/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120222.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, February 22, 2012, Vol. 16, No. 52 Headlines 1468 TOWERS: Case Summary & 7 Largest Unsecured Creditors 155 EAST: Sale to Canpartners Approved; Deal to Close March 30 30DC INC: Delays Form 10-Q for Dec. 31 Quarter 3POWER ENERGY: Blames Exec. Changes for Delays in Q3's Form 10-Q AMBAC FINANCIAL: Indenture Trustees Oppose Plan Confirmation AMBAC FINANCIAL: Awards $730,000 in Cash Bonuses to Top Execs. AMBAC FINANCIAL: Disclosure Order in AAC v. DLJ Suit Rejected AMERICAN AIRLINES: Needs Strong Pacific Business AMERICAN AIRLINES: To Renegotiate $1.6-Bil. BNDES Debt AMERICAN AIRLINES: Streamlines Management as Part of Restructuring AMERICAN AIRLINES: Proposes to Assume Chartis Insurance Programs AMERICAN AIRLINES: Feb. 29 Final Hearing on Deloitte Hiring AMERICAN AIRLINES: Interim Order Entered on KPMG as Tax Advisor AMERICAN DIAGNOSTIC: Access to Cash Collateral Expires March 31 AMERICAN DIAGNOSTIC: Hearing on Competing Plan Outlines on March 6 APPLIED DNA: Incurs $2.4 Million Net Loss in Dec. 31 Quarter AS SEEN ON TV: Reports $2.2 Million Net Income in Dec. 31 Qtr. ASPEN DENTAL: Moody's Assigns 'B2' to Amended $50MM Facility ATLANTIC COUNTY: Moody's Cuts Waste Revenue Bond Rating to 'Ba1' BAY THREE: Case Summary & 20 Largest Unsecured Creditors BELTWAY ONE: Keith Harper Approved as Valuation Expert BERKELEY DELAWARE: Wants Case Dismissal, Opposes Conversion BORDERS GROUP: Settlement of WARN Suit Approved on Final Basis BRILEY ENTERPRISES: Case Summary & 7 Largest Unsecured Creditors BROADCAST INTERNATIONAL: Gem Partners Retains 9.9% Equity Stake BROADCAST INTERNATIONAL: Castlerigg Holds 9.7% Equity Stake BROADCAST INTERNATIONAL: ACT Capital Stake Slightly Down to 5.1% BURBANK LANDING: Files for Chapter 11 in Baton Rouge BYOB INC: Enforcement Actions Not Subject to Automatic Stay CEMTREX INC: Delays Form 10-Q for Dec. 31 Quarter CHURCH STREET: Small Smiles in Chapter 11, Has $12MM DIP Loan CLARENDON HOLDINGS: Can Implement Plan After Challenge Rejected COMARCO INC: Dimensional Fund Stake Down to 0.26% COMSTOCK MINING: Peter Palmedo Discloses 15% Equity Stake CONFORCE INTERNATIONAL: Incurs $1.2-Mil. Net Loss in Dec. 31 Qtr. COTTONWOOD CORNERS: Court Rejects Amended Exit Plan CREDITRON FINANCIAL: Trustee Claims $4.5 Million From Covattos CRYOPORT INC: Enable Global Discloses 6.9% Equity Stake CYBERDEFENDER CORP: John Combias Holds 6.1% Equity Stake DEX ONE: Restructuring Capital Discloses 9.7% Equity Stake DIGITALGLOBE INC: Moody's Affirms 'Ba3'; Outlook Now Negative DREIER LLP: Trustee Taps BDO USA for Solvency Related Issues DRYSHIPS INC: Owns 73.9% of Ocean Rig Outstanding Common Stock DYNEGY INC: Sub. Notes Holders Seek Claim Classification DYNEGY INC: Debtors Vacate, Reject New Windsor Office Lease DYNEGY INC: Time to Remove Actions Extended to June 5 EASTERN LIVESTOCK: Gray Plant's P. Kunkel Approved as Mediator EASTMAN KODAK: Apple Hits Request for ITC Infringement Probe EASTMAN KODAK: Business as Usual for Asian Units ECOSPHERE TECHNOLOGIES: Dennis McGuire Has 17.1% Equity Stake ECOSPHERE TECHNOLOGIES: K. Grady Has 4.9% Equity Stake ELITE PHARMACEUTICALS: Has $8.7-Mil. Profit in Dec. 31 Quarter ENRON CORP: Deutsche Bank Seeks Dismissal of $100-Mil. Texas Suit ENRON CORP: Appeal in Class Suit vs. JPMorgan Remains Pending ENRON CORP: Gropper Takes Over Case After Gonzalez's Retirement EPICEPT CORP: Great Point Holds 4.3% Equity Stake EVERYWARE INC: Moody's Assigns 'B2' Corporate Family Rating FOCUS BRANDS: Moody's Assigns 'B2' Corporate Family Rating FONAR CORP: Reports $1.8 Million Net Income in Dec. 31 Quarter FONAR CORP: Red Oak Partners No Longer a Shareholder FOREVER CONSTRUCTION: Fine-tunes Proposed Reorganization Plan FORT INVESTMENTS: Case Summary & 7 Largest Unsecured Creditors FRANCISCAN COMMUNITIES: McDonald Hopkins OK'd as Panel's Counsel FRONTLINE COMMS: Moody's Says Dividend Cut Supports Profile GAMETECH INT'L: Kristin Fedor Stake Down to 4.5% GAMETECH INT'L: Richard Fedor Retains 16% Equity Stake GAMETECH INT'L: Richard Fedor, Jr., Holds 6.6% Equity Stake GELTECH SOLUTIONS: Incurs $1.4-Mil. Net Loss in Dec. 31 Quarter GENTA INC: Felix Baker Discloses 9.9% Equity Stake GENTA INC: RA Capital Discloses 9.9% Equity Stake GENTA INC: Boxer Capital Discloses 9.9% Equity Stake GENTA INC: Kevin Tang Discloses 9.9% Equity Stake GEOEYE INC: Moody's Gives Negative Outlook Amid Contracts Issues GLOBAL SOLUTIONS: Moody's Cuts Corporate Family Rating to 'Caa1' GOLDEN TEMPLE: Files for Chapter 11, to Continue Mediation GREEN PLANET: Delays Form 10-Q for Fiscal Dec. 31 Quarter GREEN PLANET: ACE Limited Holds 5.3% Equity Stake GRUBB & ELLIS: To Sell Business to BGC via Chapter 11 GULF STATES: Case Summary & 20 Largest Unsecured Creditors HARRY ALTICK: Claim for Exemption Denied for Misleading Creditors HORIZON VILLAGE: Keith Harper OK'd to Provide Valuation Services HOSTESS BRANDS: Trade Groups, Others Slam Bid to Drop Pensions HYLAND SOFTWARE: Moody's Affirms 'B2' Corporate Family Rating IMPLANT SCIENCES: Incurs $3.3 Million Net Loss in Dec. 31 Qtr. INTEGRATED BIOPHARMA: Delays Form 10-Q for December 31 Quarter INTEGRATED ENVIRONMENTAL: McAdoo Discloses 15.9% Equity Stake ISAACSON STRUCTURAL: Seeks to Auction Off New Hampshire Property J.O.C. FARMS: Case Summary & 20 Largest Unsecured Creditors JJJ HOLDING: Case Summary & Largest Unsecured Creditor KMC REAL ESTATE: Doctor Wants Plan Disclosures Disapproved KITTS DEVELOPMENT: Judge Allows Bank to Proceed With Foreclosure KURRANT MOBILE: Socius CG No Longer Owns Common Shares LA JOLLA: Boxer Capital Discloses 8.6% Equity Stake LA JOLLA: Tang Capital Holds 9.9% Equity Stake LA JOLLA: RTW Investments No Longer Has Equity Stake LANCE CHATKIN: Steel Firms May Pursue RICO Action LANDAMERICA FINANCIAL: Insurers Say $38M Deal With Lloyd's Unfair LEHMAN BROTHERS: Wants to Compel BLX to Comply With Subpoena LEHMAN BROTHERS: To Sell 301 2nd Lien Loans for $3.27-Mil. LEHMAN BROTHERS: Providence Fails in Attempt for "Customer Claims" LEHMAN BROTHERS: Proposes Gianni Origoni as Special Counsel LEHMAN BROTHERS: Allowed Claim Holders Required to Submit Docs. LEHMAN BROTHERS: Wins Nod to Settle Barclays Bank Termination Fee LIBERATOR INC: Reports $39,959 Net Income in Dec. 31 Quarter LIQUIDMETAL TECHNOLOGIES: Bank of America Has 5.5% Equity Stake LOCATION BASED TECHNOLOGIES: Gemini Stake Down to 0.8% LOS ANGELES DODGERS: Beaten Fan, Others Object to Plan Disclosures LPATH INC: Amends Form S-1 Registration Statement MAJESTIC CAPITAL: Hearing on Plan Disclosures Today MARKETING WORLDWIDE: Socius No Longer Owns Shares MCCLATCHY CO: Contrarius Holds 10.7% of Class A Shares MCCLATCHY CO: Paulson & Co. Does Not Own Class A Shares MCCLATCHY CO: Dimensional Fund Holds 5.3% of Class A Shares MCCLATCHY CO: BlueMountain Owns 6.7% of Class A Shares MEDCLEAN TECHNOLOGIES: Manatuck Hill Discloses 6.4% Equity Stake MF GLOBAL: Trustee Asked to Support "Corporate Personhood" Motion MF GLOBAL: SIPA Trustee Wants Until May 29 to Decide on Leases MF GLOBAL: Virginia Retirement to Lead Investors Suit vs. Corzine MF GLOBAL: Drafted Contingency Plan in Case of Downgrade MF GLOBAL: "Never Been Stronger," CFO Told S&P Before Collapse MF GLOBAL: CME Group Sets Up $100-Mil. Fund for Ranchers MORRIER RANCH: Proposes James P. Hurley as Bankruptcy Counsel MORRIER RANCH: Files Schedules of Assets and Liabilities MORRIS SEARS: National Park Service Debt Declared Nondischargeable MOUNTAIN COUNTRY: Involuntary Chapter 11 Case Summary MSGI SECURITY: Enable Global Discloses 9.9% Equity Stake MSR RESORT: Asks Judge Approval on Deal With Marriott MUSCLEPHARM CORP: Files Form S-1, Registers 194.8-Mil. Shares MUSCLEPHARM CORP: Socius CG No longer Owns Common Shares NATIONAL HOLDINGS: Incurs $1-Mil. Net Loss in Dec. 31 Quarter NATIONAL HOLDINGS: Bedford Oak Discloses 8.5% Equity Stake NATIONAL SLAVERY: To Repay Back Taxes Under Exit Plan NEOMEDIA TECHNOLOGIES: Colonel Baer Appointed CFO NEOMEDIA TECHNOLOGIES: JMC Holdings Discloses 5% Equity Stake NEUROLOGIX INC: Marc Panoff Resigns as Chief Financial Officer NEVEL PROPERTIES: Agriprocessors Buyer's Plan Objection Nixed NEW LEAF: Lorraine DiPaolo Discloses 19.1% Equity Stake OASIS PETROLEUM: Moody's Affirms 'B3' Corporate Family Rating OVERLAND STORAGE: Stephens Industry Holds 7.4% Equity Stake OVERLAND STORAGE: Columbus Capital Discloses 5.2% Equity Stake PALACIO DEL SOL: Voluntary Chapter 11 Case Summary PATIENT SAFETY: Kinderhook Capital Has 18.4% Equity Stake PEACHCREST GARDENS: Case Summary & 13 Largest Unsecured Creditors PHI GROUP: Delays Form 10-Q for Dec. 31 Quarter PIONEER CHRISTIAN: Case Summary & 3 Largest Unsecured Creditors PRECISION OPTICS: Incurs $324,875 Net Loss in Dec. 31 Quarter RALPH LEO BRUTSCHE: Court Lifts Stay, Denies Cash Collateral Use RAY ANTHONY: Case Dismissed; Collection Remedies Reinstated REDCO DEVELOPMENT: Disclosure Statement Conditionally Approved ROBERTS BROADCASTING: Plans to Sell Stations to Repay Creditors ROTHSTEIN ROSENFELDT: Trustees Inks $70MM Bank Settlement ROYAL HOSPITALITY: Ch. 11 Trustee Taps Kruth Stein as Accountant SALON MEDIA: Incurs $997,000 Net Loss in December 31 Quarter SECUREALERT INC: Incurs $1.6 Million Net Loss in Dec. 31 Quarter SHERWOOD BRANDS: Bankruptcy Asset Auction Scheduled for Feb. 29 SNEAKERS SPORTS: Case Summary & 9 Largest Unsecured Creditors SP NEWSPRINT: PwC Approved to Audit 2011 Financial Statements STANFORD FINANCIAL: Victims Aren't Eligible For Payouts, SIPC Says STERLING CHEMICALS: Brings Retiree Premium Fight to Supreme Court SUPERMEDIA INC: Restructuring Capital Owns 11.3% Equity Stake SUPERMEDIA INC: Schultze Asset Discloses 9.2% Equity Stake SYNAGRO TECHNOLOGIES: Moody's Cuts Corp. Family Rating to Caa2 TALON INTERNATIONAL: Lonnie Schnell Discloses 10.7% Equity Stake TALON INTERNATIONAL: Larry Dyne Discloses 9.2% Equity Stake TALON THERAPEUTICS: Samuel Isaly Ceases to Hold 5% Equity Stake TANNIN INC: Files for Chapter 11, Has $42.8MM BP Claim TELECONNECT INC: Delays Form 10-Q for Dec. 31 Quarter TELETOUCH COMMUNICATIONS: Lazarus Holds 10.5% Equity Stake THERMOENERGY CORP: Empire Capital Discloses 4.9% Equity Stake TRAILER BRIDGE: Seeks More Exclusivity as Insurance Policy TRANSUNION CORP: Moody's Lowers Corporate Family Rating to 'B2' TRANSWEST RESORT: Court Rejects Bid for Stay Relief, Examiner TRAVELODGE: Denies Bankruptcy Risk, Gets Financing TRIUS THERAPEUTICS: Wellington Stake Down to 2.91% UNI-PIXEL INC: Revelation Special Discloses 7.4% Equity Stake VIGOR: Moody's Reviews 'B1' Ratings for Possible Downgrade VIKING SYSTEMS: DAFNA Capital Discloses 5.2% Equity Stake VILLAGE AT CAMP: 3rd Amended Plan of Reorganization Wins Court OK VISUALANT INC: Gemini Master Discloses 8.7% Equity Stake WASHINGTON MUTUAL: Plan Could Be Implemented as Soon as March 8 WAVE2WAVE COMMUNICATIONS: Files for Bankruptcy Protection WAVE2WAVE COMMUNICATIONS: Voluntary Chapter 11 Case Summary WAYTRONX INC: Further Amends Form S-1 Registration Statement W.R. GRACE: Realigns Business Segments, Has New Officers W.R. GRACE: FMR LLC Has 12.45% Equity Stake W.R. GRACE: Vanguard Group Has 5.1% Equity Stake ZOO ENTERTAINMENT: Socius Capital Discloses 9.9% Equity Stake ZOO ENTERTAINMENT: Focus Capital Discloses 6.8% Equity Stake * Upcoming Meetings, Conferences and Seminars ********* 1468 TOWERS: Case Summary & 7 Largest Unsecured Creditors --------------------------------------------------------- Debtor: 1468 Towers Street, LLC 1107 Somerset Ave Lakewood, NJ 08701-2139 Bankruptcy Case No.: 12-14094 Chapter 11 Petition Date: February 20, 2012 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Kathryn C. Ferguson Debtor's Counsel: Timothy P. Neumann, Esq. BROEGE, NEUMANN, FISCHER & SHAVER 25 Abe Voorhees Drive Manasquan, NJ 08736 Tel: (732) 223-8484 Fax: (732) 223-2416 E-mail: tneumann@bnfsbankruptcy.com Scheduled Assets: $3,000,000 Scheduled Liabilities: $4,084,583 A list of the Company's seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/njb12-14094.pdf The petition was signed by Dovid Gelbwachs, member. 155 EAST: Sale to Canpartners Approved; Deal to Close March 30 -------------------------------------------------------------- The Associated Press reports Canpartners Realty Holding Co. IV, main debt holder of Hooters hotel-casino in Las Vegas, Nevada, will buy the 696-room property east of the Las Vegas Strip under a sales plan approved Friday by U.S. Bankruptcy Judge Bruce Markell. Canpartners acquired the resort with a $60 million credit bid. An auction failed to attract other bidders, according to the AP. A March 30 closing date is scheduled. According to the AP, plans call for operations to keep running as usual during the transition, and for all Hooters creditors to be paid in full. About 155 East Tropicana 155 East Tropicana LLC owns the world's first Hooters Casino Hotel, a 696-room and 4-suite hotel located one block from the Las Vegas Strip and across Tropicana Blvd. from MGM Grand. 155 East Tropicana, along with an affiliate, sought Chapter 11 protection (Bankr. D. Nev. Case No. 11-22216) on Aug. 1, 2011. 155 East sought bankruptcy protection to stop a scheduled Aug. 8 foreclosure of the second-lien debt. The two secured credit facilities were accelerated early this year. Canpartners Realty Holding Co. IV LLC acquired 98.4% of the $130 million in 8.75% second-lien senior secured notes. An additional $32.2 million of interest is owing on the second-lien debt, with US Bank NA as the indenture trustee. Holders of the $14.5 million in first-lien debt have Wells Fargo Capital Finance Inc. as their agent. The first-lien obligation is fully secured. Interest has been paid at the default rate. Gerald M. Gordon, Esq., and Brigid M. Higgins, Esq., at Gordon Silver, in Las Vegas, Nevada, serve as counsel to the Debtors. Garden City Group, Inc., is the claims agent. William G. Kimmel & Associates has been hired to provide an appraisal of the Debtors' casino hotel/property. Alvarez & Marsal serves as financial and restructuring advisor. Innovation Capital LLC serves as financial advisor for capital raising transactions and M&A transactions. 30DC INC: Delays Form 10-Q for Dec. 31 Quarter ---------------------------------------------- 30DC, Inc., was unable without unreasonable effort and expense to prepare its accounting records and schedules in sufficient time to allow its accountants to complete their review of the Company's financial statements for the period ended Dec. 31, 2011, before the required filing date for the subject quarterly report on Form 10-Q. The Company intends to file the subject Form 10-Q on or before the fifth calendar day following the prescribed due date. About 30DC Inc. New York-based 30DC, Inc., provides Internet marketing services and related training to help Internet companies in operating their businesses. It operates in two divisions, 30 Day Challenge and Immediate Edge. The Company's balance sheet at Sept. 30, 2011, showed $1.9 million in total assets, $2.1 million in total liabilities, all current, and a stockholders' deficit of $233,299. As reported in the TCR on Dec. 19, 2011, Marcum LLP, in New York, expressed substantial doubt about 30DC's ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2011. The independent auditors noted that the Company has had recurring losses, and has a working capital and stockholders' deficiency as of June 30, 2011. The Company reported a net loss of $1.44 million for the fiscal year ended June 30, 2011, following a net loss of $1.06 million in fiscal 2010. 3ODC reported a net loss of $176,941 on $415,258 of revenues for first quarter ended Sept. 30, 2011. 3POWER ENERGY: Blames Exec. Changes for Delays in Q3's Form 10-Q ---------------------------------------------------------------- As a result of the recent transition of 3Power Energy Group Inc.'s Chief Executive Officer and Chief Financial Officer duties, the process of compiling and processing the information required to be included in the Form 10-Q for the quarter ended Dec. 31, 2011, could not be completed without incurring undue hardship and expense. The Company expects the Form 10-Q to be filed within the extension period provided under Rule 12b-25 promulgated under the Securities Exchange Act of 1934, as amended. As reported in the TCR on Oct. 31, 2011, Toby Durrant resigned as the Chief Executive Officer, Chief Financial Officer, Chief Investment Officer and as a member of the Board of 3Power Energy Group Inc. effective as of Oct. 19, 2011. Umamaheswaran Balasubramaniam was named new CEO. About 3Power Energy 3Power Energy Group Inc. was incorporated in Nevada in December 2002. On March 30, 2011, the Company changed its name from Prime Sun Power Inc. to 3Power Energy and increased its authorized share capital to 300,000,000 shares. The Company plans to pursue a business model producing renewable generated electrical power and other alternative energies. On May 13, 2011, the Company acquired 100% of the issued and outstanding common stock of Seawind Energy Limited, in exchange for the issuance of 40,000,000 restricted shares of the Company's common stock. The acquisition was accounted for as a reverse merger and, accordingly, the Company is the legal survivor and Seawind Energy is the accounting survivor. The Company's balance sheet at Sept. 30, 2011, showed $4.50 million in total assets, $5.72 million in total liabilities, all current, and a $1.21 million total shareholders' deficiency. The Company reported a net loss of $2.64 million on $491,092 of sales for the six months ended Sept. 30, 2011, compared with net income of $341,201 on $3.55 million of sales for the same period during the prior year. "The ability of the Company to continue as a going concern is dependent upon, among other things, its successful execution of its plan of operations and ability to raise additional financing or capital. There is no guarantee that the Company will be able to raise additional financing or capital or sell any of services or products at a profit. These factors, among others, raise substantial doubt regarding the Company's ability to continue as a going concern," the Company said in its Form 10-Q for the quarter ended Sept. 30, 2011. AMBAC FINANCIAL: Indenture Trustees Oppose Plan Confirmation ------------------------------------------------------------ Bank of America, N.A. and other trustees for certain securities related to the rehabilitation of the Segregated Account of Ambac Assurance Corporation oppose confirmation of the Second Amended Plan of Reorganization of Ambac Financial Group, Inc. before the U.S. Bankruptcy Court for the Southern District of New York. The other objecting trustees are Wilmington Trust Company and Wilmington Trust FSB; and Deutsche Bank National Trust Company and Deutsche Bank Trust Company Americas, and Wells Fargo Bank, N.A. The Indenture Trustees are concerned that pursuant to the Plan, they could be deemed erroneously to have released their claims against AAC, the Segregated Account, the Office of the Commissioner of Insurance for the State of Wisconsin, and the OCI, in his capacity as Rehabilitator of the Segregated Account. The Indenture Trustees aver that their Claims against AAC and the Segregated Account with respect to policies issued by and agreements with AAC are the subject of a rehabilitation proceeding before the Circuit Court of the State of Wisconsin, Dane County. The Indenture Trustees have been informed that the version of the Plan that was distributed to the parties-in-interest in AFG's Chapter 11 case contains an exception to the third party release that was not included in the version of the Plan currently on file with the Court. They have been further advised that AFG intends to file a Third Amended Plan of Reorganization that will include the new exception, and additional clarificatory language, to the third party release. As of this time, AFG has not filed a Third Amended Plan. Accordingly, the Bankruptcy Court lacks jurisdiction to negate the Claims against third parties such as AAC and the Segregated Account, and those Claims are not properly the subject of any plan filed by the Debtor, the Indenture Trustees insist. Bank of America is trustee in connection with securities issued by certain entities and securitization trusts. Wells Fargo Bank, N.A. is trustee for certain residential mortgage-backed securities trusts and indenture trustee on certain residential student loan-back securities transactions. Wilmington Trust Company and Wilmington Trust FSB are trustees in connection with securities issued by certain entities and securitization trusts. The Deutsche Bank Entities are trustees for certain residential mortgage-backed securities, other asset-backed securities, collateralized loan obligation or collateralized debt obligation trusts insured by AAC. Bank of America, Wells Fargo, and WTC are separately represented by: Michael E. Johnson, Esq. ALSTON & BIRD LLP 90 Park Avenue New York, NY 10016 Tel: (212) 210-9400 Fax: (212) 210-9444 E-mail: Michael.johnson@alston.com The Deutsche Bank Entities are represented by: Wendy S. Walker, Esq. MORGAN LEWIS & BOCKIUS LLP 101 Park Avenue New York, NY 10178-0600 Tel: (212) 309-6306 Fax: (212) 309-6001 E-mail: wwalker@morganlewis.com -- and -- John M. Rosenthal, Esq. Kristine E. Bailey, Esq. MORGAN, LEWIS & BOCKIUS LLP One Market, Spear Street Tower San Francisco, California 94105 Tel: (415) 442-1000 Fax: (415) 442-1001 E-mail: jrosenthal@morganlewis.com kbailey@morganlewis.com The Chapter 11 Plan The Debtor has filed a Chapter 11 plan that is premised on a global settlement negotiated by the Debtor with the Official Committee of Unsecured Creditors, Ambac Assurance Corporation, the segregated account of AAC, the Office of the Commissioner of Insurance for the State of Wisconsin, the OCI as rehabilitator of the Segregated Account, and an informal group of holders of the Debtor's senior notes. Among other contingencies, consummation of the Debtor's plan is dependent upon resolution of the claims against the Debtor of the Department of the Treasury - Internal Revenue Service and the Debtor's adversary proceeding against the United States. As noted in the Debtor's counsel's Nov. 11, 2011 letter to the Court, substantial progress has been made towards achieving a framework for resolving the IRS Dispute. Although no settlement has been reached on all of the issues in the IRS Dispute, the Debtor has submitted to the U.S. Department of Justice a proposal for settling the dispute on terms that the Debtor believes will be acceptable to the United States, Peter A. Ivanick, Esq., at Dewey & LeBoeuf LLP, in New York, tells Judge Chapman. The terms of the Debtor's proposal includes: (i) a payment by AAC of approximately $100 million, as permitted by the Mediation Agreement; (ii) a payment by the Debtor of approximately $1.9 million in connection with the IRS Claims; (iii) a $1 billion reduction in the amount of loss carry- forwards which might otherwise be available to offset future taxable income of the Debtor's consolidated tax group; and (iv) the IRS will be paid 12.5% of any payment to the Debtor by AAC associated with NOL Usage Tier C and the IRS will be paid 17.5% of any payment to the Debtor by AAC associated with NOL Usage Tier D. Of the $1 billion reduction in the amount of loss carry-forwards which might otherwise be available, 85% of the reduction will be borne by the Debtor and 15% of the reduction will borne by AAC. Any final settlement on the IRS Dispute would require the approval of the Bankruptcy Court, OCI, the Committee, the IRS, the Department of Justice, Tax Division, the Joint Committee on Taxation, the Circuit Court of Dane County, Wisconsin, in which rehabilitation proceedings are pending with respect to the Segregated Account, and the boards of directors of the Debtor and AAC. Plan Voting Ends Feb. 29 Ambac Financial disclosed Feb. 16 that, in order to give it additional time to negotiate a final settlement of its dispute with the Department of the Treasury -- Internal Revenue Service, the voting deadline relating to the Second Amended Plan of Reorganization of Ambac Financial dated Sept. 30, 2011 has been extended to Feb. 29, 2012 at 5:00 p.m. (prevailing Pacific Time) and the Plan objection deadline has been extended to Feb. 29, 2012 at 4:00 p.m. The Bankruptcy Court hearing relating to the confirmation of the Plan remains scheduled for March 13, 2012. