAR HOLDING: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Shandar Holding Corporation dba Shandar, Inc. c/o Kevin Shanahan 137 Kuhl Road Flemington, NJ 08822 Bankruptcy Case No.: 12-12718 Chapter 11 Petition Date: February 3, 2012 Court: U.S. Bankruptcy Court District of New Jersey (Trenton) Judge: Kathryn C. Ferguson Debtor's Counsel: William S. Wolfson, Esq. WILLIAM S. WOLFSON, LLC 260 US Highway 202/31, Suite 1100 Flemington, NJ 08822 Tel: (908) 782-9333 Fax: (908) 782-0958 E-mail: wwolfsonlaw@comcast.net Scheduled Assets: $800,000 Scheduled Liabilities: $652,243 The Company's list of its five largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb12-12718.pdf The petition was signed by Kevin Shanahan, president. SHREE-HARI, INC.: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Shree-Hari, Inc. dba Motel 6 1720 W. Henderson Street Cleburne, TX 76033 Bankruptcy Case No.: 12-30847 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Debtor's Counsel: Rakhee V. Patel, Esq. PRONSKE & PATEL, P.C. 2200 Ross Avenue, Suite 5350 Dallas, TX 75201 Tel: (214) 658-6500 Fax: (214) 658-6509 E-mail: rpatel@pronskepatel.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Ketan Bhakta, director. SPANISH PEAKS: Concierge to Auction 3 Homes on March 2 ------------------------------------------------------ Four luxury mountain residences located within the Yellowstone Club and The Club at Spanish Peaks -- two exclusive gated communities with superior amenities including private ski and golf resort access -- will sell during a live auction on March 2, Concierge Auctions said. The auction will be conducted in cooperation with Rivers To Peaks Real Estate ~ Big Sky Real Estate. "The seller developed these idyllic vacation homes ideally situated in the heart of the most luxurious amenities these communities offer," stated Martha Johnson, listing agent with Rivers To Peaks ~ Big Sky Real Estate. "The seller believes this is the time to sell and we're looking to achieve this goal by working with Concierge Auctions. In just a few short weeks we'll be heading to auction and look forward to closings within 30 days thereafter." One of the four residences is located within the Yellowstone Club, one of the world's only ski and golf communities. Originally listed for $4.995 million, the four bedroom, six bathroom residence contains roughly 4,806 square feet of living space including multiple living rooms, great outdoor entertaining areas and private ski bridge access. The Yellowstone Club's extensive amenities include over 2,200 private skiable acres, a Tom Weiskopf-designed golf course, several dining options, state-of- the-art fitness facilities, retail shops, a business center, endless outdoor activities and a youth center with a rock climbing wall, movie theater, basketball court, arcade games and more. The remaining three residences are located within Spanish Peaks, a 5,700-acre ski and golf community, adjacent to the slopes of Big Sky Resort Biggest Skiing in America(TM) and also home to a Tom Weiskopf-signature golf course. These properties were originally listed from $2.48 million to $3.2 million. Pioneer Cabin 18 is a furnished five bedroom, six and a half bathroom residence with approximately 3,423 square feet including a detached, two-car garage. Both Discovery Cabins 14 and 15 also have five bedrooms, six and a half bathrooms but with attached, two-car garages. Both contain roughly 3,514 square feet each. All residents at Spanish Peaks enjoy private fairways, secluded slopes, recreational trails, elegant dining and a 32,000-square-foot clubhouse. "We're excited to be back in Montana, continuing our presentation of the most motivated sellers in the most ultimate destination resorts nationwide," stated Laura Brady, Vice President of Marketing for Concierge Auctions. "From the Four Seasons Resort Hualalai in Kona, Hawaii to The Bear's Club in Jupiter, Florida and now the Yellowstone Club and Spanish Peaks, Concierge Auctions is dedicated to presenting the best opportunities for today's discerning buyers to live the premier resort lifestyle." Big Sky is located roughly midway between West Yellowstone and Bozeman in the southwestern part of Montana. Both the Yellowstone Club and Spanish Peaks offer the ultimate in exclusivity and are minutes from Yellowstone National Park, which reaches beyond 2.2 million acres. In addition to skiing and golf, residents and visitors also enjoy mountain biking, fishing, snowmobiling, horseback riding, rock climbing and white water rafting. The closest airport is Gallatin Field Airport, located about 50 miles south in Belgrade. The auction of the residences at Yellowstone Club and Spanish Peaks will be held on March 2. Bidders will be able to participate in person or proxy via telephone or Internet. A 2% and 3% commission is offered to the buyers' representing brokers for the Yellowstone Club and Spanish Peaks sales, respectively. The properties are available for preview daily by appointment. For more information visit http://www.BigSkyAuction.com/or call 800-211-1785. About Concierge Auctions Concierge Auctions -- http://www.ConciergeAuctions.com/-- is the preeminent luxury real estate auction firm serving high-end sellers nationwide through an accelerated marketing process that obtains fair market value for high-end properties in a 60-day timeframe. As a preferred auction partner to Sotheby's International Realty(R) and other luxury brokerage firms nationwide, the company has executed auctions from New York to Hawaii and hosts a database that includes more than 100,000 luxury real estate buyers and agents from all 50 states and 38 countries and territories. The principals of Concierge Auctions have been involved in the transfer of more than $2 billion in luxury real estate sales over the past 10 years. About Spanish Peaks Spanish Peaks Holdings II LLC, Spanish Peaks Lodge LLC, and The Club at Spanish Peaks LLC own and operated a 5,700 acre private residential community in Big Sky, Montana. The facilities include a highly rated golf course and club house and private ski lifts with access to major local ski resorts. Holdings, Lodge, and The Club each filed a voluntary Chapter 7 petition (Bankr. D. Del. Case Nos. 11-13300 to 11-13302) on Oct. 14, 2011. Liabilities exceed $100 million while assets are less than $50 million, according to the petition. Charles M. Forman was named Chapter 7 Trustee. The Chapter 7 Trustee is represented by Katharine L. Mayer, Esq., at McCarter & English LLP; and Erin J. Kennedy, Esq., Michael E. Holt, Esq., and Angela Sheffler Abreu, Esq., at Forman Holt Eliades & Ravin LLC. In January 2012, Delaware Bankruptcy Judge Brendan Linehan Shannon ruled that the Spanish Peaks bankruptcy case will be transferred from Delaware to Montana. Ten creditors, including Morrison Maierle, Kenyon-Noble Lumber Company and Walker Excavation Inc., requested the venue transfer. Eight of those creditors are based in Montana. SRE INVESTMENTS: Court Approves Mesch Clark as Attorneys -------------------------------------------------------- SRE Investments, L.P., et al., sought and obtained permission from the Bankruptcy Court to employ Mesch, Clark & Rothschild, P.C., as their attorneys. MC&R will: (a) give the Debtors legal advice with respect to their powers and duties in the continued operation and management of their properties; (b) take necessary action to recover certain property and money owed to the Debtors, if necessary; (c) represent the Debtors in litigation; (d) prepare on behalf of the Debtors, the necessary applications, answers, complaints, orders, reports, disclosure statement, plan of reorganization, motions and other legal papers; and (e) perform all other legal services that the Debtors deem necessary. To the best of the knowledge of the Debtors, MC&R has no connection with the creditors, or any other party-in-interest or their respective attorneys in this case. MC&R attorneys who will be responsible in representing the Debtors and their current hourly rates are: Michael McGrath $495 Frederick J. Petersen $350 Partners $250 - $550 Associates $200 - $300 Paralegals $160 Legal Assistants $85 - $115 Law Clerks $100 In addition, MC&R will seek reimbursement in full for all reasonably incurred expenses, including, without limitation, travel costs, long distance calls, courier and express mail costs, special or hand deliveries, copying costs, document processing, court fees, transcript costs and other expenses. The firm can be reached at: Michael W. McGrath, Esq. MESCH CLARK & ROTHSCHILD 259 North Meyer Avenue Tucson, AZ 85701-1090 Tel: (520) 624-8886 Fax: (520) 798-1037 Tucson, Arizona-based SRE Investments, L.P., owns several lots at Saguaro Ranch in Pima County, Arizona. SRE Investments filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 11-33247) on Dec. 6, 2011. Judge Eileen W. Hollowell presides over the case. Michael W. McGrath, Esq. -- ecfbk@mcrazlaw.com -- at Mesch Clark & Rothschild, serves as the Debtor's counsel. In its Schedules of Assets and Liabilities, SRE Investments disclosed total assets of $10.14 million and total liabilities of $3.72 million. SRE INVESTMENTS: Jointly Administered Under Schomac Group Case -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona has assigned the Chapter 11 cases of NSS RV Central OG Limited Partnership and SRE Investments, L.P., to Honorable Eileen Hollowell upon the request of the Debtors. The Court ordered joint administration of the Debtors' cases under bankruptcy case of The Schomac Group, Inc., Case No. 11-22717. The Debtors are owned by the same members and are managed by the same persons, W. Michael Schoff and Ryan Schoff. The Jointly Administered Debtors share ownership, corporate offices, operations, and the issues to be resolved in the cases are substantially the same. To the best of the Debtors' knowledge, there is no potential conflict of interest among the bankruptcy estates. Tucson, Arizona-based SRE Investments, L.P., owns several lots at Saguaro Ranch in Pima County, Arizona. SRE Investments filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 11-33247) on Dec. 6, 2011. Judge Eileen W. Hollowell presides over the case. Michael W. McGrath, Esq. -- ecfbk@mcrazlaw.com -- at Mesch Clark & Rothschild, serves as the Debtor's counsel. In its Schedules of Assets and Liabilities, SRE Investments disclosed total assets of $10.14 million and total liabilities of $3.72 million. SRE INVESTMENTS: U.S. Trustee Unable to Form Committee ------------------------------------------------------ The U.S. Trustee for Region 14 told the Bankruptcy Court that a committee under Section 1102 of the Bankruptcy Code has not been appointed because an insufficient number of persons holding unsecured claims against SRE Investments, L.P., have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest develop among the creditors. Tucson, Arizona-based SRE Investments, L.P., owns several lots at Saguaro Ranch in Pima County, Arizona. SRE Investments filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 11-33247) on Dec. 6, 2011. Judge Eileen W. Hollowell presides over the case. Michael W. McGrath, Esq. -- ecfbk@mcrazlaw.com -- at Mesch Clark & Rothschild, serves as the Debtor's counsel. In its Schedules of Assets and Liabilities, SRE Investments disclosed total assets of $10.14 million and total liabilities of $3.72 million. ST. PAUL BUILDING: Case Summary & 9 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: St. Paul Building, LLC c/o Commonwealth Properties 6 West Fifth Street, Suite 900 St. Paul, MN 55102 Bankruptcy Case No.: 12-30629 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court District of Minnesota (St Paul) Judge: Gregory F. Kishel Debtor's Counsel: Michael L. Meyer, Esq. RAVICH MEYER KIRKMAN MCGRATH NAUMAN & TANSEY PA 4545 IDS Center 80 South Eighth Street Mineapolis, MN 55402 Tel: (612) 17-4745 E-mail: mlmeyer@ravichmeyer.