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. The confirmation hearing for approval of Ambac's Chapter 11 plan, originally set for Dec. 8, is now on the calendar for Jan. 19. Disagreements with the Wisconsin insurance commissioner over the sharing of tax benefits had held up a plan for the holding company. Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMBAC FINANCIAL: Awards $730,000 in Cash Bonuses to Top Execs. -------------------------------------------------------------- Ambac Financial Group, Inc.'s Compensation Committee of the Board of Directors approved the payment of a cash bonus to Diana N. Adams, the Company's president and chief executive officer, of $550,000, and to David Trick, the Company's chief financial officer, of $180,000 for their performance in 2011, according to a February 10, 2012 filing with the U.S. Securities and Exchange Commission. Moreover, the Compensation Committee approved an increase in Ms. Adams' base salary for 2012 to $750,000. As previously reported, Mr. Trick received quarterly retention payments in 2011, totaling $220,000. Ambac Assurance Corporation will pay its allocable portion of those amounts in accordance with AFG's procedures for allocating expenses. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. The confirmation hearing for approval of Ambac's Chapter 11 plan, originally set for Dec. 8, is now on the calendar for Jan. 19. Disagreements with the Wisconsin insurance commissioner over the sharing of tax benefits had held up a plan for the holding company. Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMBAC FINANCIAL: Disclosure Order in AAC v. DLJ Suit Rejected ------------------------------------------------------------- The Appellate Division of the Supreme Court of New York, First Department, ruled that the New York Supreme Court erred in granting a motion to compel disclosure of privileged documents in the action captioned Ambac Assurance Corp v. DLJ Mortgage Capital, Inc. The action arises from the securitization of home equity lines of credit, which were aggregated into a "pool" by defendant DLJ Mortgage, and then transferred to a trust that was formed to issue securities to investors. The securities would be paid down based on the cash flow from the pooled loans. Defendant Credit Suisse Securities USA LLC served as the underwriter for the public offering of these securities, and plaintiff Ambac Assurance Corporation, through plaintiff The Segregated Account of AMBAC Assurance Corporation, issued an insurance policy guaranteeing payment of certain classes of the securities issued. When the loans began to default at what the Plaintiffs considered to be a high rate, they retained a law firm, which retained RMG Global to conduct a forensic re-underwriting review of the loans in the securitization. Following the Plaintiffs' commencement of the action based on RMG's findings, the Defendants served demands seeking any and all records surrounding RMG's review. The Plaintiffs provided the Defendants with RMG's conclusions and the raw data RMG used in its analysis of the loans at issue. However, the Plaintiffs objected to the remainder of defendants' demands, including any correspondence between RMG and the law firm plaintiffs retained, and documents concerning the methodology employed by RMG in its review, citing attorney work product and trial preparation privileges. The Defendants sought to compel disclosure because the Plaintiffs had placed RMG's findings "at issue." The Supreme Court granted the Defendants' motion, finding that the Plaintiffs failed to meet their burden of establishing privilege and that they waived privilege by placing the materials "at issue." Although the party challenging disclosure bears the burden of establishing that the information sought is immune from disclosure, the Defendants did not challenge the existence of a privilege until their reply, the Appeals Court found. Moreover, the fact "that a privileged communication contains information relevant to issues the parties are litigating does not, without more, place the contents of the privileged communication itself at issue' in the lawsuit," the Appeals Court opined. The Plaintiffs did not waive privilege by placing RMG's review of the loans "at issue," the Appeals Court found. Since plaintiffs do not "need the privileged documents to sustain [their] cause of action," they have not "waived the attorney- client privilege by injecting privileged materials into the lawsuit," the Appeals Court held. Nor did plaintiffs waive the privilege by making a selective non-disclosure, the Appeals Court concluded. Moreover, the Appeals Court granted, on consent, a motion seeking to have it take judicial notice of certain court records. A copy of the Appeals Court's February 7, 2012 decision is accessible for free at http://ResearchArchives.com/t/s?7790 About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. The confirmation hearing for approval of Ambac's Chapter 11 plan, originally set for Dec. 8, is now on the calendar for Jan. 19. Disagreements with the Wisconsin insurance commissioner over the sharing of tax benefits had held up a plan for the holding company. Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMERICAN AIRLINES: Needs Strong Pacific Business ------------------------------------------------ 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 AIRLINES: To Renegotiate $1.6-Bil. BNDES Debt ------------------------------------------------------ Reuters, citing a Brazilian newspaper's report, said American Airlines is renegotiating terms of $1.6 billion in debt owed to Brazil's state development bank to help it emerge more rapidly from bankruptcy in the United States. According to Reuters, Brazil's Valor Economico reported that American Airlines Chief Executive Thomas Horton declined to say how the company plans to pay the BNDES. AMR wants to rework terms of the debt, which it incurred to finance the purchase of Embraer planes between 1998 and 2002. According to Reuters, Mr. Horton told Valor AMR could return some planes to Embraer and pay down a portion of the BNDES debt, among other potential alternatives. Reuters says representatives for Embraer and American Airlines were not immediately available for comment. A spokesman at Rio de Janeiro BNDES did not have an immediate comment on the Valor report. 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 AIRLINES: Streamlines Management as Part of Restructuring ------------------------------------------------------------------ American Airlines announced Feb. 15, 2012, the retirement of two leadership team members, as well as additional changes to its global leadership team that will streamline its management organization and advance its restructuring objectives. The Company said the organizational changes are designed to further enhance its focus on customers by fully integrating all of its customer-facing activities into the customer organization, and by consolidating its global sales and marketing functions within the commercial organization. * Peter J. Dolara, Senior Vice President -- Mexico, Caribbean and Latin America (MCLA), will retire June 30. * Thomas R. Del Valle, Senior Vice President -- Airport Services and Cargo, will retire by June 30. * Craig S. Kreeger, Senior Vice President -- Customer, will add Airport Services and operations for MCLA and Europe and Pacific to his current management duties. * Virasb Vahidi, Chief Commercial Officer, will assume additional responsibility for all international Sales and Marketing by adding Pacific, Mexico, Caribbean and Latin America to his oversight of Europe. * Art Torno, currently Vice President -- New York, has been named Vice President -- MCLA, assuming Mr. Dolara's airport and operations duties and reporting to Kreeger. AMR Chairman and Chief Executive Officer Tom Horton said, "On behalf of the company and all of its stakeholders, I want to thank Peter and Tom for their immeasurable contributions to American Airlines, and for agreeing to stay on through mid-year to help us through a critical phase of our restructuring. Their dedication and commitment to employees, customers and the communities we serve represent all that is special about American." "As we review every area of our business to restore American to profitability, growth, and industry leadership, key to our mission is an intense focus on our customers. By combining all our customer contact teams into one organization, and consolidating our global sales and marketing activities, we will be even better positioned to continue delivering steady improvements in our customers' experience. These organizational changes represent a significant step forward toward realizing the goals of our business plan," Mr. Horton added. Mr. Dolara has provided more than four decades of service to American and its stakeholders, joining the company in 1971. Based in Miami, one of American's five key domestic markets and the gateway to Latin America, he led the development of American's industry-leading presence throughout the MCLA region. Mr. Dolara has held numerous sales positions and was Sales Manager for American's Eastern Division, based in New York City and became Vice President -- Atlantic/Caribbean and New York City Sales in March 1984. He became Senior Vice President in October 1989 and moved to Greater Miami in 1992. "When you think of airline industry icons, you think of Peter Dolara. I remember looking up to him when I joined American, and my admiration has only grown over the years," Mr. Horton said. "Peter has always put customers first, and we are fortunate that he also had the foresight to groom and develop many leaders, such as Art Torno, who will take over operational responsibilities in MCLA and continue building our leadership there. And that's also why we can finally allow Peter to enjoy his well-deserved retirement." Mr. Torno returns to the organization where he has spent the majority of his American Airlines career. Previous to his tenure in New York, Torno had responsibility for American's Caribbean operations, which included San Juan along with 24 island destinations. He also ran American's South American operations from Santiago, Chile, and served in roles overseeing American's hubs in Miami and San Juan. Mr. Del Valle has served as Senior Vice President -- Airport Services and Cargo since September 2007. He was previously American's Vice President of Customer Services beginning in August 1999. In 1989, he joined the international division as General Manager in Brussels, Belgium. Mr. Del Valle was named President of the American Eagle's Executive Airlines operation in San Juan in 1992, and in 1997 he was appointed Managing Director -- Customer Services for American Airlines in Los Angeles. Mr. Del Valle also has been a strong advocate of and participant in American's Veterans and Military initiatives that support current and former service men and women. "Tom has served admirably in one of the most challenging jobs one could have in the airline business, keeping our airports running smoothly for our customers," Mr. Horton said. "There has been no better advocate for our airport employees or customers, and he has also given countless hours of his time to help active military, veterans and their families. He is the type of person and colleague who characterizes the spirit of American Airlines, and we wish him well in his retirement." In his expanded role, Mr. Kreeger will add responsibility for Airport operations worldwide, encompassing North America, Europe and Pacific, and MCLA. The addition of Airport operations to Mr. Kreeger's current responsibilities combines reservations, inflight and airport operations, three of the most critical interaction points within the overall customer experience, into one organization. This integration will facilitate a more consistent experience for customers. Previously, as Senior Vice President -- International, Mr. Kreeger oversaw all of American's sales and ground operations activities in Europe and Asia, becoming Senior Vice President -- Customer Experience in 2010. "Craig has a wealth of experience in the airline business and a unique ability to manage complex operations and service delivery channels that span the globe and encompass a broad range of customer touch points," Mr. Horton said. "One of the important objectives of our management redesign is to ensure we best meet the needs of our customers and Craig is ideally suited for that vital mission." As part of the management redesign, Mr. Vahidi will assume additional responsibility for all international sales and marketing, including Europe and Pacific, and Mexico, Caribbean and Latin America (MCLA). Mr. Vahidi assumed the role of Chief Commercial Officer in 2010, with oversight of Sales and Marketing, Network and Fleet planning, Strategic Alliances, Revenue Management, Corporate Real Estate and the AAdvantage(R) program. Mr. Horton said, "Virasb has made great strides in strengthening our Sales and Marketing efforts in North America and Europe. Now, we have an important opportunity to do an even better job for our corporate and high-value customers by integrating Pacific and MCLA Sales and Marketing into his organization. Given Virasb's oversight of our Strategic Alliances activities, including our Joint Businesses in the Atlantic and Pacific markets, we believe these changes will help us be more coordinated, nimble and effective in meeting the needs of these important customers. As we expand our global focus with more international flying in the years ahead, we need an organizational structure best suited to these objectives." With these and other changes announced since AMR launched its restructuring on Nov. 29, 2011, the company's Leadership Team, which oversees the company's strategy and operations, has been reduced from 14 to 10 members. The Leadership Team consists of Messrs. Horton, Kreeger and Vahidi, and Jim Ream, Senior Vice President -- Operations, Bella Goren, Senior Vice President -- Chief Financial Officer, Maya Leibman, Senior Vice President -- Chief Information Officer, Gary Kennedy, Senior Vice President -- General Counsel and Chief Compliance Officer, Jeff Brundage, Senior Vice President -- Human Resources, Will Ris, Senior Vice President -- Government Affairs, and Dan Garton, President and Chief Executive Officer of American Eagle Airlines. The announcement marks the completion of the first step in the company's management redesign, which will cascade throughout American's management organization by the end of summer. During the next phase, the Leadership Team will begin the process of designing their organizations, starting with the management layer that reports directly to them. 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 AIRLINES: Proposes to Assume Chartis Insurance Programs ---------------------------------------------------------------- AMR Corp. and its affiliates seek the Bankruptcy Court's permission to assume certain insurance programs they entered into with affiliates of Chartis Inc. The Debtors are required to maintain certain insurance policies in connection with the operation of their business. Since June 1, 1193, Chartis has provided the Debtors with certain workers' compensation (including employers' liability), general liability, and automobile liability insurance coverage pursuant to insurance policies as part of a comprehensive insurance program. Under the Workers Compensation Coverage, the Debtors estimate their aggregate liability for 5,100 open Workers Compensation Claims and future Workers' Compensation Claims that the Debtors estimate will be filed through July 31, 2012 to be approximately $400 million. On November 18, 2011, Chartis, in accordance with the Insurance Program Agreements, issued a collateral call to the Debtors in the amount of $76.6 million, effectively raising the amount of collateral required to be held in the Workers' Compensation Trust Accounts from $413 million to $490.4 million, with the additional collateral being due and payable on December 19, 2011. The Debtors and Chartis, however, agreed for Chartis to reduce the Original Collateral Call by nearly $50 million to $27.5 million, in exchange for the Debtors' agreeing to assume all Insurance Program Agreements with Chartis. In addition, Chartis has agreed, subject to assumption of the Insurance Program Agreements, not to make any additional collateral calls through the end of July 2012, the end of the current policy year. If, however, the Debtors do not assume the Insurance Program Agreements prior to March 9, 2012, Chartis has asserted that the $49,130,481 difference between the Original Collateral Call and the Modified Collateral Call will become immediately due and payable on March 9, 2012 and that Chartis intends to pursue its rights with respect thereto. Under the General Liability Policies, the Debtors are not currently aware of any open prepetition claims under those policies and are not aware of any prepetition insurance premiums or other amounts that are currently outstanding or payable with respect to the General Liability Polices. As to the Auto Liability Policies, the Debtors are currently aware of only four open prepetition claims and estimate that the potential liability with respect to such claims under the Auto Liability Policies should not exceed one million dollars. Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, asserts that assumption of the Insurance Program Agreements will reduce that $76.6 Collateral Call by almost $50 million, representing a significant benefit to the Debtors' estates. Although the commencement of these Chapter 11 cases may raise an issue as to the ability of Chartis to terminate coverage based on the Debtors' failure to comply with a cash collateral demand made in accordance with the Insurance Program Agreements, it is not prudent to take this risk and address the litigation that would inevitably ensue, particularly where Chartis had agreed to the significant concessions, he stresses. If the Debtors are compelled to obtain alternative coverage, they expect the cost would be significantly higher and that they would incur substantial disruption in the claims management process, he maintains. The Court will consider the Debtors' request on February 29, 2012. Objections are due no later than February 22. 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 AIRLINES: Feb. 29 Final Hearing on Deloitte Hiring ----------------------------------------------------------- Judge Sean Lane approved on an interim basis AMR Corp.'s application to employ Deloitte Financial Advisory Services LLP as consultants, nunc pro tunc to the Petition Date. Parties will have until February 24, 2012 to file final objections to the Debtors' Application. The Court will convene a final hearing on the Debtors' Application on February 29, 2012. Before the Final Hearing and pending further order of the Court, no compensation or expense reimbursement will be paid by the Debtors to Deloitte, Judge Lane clarified. In the Application, the Debtors said they selected the firm because of its "recognized experience and knowledge" in performing bankruptcy-related services, according to Randall White, associate general counsel of AMR Corp. As consultant, Deloitte Financial will assist in developing tools and methods for a Trading Partner Response Center that would allow "vendor questions" to be addressed. The firm will also provide personnel to staff the TPRC and assist in training those personnel. Deloitte Financial will also advise the Debtors on the development of tools and procedures for vendor management, on internal and external communications related to restructuring, on the preparation of various financial reports, on claims administration and reconciliation, among other things. In exchange for its services, Deloitte Financial will be paid on an hourly basis, and will be reimbursed of its expenses. Its hourly rates range from $525 to $700 for partners, principals or directors; $400 to $550 for senior managers; $340 to $450 for managers; and $150 to $350 for other professionals. The firm agreed that its combined blended rate will not exceed $300 per hour for services related to claims administration and reconciliation, and $330 per hour for other services. Deloitte Financial does not hold interest adverse to the Debtors or their affiliates, according to a declaration by John Little, a principal of the firm. 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 AIRLINES: Interim Order Entered on KPMG as Tax Advisor --------------------------------------------------------------- Judge Sean Lane approved, on an interim basis, AMR Corp. and its affiliates' application to employ KPMG LLP as their tax compliance and tax consultants, nunc pro tunc to the Petition Date. Parties will have until February 24, 2012 to object to the Debtors' Application. The Court will convene a final hearing on the Debtors' Application on February 29, 2012. Before the Final Hearing and pending further order of the Court, no compensation or expense reimbursement will be paid by the Debtors to KPMG. As tax consultant, KPMG will provide analysis concerning the tax implications of the Debtors' bankruptcy cases. It will also review the tax section of the Debtors' bankruptcy plan, and administer tax claims management and schedule of tax liabilities. The firm also agreed to provide international executive tax services for American Airlines and its international assignees for the past three years. KPMG will be paid on an hourly basis for its tax consulting services and will be reimbursed for its expenses. The firm's hourly rates are: Professionals Hourly Rate ------------- ----------- Partner $460-$590 Partner, Washington Nat'l. Tax/M&A $540 Director $410 Director, Washington Nat'l. Tax/M&A $440 Senior Manager $355-$495 Sr. Manager, Washington Nat'l. Tax/M&A $395 Manager $295-$410 Manager, Washington Nat'l. Tax/M&A $325 Senior Associate $210-$300 Sr. Associate, Washington Nat'l. Tax/M&A $230 Associate $180-$245 Associate, Washington Nat'l. Tax/M&A $200 KPMG will also be paid for its tax compliance services at these rates: Flat Rates per Tax Compliance Services Debtors' Employee ----------------------- ----------------- US Tax Compliance US Federal Income Tax Return $1,365 US State Income Tax Return $465 US Tax Equalization Calculation $465 Pre/Post Departure Interviews $545 Cost Projection $825 US Hypothetical Tax Calculation $330 Technology Fee $15/active assignee/month US Payroll Services $146/hour Global Coordination Fee 5% of global tax services Melisa Denis, a partner at KPMG, disclosed in a declaration that her firm does hold or represent interest adverse to the Debtors or their estates. 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 DIAGNOSTIC: Access to Cash Collateral Expires March 31 --------------------------------------------------------------- The Hon. Carol A. Doyle of the U.S. Bankruptcy Court for the Northern District of Illinois authorized American Diagnostic Medicine, Inc., to use cash collateral. The Court ordered that the final order authorizing the Debtor's use of cash collateral retroactive to Jan. 28, 2011, entered on April 29, 2011, will continue in full force and effect up until March 31. The period to challenge the liens of the lenders will also be extended until Feb. 29. The status hearing on the continued use of the cash collateral will be held March 22, at 10:30 a.m. As of the Petition Date, the Debtor owes Cole Taylor Bank $829,485 in secured loans. It also owed Cardinal Health 414, LLC, $3,362,393 under a junior secured loan. The April 29 order outlined adequate protection provisions for the Debtor's use of cash collateral as well as events that will cause termination of the Debtor's use. The Debtor agreed to make adequate protection payments, and grant the lenders replacement security interest and first security interests in the Debtor's unencumbered assets. About American Diagnostic Batavia, Illinois-based American Diagnostic Medicine Inc. provides imaging technologies to hospitals, clinics, cardiologists, internal medicine groups and other health care providers throughout the United States. It filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 11-03368) on Jan. 28, 2011. Joshua D. Greene, Esq., and Michael J. Davis, Esq., at Springer, Brown, Covey, Gaetner & Davis, serve as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $11.3 million in total assets and $11.1 million in total debts. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has hired K&L Gates LLP as its counsel. AMERICAN DIAGNOSTIC: Hearing on Competing Plan Outlines on March 6 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Illinois will convene a hearing on March 6, 2012, at 10:30 a.m., to consider the adequacy of the disclosure statements with respect to the competing Chapter 11 plans for American Diagnostic Medicine, Inc. Objections, if any, are due Feb. 29. The Plan proposed by the Debtor, according to the Disclosure will ensure that the best likelihood for success and distribution to creditors. The Debtor's Plan translates to a 60% to 75% distribution to holders of allowed unsecured claims. Under the Plan, the primary objectives are: (a) maximize distributions to all creditor groups on a fair and equitable basis; and (b) provide sufficient funds to restructure the Debtor. The treatment of classes 2 and 5 are provided in the alternative under the Debtor's Plan: * In the event that unsecured creditors in class 5 vote to accept the Debtor's Plan, Cardinal Health will reduce its $4.2 million secured claim to $3 million, which will provide sufficient cash flow for the Debtor to distribute $1.2 million to holders of allowed class 5 claims over a period six years per the terms of the earnout notes. This would translate to a 60% to 75% distribution to general unsecured claims depending upon the aggregate total of the claims. * In the event the class 5 votes to reject the Debtor's Plan, the Debtor will pay Cardinal Health the sum of 4.2 million over a period of six years, and all of the equity in the Reorganized Debtor will vest with Cardinal Health. If creditors reject the Debtor's Plan and if the Debtor's Plan is confirmed over their rejection, no distribution will be made to Class 5. The Plan of Reorganization proposed by the Official Committee of Unsecured Creditors dated Jan. 17, 2012, contemplates the reorganization of the Debtor as a going concern, the payment in full of several Classes of creditors on or shortly after the Effective Date, and the payment of general unsecured claims (as well as the Allowed claim of Cardinal Health) over time from a creditors' trust. This is accomplished through a series of transactions, including, among others: 1. Existing ownership interests (equity) in the Debtor are canceled and the ADM Creditor Trust becomes the owner of the Reorganized Debtor; 2. The Committee conducts an auction for the "Beneficial Interest" in the ADM Creditor Trust (i.e. the right to manage the Reorganized Debtor, receive certain payments for doing so, and the right to own the Reorganized Debtor after it satisfies its obligations to creditors). 3. The Committee believes the sale of the Beneficial Interest will generate a minimum of $300,000 for creditors. The Sale Proceeds will be used to pay down the amounts owed to General Unsecured Creditors and Cardinal Health. 4. The Reorganized Debtor issues two notes to General Unsecured Creditors (each for $950,000) and a separate note to Cardinal Health (for $3,000,000). The Cardinal Health Note is secured by a first-priority security interest and the Unsecured Creditor Notes are secured by a second-priority security interest. 5. The Reorganized Debtor pays off the Notes over not more than a five-year period. 6. Once the Notes have been paid off in full, the purchaser of the Beneficial Interest in the ADM Creditor Trust becomes the owner of the Reorganized Debtor. 7. The ADM Creditor Trust also becomes the owner of certain Avoidance Actions, including, among others, claims against certain of the Debtor's Insiders and Affiliates. The ADM Creditor Trustee pursues the Avoidance Actions for the benefit of General Unsecured Creditors in his business judgment. 8. Administrative Claims, Priority Tax Claims, Other Secured Claims, and Non-Tax Priority Claims are unimpaired and will be paid in full on or as soon as reasonably practical after the Effective Date or receive other treatment as set forth in the Committee Plan. The ADM Creditor Trust will be administered by the ADM Creditor Trustee, who will be appointed by the Committee. The ADM Creditor Trustee will, among other things, oversee the operations of the Reorganized Debtor, pursue Avoidance Actions, receive payments on the Unsecured Creditor Notes, and make distributions to Holders of Allowed General Unsecured Claims, in accordance with the Committee Plan and ADM Creditor Trust Agreement. The Committee Plan will be financed through a combination of available cash, sale proceeds, operating profits from the Reorganized Debtor's future business operations and recoveries from avoidance actions and causes of action. A full-text copy of the Debtor's Plan is available for free at http://bankrupt.com/misc/AMERICAN_DIAGNOSTIC_ds.pdf A full-text copy of the Committee Plan is available for free at http://bankrupt.com/misc/AMERICAN_DIAGNOSTIC_ds_committee.pdf About American Diagnostic Batavia, Illinois-based American Diagnostic Medicine Inc. provides imaging technologies to hospitals, clinics, cardiologists, internal medicine groups and other health care providers throughout the United States. It filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 11-03368) on Jan. 28, 2011. Joshua D. Greene, Esq., and Michael J. Davis, Esq., at Springer, Brown, Covey, Gaetner & Davis, serve as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $11.3 million in total assets and $11.1 million in total debts. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has hired K&L Gates LLP as its counsel. APPLIED DNA: Incurs $2.4 Million Net Loss in Dec. 31 Quarter ------------------------------------------------------------ Applied DNA Sciences, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $2.41 million on $516,904 of revenue for the three months ended Dec. 31, 2011, compared with a net loss of $1.34 million on $317,817 of revenue for the same period a year ago. The Company previously disclosed a net loss of $10.51 million on $968,848 of revenue for the fiscal year ended Sept. 30, 2011, compared with a net loss of $7.91 million on $519,844 of revenue during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $2.52 million in total assets, $3.87 million in total liabilities, all current, and a $1.35 million total deficiency in stockholders' equity. RBSM LLP, in New York, noted in its report on Applied DNA's fiscal 2011 financial results that the Company has suffered recurring losses and does not have significant cash or other material assets, nor does it have an established source of revenues sufficient to cover its operations, which raises substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: http://is.gd/wA1gPA About Applied DNA Stony Brook, N.Y.-based Applied DNA Sciences, Inc., is principally devoted to developing DNA embedded biotechnology security solutions in the United States. AS SEEN ON TV: Reports $2.2 Million Net Income in Dec. 31 Qtr. -------------------------------------------------------------- As Seen On TV, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting net income of $2.24 million on $2.60 million of revenue for the three months ended Dec. 31, 2011, compared with a net loss of $979,472 on $391,710 of revenue for the same period a year ago. The Company reported a net loss of $10.20 million on $3.35 million of revenue for the nine months ended Dec. 31, 2011, compared with a net loss of $1.22 million on $848,941 of revenue for the same period during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $13.27 million in total assets, $32.73 million in total liabilities, all current, and a $19.46 million total stockholders' deficiency. EisnerAmper LLP, in Edison, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2011. The independent auditors noted that of the Company's recurring losses from operations and negative cash flows from operations. A full-text copy of the Form 10-Q is available for free at: http://is.gd/zlLoWr About As Seen on TV Clearwater, Fla.-based As Seen On TV, Inc., is a direct response marketing company. The Company identifies, develops, and markets consumer products. The Company's strategy employs three primary channels: Direct Response Television (Infomercials), Television Shopping Networks and Retail Outlets. ASPEN DENTAL: Moody's Assigns 'B2' to Amended $50MM Facility ------------------------------------------------------------ Moody's Investors Service assigned a B2 rating to the amended $50 million senior secured revolving credit facility (upsized from $35 million) and affirmed the B2 rating of the amended $320 million senior secured term loan (upsized from $195 million) of Aspen Dental Management, Inc. At the same time, Moody's affirmed Aspen's B2 Corporate Family and Probability of Default Ratings. The rating outlook is stable. Proceeds of the term loan increase will be used to make a one-time dividend distribution to shareholders totaling approximately $127 million. The company is privately-held by PE firms Leonard Green & Partners, L.P. and Ares Capital. As part of the proposed amendment, the revolving credit facility expiration date will be extended by six months, to April 2016 (from October 2015), while the term loan maturity of October 2016 will remain unchanged. Moody's assigned these ratings: $50 million senior secured revolving credit facility due April 2016, B2 (LGD3, 45%) Moody's affirmed the following ratings (with LGD point-estimate revisions): Senior secured term loan (upsized to $320 million from $195 million) due October 2016, B2 (LGD3, 45%) Moody's expects to withdraw the following ratings upon close: $35 million senior secured revolving credit facility due October 2015, B2 (LGD3, 44%) Ratings Affirmed: B2 Corporate Family Rating B2 Probability of Default Rating All ratings are subject to review of final documentation. RATINGS RATIONALE The affirmation of Aspen's B2 Corporate Family Rating reflects Moody's view that while the incremental debt associated with the one-time dividend distribution will result in the deterioration of certain key credit metrics, it is not sufficient to warrant a downgrade. While Moody's estimate of Aspen's pro forma debt to EBITDA increases to roughly 5.8 times from 4.4 times as of December 31, 2011, Moody's expects gradual improvement over the intermediate-term due to steady EBITDA growth. The ratings also reflect the company's limited absolute size relative to other single-B rated companies, based on revenue and earnings. The company's aggressive de novo growth strategy is expected to continue to constrain profitability margins and free cash flow. The ratings are supported by the company's flexibility to reduce de novo growth if necessary, and its ability to then generate positive free cash flow that could be used to reduce debt. In addition, the credit profile benefits from the large population of people that are underserved in terms of access to dental care, which Moody's believes supports Aspen's growth prospects. An upgrade of the ratings in the near-term is unlikely due to the company's high financial leverage and aggressive financial policies. In addition, Moody's expects Aspen's aggressive de novo growth strategy to constrain free cash flow and debt repayment. However, if over time, the company were to demonstrate stable same store sales growth such that adjusted leverage were to be sustained below 4.0 times and free cash flow to debt were to exceed 10%, Moody's could upgrade the ratings. The ratings could be downgraded if Aspen, or the DPM industry in general, were to face an escalation in regulatory or legal risk. As Moody's views good equity cushion as a key supporter of the ratings, additional dividends or shareholder friendly initiatives of significance could also cause the ratings to be downgraded. From a credit metrics perspective, the ratings could be downgraded if adjusted debt to EBITDA were to rise above 6 times or free cash flow were to turn negative. The principal methodology used in rating Aspen Dental Management, Inc. was the Global Business & Consumer Service Industry Methodology published in Octoner 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. Aspen Dental Management, Inc. ("Aspen"), headquartered in East Syracuse, New York, provides general dentistry services to patients through its owned subsidiaries and affiliated professional corporations ("PC"). The parent company is a dental practice management company ("DPM") that provides dental lab services and various business and management services to its dentists through long-term management services agreements. The company is privately-held by PE firms Leonard Green & Partners, L.P. ("LGP") and Ares Capital ("Ares"). ATLANTIC COUNTY: Moody's Cuts Waste Revenue Bond Rating to 'Ba1' --------------------------------------------------------------- Moody's downgrades the rating on Atlantic County Utility Authority's Waste Revenue Bonds to Ba1 from Baa3. The outlook is negative. Rating Rationale The rating downgrade to Ba1 reflects the Authority's fourth consecutive year in which net operating revenues were insufficient to cover debt service on a sum sufficient basis (net of state debt service aid subsidy), a healthy liquidity position, solid waste tonnages that have recovered from declines in prior years, however, tonnages which have fallen short of budgetary expectations for a second consecutive year, challenges to the practical implementation of the county flow control ordinance and a debt service reserve fund which has been partially drawn on since 2002. What could change the rating UP: The authority's ability to generate sufficient internal revenues to cover operations and debt service on at least a sum sufficient basis over a sustained period of time could have a positive effect on the rating. What could change the rating DOWN: Depletion of the authority's healthy liquidity position or continued debt service coverage on less than a sum sufficient basis could have a negative effect on the rating. Legal Security: Net revenues of the solid waste system. Bondholders additionally benefit from a debt service reserve which is cash funded, however the reserve has not been fully funded since the state required the authority to draw from the fund in 2002 leaving a balance of $2.6 million. The authority covenants to maintain rates sufficient for net revenues to cover debt service 1.10 times. Derivatives: None. Outlook The negative outlook reflects financial and operational challenges to the authority and it's ability to collect sufficient waste to generate revenues to cover debt service on a sum sufficient basis under the current flow control ordinance. STRENGTHS: -Strong cash position with days cash on hand at 585 days -The county wide flow control ordinance implemented in October of 2010 has enabled the authority to redirect solid waste streams to authority owned landfills thereby increasing the amount of annually recurring revenues to the authority CHALLENGES: -The authority has relied on state debt service aid to generate sufficient revenues to meet ongoing operations including capital improvements and annual repayment of debt service since 1999 -The current flow control ordinance permits the disposal of commercial waste within authority owned landfill or to landfills out of state and the authority's largest hauler began disposing of this waste out of state in October 2011. The authority is revising the current ordinance to address this loophole, however, timing of successful implementation could be delayed -Net revenues, net of state debt service aid, have dropped to below sum sufficiency for a fourth consecutive year BAY THREE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Bay Three Limited, Inc. 1356 Fischer Blvd Toms River, NJ 08753-3088 Bankruptcy Case No.: 12-14083 Chapter 11 Petition Date: February 20, 2012 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Raymond T. Lyons Jr. Debtor's Counsel: Timothy P. Neumann, Esq. BROEGE, NEUMANN, FISCHER & SHAVER 25 Abe Voorhees Drive Manasquan, NJ 08736 Tel: (732) 223-8484 Fax: (732) 223-2416 E-mail: tneumann@bnfsbankruptcy.com Scheduled Assets: $130,705 Scheduled Liabilities: $2,914,038 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/njb12-14083.pdf The petition was signed by Anthony Baiamonte, III, president. BELTWAY ONE: Keith Harper Approved as Valuation Expert ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Nevada approved Beltway One Development Group LLC's second amendment to its application to employ Keith Harper as valuation expert. The Debtor requested that the Court reaffirm that the Debtor is authorized to employ Mr. Harper to provide appraisal and valuation expert services to the Debtor, allowing compensation and reimbursement of the other fees and expenses to be paid as an administrative expense. The amendment was filed following a deposition on Jan. 4, 2012, when Wells Fargo pointed out to a misstatement that Harper was not engaged by Wachovia Bank, N.A. to appraise the Debtor's property. Harper later acknowledged that he was engaged by Wachovia in 2008 to appraise the Debtor's real property and such omission in his declaration was an "unintentional drafting oversight." About Horizon Village Square, et al. Four related Las Vegas, Nevada-based entities sought Chapter 11 bankruptcy protection on July 13, 2011. The businesses are owned or managed by local business people and firms, including Todd Nigro, Nigro Development LLC, a Nigro family trust and other investors. Horizon Village Square LLC (Bankr. D. Nev. Case No. 11-21034) owns the Vons-anchored Horizon Village Square Shopping Center near I-515 and Horizon Drive in Henderson. The property includes five retail buildings with nearly 43,000 square feet of space. Ten Saints LLC (Bankr. D. Nev. Case No. 11-21028) owns the 134- room Hampton Inn & Suites at St. Rose Parkway and Seven Hills Drive in Henderson. Beltway One Development Group LLC (Bankr. D. Nev. Case No. 11-21026) owns the Desert Canyon Business Park at Russell Road and the Las Vegas Beltway. It has two buildings and 15 acres. Nigro HQ LLC (Bankr. D. Nev. Case No. 11-21014) owns an office building at 9115 W. Russell Road occupied by Bank of George, Infinity Plus LLC and Nigro Construction Inc. Todd Nigro said the four bankruptcies were caused by threatened foreclosures -- typically related to Wells Fargo Bank demanding payments to keep loan-to-value ratios at specified levels. Judge Mike K. Nakagawa presides over the cases. Lawyers at Gordon Silver serve as the Debtors' bankruptcy counsel. The bankruptcy petitions estimated assets and debts from $1 million to $10 million each for Nigro HQ; and from $10 million to $50 million in both assets and debts for Horizon Village, Ten Saints and Beltway One. A fifth related business, Russell Boulder LLC, filed for bankruptcy (Bankr. D. Nev. Case No. 10-29724) on Oct. 19, 2010. It owns the 600-suite Siena Suites extended stay property at Boulder Highway and Russell Road. Edward M. Zachary, Esq., at Bryan Cave LLP, in Bryan Cave LLP, in Phoenix, Ariz., and Robert M. Charles, Jr., Esq., at Lewis and Roca LLP, in Las Vegas, Nev., represent Wells Fargo Bank, N.A., as counsel. BERKELEY