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company?s list of its nine largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/mnb12-30629.pdf The petition was signed by John R. Rupp, chief manager. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- IH-2, LLC 12-30627 02/06/12 ST. SIMONS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: St. Simons Lodging, LLC fka Joe McDonough, LLC dba Ocean Lodge 935 Beachview Drive St. Simons Island, GA 31522 Bankruptcy Case No.: 12-20142 Chapter 11 Petition Date: February 6, 2012 Court: U.S. Bankruptcy Court Southern District of Georgia (Brunswick) Debtor's Counsel: James B. Durham, Esq. DURHAM, MCHUGH & DUNCAN, P.C. P.O. Box 2177 Brunswick, GA 31521-2177 Tel: (912) 264-1800 Fax: (912) 264-4480 E-mail: jdurham@durhamfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company?s list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/gasb12-20142.pdf The petition was signed by Joseph N. McDonough, manager. TELLICO LANDING: Disclosure Statement Hearing Set for Feb. 15 ------------------------------------------------------------- A hearing will be held on Feb. 15, 2012, at 9:30 a.m. to consider the adequacy of the Disclosure Statement filed by Debtor Tellico Landing, LLC, in connection with its Chapter 11 Plan. The U.S. Trustee filed an objection to the Disclosure Statement for failure to include more information regarding the proposed DIP financing for the Plan. The Debtor is proposing to sell lots in 36 months to repay a $2,750,000 super priority loan and pay interest to WindRiver Investments. The Plan further proposes, in the absence of DIP financing, to attempt to sell lots to pay all creditors in full by Sept. 15, 2013. According to the U.S. Trustee, the Debtor should disclose more information regarding its plan to accomplish such a feat considering the dearth of property sales in the last three years. The U.S. Trustee asserts that the Disclosure Statement should: (a) disclose any litigation in which the Debtor or any principal of the Debtor is a party, its status, and its potential impact on the Plan of any adverse ruling; (b) specifically state whether the creditors retain acceleration and foreclosure remedies under their former contracts in the event the Plan does not succeed; and (c) include an adequate Chapter 7 liquidation analysis. Objections to the Disclosure Statement were also filed by WindRiver Investments, LLC, Pamela Snider, Bobby & JoAn Toney, Kenneth & Leyanne Harper, George & Brenda Fisher, Dennis & Patricia Terry, Sheryl Thomson, Stephen & Kaye Maynard, Gary & Nancy Scott, Premier Trust of Nevada, Trustee, Keith & Nancy Mcgarr, William & Stacey Baumhauer, James & Boni Head, Stanley & Sheila Goehring, Dana & Betsy Christensen and Jerry & Anne Hand. As reported by the TCR on Jan. 12, 2012, Class 4 WindRiver Investments, LLC, which purportedly holds a first mortgage on the real property of the Debtor, will, to the extent that it can show it has a proper claim, will be paid in full in 5 years from the date of confirmation through sales of lots at Rarity Pointe. The amount believed to be owed is approximately $7,400,000. Payment of any principal will be subordinated to the DIP financing provided by Heritage Solutions, LLC. Should lot sales at the end of the 5 year term not be sufficient to pay WindRiver, the Debtor will refinance the remaining debt and pay the remaining balance, if any, within 15 days of the end of the 5 year period. Under the Plan, Class Five unsecured non-insider creditors, owed $92,071, will be paid their claim in full over 60 months at 4% interest. The principals of the Debtor to the extent they wish to retain their interests will fund the payments. About Tellico Landing Tellico Landing, LLC, based in Maryville, Tennessee, is engaged in the development and sale of an upscale residential community along and near Tellico Lake known as "Rarity Pointe". The Company filed for Chapter 11 bankruptcy (Bankr. E.D. Tenn. Case No. 11-33018) on June 27, 2011. The case has been assigned to Judge Marcia Phillips Parsons. Thomas Lynn Tarpy, Esq., of Hagood Tarpy & Cox PLLC, represents the Debtor. The Debtor scheduled $40,444,352 in assets and $8,532,455 in liabilities. The petition was signed by Michael L. Ross, its chief manager. The United States Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed in the Tellico case because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. TELLICO LANDING: Court Approves William Legg as Economist --------------------------------------------------------- Tellico Landing, LLC, sought and obtained permission from the Bankruptcy Court to employ William Legg as an economist. Dr. Legg will review and give his opinion on the present day value of the Debtor's real property development. Dr. Legg is an economist who has taught land economics at the college level and has published regarding real estate, real estate markets, and land development. He will be reimbursed by the Debtor for his services only after application to and approval by the Court of those services. About Tellico Landing Tellico Landing, LLC, based in Maryville, Tennessee, is engaged in the development and sale of an upscale residential community along and near Tellico Lake known as "Rarity Pointe". The Company filed for Chapter 11 bankruptcy (Bankr. E.D. Tenn. Case No. 11-33018) on June 27, 2011. The case has been assigned to Judge Marcia Phillips Parsons. Thomas Lynn Tarpy, Esq., of Hagood Tarpy & Cox PLLC, represents the Debtor. The Debtor scheduled $40,444,352 in assets and $8,532,455 in liabilities. The petition was signed by Michael L. Ross, its chief manager. The United States Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed in the Tellico case because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. TENET HEALTHCARE: Franklin Mutual Discloses 7% Equity Stake ----------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Franklin Mutual Advisers, LLC, disclosed that, as of Dec. 31, 2011, it beneficially owns 30,574,641 shares of common stock of Tenet Healthcare Corporation representing 7% of the shares outstanding. As previously reported by the TCR on Feb. 2, 2011, Franklin Mutual disclosed beneficial ownership of 50,659,149 shares. A full-text copy of the amended filing is available for free at http://is.gd/zMl4tX About Tenet Healthcare Dallas, Texas-based Tenet Healthcare Corporation (NYSE: THC) -- http://www.tenethealth.com/-- is a health care services company whose subsidiaries and affiliates own and operate acute care hospitals, ambulatory surgery centers and diagnostic imaging centers. "Volume growth was very strong in our third quarter," said Trevor Fetter, president and chief executive officer. "Adjusted admissions growth of 2.3 percent and surgery growth of 3.2 percent drove a 3.5 percent increase in net operating revenues. This top line growth was further leveraged by excellent cost control and attractive pricing increases in our new contracts with commercial managed care payers. Given this progress across our key performance metrics, we are pleased to reconfirm our 2011 EBITDA Outlook in a range of $1.175 billion to $1.275 billion." The Company's balance sheet at Sept. 30, 2011, showed $8.29 billion in total assets, $6.51 billion in total liabilities, $16 million in redeemable noncontrolling interests in equity of consolidated subsidiaries, and $1.76 billion in total equity. * * * As reported by the TCR on Aug. 5, 2010, Moody's Investors Service affirmed its 'B2' corporate family rating for Tenet. The rating reflects Moody's expectation that the Company will likely see positive free cash flow for the full year ending Dec. 31, 2010, as operating results continue to improve and litigation settlement payments end in the third quarter. However, the ratings also consider the significant headwinds facing the company, and the sector as a whole, with respect to increasing bad debt expense, weak volume trends and changes in mix as commercial volumes decline. S&P's corporate credit rating on Tenet is 'B' and remains unchanged. The ratings agency noted that while the Company has experience recent successes to date of a multiyear turnaround effort, the Company has a still-weak business risk profile and high financial leverage. Fitch Ratings has issued its Recovery Rating review of the U.S. Healthcare sector. This review includes an analysis of valuation multiples, EBITDA discounts applied, and detailed recovery worksheets for issuers with a Fitch Issuer Default Rating of 'B+' or lower in this sector. Fitch Ratings has placed Tenet Healthcare Corp.'s ratings on Rating Watch Positive. Tenet's existing ratings are Issuer Default Rating 'B-'; Secured bank facility 'BB-/RR1'; Senior secured notes 'BB-/RR1'; Senior unsecured notes 'B/RR3. The ratings apply to approximately $4.3 billion of debt outstanding as of Sept. 30, 2010. TENSAR CORP: In Restructuring Talks After Missed Term Loan Payment ------------------------------------------------------------------ Dow Jones' DBR Small Cap reports that Tensar Corp. is in negotiations with its lenders to revise its capital structure following a missed term loan amortization payment by its funding entity, TSO Funding Corp. About Tensar Corp. Tensar Corp. specializes in "geogrid" site development, which uses polymer grids to stabilize aggregate fill, providing building and roadway foundation support and protection against soil erosion. Tensar's Geopier Foundation unit supplies piers for sinking into unstable soil, while its North American Green division makes erosion control blankets. Other products include retaining walls and reinforcement nets and mats created and distributed around the world by subsidiaries Tensar International and Tensar Polytechnologies. * * * As reported in the Troubled Company Reporter on Oct. 14, 2011, Standard & Poor's Ratings Services placed its corporate credit rating on Alpharetta, Ga.