DELAWARE: Wants Case Dismissal, Opposes Conversion ----------------------------------------------------------- Berkeley Delaware Court, LLC, asks the U.S. Bankruptcy Court for the Southern District of California to: -- dismiss its Chapter 11 proceeding; and -- abstain and remand adversary proceeding Berkeley Delaware v First-Citizens Bank et al., Adversary number 11-90394 LA. The Debtor relates that its secured creditor received relief from the stay and has seized its primary assets, making reorganization impossible at present. Dismissal, according to the Debtor, would be in the best interest of the estate, the Debtor and the creditors. The Debtor will seek approval of the dismissal motion at a hearing on Feb. 23, 2012 at 2:30 p.m. The Debtor opposes a motion to convert or appoint a trustee. First Citizens Bank & Trust filed a motion to convert the Debtor's case to one under Chapter 7 of the Bankruptcy Code or appoint a Chapter 11 trustee in the Debtor's estate. It asserts that: i) the Debtor paid thousands of dollars to professionals it retained postpetition without the Court's permission; ii) the Debtor's managing member and his family used estate property postpetition without any authority to do so and without paying for the use; and iii) the Debtor co-mingled estate and non-estate funds. In its request to deny FCB&T's proposal, the Debtor explains that: 1. the movant, FCB&T is not a proper party to bring the Motion, its claim having been satisfied in full, it is not a creditor and lacks standing; 2. the moving papers have twisted facts and made unfounded allegations to support its motion, obviously in an attempt to gain advantage in pending litigation against the bank. 3. converting the case would be a futile act as there is nothing of value that a trustee would want to administer. About Berkeley Delaware Court San Diego, California-based, Berkeley Delaware Court, LLC, filed for Chapter 11 protection (Bankr. S.D. Calif. Case No. 11-07128) of April 29, 2011. Dennis Winters, Esq., at Winters Law Firm, represents the Debtor in its restructuring effort. The Debtor disclosed $20,000,000 in assets and $13,712,428 in liabilities as of the Chapter 11 filing. BORDERS GROUP: Settlement of WARN Suit Approved on Final Basis -------------------------------------------------------------- Bankruptcy Judge Martin Glenn approved, on a final basis, a Settlement and Release Agreement of a WARN Act class action adversary proceeding filed against Borders Group Inc. Jared Pinsker, as Class Representative, initiated a putative class action adversary proceeding on behalf of himself and other similarly situated former Border employees. Pursuant to the Settlement, the Debtors will pay $240,000: (1) $3,000 to Mr. Pinsker as the class representative; (2) $158,000 to be divided equally among the Class Members; and (3) $79,000 in attorneys' fees to counsel for the Class. Each Class Member is slated to receive $797. The Settlement Agreement further provides that each Class Member that has not opted-out will release any and all claims he or she may have against the Debtors. Moreover, if 5% or more members of the Class decide to opt-out, the Debtors or the Liquidating Trust, as applicable, have the right to declare the Settlement null and void. The case is JARED PINSKER, on behalf of himself and all others similarly situated, Plaintiff, v. BORDERS, INC., Defendants, Adv. Proc. No. 11-02586 (Bankr. S.D.N.Y.). A copy of the Feb. 17, 2012 Memorandum Opinion is available at http://is.gd/3BIufgfrom Leagle.com. About Borders Group Borders Group operated book, music and movie superstores and mall based bookstores under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States. At Jan. 29, 2011, the Company operated 639 stores in the United States and 3 in Puerto Rico. The Company also operated a proprietary e-commerce Web site -- http://www.Borders.com/-- launched in May 2008, which included both in-store and online e-commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and roughly 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, served as counsel to the Debtors. Jefferies & Company's Inc. served as the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC served as the interim management and restructuring services provider. The Garden City Group, Inc., acted as the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, served as counsel to the DIP Agents. Lowenstein Sandler represented the official unsecured creditors committee for Borders Group. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010. Borders selected proposals by Hilco and Gordon Brothers to conduct going out of business sales for all stores after no going concern offers of higher value were submitted by the deadline. In January 2012, Borders' First Amended Joint Chapter 11 Plan of Liquidation became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Plan filed by the Debtors and the Official Committee of Unsecured Creditors at a Dec. 20, 2011 hearing. The Debtors have been renamed BGI Inc. BRILEY ENTERPRISES: Case Summary & 7 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Briley Enterprises of Greenville, Inc. fdba Bradford Creek Golf Club, Inc. 4747 US 264 East Greenville, NC 27834 Bankruptcy Case No.: 12-01290 Chapter 11 Petition Date: February 20, 2012 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Debtor's Counsel: William P. Janvier, Esq. JANVIER LAW FIRM, PLLC 1101 Haynes Street, Suite 102 Raleigh, NC 27604 Tel: (919) 582-2323 Fax: (866) 809-2379 E-mail: bill@janvierlaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb12-01290.pdf The petition was signed by Joseph D. Briley, vice president. BROADCAST INTERNATIONAL: Gem Partners Retains 9.9% Equity Stake --------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Gem Partners, LP, and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 7,892,788 shares of common stock of Broadcast International, Inc., representing 9.9% of the shares outstanding. Last year, Gem Partners disclosed ownership of 7,370,097 shares (9.9%) as of Dec. 31, 2010. A full-text copy of the filing is available at http://is.gd/KBP45d About Broadcast International Based in Salt Lake City, Broadcast International, Inc. installs, manages and supports private communication networks for large organizations that have widely-dispersed locations or operations. The Company owns CodecSys, a video compression technology to convert video content into a digital data stream for transmission over satellite, cable, Internet, or wireless networks, as well as offers audio and video production services. The Company's enterprise clients use its networks to deliver training programs, product announcements, entertainment, and other communications to their employees and customers. The Company reported a net loss of $18.66 million on $7.31 million of net sales for the year ended Dec. 31, 2010, compared with a net loss of $13.38 million on $3.62 million of net sales during the prior year. The Company reported net profit of $3.73 million on $6.32 million of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $11.65 million on $5.36 million of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $4.32 million in total assets, $12.59 million in total liabilities, and a $8.27 million total stockholders' deficit. Bankruptcy Warning The Loan Restructuring Agreement the Company entered into as part of the Debt Restructuring contains, among other things, covenants that may restrict its ability to obtain additional capital, to declare or pay a dividend or to engage in other business activities. A breach of any of these covenants could result in a default under the Company's Amended and Restated Note, in which event the holder of the note could elect to declare all amounts outstanding to be immediately due and payable, which would require the Company to secure additional debt or equity financing to repay the indebtedness or to seek bankruptcy protection or liquidation. BROADCAST INTERNATIONAL: Castlerigg Holds 9.7% Equity Stake ----------------------------------------------------------- Castlerigg Master Investments Ltd. and its affiliates jointly filed with the U.S. Securities and Exchange Commission an amended Schedule 13G disclosing that, as of Dec. 31, 2011, they beneficially own 7,769,083 shares of common stock of Broadcast International, Inc., representing 9.7% of the shares outstanding. A full-text copy of the filing is available at http://is.gd/hFELPI As previously reported by the TCR, Broadcast International on Dec. 16, 2010, entered into a loan restructuring agreement with Castlerigg, the holder of its $15.0 million senior secured convertible note. The loan restructuring agreement provides that, subject to and contingent upon the successful closing of a private offering with proceeds of not less than $8,500,000, the note will be amended and restated as an unsecured, senior convertible note in the principal amount of $5.5 million. The amended and restated note will mature three years from closing, bear an annual interest rate of 6.25%, payable semi-annually, and be convertible into shares of the Company's common stock at a conversion price of $1.35 per share, subject to adjustment. The Company is obligated to pay approximately $343,750, representing the aggregate amount interest on the amended and restated note through Dec. 31, 2011, at the closing of the transactions contemplated by the loan restructuring agreement. In consideration for amending the note, which currently represents obligations to repay $15.0 million of principal and approximately $2.75 million in accrued but unpaid interest, at the Closing, the holder will receive $2.5 million in cash, payable from the proceeds of the private offering, and a number of shares of the Company's common stock equal to $3.5 million divided by the price per share of common stock paid by the investors in the private offering. The holder will also forgive approximately $6.25 million of principal and accrued interest indebtedness, and the holder will surrender to the Company for cancellation warrants to purchase a total of 5,208,333 shares of the Company's common stock. About Broadcast International Based in Salt Lake City, Broadcast International, Inc. installs, manages and supports private communication networks for large organizations that have widely-dispersed locations or operations. The Company owns CodecSys, a video compression technology to convert video content into a digital data stream for transmission over satellite, cable, Internet, or wireless networks, as well as offers audio and video production services. The Company's enterprise clients use its networks to deliver training programs, product announcements, entertainment, and other communications to their employees and customers. The Company reported a net loss of $18.66 million on $7.31 million of net sales for the year ended Dec. 31, 2010, compared with a net loss of $13.38 million on $3.62 million of net sales during the prior year. The Company reported net profit of $3.73 million on $6.32 million of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $11.65 million on $5.36 million of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $4.32 million in total assets, $12.59 million in total liabilities, and a $8.27 million total stockholders' deficit. Bankruptcy Warning The Loan Restructuring Agreement the Company entered into as part of the Debt Restructuring contains, among other things, covenants that may restrict its ability to obtain additional capital, to declare or pay a dividend or to engage in other business activities. A breach of any of these covenants could result in a default under the Company's Amended and Restated Note, in which event the holder of the note could elect to declare all amounts outstanding to be immediately due and payable, which would require the Company to secure additional debt or equity financing to repay the indebtedness or to seek bankruptcy protection or liquidation. BROADCAST INTERNATIONAL: ACT Capital Stake Slightly Down to 5.1% ---------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, ACT Capital Management, LLLP, and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 3,916,379 shares of common stock of Broadcast International, inc., representing 5.1% of the shares outstanding. ACT previously disclosed ownership of 4,117,500 shares (5.5% of total shares outstanding) as of Dec. 31, 2010. A full-text copy of the latest regulatory filing is available at http://is.gd/NL9BRY About Broadcast International Based in Salt Lake City, Broadcast International, Inc. installs, manages and supports private communication networks for large organizations that have widely-dispersed locations or operations. The Company owns CodecSys, a video compression technology to convert video content into a digital data stream for transmission over satellite, cable, Internet, or wireless networks, as well as offers audio and video production services. The Company's enterprise clients use its networks to deliver training programs, product announcements, entertainment, and other communications to their employees and customers. The Company reported a net loss of $18.66 million on $7.31 million of net sales for the year ended Dec. 31, 2010, compared with a net loss of $13.38 million on $3.62 million of net sales during the prior year. The Company reported net profit of $3.73 million on $6.32 million of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $11.65 million on $5.36 million of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $4.32 million in total assets, $12.59 million in total liabilities, and a $8.27 million total stockholders' deficit. Bankruptcy Warning The Loan Restructuring Agreement the Company entered into as part of the Debt Restructuring contains, among other things, covenants that may restrict its ability to obtain additional capital, to declare or pay a dividend or to engage in other business activities. A breach of any of these covenants could result in a default under the Company's Amended and Restated Note, in which event the holder of the note could elect to declare all amounts outstanding to be immediately due and payable, which would require the Company to secure additional debt or equity financing to repay the indebtedness or to seek bankruptcy protection or liquidation. BURBANK LANDING: Files for Chapter 11 in Baton Rouge ---------------------------------------------------- Burbank Landing Properties, LLC, filed a bare-bones Chapter 11 petition (Bankr. M.D. La. Case No. 12-10191) on Feb. 20, 2012, in its hometown in Baton Rouge, Louisiana. It estimated assets and debts of $10 million to $50 million. A related entity, B.R.H. Consultants, Inc., filed a Chapter 11 petition (Case No. 12-10193) on the same day. According to the docket, schedules of assets and liabilities are due March 5, 2012. The Debtors are each required to file a Chapter 11 plan and disclosure statement by due June 19. The Debtors have filed applications to employ James M. Herpin and the law firm of Herpin & deGeneres, LLC, as counsel. BYOB INC: Enforcement Actions Not Subject to Automatic Stay ----------------------------------------------------------- At the behest of the Montana Department of Revenue, Bankruptcy Judge Ralph B. Kirscher held that pending state court actions involving the Revenue Department and the Debtor, and DOR's administrative enforcement actions against the Debtor based on the DOR's regulation of alcoholic beverages in Montana, are exempt from the automatic stay under 11 U.S.C. Sec. 362(b)(4) under the DOR's "police and regulatory power." A copy of the Court's Feb. 17, 2012 Memorandum Of Decision is available at http://is.gd/lEhAxvfrom Leagle.com. B.Y.O.B. Inc. filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 11-62347) on Dec. 23, 2011. It scheduled total assets of $304,640.34 and liabilities of $690,962.05. The Montana Department of Revenue is the largest creditor listed on Schedule D with a claim in an amount stated of $275,000 secured by a statutory lien and inventory with a value stated in the amount of $172,642.78. CEMTREX INC: Delays Form 10-Q for Dec. 31 Quarter ------------------------------------------------- Cemtrex, Inc., was unable to file its Quarterly Report on Form 10-Q for its three-month period ended Dec. 31, 2011, by the prescribed date of Feb. 14, 2012, due to a delay with finalizing its results of operations for that period. The Company intends to file the quarterly report by Feb. 22, 2012. About Cemtrex, Inc. Farmingdale, N.Y.-based Cemtrex, Inc., is engaged in manufacturing and selling the most advanced instruments for emission monitoring of particulate, opacity, mercury, sulfur dioxide, nitrogen oxides, etc. Cemtrex also provides turnkey services for carbon creation projects from abatement of greenhouse gases pursuant to Kyoto protocol and assists project owners in selling of carbon credits globally. The Company's products are sold to power plants, refineries, chemical plants, cement plants & other industries including federal and state governmental agencies. The Company's balance sheet at Sept. 30, 2011, showed $2.42 million in total assets, $2.33 million in total liabilities, and $94,486 in total stockholders' equity. Gruber & Company, LLC, in Saint Louis, Missouri, did not include a going concern qualification in its report on the Company's fiscal 2011 financial results. As reported in the Troubled Company Reporter on Jan. 21, 2011, Gruber & Company, LLC, in Saint Louis, Mo., expressed substantial doubt about Cemtrex's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company has a negative equity and negative working capital. Cemtrex reported net income of $1.01 million on $13.73 million of revenue for the 12 months ended Sept. 30, 2011, compared with a net loss of $1.02 million on $3.30 million of revenue during the prior year. CHURCH STREET: Small Smiles in Chapter 11, Has $12MM DIP Loan ------------------------------------------------------------- Church Street Health Management, LLC, formerly doing business as Sanus Holdings LLC and FORBA Holdings, LLC, filed a bare-bones Chapter 11 petition (Bankr. M.D. Tenn. Case No. 3:12-bk-01573) in Nashville, Tennessee on Feb. 20, 2012. The Debtor estimated assets and debts of up to $500 million. A filing indicates that related debtors are Small Smiles Holding Company, LLC, Forba NY, LLC, EEHC, Inc., and Forba Services, LLC. The Company operates Small Smiles Dental Centers, whose 67 clinics have treated more than 1 million underprivileged children. Dow Jones' Daily Bankruptcy Review notes the Company has been the target of a government investigation and a television news expose. Dow Jones says the Company filed for Chapter 11 to begin the process of selling its operations to repay its debts. The Debtor has engaged Waller Lansden Dortch & Davis, LLP as bankruptcy counsel, and Alvarez & Marsal Healthcare Industry Group, LLC, as financial and restructuring advisor. Martin McGahan, a managing director at A&M, will serve as chief restructuring officer of Church Street. According to the resolution authorizing the bankruptcy filing, the Debtor intends to enter into a DIP credit agreement with lenders led by Garrison Loan Agency Services, LLC. The credit agreement will provide the Debtor with up to an aggregate principal amount of $12 million in a revolving credit facility. CLARENDON HOLDINGS: Can Implement Plan After Challenge Rejected --------------------------------------------------------------- Clarendon Holdings, LLC, may proceed with the implementation of its Chapter 11 plan of reorganization and exit bankruptcy protection after the U.S. District Court for the Northern District of Carolina denied a motion filed by Gateway Bank and Trust Company to stay the confirmation order pending a resolution of its appeal of the order. Gateway seeks to stay the bankruptcy court's order confirming a "dirt for debt" plan in which the debtor will surrender to Gateway the real property that serves as collateral for Gateway's secured lien. Under the plan, the debtor will receive a credit equal to the fair market value of the real property, with the deficiency being treated as an unsecured claim. Gateway contends that the plan is not fair and equitable because it fails to provide Gateway with the indubitable equivalent of its claim. Gateway maintains that the property should be valued based on its liquidation value and that absent a stay, the debtor will make pro rata distributions to its unsecured creditors to the detriment of Gateway. Senior District Judge Malcolm J. Howard said Gateway has not demonstrated that it is likely to suffer irreparable harm absent a stay of the bankruptcy court's order. On Dec. 20, 2011, the bankruptcy court entered an order confirming the Chapter 11 plan. A copy of the District Court's Feb. 14, 2012 Order is available at http://is.gd/OWM9Gpfrom Leagle.com. Gateway Bank and Trust Company is represented by Lisa P. Sumner, Esq., and David M. Warren, Esq. -- lsumner@poynerspruill.com and dwarren@poynerspruill.com -- at Poyner Spruill LLP. About Clarendon Holdings Wilmington, North Carolina-based Clarendon Holdings, LLC -- aka FST LLC, Pentagon Holdings LLC, and Mulberry Holdings, LLC -- filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 11-02479) on March 31, 2011. Clarendon owns real property located at 230 North Second Street, Wilmington, North Carolina. Judge Stephani W. Humrickhouse presides over the case. George M. Oliver, Esq., at Oliver & Friesen, PLLC, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and debts. The petition was signed by Todd J. Toconis, member/manager. Affiliate Bannerman Holdings, LLC, filed for Chapter 11 (Bankr. E.D.N.C. Case No. 10-01053) on Feb. 12, 2010. COMARCO INC: Dimensional Fund Stake Down to 0.26% ------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Dimensional Fund Advisors LP disclosed that, as of Dec. 31, 2011, it beneficially owns 19,419 shares of common stock of Comarco Inc. representing 0.26% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/pshs0U About Comarco Inc. Based in Lake Forest, California, Comarco, Inc. (OTC: CMRO) -- http://www.comarco.com/-- is a provider of innovative, patented mobile power solutions that can be used to power and charge notebook computers, mobile phones, and many other rechargeable mobile devices with a single device. For the nine months ended Oct. 31, 2011, the Company has reported a net loss $3,954,000 on $7,128,000 of revenue, compared with a net loss of $2,623,000 on $25,781,000 of revenue for nine months ended Oct. 31, 2010. The Company's balance sheet at Oct. 31, 2011, showed $5,051,000 in total assets, $5,065,000 in total liabilities, and a stockholders' deficit of $14,000. As reported in the TCR on May 3, 2011, BDO USA, LLP, in Costa Mesa, California, expressed substantial doubt about Comarco's ability to continue as a going concern, following the Company's results for the fiscal year ended Jan. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations, has had declining working capital and uncertainties surrounding the Company's ability to borrow under its credit facility. COMSTOCK MINING: Peter Palmedo Discloses 15% Equity Stake --------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Peter F. Palmedo and his affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 4,981,037 shares of common stock of Comstock Mining Inc. representing 15.07% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/i18dHr About Comstock Mining Virginia City, Nev.-based Comstock Mining Inc. is a Nevada-based, gold and silver mining company with extensive, contiguous property in the historic Comstock district. The Company began acquiring properties in the Comstock in 2003. Since then, the Company has consolidated a substantial portion of the Comstock district, secured permits, built an infrastructure and brought the exploration project into test mining production. The Company continues acquiring additional properties in the Comstock district, expanding its footprint and creating opportunities for exploration and mining. The goal of the Company's strategic plan is to deliver stockholder value by validating qualified resources (measured and indicated) and reserves (probable and proven) of 3,250,000 gold equivalent ounces by 2013, and commencing commercial mining and processing operations by 2011, with annual production rates of 20,000 gold equivalent ounces. The Company reported a net loss of $60.32 million for the year ended Dec. 31, 2010, compared with a net loss of $6.06 million during the prior year. The Company had no revenues from operations for the years ended Dec. 31, 2010 and 2009. The Company reported a net loss of $9.10 million on $299,246 of hotel revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $26.63 million on $0 of revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $26.57 million in total assets, $10.01 million in total liabilities and $16.55 million in total stockholders' equity. CONFORCE INTERNATIONAL: Incurs $1.2-Mil. Net Loss in Dec. 31 Qtr. ----------------------------------------------------------------- Conforce International, Inc., filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of US$1.20 million on US$33,152 of product revenue for the three months ended Dec. 31, 2011, compared with a net loss of US$608,138 on US$14,810 of product revenue for the same period a year ago. The Company reported a net loss of US$2.85 million on US$87,953 of product revenue for the nine months ended Dec. 31, 2011, compared with a net loss of US$1.01 million on US$70,529 of product revenue for the same period during the prior year. The Company reported a net loss of $2.1 million on $305,824 of revenue for the fiscal year ended March 31, 2011, compared with a net loss of $729,903 on $920,937 on revenue for the fiscal year ended March 31, 2010. The Company's balance sheet at Dec. 31, 2011, showed US$6 million in total assets, $2.20 million in total liabilities and US$3.79 million in shareholders' equity. BDO Canada LLP expressed substantial doubt about ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring losses. A full-text copy of the Form 10-Q is available for free at: http://is.gd/JjUTgK About Conforce International Headquartered in Concord, Ontario, Canada, Conforce International, Inc., has been in the shipping container business repairing, selling or storing containers for over 25 years. The Company has been engaged in the research and development of a polymer based composite shipping container and highway trailer flooring product. As a result, the Company has developed EKO-FLOR. The Company is now outfitting its new manufacturing facility in Peru, Indiana for the production of EKO-FLOR for the North American highway trailer market. COTTONWOOD CORNERS: Court Rejects Amended Exit Plan --------------------------------------------------- Bankruptcy Judge Robert H. Jacobvitz denied confirmation of Cottonwood Corners Phase V LLC's amended Chapter 11 plan. Jefferson-Pilot Investments, Inc., Cottonwood's largest creditor, had opposed confirmation. Judge Jacobvitz said JPI is entitled to interest on reimbursable expenses and attorneys' fees it incurred pursuant to a 2007 note and mortgage, and to post-petition interest at the default rate while the chapter 11 case is pending prior to the effective date of a plan. Because the class containing JPI's claim is impaired, Cottonwood must satisfy the requirements of 11 U.S.C. Sec. 1129(b) with respect to that class. Under the Plan, as currently formulated, the cram down rate of interest is 7% per annum. The Court also held the Plan as currently formulated, the Plan is not feasible; nor has Cottonwood satisfied the fair and equitable requirements of 11 U.S.C. Sections 1129(b)(1) and 1129(b)(2)(A)(iii) under the Plan's current formulation. JPI claims that Cottonwood owes it $4,760,819 as of Jan. 31, 2012, which includes $4,156,879.34 owed as of the Petition Date. The Plan contains two alternatives for treating JPI's claim, which JPI may choose at its option. Under Option 1, JPI's loan would be de- accelerated. The original payment terms and non-default interest rate of 5.86% per annum would be reinstated as to the portion of the debt owed not included in the "arrearage," as defined in the Plan. Cottonwood would cure the arrearage over a period of 5.75 years in equal quarterly payments. Under Option 2, Cottonwood would pay the entire balance of the indebtedness owed by Cottonwood to JPI two years after the Plan effective date. A member of RSF Land & Cattle Company, LLC, which is itself a member of Cottonwood, would deposit $1 million in cash or negotiable instruments to be used as additional collateral or capital to facilitate a refinancing to effectuate the payoff of JPI. The Plan does not identify the member of RSF, or where or when the deposit would be made. If Cottonwood failed to pay as agreed, the deed would be delivered to JPI and recorded. Recordation of the deed would constitute payment in full to JPI. On Jan. 30, 2007, Cottonwood borrowed $3.5 million from JPI to fund the buyout of a building and related improvements made by Circuit City Stores West Coast, Inc., on the property owned by Cottonwood. The Debtor filed an Amended Plan of Reorganization on Oct. 7, 2011. The Court held confirmation hearings on Jan. 25 and 26, 2012. The parties filed post-hearing briefs on Feb. 7, 2012. In its ruling, the Court held that Cottonwood may file a new plan or a further modification to the Plan. A copy of the Court's Feb. 17, 2012 Memorandum Opinion is available at http://is.gd/5Ue0TPfrom Leagle.com. About Cottonwood Cottonwood Corners Phase V LLC is a New Mexico limited liability company owned 83% by RSF Land & Cattle Company LLC and 17% by SED CAP. Its main asset is a pad within a larger shopping center in Albuquerque, New Mexico. Cottonwood filed for Chapter 11 bankruptcy (Bankr. D. N.M. Case No. 11-12663) on June 8, 2011. Daniel J. Behles, Esq., at Moore, Berkson & Gandarilla, P.C., serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and debts. The petition was signed by David S. Smoak, president. Faye B. Feinstein, Esq., and Lauren Nachinson, Esq. -- faye.feinstein@quarles.com and lauren.nachinson@quarles.com -- at Quarles & Brady LLP, in Chicago, argue for Jefferson-Pilot Investments, Inc. William R. Keleher, Esq., serves as JPI's local counsel. CREDITRON FINANCIAL: Trustee Claims $4.5 Million From Covattos -------------------------------------------------------------- Ed Palattella at Erie Times-News reports that the trustee appointed to oversee the case of Telatron Marketing Group Inc. is pursuing the former owners, Alfred D. and Joyce M. Covatto, for $4.5 million in costs and expenses that the trustee is alleging grew out of fraud by the Covattos while they ran the Erie telemarketing firm. According to the report, of the $4.5 million, the trustee claims $727,082 is related to what he says was Telatron's relationship with Unicredit America Inc., the now-defunct Erie debt-collection agency accused of using a fake courtroom to intimidate debtors. The state Attorney General's Office is suing Unicredit -- whose now-former president is Alfred Covatto's son -- in a consumer- protection case in Erie County Court. The report relates that the Telatron trustee said it wants to use the $4.5 million to help pay Telatron's creditors, which include the Internal Revenue Service, whose claims total $2.4 million in unpaid taxes, and the Pennsylvania Department of Revenue, whose claims total $1.2 million in unpaid taxes. The sale of Telatron in January did not raise enough money to pay the taxing authorities and other creditors in full. The report says the $4.5 million claim is related to what the trustee, John Melaragno, described in court records as "fraudulent transfers." Mr. Melaragno is claiming the $4.5 million is due to "excess rent and other costs paid on behalf of insiders of Creditron" while the Covattos were in charge, according to court records. Creditron Financial Corp. did business as Telatron. The Covattos are disputing the $4.5 million claim, but are proposing to pay 5% of the amount -- or $223,469 -- over five years, according to court records, the report says. Erie Times-News relates that the Covattos have also filed for bankruptcy, and they are facing claims of their own. They are proposing to raise money to settle the debts by, among other things, selling their house, and by using Alfred Covatto's Social Security benefits, according to documents filed in U.S. Bankruptcy Court in Erie. The proposals are subject to approval by the creditors and Chief U.S. Bankruptcy Judge Thomas P. Agresti. The report says the Covattos lack enough assets to cover all the claims against them and Telatron. When they filed for personal Chapter 11 bankruptcy, in May, they disclosed debts of $918,442, including $851,305 in taxes. Those debts exclude the $4.5 million claim. The Covattos' assets now amount to $2.7 million. Based in Erie, Pennsylvania, Creditron Financial Corporation dba Telatron Marketing Group Inc. filed for Chapter 11 bankruptcy protection (Bankr. W.D. Penn. Case No. 08-11289) on July 3, 2008. Stephen H. Hutzelman, Esq., at Plate Shapira Hutzelman Berlin May, et al., represents the Debtor. The Debtor disclosed $3 million in total assets, and $4.8 million in total liabilities in its bankruptcy petition. A private business from New York City, Y & Y Holdings LLC, bought Telatron's assets for $600,000 and renamed it Agility Marketing Inc. CRYOPORT INC: Enable Global Discloses 6.9% Equity Stake ------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Enable Global Capital, LLC, and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 2,099,754 shares of common stock of CryoPort, Inc., representing 6.9% of the shares outstanding. Enable previously disclosed ownership of 838,982 shares (roughly 9.9% of the stock outstanding) as of Feb. 25, 2010. A full-text copy of the latest filing is available for free at http://is.gd/VWdNHx About CryoPort Inc. Headquartered in Lake Forest, Calif., CryoPort, Inc. (OTC BB: CYRXD) -- http://www.cryoport.com/-- provides innovative cold chain frozen shipping system dedicated to providing superior, affordable cryogenic shipping solutions that ensure the safety, status and temperature of high value, temperature sensitive materials. The Company has developed a line of cost-effective reusable cryogenic transport containers capable of transporting biological, environmental and other temperature sensitive materials at temperatures below 0-degree Celsius. KMJ Corbin & Company LLP expressed substantial doubt about CryoPort's ability to continue as a going concern, following the Company's fiscal 2009 results. The firm noted that the Company has incurred recurring losses and negative cash flows from operations since inception. The Company's balance sheet at Sept. 30, 2011, showed $6.43 million in total assets, $3.92 million in total liabilities, and $2.50 million in total stockholders' equity. CYBERDEFENDER CORP: John Combias Holds 6.1% Equity Stake -------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, John A. Combias disclosed that, as of Dec. 31, 2011, he beneficially owns 1,758,823 shares of common stock of Cyberdefender Corporation representing 6.14% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/ZKILOo About CyberDefender Los Angeles, Calif.-based CyberDefender Corporation is a provider of remote LiveTech services and security and computer optimization software and to the consumer and small business market. The Company's mission is to bring to market advanced solutions to protect computer users against Internet viruses, spyware, identity theft and related security threats. The Company reported a net loss of $17.58 million on $39.88 million of total net revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $31.21 million on $31.93 million of total net revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $7.96 million in total assets, $42.54 million in total liabilities, and a $34.58 million total stockholders' deficit. Bankruptcy Warning During the third quarter, the Company closed two private offerings of subordinated convertible promissory notes to accredited investors, totaling $3.2 million with a commitment for another $2.0 million. The Company believes, but cannot insure, that the $5.2 million will be sufficient to permit the Company to continue to operate until it can secure the additional financing that it requires to continue to operate as a going concern and to repay the approximately $11.7 million of debt owed to GR Match, LLC, due on March 31, 2012. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, if additional financing is not secured, it would raise substantial doubt about the Company's ability to continue as a going concern. The Company is presently engaged in active discussions with existing and prospective investors to secure additional financing, but there are no commitments at this time and the Company can give no assurance that the additional financing can be secured on favorable terms, or at all. If the Company cannot obtain additional financing, the Company may be forced to further curtail its operations, or possibly be forced to evaluate a sale of the Company or consider other alternatives, such as bankruptcy. DEX ONE: Restructuring Capital Discloses 9.7% Equity Stake ---------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Restructuring Capital Associates, L.P., and James D. Bennett disclosed that, as of Dec. 31, 2011, they beneficially own 4,873,043 shares of common stock of Dex One Corporation representing 9.7% of the shares outstanding. A full- text copy of the filing is available at http://is.gd/2OF9bM About Dex One Dex One, headquartered in Cary, North Carolina, is a local business marketing services company that includes print directories and online voice and mobile search. Revenue was approximately $1.1 billion for the LTM period ended Sept. 30, 2010. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09- 11833 through 09-11852). They emerged from bankruptcy on Jan. 29, 2010. On the Effective Date and in connection with its emergence from Chapter 11, RHD was renamed Dex One Corporation. * * * As reported by the TCR on Nov. 21, 2011, Standard & Poor's Ratings Services lowered its ratings on Dex One Corp. and related entities to 'CCC+' from 'B-'. "The rating action is based on Dex One Corp.'s continued weak operating performance and its announcement that it is exploring a potential amendment, which would allow subpar repurchases of its term debt," said Standard & Poor's credit analyst Chris Valentine. He explained, "The term loan is trading at a very significant discount to the par value, which we believe suggests a high probability of a subpar buyback sometime over the next 12 months. Under Standard & Poor's criteria, we would view these subpar buybacks as tantamount to a default." In the Oct. 10, 2011, edition of the TCR, Moody's Investors Service has downgraded the corporate family rating (CFR) for Dex One Corporation's ("Dex One" or "the company") to B3 from B1. The downgrade reflects Moody's doubts that the company will be able to transition its business away from a reliance on print directories quickly enough to stabilize its revenues and earnings. Consequently, Moody's expects that the relatively robust levels of free cash flow that the company is currently generating will decline at an accelerating pace over time. Moody's ratings outlook for Dex One remains negative. DIGITALGLOBE INC: Moody's Affirms 'Ba3'; Outlook Now Negative ------------------------------------------------------------- Moody's Investors Service has changed the outlook of DigitalGlobe Inc.'s ratings to negative from stable based on increasing risk that the US government will seek to renegotiate the terms of its EnhancedView contract with the company. The status of DigitalGlobe's US government contracts are intertwined with election year budget deliberations and expected delivery of a study of the entire EnhancedView satellite imagery program by the Obama administration in April. A possible reduction in US government revenues may lead the company to tap its revolver to complete the construction of its WorldView-3 satellite, expected to be deployed in 2014, thereby increasing credit risk. As part of the rating action, Moody's affirmed the company's Ba3 corporate family rating ("CFR") and B1 probability of default rating ("PDR"). In addition, due to the uncertainty of the appropriations, Moody's downgraded the company's liquidity rating to SGL-2 from SGL-1 as the Moody's anticipates less cash headroom if the US government contracts are curtailed. Moody's estimates that DigitalGlobe in aggregate, receives 61% of its revenues from the US Government. In August, 2010, DigitalGlobe received a $2.8 billion National Geospatial-Intelligence Agency ("NGA") award in a series of ten one-year contracts, which includes a Service Level Agreement ("SLA") for $2.8 billion over 10 years for satellite imagery collected on the company's existing satellites along with revenue commitments on imagery collected from future satellites. The contracts are subject to ongoing reviews by the NGA, with the budgets dependent on Congressional appropriations. As a condition of the EnhancedView contract award, DigitalGlobe is constructing the next-generation WorldView-3 satellite. The company estimates that it will have about $650 million in EnhancedView related capital expenditures, of which approximately $215 million has been spent through the third quarter of 2011. Moody's has taken these rating actions: Issuer: DigitalGlobe, Inc. -- Corporate Family Rating, Affirmed Ba3 -- Probability of Default Rating, Affirmed B1 -- $100 million Senior Secured Revolver due 2016, Affirmed Ba3 (LGD3-34%) -- Senior Secured Term Loan due 2018, Affirmed Ba3 (LGD3-34%) -- Speculative Grade Liquidity Rating, Changed to SGL-2 from SGL-1 -- Outlook, Changed to Negative from Stable RATINGS RATIONALE DigitalGlobe's Ba3 rating largely reflects the uncertainty of future EnhancedView appropriations and potential reduction in the company's financial flexibility until the construction of its WorldView-3 satellite is complete. Given the specialized nature of the high-resolution imagery satellites, Moody's believe that DigitalGlobe cannot moderate the pace of the construction, and the company will continue to invest capital heavily through 2014. The company may alleviate the estimated $50 million to $70 million in launch costs if it decides to keep the satellite on the ground for a later deployment. The ratings are supported by the increasing needs for high resolution surveillance and mapping applications by the various arms of the US Government. Also, in the event of a budget impasse, under "continuing resolutions" provisions, the payments revert to previous fiscal year's levels, which would preserve DigitalGlobe's US government revenue stream through 2012. The specialized products and services provided by commercial imagery providers are difficult to replicate, and the DoD does not have spare capacity on its classified imagery satellites to replace the current service. Thus, while there is high probability that the negotiated payments beyond 2012 will be reduced, the risk of a full elimination of the EnhancedView program that governs the DoD's purchases of commercial satellite imagery is minimal. In 2010, when the EnhancedView awards were announced to DigitalGlobe and peer commercial imagery provider GeoEye, the NGA voiced strong support for the industry, as well as a desire to maintain two private industry participants to diversify the sourcing of global imagery. However, with the escalating US budget deficit, Department of Defense ("DoD") programs are among the most visible items to cut, and Moody's is not convinced that the same support for two players exists in the current deliberations. Therefore, in addition to possible absolute contract cuts, the NGA allocations may favor one company over the other. As both companies are building new satellites, the NGA decision may render one of the two new satellites commercially untenable in the near term. DigitalGlobe's SGL-2 liquidity rating indicates good liquidity. Over the 4-quarter horizon to December 31, 2012 DigitalGlobe's main source of liquidity is expected to be cash on hand, which was about $210 million at September 30, 2011. The company also has a $100 million revolving credit facility which is undrawn. What Could Change the Rating - Up Upward rating momentum and/or outlook stabilization will occur if the US budget deliberations result in the confirmation of the expected revenue streams which carries the company over to a successful launch and deployment of the new satellite. Additionally, ratings may be raised if the company diversifies its revenues away from the US government, and the resulting cash flow augments the company's liquidity while free cash flow generation reaches over $150mm per year. What Could Change the Rating - Down Rating downgrades would be driven by unfavorable DoD budget outcome which would significantly curtail US government revenues, and if the company is unable to replenish those revenues from other customers. Given the high technology risk endemic in the company's business model, ratings would come under pressure if there is a significant impairment of assets in space that is not covered by