-based Tensar Corp. on CreditWatch with developing implications. The CreditWatch listing follows Tensar Corp.'s announcement that it is seeking to raise $300 million in senior secured credit facilities to refinance its existing debt. If the transaction is completed as currently proposed, S&P saidi t would raise the corporate credit rating on Tensar Corp. to 'B-' from 'CCC'. TENSAR CORP: S&P Lowers Corporate Credit Rating to 'SD' ------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Alpharetta, Ga.-based Tensar Corp. to 'SD' from 'CCC'. "We also lowered the issue-level rating on TCO Funding Corp.'s first-lien term loan to 'D' from 'B-.' At the same time, we removed the corporate credit rating on Tensar Corp. and the issue-level rating on TCO Funding Corp.'s first-lien term loan from CreditWatch, where they were placed with developing implications on Oct. 11, 2011," S&P said. "The rating actions follow our understanding that TCO Funding Corp., an entity formed to comply with Islamic Shari'ah financing rules, did not make its recently due quarterly amortization payment on its first-lien term loan," S&P said. "As a result, we lowered the corporate credit rating on Tensar Corp. to 'SD' because it is our understanding that TCO Funding Corp. has paid interest on its term loan, as well as interest and principal on other issues. In accordance with our criteria, we lowered the issue-level rating on the term loan to 'D', since we view a principal payment as unlikely within a five-day grace period," S&P said. "Tensar Corp. announced in October that it was seeking to raise $300 million in senior secured credit facilities to refinance its existing debt. Should Tensar complete its refinancing, we will reassess its credit quality and assign new ratings reflecting our view of the company's operating prospects, capital structure, and liquidity position. Alternatively, we could lower the corporate credit rating to 'D' from 'SD' if TCO Funding Corp. stops making future interest and principal payments, or if the company files for bankruptcy," S&P said. TERRESTAR CORP: DISH Gets Canadian Nod for License Transfer ----------------------------------------------------------- DISH Network Corporation announced the Canadian approval of the TerreStar license transfer request. "DISH is pleased to announce that Industry Canada has approved the transfer of the Canadian spectrum licenses held by TerreStar to DISH. In granting its approval, Industry Canada reached the conclusion that the transfer would be in the public interest in light of 'the capacity that would be available in Canada,' among other reasons." U.S. bankruptcy courts approved DISH's acquisition of the spectrum licenses held by TerreStar and DBSD in the middle of 2011. DISH is prepared to immediately close both transactions upon receiving Federal Communications Commission approval of the transactions and associated waiver requests, which will enable DISH to move forward with its planned wireless initiatives. DISH believes that immediate Commission approval will be a win for consumers, competition, infrastructure investment, and American jobs." About DISH Network DISH Network Corporation -- http://www.dish.com/-- through its subsidiary DISH Network L.L.C., provides approximately 13.945 million satellite TV customers, as of Sept. 30, 2011, with the highest quality programming and technology with the most choices at the best value, including HD Free for Life. About TerreStar Corp. and TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which filed on Oct. 19, 2010. The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC's case is jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11-10612 (SHL). The seven Debtor entities who sought joint administration with TSC are TerreStar New York Inc., Motient Communications Inc., Motient Holdings Inc., Motient License Inc., Motient Services Inc., Motient Ventures Holdings Inc., and MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks -- TSN -- the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100 million to $500million in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the Committee's financial advisor. TerreStar has signed a contract to sell its business to Dish Network Corp. for $1.38 billion. TerreStar cancelled a June 30 auction because there were no competing bids submitted by the deadline. As reported in the TCR on Nov. 23, 2011, TerreStar Networks Inc. sold the business to Dish Network Corp. for $1.38 billion, negotiated a settlement with creditors, and filed a liquidating Chapter 11 plan. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports the hearing to approve the explanatory disclosure statement is set for Dec. 16. If the plan stays on track, the confirmation hearing for approval of the plan would take place Feb. 13. TERRESTAR NETWORKS: Files Chapter 11 Plan Supplement ---------------------------------------------------- BankruptcyData.com reports that TerreStar Networks filed with the U.S. Bankruptcy Court a Supplement for its Chapter 11 Plan containing these documents: Liquidating Trust Agreement, Interim TSN Trust Agreement, New Certificates of Incorporation, New by- Laws, Identity of New Boards, Identity of New Officers, List of Assumed Executory Contracts and Unexpired Leases, List of Rejected Executory Contracts and Unexpired Leases, Schedule of Retained Causes of Action, New Employment Agreements, Schedule of Insurance Policies, Summary of Terms and Conditions of Tail Insurance and Interim TSN Warrant Agreement. About TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which filed on Oct. 19, 2010. The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC's case is jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11-10612 (SHL). The seven Debtor entities who sought joint administration with TSC are TerreStar New York Inc., Motient Communications Inc., Motient Holdings Inc., Motient License Inc., Motient Services Inc., Motient Ventures Holdings Inc., and MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks -- TSN -- the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the Committee's financial advisor. TerreStar Networks sold its business to Dish Network Corp. for $1.38 billion. It canceled a June 2011 auction because there were no competing bids submitted by the deadline. TerreStar Networks previously filed a reorganization plan that called for secured noteholders to swap more than $850 million in debt for nearly all the equity in reorganized TerreStar. Junior creditors, however, would see little recovery under that plan while existing equity holders would be wiped out. TerreStar Networks scrapped that plan in 2011 in favor of the auction. In November 2011, TerreStar Networks filed a liquidating Chapter 11 plan after striking a settlement with creditors. The creditors' committee initiated lawsuits in July to enhance the recovery by unsecured creditors. TOWN CENTER: U.S. Trustee Balks at Plan Outline Adequacy -------------------------------------------------------- Donald F. Walton, U.S. Trustee for Region 21, asks the U.S. Bankruptcy Court for the Southern District of Florida to deny the approval of the Disclosure Statement explaining Town Center at Doral, LLC, et al.'s Chapter 11 Plan. The U.S. Trustee explains that, among other things: 1. The Disclosure Statement does not adequately describe the terms for transfer of ownership to the Plan Sponsor, whether the equity is subject to competitive bidding, or whether the secured creditors have a right to credit bid; 2. The Unsecured Creditor Distribution must be secured either by the real property or in the equity interest of the Debtor, until all payments have been made; 3. The Disclosure Statement fails to state, in bolded language, that there will be 30 days during which the creditors may file rejection damages claims, as per Local Rule 6006-1(A). The U.S. Trustee also relates that in the absence of amendments to deal with these matters, the Court disapprove the proposed Disclosure Statement and convert the case to one under Chapter 7 of the Bankruptcy Code. As reported in the Troubled Company Reporter on Jan. 25, 2012, on the Effective Date, in full and final satisfaction of the DIP Financing Claim, and subject to Terra Landmark's simultaneous payment of the Initial Equity Contribution to the Reorganized Debtors, the Holder of the DIP Financing Claim will receive, as soon as reasonably practicable on or after the Effective Date, 100% of the New Membership Units in the Reorganized Debtors. The Plan contemplates the development of the Debtor's property as a single project in phases. The initial phase of the New Development will focus on the North Parcel, which will consist primarily of residential units, including townhomes and single- family homes. The development of the South Parcel will include both residential, retail, and commercial office components. The Debtors believe that the restructuring proposed in the Plan will enable the Reorganized Debtors to quickly pursue development of the North and South Parcels for the benefit of all economic parties in interest. A copy of the Disclosure Statement dated Dec. 21, 2011, is available for free at: http://bankrupt.com/misc/towncenter.doc108.pdf About Town Center Town Center at Doral, LLC, Landmark at Doral East, LLC, Landmark at Doral South, LLC, Landmark Club at Doral, LLC, and Landmark at Doral Developers, LLC, companies associated with the aborted Landmark at Doral development, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case Nos. 11-35884 to 11-35888) on Sept. 19, 2011, almost three years after AmTrust Bank sought to foreclose on the project. Town Center at Doral, LLC, posted assets of $29,297,300 and liabilities of $166,133,171. Isaac Kodsi signed the petitions as vice president. The Property consists of 16 individual tracts of land that remain undeveloped with the exception of an unfinished 4-level parking garage. Prior to the Petition Date, the Debtors had sought and obtained approvals for the development of residential units (townhomes and condominiums), retail/office/mixed use, and flex office at the Property. Mindy A. Mora, Esq., and Tara V. Trevorrow, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, in Miami, serve as counsel to the Debtors. Glenn D. Moses, Esq., at Genovese, Joblove & Battista, P.A., IN Miami, represents the official committee of unsecured creditors. Cleveland, Ohio-based AmTrust filed for foreclosure in October 2008 based on the $124.4 million in mortgages that were granted the developer in 2005. Several projects started by EB Developers fell into foreclosure after owner and CEO Elie Berdugo died in February 2008. TOWN CENTER: Court Denies Request to Value Property at $40 Million ------------------------------------------------------------------ The Hon. Robert A. Mark of the U.S. Bankruptcy Court for the Southern District of Florida denied approval of Town Center at Doral, LLC, et al.'s motion to value collateral without prejudice. In making its decision, the Court considered