insurance. The principal methodology used in rating DigitalGlobe, Inc. was the Global Aerospace and Defense Industry Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Longmont, Colorado, DigitalGlobe is a commercial satellite imagery company which operates a constellation of three Earth imaging satellites - QuickBird, WorldView-1, and WorldView- 2. DigitalGlobe is one of two US-based companies (along with GeoEye Inc) operating in this industry. DigitalGlobe generated $324 million in revenues for twelve months ending September 30, 2011. DREIER LLP: Trustee Taps BDO USA for Solvency Related Issues ------------------------------------------------------------ Sheila M. Gowan, Chapter 11 trustee for Dreier LLP, asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ BDO USA, LLP, as special financial advisor in connection with solvency related issues, nunc pro tunc to Jan. 23, 2012. In the fourth quarter of 2010, the trustee, through Diamond McCarthy LLP and her special counsel ASK Financial LLP, commenced approximately 50 adversary proceedings to recover fraudulent and/or preferential transfers. In many of the Adversary Proceedings, the solvency of the Debtor has been raised as a defense. The trustee and various defendants in the Adversary Proceedings have entered into scheduling stipulations which require, inter alia, that the parties make the expert witness disclosures required by Bankruptcy Rule 7026(a)(2) no later than May 13, 2012. The trustee explains that prosecution of the Adversary Proceedings requires the trustee to present expert testimony on the Debtor's insolvency, and DSI has informed the trustee that it does not wish to act as a testifying expert on that issue. The trustee therefore applies for an order authorizing the employment of BDO as special financial advisor in connection with solvency related issues for the purposes set for. The trustee submits that it is necessary to retain BDO to, inter alia: a. provide assistance in reviewing and analyzing financial information and other relevant data relating to the Debtor; b. perform forensic and financial analyses, including but not limited to the evaluation of solvency, avoidance actions, fraudulent conveyances and related party claims; c. provide an expert report and possible testimony regarding the financial condition of the Debtor at all relevant times; and d. assist counsel in preparing for any depositions and court hearings as requested. BDO's hourly rates for calendar year 2012 range from $150 to $795 per hour. BDO has agreed to cap its fees for its highest billed professional at $625 per hour for the engagement. To the best of the trustee's knowledge, Dreier LLP is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The trustee is represented by: Howard D. Ressler, Esq. Stephen T. Loden, Esq. DIAMOND McCARTHY LLP 620 Eighth Avenue, 39th Floor New York, NY 10018 Tel: (212) 430-5400 Fax: (212) 430-5499 E-mail: hressler@diamondmccarthy.com About Marc Dreier and Dreier LLP Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On Dec. 8, 2008, the U.S. Securities and Exchange Commission filed a suit, alleging that Mr. Dreier made fraudulent offers and sales of securities in several cities, selling fake promissory notes to hedge and other private investment funds. The SEC asserted that Mr. Dreier also distributed phony financial statements and audit opinions, and recruited accomplices in connection with that scheme. Mr. Dreier, currently in prison, was charged by the U.S. government for conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No. 09-cr-00085). Dreier LLP sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, was tapped as counsel. The Debtor estimated assets of $100 million to $500 million, and debts between $10 million and $50 million in its Chapter 11 petition. Sheila M. Gowan, a partner with Diamond McCarthy, was appointed Chapter 11 trustee for the Dreier law firm. Ms. Gowan is represented by Jason Porter, Esq., at Diamond McCarthy LLP. Wachovia Bank National Association, the Dreier LLP Chapter 11 trustee, and Steven J. Reisman as post-confirmation representative of the bankruptcy estate of 360networks (USA) Inc. signed a petition that put Mr. Dreier into bankruptcy under Chapter 7 on Jan. 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier, 60, pleaded guilty to fraud and other charges in May 2009. The scheme to sell $700 million in fake notes unraveled in late 2008. Mr. Dreier is serving a 20-year sentence in a federal prison in Minneapolis. DRYSHIPS INC: Owns 73.9% of Ocean Rig Outstanding Common Stock -------------------------------------------------------------- DryShips Inc. filed with the U.S. Securities and Exchange Commission a Schedule 13G disclosing that, as of Dec. 31, 2011, it beneficially owns 97,301,755 shares of common stock of Ocean Rig UDW Inc. representing 73.9% of the shares outstanding. A full- text copy of the filing is available at http://is.gd/f5c66N About DryShips Inc. Based in Greece, DryShips Inc. -- http://www.dryships.com/-- -- owns and operates drybulk carriers and offshore oil deep water drilling units that operate worldwide. As of Sept. 10, 2010, DryShips owns a fleet of 40 drybulk carriers (including newbuildings), comprising 7 Capesize, 31 Panamax and 2 Supramax, with a combined deadweight tonnage of over 3.6 million tons and 6 offshore oil deep water drilling units, comprising of 2 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships. DryShips's common stock is listed on the NASDAQ Global Select Market where it trades under the symbol "DRYS". On Nov. 25, 2010, DryShips Inc. entered into a waiver letter for its US$230.0 million credit facility dated Sept. 10, 2007, as amended, extending the waiver of certain covenants through Dec. 31, 2010. In its audit report on the Company's financial statements for the year ended Dec. 31, 2010, Deloitte, Hadjipavlou Sofianos & Cambanis S.A., noted that the Company's inability to comply with financial covenants under its original loan agreements as of Dec. 31, 2009, its negative working capital position and other matters raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2011, showed $8.68 billion in total assets, $4.72 billion in total liabilities, and $3.96 billion in total equity. DYNEGY INC: Sub. Notes Holders Seek Claim Classification -------------------------------------------------------- Claren Road Asset Management LLC and CQS DO S1 Limited ask the Bankruptcy Court to determine the classification of the subordinated notes claims issued by Dynegy Holdings LLC prepetition. CQS is a holder of approximately $49 million principal amount of Series B 8.316% Subordinated Capital Income Securities due 2027. Claren Road relates that before the Petition Date, NCG Corporation n/k/a Dynegy Holdings LLC issued $200 million aggregate principal amount Series B 8.316% Subordinated Deferrable Interest Debentures pursuant to an indenture dated as of May 28, 1997. It adds that the Debtors also had roughly $3.5 billion in outstanding senior unsecured notes issued under an indenture dated September 26, 1996, as amended and restated as of March 23, 1998, as amended and restated as of March 14, 2001, and under various supplemental indentures thereto. On behalf of CQS, Paul N. Silverstein, Esq., at Andrews Kurth LLP, in New York, says that "in a transparent attempt to disenfranchise the holders of the Subordinated Notes and render their Plan votes meaningless, Dynegy Holdings LLC and Dynegy Inc., as Plan proponents have grouped all General Unsecured Claims into one single Class 3 under their proposed Plan." Class 3 includes, among others, Senior Notes Claims and Subordinated Notes Claims. Claren Road's counsel, Matthew J. Williams, Esq., at Gibson Dunn & Crutcher LLP, in New York, argues that because the holders of Subordinated Notes Claims have substantially different rights against the Debtors than do the holders of Senior Notes Claims, the Subordinated Notes Claims do not fare nearly as well under the Plan. He points out that the Plan demands that claimants holding Subordinated Notes Claims agree to reduce their allowed claim to 35%. "If a particular holder of a Subordinated Notes Claim refuses to do so, no recovery is provided on account of that claim," Mr. Williams notes. Given that even in the best case scenario, holders of Subordinated Notes Claims are not receiving anything near payment in full, if that class of creditors were to vote against the Plan, the absolute priority rule would prohibit Dynegy Inc. from retaining its equity interests, Mr. Williams argues. So rather than run this risk, the co-proponents have lumped the holders of Subordinated Notes Claims with holders of the Senior Notes Claims for voting purposes, even though they are not 'substantially similar' as required by the Bankruptcy Code, Mr. Williams contends. He adds that senior notes claims and subordinated notes claims have substantially different rights, so much so that courts have stated it "rather obvious" that separate classification is appropriate for senior and subordinated debt. Rather than proposing a plan that would comply with the Bankruptcy Code like providing that all holders of unsecured claims receive payment in full prior to Dynegy Inc. and its equity holders receiving any distribution, the Plan Proponents have classified the Subordinated Notes Claims together with the Senior Notes Claims in order to "artificially extinguish a dissenting class," Mr. Silverstein asserts. He adds that the Plan Proponents' efforts constitute a blatant attempt to circumvent the "cram down" provisions of Section 1129(b)(2)(B) of the Bankruptcy Code in order to provide Dynegy Inc. with a recovery while compromising Subordinated Notes Claims. "This obvious tactical maneuver -- which is tantamount to 'reverse gerrymandering' -- subverts the rights of holders of Subordinated Notes Claims by ignoring the requirement of Section 1122(a) [of the Bankruptcy Code] that different claims be separately classified," Mr. Silverstein says. For these reasons, CQS and Claren Road asks the Court to conduct a hearing on the Plan's classification scheme -- particularly as it relates to the classification of Senior Notes Claims and Subordinated Notes Claims in one class. They contend that the hearing will save time and resources of the Debtors' estates and parties in interest by testing the Plan Proponents' illegitimate classification scheme before an expensive and time-consuming solicitation and confirmation process is undertaken. The Court will hear CQS and Claren Road's requests on Feb. 24, 2012. Appaloosa No Longer Owns Notes Appaloosa Management L.P. told the Bankruptcy Court that it no longer owns any Series B 8.316% Subordinated Capital Income Securities due 2027. Accordingly, Appaloosa withdrew its request to determine the classification of its claim and to have it separately classified under "Subordinated Notes Claims" in the Debtors' and Dynegy, Inc.'s proposed Chapter 11 Plan of Reorganization. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to Nov. 16, 2011. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) DYNEGY INC: Debtors Vacate, Reject New Windsor Office Lease ----------------------------------------------------------- Dynegy Holdings LLC and its affiliates ask the Bankruptcy Court for authority to reject an unexpired lease by and among Debtor Dynegy Northeast Generation, Inc., and First Columbia 4-LA LLC of approximately 10,000 square feet of office space located at Suite 200, 4 London Avenue, in New Windsor, New York. The rejection date is as of Jan. 31, 2012. The Property is currently vacant and has been vacant for 30 days, Sophia P. Mullen, Esq., at Sidley Austin LLP, in New York, tells the Court. She notes that the Debtors have already returned the keys to the Property to the Landlord. Since the Petition Date, the Debtors have continued to pay rent while they evaluated their options with respect to the Property, including attempts to find a subtenant on acceptable terms, Ms. Mullen says. She relates that the Debtors are no longer using, and do not anticipate any future use for, the Property. Accordingly, the Debtors assert that rejection of the Unexpired Lease is appropriate and should therefore be approved. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to Nov. 16, 2011. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) DYNEGY INC: Time to Remove Actions Extended to June 5 ----------------------------------------------------- The Bankruptcy Court has ruled that the time period provided by Rule 9027 of the Federal Rules of Bankruptcy Procedure within which Dynegy Holdings LLC and its affiliates may file notices of removal and related proceedings is enlarged and extended through and including June 5, 2012. The June 5, 2012 deadline to file removal actions applies to all matters specified in Rules 9027(a)(2) and (a)(3) of the Federal Rules of Bankruptcy Procedure. The Order is without prejudice to the Debtors' right to seek further extensions of the time within which to remove related proceedings. This was the first extension sought by the Debtor. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to Nov. 16, 2011. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) EASTERN LIVESTOCK: Gray Plant's P. Kunkel Approved as Mediator -------------------------------------------------------------- The Hon. Basil H. Lorch III of the U.S. Bankruptcy Court for the Southern District of Indiana Eastern authorized James A. Knauer, the Chapter 11 trustee for Eastern Livestock Co., LLC, to employ Phillip L. Kunkel and Gray, Plant & Mooty, LLC as standing mediator. As reported in the Troubled Company Reporter on Jan. 27, 2012, Mr. Kunkel will mediate matters, issues or disputes that the trustee and one or more parties may choose to submit to mediation. The trustee has discussed his interest in creating a mechanism by which the Trustee and parties may voluntarily mediate certain of the disputes and claims in the case. The National Cattlemen's Beef Association recommended the mediator to the trustee based upon the mediator's experience with the industry and with the bankruptcy issues. The mediator is a principal at the law firm of Gray, Plant & Mooty, LLC, and is experienced in agriculture-related bankruptcies, having served as a trustee in bankruptcy cases involving debtors involved in the cattle industry. The trustee selected the mediator because the mediator is experienced and is well-qualified to serve as a mediator with respect to issues that parties are likely to want to mediate. Mr. Kunkel assures the Court he does not hold or represent an interest adverse to the estate on the matters on which he is to be employed. The Mediator has disclosed that he or other members of his firm have advised the NCBA regarding the Debtor's chapter 11 case and its potential impact on the beef industry and has further disclosed that such representation may continue with respect to unrelated matters. The NCBA has not filed a proof of claim and the Trustee does not believe that the NCBA is a creditor in the Debtor's case and is adverse to the estate. Regardless, the Mediator will not be asked to mediate any disputes to which the NCBA is a party unless the Mediator obtains all necessary consents. The Trustee believes that the Mediator is therefore "disinterested," as that term is defined by the Bankruptcy Code. The mediator's services will be billed at an hourly rate of $500 per hour; travel time will be billed at an hourly rate of $250 per hour. All reasonable out of pocket expenses of the mediator will also be reimbursed. The mediator may use associates or paralegals with Gray Plant Mooty, the mediator's firm, to assist the mediator with the organization of documents, review of mediation submissions, research, and drafting documents for the mediator. Associates will be billed at an hourly rate of $250; and paralegals will be billed at an hourly rate of $160. The trustee will pay one-half of the mediator's fees and expenses; any party requesting mediation will pay one-half of the mediator's fees and expenses. Any party requesting mediation will pay to the mediator an advance mediation fee of $5,500 at the time they request mediation. All fees and expenses will be paid within 15 days of the completion of the mediation and upon submission by the mediator of an itemized invoice to counsel for the parties. About Eastern Livestock Eastern Livestock Co., LLC, was one of the largest cattle brokerage companies in the United States, with operations and assets located in at least 11 states. ELC was headquartered in New Albany, Indiana, with branch locations across several states. It shut operations in November 2010. On Dec. 6, 2010, creditors David L. Rings, Southeast Livestock Exchange, LLC, and Moseley Cattle Auction, LLC, filed an involuntary Chapter 11 petition (Bankr. S.D. Ind. Case No. 10-93904) for the Company. The creditors asserted $1.45 million in claims for "cattle sold," and are represented by Greenebaum Doll & McDonald PLLC. The Court entered an Order for Relief on Dec. 28, 2010. Judge Basil H. Lorch III, at the behest of the creditors, appointed a trustee to operate Eastern Livestock's business. The Chapter 11 trustee has tapped James M. Carr, Esq., at Baker & Daniels LLP, as counsel and Katz, Sapper & Miller, LLP, as accountants. BMC Group Inc. is the claims and notice agent. The Debtor has disclosed $81,237,865 in assets and $40,154,698 in papers filed in Court. An affiliate, East-West Trucking Co., LLC, filed a Chapter 7 petition (Bankr. S.D. Ind. Case No. 10-93799) on Nov. 23, 2010, estimating assets and debts of $1 million to $10 million. The petition was signed by Thomas P. Gibson, as manager. Michael J. Walro, appointed as Chapter 7 Trustee for East-West Trucking, has tapped James T. Young, Esq., at Rubin & Levin, P.C., in Indianapolis as counsel. Mr. Gibson, together with his spouse, Patsy M. Gibson, pursued a personal bankruptcy case (Bankr. S.D. Ind. Case No. 10-93867) in 2010. Kathryn L. Pry, the court-appointed trustee for the Gibson's Chapter 7 case, tapped Dale & Eke, P.C., as counsel. EASTMAN KODAK: Apple Hits Request for ITC Infringement Probe ------------------------------------------------------------ Apple Inc. asked the U.S. International Trade Commission to reject Eastman Kodak Co.'s call to investigate purported infringement of digital camera patents by the iPhone, iPad and iPod, according to a Feb. 8 report by Law360. In a letter to the ITC, Apple's attorney, D. Sean Trainor, Esq. at Kirkland & Ellis LLP, said Eastman Kodak's bankruptcy means an investigation would be against the public interest. "Kodak's complaint does not seek legitimate protection of a domestic industry," Mr. Trainor said, adding it "appears to be an attempt to maximize the value of the patent." About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. are not included in the filing and will continue to operate as usual. The Company, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Having invested significantly in research and development for over a century, Kodak has a vast portfolio of patents. In 1975, Kodak scientists invented the first digital camera. Kodak then went on to develop a vast collection of patented technologies to enhance digital image capture and processing, technologies that are used in virtually every modern digital camera, smartphone and tablet, as well as numerous other devices. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Kodak says it has "significant" legacy liabilities, which include $1.2 billion in non-U.S. pension liabilities, $1.3 billion of Other Post-Employment Benefit ("OPEB") liabilities and roughly $100 million in environmental liabilities. Kodak has outstanding funded debt in an aggregate amount of roughly $1.6 billion, consisting primarily of roughly: (a) $100 million outstanding under the first lien revolving credit facility plus an additional $96 million in face amount of outstanding letters of credit; (b) $750 million in principal amount of second lien secured notes; (c) $400 million in principal amount of convertible notes; and (d) $283 million in principal amount of other senior unsecured debt. Kodak also has roughly $425 million in outstanding trade debt. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtor. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). EASTMAN KODAK: Business as Usual for Asian Units ------------------------------------------------ Eastman Kodak's business affiliates in the Asia-Pacific continues to operate in the normal course despite the U.S. parent's bankruptcy filing, according to Lois Lebegue, Kodak's Asia-Pacific managing director for consumer digital and graphic communications groups. The director said Kodak in Asia is not part of the filing for bankruptcy by the U.S. office and its subsidiaries, Alma Buelva of The Philippine Star wrote. He explained that "the filing is for restructuring and reorganization to take care of the legacy pensions and other matters. We are not affected by it here in Asia, which is the most solid region for the company." Mr. Lebegue, however, said Kodak in Asia will naturally go along the company's global restructuring that should see it focusing on its most valuable business lines. He said the plan is to exert three-fourths of the company's resources for business-to-business and one-fourth for consumer offerings, the PhilStar reported. Kodak employs more than 4,000 core people in Asia where it has six manufacturing plants, 14 subsidiaries and three R&D centers, the PhilStar related. As a whole, Asia represents a $1.5-billion business for Kodak, Mr. Lebegue said. Armin A. Amio of The BusinessMirror pointed out that Kodak, in Asia, has been partnering with other solutions providers to grow its enterprise business. In the Philippines, it linked up with Unisys for the National Statistics Office's documentation program, the report said. Other major clients include Maybank, HSBC Corp., the Hong Kong government, Japan's national assembly, to name a few, the report added. The PhilStar noted that in the Philippines, the brand name has become a local term -- kodakan -- which means to take pictures. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. are not included in the filing and will continue to operate as usual. The Company, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Having invested significantly in research and development for over a century, Kodak has a vast portfolio of patents. In 1975, Kodak scientists invented the first digital camera. Kodak then went on to develop a vast collection of patented technologies to enhance digital image capture and processing, technologies that are used in virtually every modern digital camera, smartphone and tablet, as well as numerous other devices. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Kodak says it has "significant" legacy liabilities, which include $1.2 billion in non-U.S. pension liabilities, $1.3 billion of Other Post-Employment Benefit ("OPEB") liabilities and roughly $100 million in environmental liabilities. Kodak has outstanding funded debt in an aggregate amount of roughly $1.6 billion, consisting primarily of roughly: (a) $100 million outstanding under the first lien revolving credit facility plus an additional $96 million in face amount of outstanding letters of credit; (b) $750 million in principal amount of second lien secured notes; (c) $400 million in principal amount of convertible notes; and (d) $283 million in principal amount of other senior unsecured debt. Kodak also has roughly $425 million in outstanding trade debt. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtor. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). ECOSPHERE TECHNOLOGIES: Dennis McGuire Has 17.1% Equity Stake ------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Dennis and Jacqueline McGuire disclosed that, as of Dec. 31, 2011, they beneficially own 29,354,487 shares of common stock of Ecosphere Technologies, Inc., representing 17.1% based on 145,682,029 shares outstanding as of Dec. 31, 2011. A full-text copy of the filing is available for free at: http://is.gd/Hu3OBd About Ecosphere Technologies Stuart, Fla.-based Ecosphere Technologies, Inc. (OTC BB: ESPH) -- http://www.ecospheretech.com/-- is a diversified water engineering, technology licensing and environmental services company that designs, develops and manufactures wastewater treatment solutions for industrial markets. Ecosphere, through its majority-owned subsidiary Ecosphere Energy Services, LLC ("EES"), provides energy exploration companies with an onsite, chemical free method to kill bacteria and reduce scaling during fracturing and flowback operations. As reported in the TCR on Mar 22, 2011, Salberg & Company, P.A., in Boca Raton, Fla., expressed substantial doubt about Ecosphere Technologies' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has a net loss applicable to Ecosphere Technologies, Inc. common stock of $22,237,207, and net cash used in operations of $1,267,206 for the year ended Dec. 31, 2010, and a working capital deficit, a stockholders' deficit and an accumulated deficit of $5,459,051, $1,780,735 and $110,025,222, respectively, at Dec. 31, 2010. In addition, the Company has redeemable convertible cumulative preferred stock that is eligible for redemption at a redemption amount of $3,877,796 including accrued dividends as of Dec. 31, 2010. The Company reported a net loss of $5.53 million on $12.80 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $18.80 million on $6.42 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $9.49 million in total assets, $7.01 million in total liabilities, $3.95 million in total redeemable convertible cumulative preferred stock, and a $1.47 million total stockholders' deficit. ECOSPHERE TECHNOLOGIES: K. Grady Has 4.9% Equity Stake ------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Kevin P. Grady disclosed that, as of Dec. 31, 2011, he beneficially owns 7,149,010 shares of common stock of Ecosphere Technologies, Inc., representing 4.9% based on 145,682,029 shares outstanding as of Dec. 31, 2011. A full-text copy of the filing is available at http://is.gd/Go60xO About Ecosphere Technologies Stuart, Fla.-based Ecosphere Technologies, Inc. (OTC BB: ESPH) -- http://www.ecospheretech.com/-- is a diversified water engineering, technology licensing and environmental services company that designs, develops and manufactures wastewater treatment solutions for industrial markets. Ecosphere, through its majority-owned subsidiary Ecosphere Energy Services, LLC ("EES"), provides energy exploration companies with an onsite, chemical free method to kill bacteria and reduce scaling during fracturing and flowback operations. As reported in the TCR on Mar 22, 2011, Salberg & Company, P.A., in Boca Raton, Fla., expressed substantial doubt about Ecosphere Technologies' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has a net loss applicable to Ecosphere Technologies, Inc. common stock of $22,237,207, and net cash used in operations of $1,267,206 for the year ended Dec. 31, 2010, and a working capital deficit, a stockholders' deficit and an accumulated deficit of $5,459,051, $1,780,735 and $110,025,222, respectively, at Dec. 31, 2010. In addition, the Company has redeemable convertible cumulative preferred stock that is eligible for redemption at a redemption amount of $3,877,796 including accrued dividends as of Dec. 31, 2010. The Company also reported a net loss of $5.53 million on $12.80 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $18.80 million on $6.42 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $9.49 million in total assets, $7.01 million in total liabilities, $3.95 million in total redeemable convertible cumulative preferred stock, and a $1.47 million total stockholders' deficit. ELITE PHARMACEUTICALS: Has $8.7-Mil. Profit in Dec. 31 Quarter -------------------------------------------------------------- Elite Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission a Form 10-Q reporting net income attributable to common shareholders of $8.76 million on $509,938 of total revenues for the three months ended Dec. 31, 2011, compared with net income of $5.92 million on $1.22 million of total revenues for the same period during the prior year. The Company reported a net loss of $8.05 million on $1.77 million of total revenues for the nine months ended Dec. 31, 2011, compared with net income attributable to common shareholders of $3.02 million on $3.05 million of total revenues for the same period a year ago. The Company previously reported a net loss of $13.6 million for fiscal year ended March 31, 2011, following a net loss of $8.1 million in fiscal year 2010. The Company's balance sheet at Dec. 31, 2011, showed $10.34 million in total assets, $24.65 million in total liabilities and a $14.31 million total stockholders' deficit. Demetrius & Company, L.L.C., in Wayne, New Jersey, expressed substantial doubt about Elite Pharmaceuticals' ability to continue as a going concern. The independent auditors noted that the Company has experienced significant losses resulting in a working capital deficiency and shareholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/SyJxWh About Elite Pharmaceuticals Northvale, New Jersey-based Elite Pharmaceuticals, Inc., is a specialty pharmaceutical company principally engaged in the development and manufacture of oral, controlled-release products, using proprietary technology and the development and manufacture of generic pharmaceuticals. The Company has one product, Phentermine 37.5mg tablets, currently being sold commercially. ENRON CORP: Deutsche Bank Seeks Dismissal of $100-Mil. Texas Suit ----------------------------------------------------------------- Deutsche Bank AG asks a Texas federal court to dismiss a lawsuit filed by several Canadian hedge funds alleging that the bank aided Enron Corp.'s demise and sent officers to prison. Deutsche Bank asserts that the allegations are weak and can't support the complaint, Law360 reported. The lawsuit, where the hedge funds allege that the financial institutions provided critical support to the massive fraud that brought down Enron, was revived in August after four years of negotiations on a proposed $7.2 billion settlement in a related class complaint, the report noted. The revived lawsuit seeks $100 million. In September last year, Barclays PLC, JPMorgan Chase & Co. and other major financial institutions asked the same Texas federal court to dismiss the complaint with respect to them. The lawsuit also names Merrill Lynch & Co. Inc., banks and underwriters accountable for losses stemming from the spectacular collapse of Enron. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 01-16033) on Dec. 2, 2001, following controversy over accounting procedures that caused its stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP; Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors won confirmation of their Plan in July 2004, and the Plan was declared effective on Nov. 17, 2004. After approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre- bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. ENRON CORP: Appeal in Class Suit vs. JPMorgan Remains Pending ------------------------------------------------------------- An appeal from a court order dismissing a purported class action lawsuit related to JPMorgan Chase & Co.'s banking relationship with Enron Corp. remains pending, according to JPMorgan's Nov. 4, 2011 Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended Sept. 30, 2011. JPMorgan Chase and certain of its officers and directors are involved in several lawsuits seeking damages arising out of the Firm's banking relationships with Enron Corp. and its subsidiaries. A number of actions and other proceedings against Enron previously were resolved, including a class action lawsuit captioned Newby v. Enron Corp. and adversary proceedings brought by Enron's bankruptcy estate. The remaining Enron-related actions include individual actions by Enron investors, an action by an Enron counterparty, and a purported class action filed on behalf of JPMorgan Chase employees who participated in Enron's 401(k) plan asserting claims under Employee Retirement Income Security Act for alleged breaches of fiduciary duties by JPMorgan Chase, its directors and named officers. That action has been dismissed, and is on appeal to the United States Court of Appeals for the Second Circuit. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 01-16033) on Dec. 2, 2001, following controversy over accounting procedures that caused its stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP; Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors won confirmation of their Plan in July 2004, and the Plan was declared effective on Nov. 17, 2004. After approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre- bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. ENRON CORP: Gropper Takes Over Case After Gonzalez's Retirement --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York notified parties-in-interest that the Chapter 11 cases of Enron Creditors Recovery Corp. and its Debtor affiliates have been reassigned to Judge Allan L. Gropper from Chief Judge Arthur J. Gonzalez. Judge Gonzalez, who has handled Enron's Chapter 11 case since it filed in December 2001, is set to retire. Judge Gonzalez has also handled the Chapter 11 cases of Worldcom, which filed for bankruptcy in May 2002, and Chrysler in 2009. Judge Cecelia G. Morris has been appointed Chief Bankruptcy Judge for a term of five years effective March 1, 2012. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 01-16033) on Dec. 2, 2001, following controversy over accounting procedures that caused its stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP; Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors won confirmation of their Plan in July 2004, and the Plan was declared effective on Nov. 17, 2004. After approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre- bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. EPICEPT CORP: Great Point Holds 4.3% Equity Stake ------------------------------------------------- Great Point Partners, LLC, and its affiliates filed with the U.S. Securities and Exchange Commission an amended Schedule 13G disclosing that, as of Dec. 31, 2011, they beneficially own 3,181,818 shares of common stock of EpiCept Corporation representing 4.29% based on a total of 71,003,667 shares outstanding as reported by the Company on its Form 10-Q filed on Nov. 10, 2011. A full-text copy of the Schedule is available for free at http://is.gd/S4ThFQ About EpiCept Corporation Tarrytown, N.Y.-based EpiCept Corporation (Nasdaq and Nasdaq OMX Stockholm Exchange: EPCT) -- http://www.epicept.com/-- is focused on the development and commercialization of pharmaceutical products for the treatment of cancer and pain. The Company's lead product is Ceplene(R), approved in the European Union for the remission maintenance and prevention of relapse in adult patients with Acute Myeloid Leukemia (AML) in first remission. In the United States, a pivotal trial is scheduled to commence in 2011. The Company has two other oncology drug candidates currently in clinical development that were discovered using in-house technology and have been shown to act as vascular disruption agents in a variety of solid tumors. The Company's pain portfolio includes EpiCept(TM) NP-1, a prescription topical analgesic cream in late-stage clinical development designed to provide effective long-term relief of pain associated with peripheral neuropathies. The Company's recurring losses from operations and the Company's stockholders' deficit raise substantial doubt about its ability to continue as a going concern and, as a result, the Company's independent registered public accounting firm, Deloitte & Touche LLP, in Parsippany, New Jersey, included an explanatory paragraph in its report on the Company's consolidated financial statements for the year ended Dec. 31, 2010, which was included in our Annual Report on Form 10-K, with respect to this uncertainty. The Company reported a net loss of $12.20 million on $737,000 of total revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $12.56 million on $703,000 of total revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $12.19 million in total assets, $26.44 million in total liabilities and a $14.25 million total stockholders' deficit. EVERYWARE INC: Moody's Assigns 'B2' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service assigned a B3 rating to the proposed senior secured term loan of EveryWare, Inc. (EveryWare), the newly formed holding company of Anchor Hocking, LLC (Anchor) and Oneida, Ltd (Oneida). In addition, Moody's assigned EveryWare B2 Corporate Family and Probability of Default Ratings. The outlook is stable. Proceeds from the proposed $150 million senior secured term loan and $40 million of drawings under the proposed $75 million asset based revolver (unrated by Moody's) will be used to repay substantially all of Anchor's and Oneida's existing outstanding debt and to pay a $16 million distribution to the company's shareholders. Moody's ratings are subject to receipt and review of final documentation. New ratings assigned: EveryWare, Inc. - Corporate Family Rating at B2 - Probability of Default Rating at B2 Anchor Hocking, LLC and Oneida, Ltd - $150 million senior secured term loan rating at B3 (LGD 4, 59%) This is an initial rating for EveryWare, Inc. RATINGS RATIONALE The B2 Corporate Family Rating reflects EveryWare's small scale, the relatively high sensitivity of operating performance to general economic activity -- and to the restaurant and leisure sectors in particular -- its relatively high pro forma leverage, and its lack of track record as a newly formed entity as a result of the Anchor and Oneida merger. The ratings also reflect the fact that the company's financial policies will be dictated by the financial sponsor's return goals. At the same time, the ratings incorporate EveryWare's good near term liquidity, its portfolio of well recognized brands, and the likely synergies from combining Oneida's customer base in the foodservice industries and Anchor's presence in the retail sector. "The stable outlook reflects our expectation that the company will successfully integrate Anchor's and Oneida's businesses and achieve synergies that will lead to modest credit metrics improvements" stated Mariko Semetko, an Analyst at Moody's. "The outlook also reflects our view that the company will maintain good liquidity and will not make debt funded distributions to its financial sponsor beyond the initial transaction", added Semetko. An upgrade in the near term is unlikely given the small scale and the lack of history as a merged company. Over time, ratings could be upgraded should the company achieve meaningful synergies and increase its scale while maintaining adequate liquidity and conservative financial policies. Specifically, an upgrade would require debt/EBITDA to be sustained below 4.0 times and EBITA/interest expense sustained above 2.5 times. The ratings could be downgraded should operating performance weaken, should financial policies become more aggressive, or should liquidity deteriorate. Specifically, the ratings could be downgraded should debt/EBITDA approach 5.5 times or should EBITA/interest expense approach 1.5 times. The principal methodology used in rating EveryWare, Inc. was the Global Consumer Durables 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. EveryWare, Inc., headquartered in Lancaster, OH, sells tableware to mass retail and foodservice industries. The company's portfolio of brands includes Anchor, Oneida, Sant'Andrea, Stolzle, Spiegelau, Viners, Buffalo China and Schonwald. EveryWare is owned by private equity firm Monomoy Capital Partners. Pro forma fiscal 2011 revenues were approximately $420 million. FOCUS BRANDS: Moody's Assigns 'B2' Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service stated that Focus Brands Inc.'s ratings are unaffected by the proposed first lien term loan increase to $305 million from $290 million and concurrent second lien term loan decrease to $115 million from $130 million. Pricing on the first lien tern loan has also been modestly reduced. Focus Brands' ratings and LGD Assessment changes are: -- Corporate Family Rating at B2 -- Probability of Default Rating at B2 -- $15 million first lien revolver due 2017 at B1 (LGD 3, 35%) from (LGD 3, 33%) -- $305 million first lien term loan due 2018 at B1 (LGD 3, 35%) from (LGD 3, 33%) -- $115 million second lien term loan due 2018 at Caa1 (LGD 5, 88%) from (LGD 5, 87%) These ratings are unchanged and will be withdrawn at the completion of the transaction: -- First lien revolver due 2015 at B2 (LGD 3, 49%) -- First lien term loan due 2016 at B2 (LGD 3, 49%) Focus Brands intends on using proceeds from the proposed term loans along with excess cash to refinance existing debt, fund a dividend to shareholders and pay related fees and expenses. The ratings are subject to closure of the transaction as proposed, and Moody's review of final documentation. The principal methodology used in rating Focus Brands was the Global Restaurant Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Focus Brands Inc. owns, operates, and franchises, approximately 3,500 restaurants under the brand names Auntie Anne's, Carvel Ice Cream, Cinnabon, Moe's Southwest Grill, Schlotzsky's and Seattle's Best Coffee. Revenues approached $170 million for the latest twelve month period ended September 2011, with sales of the system (including franchisees) of approximately $1.4 billion. Focus Brands has been owned by an affiliate of Roark Capital Group (Roark) since 2001. FONAR CORP: Reports $1.8 Million Net Income in Dec. 31 Quarter -------------------------------------------------------------- Fonar Corporation filed with the U.S. Securities and Exchange Commission a Form 10-Q reporting net income of $1.81 million on $9.32 million of net total revenues for the three months ended Dec. 31, 2011, compared with net income of $1.36 million on $8.02 million of net total revenues for the same period a year ago. The Company's balance sheet at Dec. 31, 2011, showed $33.45 million in total assets, $24.27 million in total liabilities and $9.17 million in total stockholders' equity. For fiscal 2011, the Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. Marcum, LLP, in New York, noted that the Company has negative working capital at June 30, 2011, and is dependent on asset sales to fund its operations. The Company reported net income of $3.31 million for the fiscal year ended June 30, 2011, following a net loss of $3.01 million in the previous year. A full-text copy of the Form 10-Q is available at: http://is.gd/XIh5ZX About FONAR FONAR was incorporated in 1978, making it the first, oldest and most experienced MRI company in the industry. FONAR introduced the world's first commercial MRI in 1980, and went public in 1981. Since its inception, nearly 300 recumbent-OPEN MRIs and 150 UPRIGHT(R) Multi-Position(TM) MRI scanners worldwide have been installed. FONAR's stellar product line includes the Upright(TM) MRI (also known as the Stand-Up(TM) MRI), the only whole-body MRI that performs Position(TM) imaging (pMRI(TM)) and scans patients in numerous weight-bearing positions, i.e. standing, sitting, in flexion and extension, as well as the conventional lie-down position. FONAR CORP: Red Oak Partners No Longer a Shareholder ---------------------------------------------------- Red Oak Partners, LLC, and its affiliates disclosed in an amended Schedule 13G filed with the U.S. Securities and Exchange Commission that, as of Dec. 31, 2011, they do not beneficially own any shares of common stock of Fonar Corporation. Fonar Corp. previously disclosed that as of June 2, 2011, it had 442,487 shares, representing 8.03% of the shares outstanding. A full-text copy of the latest regulatory filing is available at http://is.gd/qBAVoK About FONAR Corp. FONAR was incorporated in 1978, making it the first, oldest and most experienced MRI company in the industry. FONAR introduced the world's first commercial MRI in 1980, and went public in 1981. Since its inception, nearly 300 recumbent-OPEN MRIs and 150 UPRIGHT(R) Multi-Position(TM) MRI scanners worldwide have been installed. FONAR's stellar product line includes the Upright(TM) MRI (also known as the Stand-Up(TM) MRI), the only whole-body MRI that performs Position(TM) imaging (pMRI(TM)) and scans patients in numerous weight-bearing positions, i.e. standing, sitting, in flexion and extension, as well as the conventional lie-down position. The Company's balance sheet at Dec. 31, 2011, showed $33.45 million in total assets, $24.27 million in total liabilities and $9.17 million in total stockholders' equity. For Fiscal 2011, the Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. Marcum, LLP, in New York, noted that the Company has negative working capital at June 30, 2011, and is dependent on asset sales to fund its operations. FOREVER CONSTRUCTION: Fine-tunes Proposed Reorganization Plan ------------------------------------------------------------- Forever Construction, Inc., submitted to the U.S. Bankruptcy Court for the Northern District of Illinois a First Amended Plan of Reorganization and an explanatory Disclosure Statement. The Plan provides for the distributions to the holders of allowed claims from funds realized from the continued operation of the Debtor's business, well as existing cash deposits. Under the Plan, Classes 1, 2, 3 and 4 will be paid of principal and interest on secured debt at a non-default rate of interest, pursuant to existing loan documentation, or as modified or renewed by agreement. The Debtor will surrender property securing Classes 5, 6, 7's claims in full satisfaction of the claims. The allowed general unsecured claims will share pro rata payments made on a quarterly basis over five years, without interest. Shareholders will retain their ownership interest in exchange for a new vale contribution of $2,500. A full-text copy of the First Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/FOREVER_CONSTRUCTION_ds_1stamended.pdf About Forever Construction Waukegan, Illinois-based Forever Construction, Inc., is the owner and operator of several multi-tenant residential properties located in or near Waukegan, Illinois. The Debtor filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 10-33276) on July 27, 2010. Joel A. Schechter, Esq., serves as counsel to the Debtor. The Debtor tapped Jon P. Morgan of InTerra Realty as its real estate sales agent. The Debtor estimated assets and debts at $10 million to $50 million in its Chapter 11 petition. No creditors committee has been appointed in the case. FORT INVESTMENTS: Case Summary & 7 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Fort Investments, Inc. 8610 Gonzalez Lake Dr Tampa, FL 33625 Bankruptcy Case No.: 12-02259 Chapter 11 Petition Date: February 20, 2012 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Rosalind R Griffie, Esq. THE LAW OFFICE OF ROSALIND R GRIFFIE PA 125 South State Road 7 Suite 104-336 West Palm Beach, FL 33414 Tel: (561) 939-4871 E-mail: griffielaw@aol.