the testimony of the two experts, Lee Waronker and Woodward Hanson, and reviewed and considered their reports which were admitted into evidence without objection. As reported in the Troubled Company Reporter on Jan. 23, 2012, the Debtor asked that the Court determine the value of their property at $40 million. The property consists of 16 individual tracts of land that remain undeveloped with the exception of an unfinished 4-level parking garage. Prior to the Petition Date, the Debtors had sought and obtained approvals for the development of residential units (townhomes and condominiums), retail/office/mixed use, and flex office at the property. The Debtors related that according to the Miami-Dade County Property Appraiser, the current assessed values of the Debtors' parcels are: NAME OF DEBTOR LOT SIZE VALUE -------------- -------- ----- Town Center at Doral, LLC 57.09 acres $24,297,300 Landmark at Doral East, LLC 15.72 acres $4,745,449 Landmark Club at Doral, LLC 70,131.5 sq. ft. $724,500 Landmark at Doral South, LLC 18.93 acres $6,621,975 Landmark at Doral Developers, LLC Air rights over 18.93 acres Unknown Total: $36,389,224 The Debtors explained that in order to successfully propose and confirm a plan of reorganization, they must establish the value of the property, which serves as the sole source of collateral in these cases. Specifically, the Debtors need to know the value of the property to classify the claims of creditors Landmark at Doral Community Development District (CDD) and AMT CADC Venture, LLC (AMT) and determine the appropriate treatment for the claims under the plan. In this relation, the Debtors retained Waronker & Rosen, Inc. to prepare an appraisal of the property. The Debtor believes that the property is worth approximately $40 million in the aggregate. About Town Center Town Center at Doral, LLC, Landmark at Doral East, LLC, Landmark at Doral South, LLC, Landmark Club at Doral, LLC, and Landmark at Doral Developers, LLC, companies associated with the aborted Landmark at Doral development, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case Nos. 11-35884 to 11-35888) on Sept. 19, 2011, almost three years after AmTrust Bank sought to foreclose on the project. Town Center at Doral, LLC, posted assets of $29,297,300 and liabilities of $166,133,171. Isaac Kodsi signed the petitions as vice president. The Property consists of 16 individual tracts of land that remain undeveloped with the exception of an unfinished 4-level parking garage. Prior to the Petition Date, the Debtors had sought and obtained approvals for the development of residential units (townhomes and condominiums), retail/office/mixed use, and flex office at the Property. Mindy A. Mora, Esq., and Tara V. Trevorrow, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, in Miami, serve as counsel to the Debtors. Glenn D. Moses, Esq., at Genovese, Joblove & Battista, P.A., IN Miami, represents the official committee of unsecured creditors. Cleveland, Ohio-based AmTrust filed for foreclosure in October 2008 based on the $124.4 million in mortgages that were granted the developer in 2005. Several projects started by EB Developers fell into foreclosure after owner and CEO Elie Berdugo died in February 2008. TRANS-LUX CORP: Henry Hackel Discloses 9.1% Equity Stake -------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Henry Hackel disclosed that, as of Nov. 14, 2011, he beneficially owns 425,750 shares of common stock of Trans-Lux Corporation representing 9.1% based on 4,686,923 shares of Common Stock issued and outstanding. A full-text copy of the filing is available for free at http://is.gd/kjtGDN About Trans-Lux Corporation Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a designer and manufacturer of digital signage display solutions for the financial, sports and entertainment, gaming and leasing markets. Trans-Lux reported a net loss of $7.03 million on $24.30 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $8.79 million on $28.54 million of total revenues during the prior year. The Company also reported a net loss of $5.45 million on $17.12 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $5.25 million on $18.73 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $29.73 million in total assets, $35.31 million in total liabilities, and a $5.58 million total stockholders' deficit. As reported by the TCR on April 8, 2011, UHY LLP, in Hartford, Connecticut, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant recurring losses from continuing operations and has a significant working capital deficiency. In 2009, the Company had a loss from continuing operations of $8.8 million and has a working capital deficiency of $16.0 million as of Dec. 31, 2009. Furthermore, the Company is in default of the indenture agreements governing its outstanding 9 1/2% Subordinated debentures and its 8 1/4% Limited convertible senior subordinated notes so that the trustees or holders of 25% of the outstanding Debentures and Notes have the right to demand payment immediately. TUBE CITY: S&P Cuts Rating on $165-Mil. Sr. Term Loan to 'BB-' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its issue-level rating and revised its recovery rating on Glassport, Pa.-based Tube City IMS Corp.'s (Tube City; BB-/Stable/--) senior secured term loan. We lowered the issue-rating on the $165 million senior secured term loan facility due January 2014 to 'BB-' (same as the corporate credit rating) from 'BB'. "We also revised the recovery rating on these notes to '4' from '2'. The '4' recovery rating indicates our expectations for average (30% to 50%) recovery in the event of a payment default," S&P said. "We affirmed our 'B' issue-level rating (two notches lower than the corporate credit rating) on Tube City's senior subordinated notes. The recovery rating on the notes is '6', indicating our expectation for negligible (0% to 10%) recovery in the event of a default," S&P said. "We revised the recovery ratings on U.S.-based steel mill services provider Tube City to reflect a new $350 million asset-based loan facility due 2016," said Standard & Poor's credit analyst Maurice Austin. "The corporate credit rating on Tube City reflects our assessment of the company's financial risk profile as 'significant'. Our rating on Tube City incorporates our expectation that the current operating environment in the steel industry is likely to prevail in the next two years, with capacity utilization rates above 70% and incremental growth in production volumes. Our rating also incorporates our assessment of Tube City's business risk as 'weak', given its dependence on steel mill production volumes, operations in a competitive and capital-intensive industry, and some customer concentration risk. The ratings also reflect the company's long-term contracts with customers, a favorable niche business position, and good margins compared with services centers and steel processors," S&P said. Ratings List Rating Affirmed Tube City IMS Corp. Corporate credit rating BB-/Stable/-- Downgraded; Recovery Rating Revised Tube City IMS Corp. To From Senior secured term loan BB- BB Recovery Rating 4 2 Rating Affirmed Senior subordinated notes B Recovery rating 6 ULURU INC: Gets Continued Listing Standards Notice From Amex ------------------------------------------------------------ ULURU Inc. disclosed that the Company has received notice from the NYSE Amex, dated Feb. 3, 2012, indicating that the Exchange has accepted the Company's plans of compliance and granted the Company an extension until April 2, 2012 to regain compliance with the continued listing standards of Section 1003(a)(iv) of the Exchange's Company Guide and an extension until March 21, 2013 to regain compliance with the continued listing standards of Section 1003(a)(iii) of the Exchange's Company Guide. Previously, the Company had received notice from the Exchange, dated Dec. 5, 2011, that the Company did not meet the provisions of Section 1003(a)(iv) since the Company has sustained losses which are so substantial in relation to its overall operations or its existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether the Company will be able to continue operations and/or meet its obligations as they mature. The Company had also received a previous notice from the Exchange, dated Sept. 21, 2011, that the Company was below the Exchange's stockholders' equity continued listing standards and did not meet the provisions of Section 1003(a)(iii) since the Company reported stockholders' equity of less than $6,000,000 at June 30, 2011 and has incurred losses from continuing operations and/or net losses in its five most recent fiscal years ended Dec. 31, 2010. The Company will be subject to periodic review by Exchange Staff during the extension period. Failure to make progress consistent with the plans or to regain compliance with the continued listing standards by the end of each applicable extension period could result in the Company being delisted from the Exchange. About ULURU Inc ULURU Inc. -- http://www.ULURUinc.com/-- is a specialty pharmaceutical company focused on the development of a portfolio of wound management and oral care products to provide patients and consumers improved clinical outcomes through controlled delivery utilizing its innovative Nanoflex(TM) Aggregate technology and OraDisc(TM) transmucosal delivery system. USG CORPORATION: Incurs $100 Million Net Loss in Fourth Quarter --------------------------------------------------------------- USG Corporation reported a net loss of $100 million on $750 million of net sales for the three months ended Dec. 31, 2011, compared with a net loss of $121 million on $696 million of net sales for the same period during the prior year. The Company reported a net loss of $390 million on $3.02 billion of net sales for the twelve months ended Dec. 31, 2011, compared with a net loss of $405 million on $2.94 billion of net sales during the prior year. USG Corporation's balance sheet as of Dec. 31, 2011, showed $3.72 billion in total assets, $3.56 billion in total liabilities and $156 million in total stockholders' equity. "While some markets remain at or near historically low levels, all of our businesses continue to benefit from the strategic actions we have taken to reduce costs and strengthen our operations," said James S. Metcalf, Chairman, President and CEO. "United States Gypsum Company and L&W Supply Corporation, our two largest businesses, reduced their reported operating losses in 2011 compared to the prior year, while many of our other key units achieved an operating profit in 2011." A full-text copy of the press release is available for free at: http://is.gd/OE5TK9 About USG Corporation Based in Chicago, Ill., USG Corporation -- http://www.usg.com/-- through its subsidiaries, manufactures and distributes building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The company filed for Chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). When the Debtors filed for protection from their creditors, they disclosed $3,252,000,000 in assets and $2,739,000,000 in debts. The Debtors emerged from bankruptcy protection on June 20, 2006. * * * As reported by the TCR on Aug. 15, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on USG Corp. to 'B' from 'B+'. "The downgrade reflects our expectation that USG's operating results and cash flow are likely to be strained over the next year due to the ongoing depressed level of housing starts and still- weak commercial construction activity," said Standard & Poor's credit analyst Thomas Nadramia. "It is now more likely, in our view, that any meaningful recovery in housing starts may be deferred until late 2012 or into 2013. As a result, the risk that USG's liquidity in the next 12 to 24 months will continue to erode (and be less than we incorporated into our prior ratings) has increased. The ratings previously incorporated a greater improvement in housing starts, which would have enabled USG to reduce its negative operating cash flow in 2012 and achieve breakeven cash flow or better by 2013." In the Sept. 14, 2011, edition of the TCR, Fitch Ratings has downgraded USG Corporation's Issuer Default Rating (IDR) to 'B-' from 'B'. The Rating Outlook remains Negative. The ratings downgrade and the Negative Outlook reflect Fitch's belief that underlying demand for the company's products will remain weak through at least 2012 and the company's liquidity position is likely to deteriorate in the next 18 months. With the recent softening in the economy and lowered economic growth expectations for 2011 and 2012, the environment may at best support a relatively modest recovery in housing metrics over the next year and a half. Fitch had previously forecast a slightly more robust housing environment in 2011 and 2012. Moreover, new commercial construction is expected to decline further this year and may only grow moderately next year. VITRO SAB: Mexican Judge Approves Debt Restructuring ---------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Mexican glass maker Vitro SAB said Tuesday that a court in Mexico has approved its debt restructuring, but that it expects certain of its bondholders who have fought the deal to continue efforts against the plan. About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global glass producer, serving the construction and automotive glass markets and glass containers needs of the food, beverage, wine, liquor, cosmetics and pharmaceutical industries. Vitro is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009, and sought to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. Concurso Mercantil & Chapter 15 Proceedings Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, commencing its voluntary concurso mercantil proceedings -- the Mexican equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on Dec. 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. The judge said Vitro couldn't push through a plan to buy back or swap US$1.2 billion in debt from bondholders based on the vote of US$1.9 billion of intercompany debt when third-party creditors were opposed. Vitro as a result dismissed the first Chapter 15 petition following the ruling by the Mexican court. On April 12, 2011, an appellate court in Mexico reinstated the reorganization. Accordingly, Vitro SAB on April 14 re-filed a petition for recognition of its Mexican reorganization in U.S. Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11- 11754). The Vitro parent told the Mexico stock exchange that it received sufficient acceptances of its reorganization pending in a court in Monterrey. The approval vote was evidently obtained using claims of affiliates. The bondholders are opposing the Mexican reorganization plan because shareholders could retain ownership while bondholders aren't being paid in full. Bondholders previously cited an "independent analyst" who estimated the Mexican plan was worth 49% to 54% of creditors' claims. In the present Chapter 15 case, the Debtor seeks to block any creditor suits in the U.S. pending the reorganization in Mexico. Chapter 11 Proceedings A group of noteholders opposed the exchange -- namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P. Together, they held US$75 million, or approximately 6% of the outstanding bond debt. The Noteholder group commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders, known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. The U.S. affiliates subject to the involuntary petitions are Vitro Chemicals, Fibers & Mining, LLC (Bankr. N.D. Tex. Case No.10-47472); Vitro America, LLC (Bankr. N.D. Tex. Case No. 10- 47473); Troper Services, Inc. (Bankr. N.D. Tex. Case No. 10- 47474); Super Sky Products, Inc. (Bankr. N.D. Tex. Case No. 10- 47475); Super Sky International, Inc. (Bankr. N.D. Tex. Case No. 10-47476); VVP Holdings, LLC (Bankr. N.D. Tex. Case No. 0-47477); Amsilco Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47478); B.B.O. Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47479); Binswanger Glass Company (Bankr. N.D. Tex. Case No. 10-47480); Crisa Corporation (Bankr. N.D. Tex. Case No. 10-47481); VVP Finance Corporation (Bankr. N.D. Tex. Case No. 10-47482); VVP Auto Glass, Inc. (Bankr. N.D. Tex. Case No. 10-47483); V-MX Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47484); and Vitro Packaging, LLC (Bankr. N.D. Tex. Case No. 10-47485). A bankruptcy judge in Fort Worth, Texas, denied involuntary Chapter 11 petitions filed against four U.S. subsidiaries. On April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro America LLC and three other U.S. subsidiaries -- that were subject to the involuntary petitions into voluntary Chapter 11. The Texas Court on April 21 denied involuntary petitions against the eight U.S. subsidiaries that didn't consent to being in Chapter 11. Kurtzman Carson Consultants is the claims and notice agent to Vitro America, et al. Alvarez & Marsal North America LLC, is the Debtors' operations and financial advisor. The official committee of unsecured creditors appointed in the Chapter 11 cases of Vitro America, et al., has selected Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, as counsel. Blackstone Advisory Partners L.P. serves as financial advisor to the Committee. The U.S. Vitro companies sold their assets to American Glass Enterprises LLC, an affiliate of Sun Capital Partners Inc., for US$55 million. WASHINGTON MUTUAL: Court Trims FDIC's $129MM Claims Over Losses --------------------------------------------------------------- Martin Bricketto at Bankruptcy Law360 reports that a California federal judge on Monday again trimmed the Federal Deposit Insurance Corp.'s $129 million suit accusing an appraisal services company of breaching contracts with Washington Mutual Inc. and causing it to suffer losses on bad mortgage loans. Acting as the receiver for WaMu, the FDIC has argued that CoreLogic Valuation Services LLC inflated real estate appraisals by using unqualified personnel to perform the work, additionally contending that the company's quality control methods were severely inadequate, Law360 relates. The suit was filed in May. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York, and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. On Jan. 7, 2011, the Bankruptcy Court entered a 107-page opinion determining that the global settlement agreement, among certain parties including WMI, the Federal Deposit Insurance Corporation and JPMorgan, upon which the Plan is premised, and the transactions contemplated therein, are fair, reasonable, and in the best interests of WMI. However, the Opinion and related order denied confirmation, but suggested certain modifications to the Company's Sixth Amended Joint Plan of Affiliated Debtors that, if made, would facilitate confirmation. WaMu filed a Modified Sixth Amended Joint Plan and a related Supplemental Disclosure Statement, which it believes would address the Bankruptcy Court's concerns. On Sept. 13, 2011, Judge Walrath denied confirmation of WaMu's Modified Sixth Amended Plan and granted equity committee standing to prosecute claims for equitable disallowance but stayed the ruling pending mediation. WaMu said it would seek confirmation of a revised plan "as soon as practicable." The Plan proposes to pay more than $7 billion to creditors and incorporates a global settlement agreement resolving issues among the Debtors, JPMorgan Chase, the Federal Deposit Insurance Corp. in its corporate capacity and as receiver for WaMu Bank, certain large creditors, certain WMB senior noteholders, and the creditors' committee. The Settlement Noteholders are Appaloosa Management, L.P., Aurelius Capital Management LP, Centerbridge Partners, LP, and Owl Creek Asset Management, L.P. WATERFORD FUNDING: $1.6MM in Transfers to Humphrey Fraudulent ------------------------------------------------------------- Bankruptcy Judge R. Kimball Mosier ruled that payments received by Daniel Quentin Humphrey from Waterford Funding LLC were fraudulent transfers. Accordingly, Judge Mosier granted a motion for summary judgment filed by Gil A. Miller, the Chapter 11 trustee for Waterford Funding and its affiliates, saying the Chapter 11 Truste is entitled to recover for the benefit of the Debtors' estate $1,675,000. From November 2001 through the Petition Date, Waterford transferred roughly $3,971,270 to Mr. Humphrey. Within four years prior to the Petition Date, Waterford transferred $1,675,000 to Mr. Humphrey. He received $1,205,000 of the Fraudulent Transfers, within two years prior to the Petition Date. The lawsuit is Gil A. Miller, Chapter 11 Trustee for Waterford Funding, LLC, et al., Plaintiff, v. Daniel Quentin Humphrey, an individual, Defendant, Adv. Proc. No. 10-02889 (Bankr. D. Utah). A copy of Judge Mosier's Feb. 3, 2012 Findings of Fact and Conclusions of Law is available at http://is.gd/k6Gfedfrom Leagle.com. Daniel Quentin Humphrey appeared pro se. About Waterford Funding Based in Salt Lake City, Utah, Waterford Funding, LLC -- http://www.waterfordfunding.com/-- specializes in solving the short-term cash flow problems of new, early-stage and established commercial enterprises through real-estate based loans. Waterford Funding and Waterford Loan Fund filed for Chapter 11 bankruptcy (Bankr. D. Utah Case No. 09-22584 and 09-22583) on March 20, 2009. James W. Anderson, Esq., at Miller Guymon, PC, served as the Debtors' counsel. Waterford Loan Fund's petition estimated $1 million to $10 million in assets, and $50 million to $100 million in debts. On Jan. 5, 2010, the Court approved the resignation of Daniel A. Scarlet as Chief Restructuring Officer and the appointment of the Chapter 11 Trustee. Gil A. Miller was named the Chapter 11 Trustee. In January 2011, the Bankruptcy Court granted the Chapter 11 Trustee's request for substantive consolidation as of March 20, 2009, of the Debtors' estates with those of affiliates Waterford Services, LLC; Waterford Perdido, LLC; Waterford Candwich, LLC; and Investment Recovery, LLC. WESTERLY HOSPITAL: S&P Cuts $8.6-Mil. Revenue Bond Rating to 'C' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term rating on Rhode Island Health & Educational Building Corp.'s $8.6 million hospital revenue bonds series 1994, issued for Westerly Hospital, to 'C' from 'CCC'. The outlook is negative. "The multi-notch downgrade is due to a notification that Westerly Hospital made only a partial payment on its semi-annual debt service payment due Jan. 1, 2012, with the bond trustee using trustee held funds to fulfill the remaining obligation," said Standard & Poor's credit analyst Jennifer Soule. The negative outlook reflects Westerly Hospital's Special Master Receivership status since December 2011, and our expectation that Westerly will not make its June 1, 2012, debt service payment. WILLIAMS LOVE: Court Rejects Brann's Attorney Lien Claim -------------------------------------------------------- Heather Brann claims that amounts she is owed by Williams, Love, O'Leary & Powers, P.C., for services she performed on what the parties refer to as the "Pain Pump" cases are secured by an attorney's lien on the recoveries from the Pain Pump cases. Williams Love filed the adversary proceeding for a declaration that Ms. Brann does not have a lien. Both the Debtor and Ms. Brann move for summary judgment. Intervenor Sterling Savings Bank opposes Mr. Brann's motion. Bankruptcy Judge Elizabeth Perris ruled that Ms. Brann does not have an attorney's lien. Judge Perris granted the Debtor's motion for summary judgment and denied Ms. Brann's motion according to a Feb. 7, 2012 Memorandum Opinion available at http://is.gd/uudVSM from Leagle.com. Over the past few years, the Debtor has been representing clients in litigation relating to injuries they claim was caused by portable devices used post-surgery to infuse pain medication directly into shoulders. Each Pain Pump client entered into a Client Engagement Agreement with the Debtor. No clients entered into fee agreements with Ms. Brann. Ms. Brann is an attorney licensed to practice law in Oregon. In November 2008, she began working with the Debtor on the Pain Pump cases, pursuant to an oral fee agreement with the Debtor. The case is WILLIAMS, LOVE, O'LEARY, & POWERS, P.C., Plaintiff, v. HEATHER A. BRANN, Defendant, Adv. Proc. No. 11-3279 (Bankr. D. Ore.). About Williams Love O'Leary & Powers Based in Portland, Oregon, Williams, Love, O'Leary & Powers, P.C., fdba Williams, Dailey & O'Leary, P.C., dba WLOP and WDO.com, is a law firm that has a national practice representing individuals in medical product liability cases. It filed for Chapter 11 bankruptcy (Bankr. D. Ore. Case No. 11-37021) on Aug. 14, 2011. Judge Elizabeth L. Perris presides over the case. The Debtor disclosed $8,602,955 in assets and $6,734,830 in liabilities as of the Chapter 11 filing. The petition was signed by Michael L. Williams, its president. Albert N. Kennedy, Esq., and Michael W. Fletcher, Esq., at Tonkon Torp LLP, in Portland, Oregon, represent the Debtor as counsel. WINDRUSH SCHOOL: Wells Fargo Objects to Debtor's Motion to Dismiss ------------------------------------------------------------------ Wells Fargo Bank, N.A., as Trustee of the $13 million bond issue encumbering Windrush School's facilities, objects to the Debtor's motion to dismiss its pending Chapter 11 bankruptcy case and asks the U.S. Bankruptcy Court for the Northern District of California to defer the dismissal until a factual hearing at which Trustee will demonstrate Debtor is not in compliance with the terms of the Settlement Agreement between the Debtor and the trustee. WFB states: 1. The Debtor has clearly defaulted on material obligations under the Settlement Agreement entered into with the Trustee under the terms of which the School is required to begin the wind-down process. 2. The Debtor is not in compliance with the terms of the Settlement Agreement and accordingly does not have the right to ask the Court to dismiss its bankruptcy case. As reported in the TCR on Jan. 31, 2012, Windrush School asked the Bankruptcy Court to dismiss its Chapter 11 case with prejudice, pursuant to Section 1112 of the Bankruptcy Code. The Debtor told the Court that, assuming that it is in compliance with the the terms of the WFB Settlement Agreement as of Jan. 31, 2012, there will be no further need for protection for the Debtor under the provisions of Chapter 11, and therefore, dismissal is warranted. In its motion to dismiss, the Debtor says it has satisfied all of the criteria required of it as of Dec. 31, 2011, under the terms of the WFB Settlement Agreement, and anticipates satisfying the agreement's requirements as of Jan. 31, 2012, as well. Accordingly, assuming achievement of those requirements, dismissal of the Debtor's Chapter 11 case will be appropriate in early February 2012 under the terms of the WFB Settlement Agreement. About Windrush School Based in El Cerrito, California, Windrush School is a private K-8 school. The Company filed for Chapter 11 protection on Sept. 30, 2011 (Bankr. D. N.D. Calif. Case No. 11-70440). Judge William J. Lafferty presides over the case. Merle C. Meyers, Esq., and Michele Thompson, Esq., at Meyers Law Group P.C., I San Francisco, Calif., represent the Debtor. In its schedules, the Debtor disclosed $14,809,364 in assets and $13,206,276 in liabilities. Attorneys for secured lender Wells Fargo Bank N.A. are Mike C. Buckley, Esq., James Neudecker, Esq., and Renee C. Feldman, Esq., at Reed Smith LLP. Wells Fargo is the Indenture Trustee under an Indenture between California Statewide Communities Development Authority dated as of July 1, 2017, pertaining to $13,000,000 of revenue bonds issued by the Authority. * Federal Judge Resigns, Forms Holwell Shuster ---------------------------------------------- The Hon. Richard J. Holwell, the Southern District of New York judge who recently presided over the insider trading trial of Galleon Group founder Raj Rajaratnam, has disclosed his departure from the federal judiciary to open a boutique litigation firm alongside two prominent New York-based trial lawyers. At the new firm -- which will be known as Holwell Shuster & Goldberg -- Judge Holwell rejoins Michael Shuster and Daniel Goldberg, with whom he practiced at White & Case before his appointment to the bench in 2003. Shuster was Global Head of Litigation at the 2,000-lawyer White & Case firm, and is recognized by Chambers USA as one of New York's leading commercial litigators. He and Goldberg, a veteran litigator recognized by New York Super Lawyers as a top trial lawyer in New York, most recently practiced together at Kasowitz, Benson, Torres & Friedman. "Serving as a federal judge was the honor of a lifetime," Judge Holwell said. "But it's time for me to stretch my legs and return to my roots as an advocate." Judge Holwell has participated in a number of the largest securities fraud matters to reach trial in recent decades. In addition to his widely praised handling of the Rajaratnam trial, he also presided over the 2011 securities class action trial against Vivendi--one of the few complex securities fraud trials to go to a jury verdict. In private practice, he and Shuster litigated over 30 civil and criminal suits in the U.S. and abroad arising from the insolvency of Credit Lyonnais, including a highly publicized fraud action against Kirk Kerkorian relating to his sale of MGM Film Studios. "We are creating an elite litigation boutique capable of handling the most demanding matters anywhere in the United States or abroad," said Shuster. Together with Goldberg, Judge Holwell also represented New York Governor George Pataki in high-profile litigation establishing the Governor's authority to remove a district attorney for refusing to enforce the laws of New York in a death penalty case. Dorit Ungar Black, a commercial litigator and international arbitration specialist, will also be a founding partner of the firm. Drawing on the rich and varied experience of its partnership, Holwell Shuster & Goldberg will focus its practice on complex commercial litigation, securities fraud, antitrust, international arbitration, white collar, government investigation, and pro bono matters. The firm expects to be in the forefront of the movement in the legal profession away from traditional hourly billing toward value-based fee arrangements. "The market for legal services definitely is changing," Goldberg said. "Our new firm is committed to responding to oft-expressed client preferences for billing arrangements that are responsive to clients' desire for cost certainty and appropriate risk sharing." The firm opens its office today at 335 Madison Avenue in New York City. Bio details: -- Judge Richard J. Holwell -- Educated at Villanova University (B.A., 1967) and Columbia University School of Law (J.D., cum laude, 1970). -- Awarded Columbia-Cambridge Fellowship, Cambridge University Institute of Criminology (Dip. Crim., 1971). -- Extensive trial experience over the course of 30 years of private practice. -- Executive Partner for Disputes, White & Case (1995-2003). -- Appointed United States District Court Judge, Southern District of New York, on September 17, 2003. -- Michael S. Shuster -- Educated at York University (B.A., 1982) and McGill University Law School (J.D. and B.C.L., 1986). -- Senior Editorial Board, McGill Law Journal. -- Over 25 years experience as a trial lawyer. -- Ranked by Chambers USA as a leading New York commercial litigator; recognized as a New York Super Lawyer (2008-11); recognized as a "local litigation star" by Benchmark Litigation (2011-12). -- Representative historical clients include Comcast Corporation, Visa USA, Royal Bank of Canada, Raytheon Corporation, Mega Brands. -- Daniel P. Goldberg -- Educated at Trinity College (B.A., 1989) and Pace University School of Law (J.D., magna cum laude, 1995). -- Served as law clerk to the Hon. Sondra Miller of the New York Supreme Court, Appellate Division, Second Department. -- Past Secretary, Committee on Second Circuit Court for the Federal Bar Council. -- Over 16 years experience as a trial lawyer. -- Recognized as a New York Super Lawyer (2010-11). -- Representative historical clients include Soros Fund Management, Caspian Capital, Camulos Capital, Redwood Capital, Eurofins, Duane Reade, Mega Bloks. -- Dorit Ungar Black -- Educated at the University of Vienna Law School (Magistra Iuris, 1999) and Columbia University (LL.M., 2003). -- Over 11 years experience as a commercial litigator and international arbitration specialist, most recently as a partner at Kasowitz, Benson, Torres & Friedman, and prior to that as an associate at White & Case and Wolf Theiss & Partners (Vienna). -- German native speaker, fluent in Hebrew. Commentary: -- Richard Holwell: "Only the most exceptional opportunity would have compelled me to leave the bench. To create a firm with Mike and Dan, two litigators at the very top of their craft, is just such an opportunity. Having thoroughly enjoyed my experience as a member of the judiciary, I'm now excited to reenter private practice." -- Mike Shuster: -- "Dan and I are excited that, in partnering with Judge Holwell, our team will be in a position to offer our current and future clients a unique combination of energy, judgment, and experience as we represent them in high-stakes commercial litigation, investigations, and arbitration matters. There is no substitute for Rick's decade of experience on the federal bench, and Dan and I are honored to have him at our side." -- "It's tough to leave such a high-quality firm as Kasowitz, but the market is increasingly amenable to sophisticated boutiques and the moment was right for us to create this new firm." -- "Dan, Dorit, and I have thoroughly enjoyed our time at Kasowitz and were it not for this unique opportunity, we would have never even thought of leaving the firm." -- Dan Goldberg: -- "Clients want their lawyers to use technology and other increasingly advanced resources to the fullest extent to manage costs, without having to sacrifice the expert judgment and zealous representation they seek." -- "We stand ready to assist attorneys at larger firms, including the friends we leave behind at Kasowitz and White & Case, who find themselves conflicted out of litigation engagements." Notable matters handled by Holwell Shuster & Goldberg lawyers: -- U.S. v. Rajaratnam -- Judge Holwell presided over the six- week trial of the Galleon Group founder, the largest insider- trading case in a generation, featuring the first-ever use of wiretap-obtained evidence in a case focused exclusively on allegations of insider trading. -- In re Vivendi securities fraud litigation -- In a case that produced multiple published opinions on novel matters of law, Judge Holwell presided over this class action brought by shareholders of Vivendi (owner of Seagrams and Universal Studios, among other entities). It was the first in a series of cases in which foreign plaintiffs who bought shares on foreign exchanges attempted to avail themselves of remedies for securities fraud available in U.S. courts. -- Comcast antitrust litigation -- Represented Comcast Corporation, the world's largest cable television provider, in precedential class action litigation challenging the industry-wide practice of grouping cable systems into regional clusters. -- SEC v. Martha Stewart -- Judge Holwell presided over the civil case brought by the SEC against Martha Stewart for alleged insider trading. Stewart settled the matter in 2004. -- Mega Brands litigation -- Represented Canadian toy manufacturer Mega Brands in connection with takeover litigation with the sellers for claims of fraud, breach of contract, and earnout calculations (which resulted in an extremely favorable settlement four weeks into a six-week trial), as well as related products liability cases throughout the country. -- Consolidated Gold Fields v. Minorco -- Represented the United States' largest gold producer, successfully enjoining a hostile takeover by a De Beers-owned entity on the ground that it would limit competition in gold markets. -- Credit Lyonnais bankruptcy litigation -- Led a team that handled over thirty suits arising from the bankruptcy of Credit Lyonnais, which included a Delaware trial over control of the MGM/United Artists movie studio, as well as criminal investigations in the U.S., Italy, and France. -- Johnson v. Pataki -- Successfully defended then-Gov. Pataki's use of his supersedure authority to remove a district attorney who, while handling a first-degree murder case, refused to state whether he would ever seek the death penalty. -- Enron class action securities litigation -- Represented the Royal Bank of Canada in connection with the Enron debacle. This included successfully defending RBC against claims brought both in the securities class action case ("Newby"), as well as fending off the claims levied against it by Enron itself in its bankruptcy. -- Radol v. Thomas -- Represented U.S. Steel in a securities fraud class action trial arising out of the company's "white knight" rescue of Marathon Oil Company from a hostile tender offer launched by Mobil Oil. About Holwell Shuster & Goldberg Founded by former Southern District of New York Judge Richard Holwell and trial lawyers Michael Shuster, Daniel Goldberg, and Dorit Ungar Black, Holwell Shuster & Goldberg is a litigation boutique focused on the representation of clients in complex commercial, securities, antitrust, and bankruptcy litigation, as well as related civil, criminal, and regulatory matters. * McGlinchey Stafford Adds Two New Attorneys in Florida -------------------------------------------------------- McGlinchey Stafford PLLC disclosed that David Ward has joined the firm's Jacksonville, Florida office and Michael Bruning has joined the firm's Fort Lauderdale, Florida office. The addition of Mr. Ward marks the seventh attorney to join the Jacksonville office since its opening in August of 2010. Mr. Bruning is the second attorney in the Fort Lauderdale office, which was opened in August of 2011. David Ward joins the firm as an Associate and will represent clients in consumer financial services litigation, real estate litigation, bankruptcy and creditors' rights. He earned his Juris Doctor degree from Florida Coastal School of Law in 2008. Mr. Ward also holds a Master of Arts degree and a Bachelor of Arts degree in History from Virginia Commonwealth University. Michael Bruning joins the firm as an Associate and will also focus his practice on the representation of clients in consumer financial services litigation involving real estate, creditors' rights and foreclosures. Mr. Bruning earned his Juris Doctor degree from Florida International University School of Law in 2005, where he served as the Vice President of the Moot Court Board. He also holds a Bachelor of Science degree in Psychology from the University of Florida. "As McGlinchey Stafford continues to respond to the needs of our clients located in Florida, we are excited to add these two outstanding attorneys to our team," said Anthony Rollo, head of the firm's Commercial Litigation Group. "Adding David and Michael to our Florida team is exciting and represents McGlinchey Stafford's client-service approach to growth," said the firm's Managing Partner, Rudy Aguilar. About McGlinchey Stafford McGlinchey Stafford PLLC -- http://www.mcglinchey.com/-- is a full-service law firm providing innovative legal counsel to business clients nationwide. Guiding clients wherever business and law intersect, McGlinchey Stafford attorneys are based in ten offices in Florida, Louisiana, Mississippi, New York, Ohio and Texas. * Bankr. Attys. Garner and Marum Among New Sheppard Partners ------------------------------------------------------------ Sheppard, Mullin, Richter & Hampton LLP disclosed that the firm has elevated twelve of its attorneys to partner. The twelve new partners are Martin Bader (Del Mar), Will Chuchawat (Los Angeles), Jeffrey W. Forrest (San Diego), Darren Franklin (Los Angeles), Jenny Park Garner (San Francisco), Matthew W. Holder (Del Mar), Moe Keshavarzi (Los Angeles), J. Barrett Marum (San Diego), Daniel J. McQueen (Los Angeles), Aaron J. Sobaski (Orange County), Olivier F. Theard (Los Angeles) and Whitney Walters (Century City). Jenny Park Garner, in the firm's Finance and Bankruptcy practice group in the San Francisco office, specializes in commercial law, real estate, secured and unsecured lending transactions, workouts, bankruptcy, and enforcement of creditor's rights and remedies. Park Garner represents a wide range of clients in all aspects of finance, real estate, bankruptcy, and creditor's rights matters. Her commercial lending practice includes structuring, negotiating and documenting senior and mezzanine debt financing, participating or contingent interest financing, and loans for the commercial mortgage backed securities market. Park Garner has extensive experience in advising clients on problem loans and creditor's rights and remedies, including real property and UCC foreclosures, deeds in lieu of foreclosure, writs and receivership, and relief from stay proceedings, and in industries such as single-family and multi-family residential projects, mixed use projects, office, hospitality, retail, manufacturing, communications, entertainment, health care and fine art. She received her J.D. from the University of California, Berkeley (Boalt Hall) in 2001 and her undergraduate degree, with high distinction, Phi Beta Kappa, from the University of California, Berkeley in 1997. Barrett Marum is a member of the firm's Business Trial and Finance and Bankruptcy practice groups, and is based in the San Diego office. Marum practices in the areas of business bankruptcy law and commercial litigation. He has experience representing parties involved in complex insolvency proceedings, including representing debtors, creditors and other parties in pre-bankruptcy litigation, workout negotiations and bankruptcy proceedings. Marum also has a wide variety of experience representing plaintiffs and defendants in disputes in state and federal court, including claims involving breach of contract, real property, unfair business practices, business torts, federal banking laws and regulations and borrower litigation against lenders. Marum received his J.D., Order of the Coif, from the University of California, Los Angeles in 2003 and his undergraduate degree, with high honors, from the University of California, Berkeley in 2000. About Sheppard, Mullin Sheppard, Mullin, Richter & Hampton LLP -- http://www.sheppardmullin.com/-- is a full service Global 100 firm with more than 570 attorneys in 14 offices located in the United States, Europe and Asia. Since 1927, companies have turned to Sheppard Mullin to handle corporate and technology matters, high stakes litigation and complex financial transactions. In the U.S., the firm's clients include more than half of the Fortune 100. * Barnes & Thornburg Adds Paul Laurin in LA Office -------------------------------------------------- Barnes & Thornburg LLP announced Feb. 6 that Paul J. Laurin has joined the firm's Los Angeles office as a partner in the Finance, Insolvency and Restructuring Department. Mr. Laurin was previously a partner in the Los Angeles office of Rutter Hobbs & Davidoff, Inc. Mr. Laurin focuses his practice in the areas of business litigation and creditors' rights. He represents lenders, media and entertainment companies and individuals in the assertion and defense of their rights in state, federal and bankruptcy courts. He is experienced in assisting clients in the analysis of complex insolvency driven business decisions and strategy and through all aspects of litigation from pre-judgment provisional remedies and relief through trial and appeal. He will lead the firm's creditors' rights practice in California. "Paul has a very successful practice, which will supplement and expand our creditors' rights and bankruptcy representation capabilities in Los Angeles and nationally," said David C. Allen, managing partner of Barnes & Thornburg's Los Angeles office. "The firm's value proposition continues to fuel growth opportunities in Los Angeles as we attract well recognized partners across a number of key practices." "Paul is a highly recognized business litigator in Los Angeles and nationwide," said Patrick E. Mears, chairman of Barnes & Thornburg's Finance, Insolvency and Restructuring Department. "His substantial courtroom experience and his extensive work handling mega-bankruptcies and other complex situations make him a strong addition to the firm." Additionally, Christian A. Jordan has joined Barnes & Thornburg as an associate in the Finance, Insolvency and Restructuring Department. He also comes to the firm from Rutter Hobbs & Davidoff. With the arrival of Messrs. Laurin and Jordan, there are 18 attorneys in the Los Angeles office of Barnes & Thornburg, which opened in February 2011. To start the year, leading labor and employment lawyer Howard D. Fabrick joined Barnes & Thornburg's Los Angeles office as a partner in the Labor and Employment Law Department and Entertainment and Music Group. * Hodgson Russ Snags Two Lewis Brisbois Bankruptcy Pros ------------------------------------------------------- Gavin Broady at Bankruptcy Law360 reports that Hodgson Russ LLP has strengthened its New York bankruptcy practice group with the addition of two former Lewis Brisbois Bisgaard & Smith LLP attorneys, including the former co-chair of Lewis Brisbois' bankruptcy and insolvency group, Hodgson Russ said Wednesday. Heidi J. Sorvino brings 23 years of bankruptcy litigation experience to the New York office of Hodgson Russ' bankruptcy, restructuring and commercial litigation practice group, where she will serve as a partner. She is joined by her former Lewis Brisbois colleague Carmine J. Castellano, according to Law360. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In Re Ruben De La Trinidad Bankr. D. Ariz. Case No. 12-01717 Chapter 11 Petition filed January 31, 2012 In Re Nickel & Dimer, LLC Bankr. D. Ariz. Case No. 12-01779 Chapter 11 Petition filed January 31, 2012 See http://bankrupt.com/misc/azb12-01779.pdf represented by: Tracy S. Essig, Esq. Law Office Of Tracy S. Essig E-mail: tracy@tessiglaw.com In Re Roger Meyer Bankr. C.D. Calif. Case No. 12-10955 Chapter 11 Petition filed January 31, 2012 In Re W T Rogers Bankr. C.D. Calif. Case No. 12-12354 Chapter 11 Petition filed January 31, 2012 In Re Old Colonies Investment LLC Bankr. N.D. Calif. Case No. 12-40905 Chapter 11 Petition filed January 31, 2012 See http://bankrupt.com/misc/canb12-40905.pdf represented by: C. Bruce Teeter, Esq. Law Office of C. Bruce Teeter In Re Ramon Cabrera Bankr. N.D. Calif. Case No. 12-40951 Chapter 11 Petition filed January 31, 2012 In Re Jane W. Kaltenheuser Revokable Trust Bankr. D.C. Case No. 12-00058 Chapter 11 Petition filed January 31, 2012 Filed Pro Se In Re A Better Hearing, Inc. Bankr. M.D. Fla. Case No. 12-01408 Chapter 11 Petition filed January 31, 2012 See http://bankrupt.com/misc/flmb12-01408.pdf represented by: Robert L. Vaughn, Esq. Law Office of Robert L. Vaughn E-mail: generalmail@rlvlaw.com In Re Brian Culmer Bankr. S.D. Fla. Case No. 12-12520 Chapter 11 Petition filed January 31, 2012 In Re Shanry Realty Trust Bankr. D. Mass. Case No. 12-40339 Chapter 11 Petition filed January 31, 2012 See http://bankrupt.com/misc/mab12-40339.pdf represented by: Carl D. Aframe, Esq. Aframe & Barnhill E-mail: aframe@aframebarnhill.com In Re Robert Diamond Bankr. D. Nev. Case No. 12-11074 Chapter 11 Petition filed January 31, 2012 In Re Oscar Pierce Bankr. E.D. Pa. Case No. 12-10805 Chapter 11 Petition filed January 31, 2012 In Re Frank Previte Bankr. W.D. Pa. Case No. 12-70075 Chapter 11 Petition filed January 31, 2012 In Re Jose Torres Torres Bankr. D. Puerto Rico Case No. 12-00729 Chapter 11 Petition filed January 31, 2012 In Re Gerard Bovaird Bankr. E.D. Va. Case No. 12-10590 Chapter 11 Petition filed January 31, 2012 In Re Daniel Peterson Bankr. W.D. Wash. Case No. 12-10861 Chapter 11 Petition filed January 31, 2012 In Re Billy Miller Bankr. N.D. Ala. Case No. 12-40182 Chapter 11 Petition filed February 1, 2012 In Re Dustin Bowen Bankr. D. Ariz. Case No. 12-01855 Chapter 11 Petition filed February 1, 2012 In Re Impact Marketing Group, LLC Bankr. D. Ariz. Case No. 12-01856 Chapter 11 Petition filed February 1, 2012 See http://bankrupt.com/misc/azb12-01856.pdf represented by: Harold Campbell, Esq. Campbell & Coombs, P.C. E-mail: heciii@haroldcampbell.com In Re Andrew Bodewin Bankr. C.D. Calif. Case No. 12-12526 Chapter 11 Petition filed February 1, 2012 In Re Armida Moreno Bankr. C.D. Calif. Case No. 12-13768 Chapter 11 Petition filed February 1, 2012 In Re Barry Kuhnke Bankr. C.D. Calif. Case No. 12-11350 Chapter 11 Petition filed February 1, 2012 In Re Chick Pea LLC Bankr. C.D. Calif. Case No. 12-11345 Chapter 11 Petition filed February 1, 2012 See http://bankrupt.com/misc/cacb12-11345.pdf represented by: Vakhe Khodzhayan, Esq. KG Law E-mail: vahe@lawyer.com In Re David Rudich Bankr. C.D. Calif. Case No. 12-13698 Chapter 11 Petition filed February 1, 2012 In Re Edgar Espinoza Bankr. C.D. Calif. Case No. 12-13739 Chapter 11 Petition filed February 1, 2012 In Re Luis Sinbaldi Bankr. C.D. Calif. Case No. 12-11351 Chapter 11 Petition filed February 1, 2012 In Re Simla Mehta Bankr. C.D. Calif. Case No. 12-13744 Chapter 11 Petition filed February 1, 2012 In Re Edwin Guadamuz Bankr. E.D. Calif. Case No. 12-22035 Chapter 11 Petition filed February 1, 2012 In Re Kenneth Carvalho Bankr. N.D. Calif. Case No. 12-50827 Chapter 11 Petition filed February 1, 2012 In Re Devroc Homes, Inc. Bankr. M.D. Fla. Case No. 12-01359 Chapter 11 Petition filed February 1, 2012 See http://bankrupt.com/misc/flmb12-01359.pdf represented by: Paris L. Davis, Jr., Esq. Anderson Pinkard, P.A. E-mail: pdavis@floridalawpartners.com In Re Ronnie Stewart Bankr. S.D. Ga. Case No. 12-30038 Chapter 11 Petition filed February 1, 2012 In Re Harmon's Motor Services, Inc. Bankr. N.D. Ill. Case No. 12-03566 Chapter 11 Petition filed February 1, 2012 See http://bankrupt.com/misc/ilnb12-03566.pdf represented by: Paul M. Bach, Esq. Bach Law Offices E-mail: paul@bachoffices.com In Re Reid Fields Bankr. N.D. Ill. Case No. 12-03563 Chapter 11 Petition filed February 1, 2012 In Re The Pampering Den Bankr. N.D. Ill. Case No. 12-03673 Chapter 11 Petition filed February 1, 2012 In Re Luis Vazquez Bankr. D. Nev. Case No. 12-11164 Chapter 11 Petition filed February 1, 2012 In Re Kenneth Davis Bankr. E.D.N.Y. Case No. 12-70545 Chapter 11 Petition filed February 1, 2012 In Re Jorge Canario Bankr. E.D. N.C. Case No. 12-00841 Chapter 11 Petition filed February 1, 2012 In Re Dunbar Concrete Products, Inc. Bankr. D. N.J. Case No. 12-12560 Chapter 11 Petition filed February 1, 2012 See http://bankrupt.com/misc/njb12-12560.pdf represented by: Dean G. Sutton, Esq. E-mail: dgs123@ptd.net In Re Greater Dayton Industrial Laser, LLC Bankr. S.D. Ohio Case No. 12-30423 Chapter 11 Petition filed February 1, 2012 See http://bankrupt.com/misc/ohsb12-30423.pdf represented by: Lester R. Thompson, Esq. E-mail: tdbklaw@gmail.com In Re Friendship Missionary Baptist Church of Coliumbia, Inc. Bankr. M.D. Tenn. Case No. 12-00977 Chapter 11 Petition filed February 1, 2012 See http://bankrupt.com/misc/tnmb12-00977.pdf represented by: Steven L. Lefkovitz, Esq. Law Offices Lefkovitz & Lefkovitz E-mail: slefkovitz@lefkovitz.com In Re GWD Foods, Inc. dba Gary's Cafe' dba Gary's Coffee Shop Bankr. E.D. Texas Case No. 12-10070 Chapter 11 Petition filed February 1, 2012 See http://bankrupt.com/misc/txeb12-10070.pdf represented by: Frank J. Maida, Esq. Maida Law Firm E-mail: maidalawfirm@gt.rr.com In Re David Mitchell Bankr. E.D. Va. Case No. 12-10636 Chapter 11 Petition filed February 1, 2012 In Re The Best Italian Restaurant, LLC Bankr. E.D. Va. Case No. 12-10641 Chapter 11 Petition filed February 1, 2012 See http://bankrupt.com/misc/txeb12-10070.pdf represented by: George LeRoy Moran, Esq. E-mail: glmoran@yahoo.com In Re Lilian Salmorin Bankr. C.D. Calif. Case No. 12-13907 Chapter 11 Petition filed February 2, 2012 In Re Terence ONeil Bankr. D. Conn. Case No. 12-50192 Chapter 11 Petition filed February 2, 2012 In Re Patrick Stover Bankr. D. Maine Case No. 12-20086 Chapter 11 Petition filed February 2, 2012 In Re Michael Romano Bankr. D. Mass. Case No. 12-40373 Chapter 11 Petition filed February 2, 2012 In Re Scott Condon Bankr. D. Mass. Case No. 12-10868 Chapter 11 Petition filed February 2, 2012 In Re Joselito Ferrer Bankr. D. Nev. Case No. 12-50224 Chapter 11 Petition filed February 2, 2012 In Re Arthur Galpin Bankr. D. Ore. Case No. 12-60362 Chapter 11 Petition filed February 2, 2012 In Re Stanley Dye Bankr. M.D. Pa. Case No. 12-00609 Chapter 11 Petition filed February 2, 2012 In Re Luis Ortiz Rivera Bankr. D. Puerto Rico Case No. 12-00769 Chapter 11 Petition filed February 2, 2012 In Re Geoffrey Hubona Bankr. E.D. Tenn. Case No. 12-10549 Chapter 11 Petition filed February 2, 2012 In Re Jimmy Bak Bankr. W.D. Texas Case No. 12-50313 Chapter 11 Petition filed February 2, 2012 In Re Daniel McClellan Bankr. N.D. Ala. Case No. 12-40198 Chapter 11 Petition filed February 3, 2012 In Re Carmencita Dela Cruz Bankr. C.D. Calif. Case No. 12-14011 Chapter 11 Petition filed February 3, 2012 In Re Daniel Kass Bankr. C.D. Calif. Case No. 12-10470 Chapter 11 Petition filed February 3, 2012 In Re Hector Cerna Bankr. C.D. Calif. Case No. 12-14096 Chapter 11 Petition filed February 3, 2012 In Re Samuel Bote Bankr. C.D. Calif. Case No. 12-11409 Chapter 11 Petition filed February 3, 2012 In Re Haakon Magnussen Bankr. N.D. Calif. Case No. 12-41039 Chapter 11 Petition filed February 3, 2012 In Re Willie Ruffin Bankr. N.D. Ga. Case No. 12-52675 Chapter 11 Petition filed February 3, 2012 In Re Frank Lyons Bankr. N.D. Ill. Case No. 12-03853 Chapter 11 Petition filed February 3, 2012 In Re Marek Strzalka Bankr. D. Mass. Case No. 12-10894 Chapter 11 Petition filed February 3, 2012 In Re Tomasz Brojek Bankr. D. Mass. Case No. 12-10897 Chapter 11 Petition filed February 3, 2012 In Re Brock Collins Bankr. D. Md. Case No. 12-11846 Chapter 11 Petition filed February 3, 2012 In Re John Fanuzzi Bankr. D. Mont. Case No. 12-60143 Chapter 11 Petition filed February 3, 2012 In Re Efrem Rosenfeld Bankr. D. Nev. Case No. 12-11297 Chapter 11 Petition filed February 3, 2012 In Re Rob Hughitt Bankr. N.D. Texas Case No. 12-40653 Chapter 11 Petition filed February 3, 2012 In Re Paul Christensen Bankr. W.D. Wash. Case No. 12-40663 Chapter 11 Petition filed February 3, 2012 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***