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb12-02259.pdf The petition was signed by Alexis Gonzalez, president. FRANCISCAN COMMUNITIES: McDonald Hopkins OK'd as Panel's Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Ohio authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of the Franciscan Communities St. Mary of the Woods, Inc., to retain McDonald Hopkins LLC as counsel. As reported in the Troubled Company Reporter on Feb. 16, 2012, Scott N. Opincar, a member of McDonald Hopkins, told the Court that his hourly rate is $450, and hourly rates of the firm's personnel are: Sean D. Malloy, member $505 Members $280 - $660 Of Counsel $310 - $605 Associates $185 - $395 Paralegals $115 - $245 Law Clerks $60 - $125 Mr. Opincar assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Franciscan Communities Illinois-based Franciscan Communities St. Mary of the Woods, Inc., owns and operates a senior living community in Avon, Ohio. The not-for-profit community is owned and managed by the Franciscan Sisters of Chicago Service Corp. Franciscan Communities St. Mary of the Woods filed for Chapter 11 bankruptcy (Bankr. N.D. Ohio Case No. 11-19865) on Nov. 21, 2011, after it failed to negotiate an out-of-court workout with holders of tax-free bonds. Judge Jessica E. Price Smith oversees the case. The Debtor disclosed assets of $36 million and debt totaling $48 million as of the Chapter 11 filing. In its schedules, the Debtor disclosed $22,314,854 in assets and $49,555,487 in liabilities. The Debtor is represented by Heather Lennox, Esq., Carl E. Black, Esq., and Daniel M. Syphard, Esq., at Jones Day, as bankruptcy counsel. The Garden City Group, Inc., is the claims and noticing agent. Franciscan Sisters of Chicago, the sole member of the Debtor, is providing $4.5 million in DIP loans. The DIP Lender is represented by George Mesires, Esq., and Daniel P. Strzalka, Esq., at Ungaretti & Harris LLP. The Bank of New York Mellon Trust Company, N.A., the bond trustee, is represented by Bruce H. White, Esq., and Clifton R. Jessup, Esq., at Greenberg Traurig LLP. Wells Fargo Bank, N.A., as Master Trustee, is represented by Daniel S. Bleck, Esq., at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., and John R. Weiss, Esq., at Duane Morris LLP. Sovereign Bank, provider of the Debtor's letter of credit facility, is also represented by John R. Weiss, Esq., at Duane Morris LLP. FRONTLINE COMMS: Moody's Says Dividend Cut Supports Profile ----------------------------------------------------------- Moody's Investors Service said that Frontier Communications Corp.'s (Ba2 stable) dividend cut, announced on Feb. 16, will support the company's liquidity profile, as the roughly $350 million in expected savings over the next 12 months will bolster Frontier's cash position, enabling it to earmark cash to pay down a portion of current debt maturities and pay for capital improvement projects to aid its company's competitive position. As such, the ratings and the outlook benefit in the near term from the enhanced liquidity. Moody's current ratings for Frontier Communications Corporation and and following affiliate are: Frontier Communications Corporation LT Corporate Family Ratings (domestic currency) Rating of Ba2 Probability of Default Rating of Ba2 Speculative Grade Liquidity Rating of SGL-1 Senior Unsecured (domestic currency) Rating of Ba2 Senior Unsecured Bank Credit Facility (domestic currency) Rating of Ba2 Senior Unsec. Shelf (domestic currency) Rating of (P)Ba2 LGD Senior Unsecured (domestic currency) Assessment of 55 - LGD4 LGD Senior Unsecured Bank Credit Facility (domestic currency) Assessment of 55 - LGD4 BACKED Senior Unsecured (domestic currency) Rating of Baa2/Ba2 LGD BACKED Senior Unsecured (domestic currency) Assessment of 55 - LGD4 Underlying Senior Unsecured (domestic currency) Rating of Ba2 LGD Underlying Senior Unsecured (domestic currency) Assessment of 55 - LGD4 RATINGS RATIONALE The principal methodology used in rating Frontier Communications was the Global Telecommunications Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. GAMETECH INT'L: Kristin Fedor Stake Down to 4.5% ------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Kristin A. Fedor disclosed that, as of Dec. 31, 2011, she beneficially owns 543,731 shares of common stock of Gametech International Inc representing 4.5% of the shares outstanding. Ms. Fedor disclosed in January 2011 ownership of 645,177 shares, representing 5.4% of the shares outstanding. A full-text copy of the latest regulatory filing is available for free at http://is.gd/Bfg6yG About GameTech International Based in Reno, Nevada, GameTech develops and manufactures gaming entertainment products and systems. GameTech holds a significant position in the North American bingo market with its interactive electronic bingo systems, portable and fixed-based gaming units, and complete hall management modules. It also holds a significant position in select North American VLT markets, primarily Montana, Louisiana, and South Dakota, where it offers video lottery terminals and related gaming equipment and software. It also offers Class III slot machines and server-based gaming systems. The Company reported a net loss of $20.4 million on $35.2 million of revenue for the 52 weeks ended Oct. 31, 2010, compared with a net loss of $10.5 million on $47.8 million of revenue for the 52 weeks ended Nov. 1, 2009. Piercy Bowler Taylor & Kern, in Las Vegas, Nevada, expressed substantial doubt about GameTech International, Inc.'s ability to continue as a going concern. The independent auditors noted that the Company has suffered reoccurring losses from operations and has been unable to extend the maturity of its debt, or raise additional capital necessary to execute its business plan. The Company's balance sheet at May 1, 2011, showed $40.19 million in total assets, $32.33 million in total liabilities and $7.86 million in total stockholders' equity. GAMETECH INT'L: Richard Fedor Retains 16% Equity Stake ------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Richard T. Fedor and his affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 1,995,079 shares of common stock of Gametech International Inc. representing 16.3% of the shares outstanding. Mr. Fedor previously disclosed ownership of 1,997,963 shares (16.4%) in February 2011. A full- text copy of the regulatory filing is available at http://is.gd/rkQDzj About GameTech International Based in Reno, Nevada, GameTech develops and manufactures gaming entertainment products and systems. GameTech holds a significant position in the North American bingo market with its interactive electronic bingo systems, portable and fixed-based gaming units, and complete hall management modules. It also holds a significant position in select North American VLT markets, primarily Montana, Louisiana, and South Dakota, where it offers video lottery terminals and related gaming equipment and software. It also offers Class III slot machines and server-based gaming systems. The Company reported a net loss of $20.4 million on $35.2 million of revenue for the 52 weeks ended Oct. 31, 2010, compared with a net loss of $10.5 million on $47.8 million of revenue for the 52 weeks ended Nov. 1, 2009. Piercy Bowler Taylor & Kern, in Las Vegas, Nevada, expressed substantial doubt about GameTech International, Inc.'s ability to continue as a going concern. The independent auditors noted that the Company has suffered reoccurring losses from operations and has been unable to extend the maturity of its debt, or raise additional capital necessary to execute its business plan. The Company's balance sheet at May 1, 2011, showed $40.19 million in total assets, $32.33 million in total liabilities and $7.86 million in total stockholders' equity. GAMETECH INT'L: Richard Fedor, Jr., Holds 6.6% Equity Stake ----------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Richard T. Fedor Jr., disclosed that, as of Dec. 31, 2011, he beneficially owns 789,073 shares of common stock of Gametech International Inc. representing 6.6% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/XEcvc3 About GameTech International Based in Reno, Nevada, GameTech develops and manufactures gaming entertainment products and systems. GameTech holds a significant position in the North American bingo market with its interactive electronic bingo systems, portable and fixed-based gaming units, and complete hall management modules. It also holds a significant position in select North American VLT markets, primarily Montana, Louisiana, and South Dakota, where it offers video lottery terminals and related gaming equipment and software. It also offers Class III slot machines and server-based gaming systems. The Company reported a net loss of $20.4 million on $35.2 million of revenue for the 52 weeks ended Oct. 31, 2010, compared with a net loss of $10.5 million on $47.8 million of revenue for the 52 weeks ended Nov. 1, 2009. Piercy Bowler Taylor & Kern, in Las Vegas, Nevada, expressed substantial doubt about GameTech International, Inc.'s ability to continue as a going concern. The independent auditors noted that the Company has suffered reoccurring losses from operations and has been unable to extend the maturity of its debt, or raise additional capital necessary to execute its business plan. The Company's balance sheet at May 1, 2011, showed $40.19 million in total assets, $32.33 million in total liabilities and $7.86 million in total stockholders' equity. GELTECH SOLUTIONS: Incurs $1.4-Mil. Net Loss in Dec. 31 Quarter --------------------------------------------------------------- GelTech Solutions, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $1.41 million on $84,551 of sales for the three months ended Dec. 31, 2011, compared with a net loss of $1.77 million on $60,637 of sales for the same period a year ago. The Company reported a net loss of $6.02 million on $221,804 of sales for the fiscal year ended June 30, 2011, compared with a net loss of $3.53 million on $566,240 of sales during the prior year. The Company reported a net loss of $2.87 million on $262,953 of sales for the six months ended Dec. 31, 2011, compared with a net loss of $2.76 million on $89,194 of sales for the same period during the prior year. Geltech Solution's balance sheet at Dec. 31, 2011, showed $986,182 in total assets, $1.92 million in total liabilities, and a $937,758 total stockholders' deficit. Salberg & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a net loss and net cash used in operating activities in 2011 of $6,026,641 and $3,636,213, respectively, and has an accumulated deficit of $15,669,827 at June 30, 2011. A full-text copy of the Form 10-Q is available for free at: http://is.gd/qUdqwU About GelTech Solutions Jupiter, Fla.-based GelTech Solutions. Inc. (OTC Bulletin Board: GLTC) -- http://www.GelTechsolutions.com/-- is a Delaware corporation organized in 2006. The Company creates innovative, Earth-friendly, cost-effective products that help industry, agriculture, and the general public accomplish environmental and safety goals, such as water conservation and the protection of lives, homes, and property from fires. The Company's current business model is focused on the following products: 1) FireIce(R), a fire suppression product, 2) SkinArmor(TM), an ointment used for protecting skin from direct flame and high temperatures, and 3) Soil2O(TM), a line of agricultural moisture retention products. GENTA INC: Felix Baker Discloses 9.9% Equity Stake -------------------------------------------------- Felix J. Baker and Julian C. Baker disclosed in an amended Schedule 13G filed with the U.S. Securities and Exchange Commission that, as of Dec. 31, 2011, they beneficially own 215,000,000 shares of common stock of Genta Incorporation representing 9.9% of the shares outstanding. A full-text copy of the regulatory filing is available at http://is.gd/a8kU8T About Genta Incorporated Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB: GNTA) -- http://www.genta.com/-- is a biopharmaceutical company engaged in pharmaceutical (drug) research and development. The Company is dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. EisnerAmper LLP, in Edison, New Jersey, expressed substantial doubt about Genta's ability to continue as a going concern following the 2010 financial results. The independent auditors noted that of the Company's recurring losses from operations, negative cash flows from operations and current maturities of convertible notes payable. The Company reported a net loss of $167.3 million on $257,000 of sales for 2010, compared with a net loss of $86.3 million on $218,000 for 2009. The Company also reported a net loss of $37.36 million on $170,000 of net product sales for the nine months ended Sept. 30, 2011, compared with a net loss of $133.43 million on $192,000 of net product sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $16.82 million in total assets, $32.13 million in total liabilities, and a $15.30 million total stockholders' deficit. Bankruptcy Warning In September 2011, the Company issued $12.7 million of units, consisting of $4.2 million of senior secured convertible notes and $8.5 million of senior secured cash collateralized convertible notes. In connection with the sale of the units, the Company also issued two types of debt warrants in an amount equal to 100% of the purchase price for each unit. The Company had direct access to $4.2 million of the proceeds, and the remaining $8.5 million of the proceeds were placed in a blocked account as collateral security for the $8.5 million senior secured cash collateralized convertible notes. Presently, with no further financing, the Company projects that it will run out of funds during the first quarter of 2012. The Company currently does not have any additional financing in place. If it is unable to raise additional funds, the Company could be required to reduce its spending plans, reduce its workforce, license one or more of its products or technologies that it would otherwise seek to commercialize itself, sell some or all of its assets, cease operations or even declare bankruptcy. There can be no assurance that the Company can obtain financing, if at all, or raise those additional funds, on terms acceptable to it. GENTA INC: RA Capital Discloses 9.9% Equity Stake ------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, RA Capital Management, LLC, and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 210,536,030 shares of common stock of Genta Incorporated representing 9.99% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/t0xYbZ About Genta Incorporated Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB: GNTA) -- http://www.genta.com/-- is a biopharmaceutical company engaged in pharmaceutical (drug) research and development. The Company is dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. EisnerAmper LLP, in Edison, New Jersey, expressed substantial doubt about Genta's ability to continue as a going concern following the 2010 financial results. The independent auditors noted that of the Company's recurring losses from operations, negative cash flows from operations and current maturities of convertible notes payable. The Company reported a net loss of $167.3 million on $257,000 of sales for 2010, compared with a net loss of $86.3 million on $218,000 for 2009. The Company also reported a net loss of $37.36 million on $170,000 of net product sales for the nine months ended Sept. 30, 2011, compared with a net loss of $133.43 million on $192,000 of net product sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $16.82 million in total assets, $32.13 million in total liabilities, and a $15.30 million total stockholders' deficit. Bankruptcy Warning In September 2011, the Company issued $12.7 million of units, consisting of $4.2 million of senior secured convertible notes and $8.5 million of senior secured cash collateralized convertible notes. In connection with the sale of the units, the Company also issued two types of debt warrants in an amount equal to 100% of the purchase price for each unit. The Company had direct access to $4.2 million of the proceeds, and the remaining $8.5 million of the proceeds were placed in a blocked account as collateral security for the $8.5 million senior secured cash collateralized convertible notes. Presently, with no further financing, the Company projects that it will run out of funds during the first quarter of 2012. The Company currently does not have any additional financing in place. If it is unable to raise additional funds, the Company could be required to reduce its spending plans, reduce its workforce, license one or more of its products or technologies that it would otherwise seek to commercialize itself, sell some or all of its assets, cease operations or even declare bankruptcy. There can be no assurance that the Company can obtain financing, if at all, or raise those additional funds, on terms acceptable to it. GENTA INC: Boxer Capital Discloses 9.9% Equity Stake ---------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Boxer Capital, LLC, and its affiliates disclosed that, as of Dec. 31, 2011, they deemed to beneficially own 212,667,887 common shares which constitute approximately 9.999% of a notional number of the Genta Incorporated's outstanding common shares. Boxer Management and Joseph Lewis each have shared voting and dispositive power with regard to the common shares beneficially owned directly by Boxer Capital. A full-text copy of the regulatory filing is available at http://is.gd/oXqmnI About Genta Incorporated Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB: GNTA) -- http://www.genta.com/-- is a biopharmaceutical company engaged in pharmaceutical (drug) research and development. The Company is dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. EisnerAmper LLP, in Edison, New Jersey, expressed substantial doubt about Genta's ability to continue as a going concern following the 2010 financial results. The independent auditors noted that of the Company's recurring losses from operations, negative cash flows from operations and current maturities of convertible notes payable. The Company reported a net loss of $167.3 million on $257,000 of sales for 2010, compared with a net loss of $86.3 million on $218,000 for 2009. The Company also reported a net loss of $37.36 million on $170,000 of net product sales for the nine months ended Sept. 30, 2011, compared with a net loss of $133.43 million on $192,000 of net product sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $16.82 million in total assets, $32.13 million in total liabilities, and a $15.30 million total stockholders' deficit. Bankruptcy Warning In September 2011, the Company issued $12.7 million of units, consisting of $4.2 million of senior secured convertible notes and $8.5 million of senior secured cash collateralized convertible notes. In connection with the sale of the units, the Company also issued two types of debt warrants in an amount equal to 100% of the purchase price for each unit. The Company had direct access to $4.2 million of the proceeds, and the remaining $8.5 million of the proceeds were placed in a blocked account as collateral security for the $8.5 million senior secured cash collateralized convertible notes. Presently, with no further financing, the Company projects that it will run out of funds during the first quarter of 2012. The Company currently does not have any additional financing in place. If it is unable to raise additional funds, the Company could be required to reduce its spending plans, reduce its workforce, license one or more of its products or technologies that it would otherwise seek to commercialize itself, sell some or all of its assets, cease operations or even declare bankruptcy. There can be no assurance that the Company can obtain financing, if at all, or raise those additional funds, on terms acceptable to it. GENTA INC: Kevin Tang Discloses 9.9% Equity Stake ------------------------------------------------- Kevin C. Tang and his affiliates filed with the U.S. Securities and Exchange Commission an amended Schedule 13G disclosing that, as of Dec. 31, 2011, they beneficially own 195,388,893 shares of common stock of Genta Incorporated representing 9.9% of the shares outstanding. A full-text copy of the filing is available at: http://is.gd/071sY8 About Genta Incorporated Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB: GNTA) -- http://www.genta.com/-- is a biopharmaceutical company engaged in pharmaceutical (drug) research and development. The Company is dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. EisnerAmper LLP, in Edison, New Jersey, expressed substantial doubt about Genta's ability to continue as a going concern following the 2010 financial results. The independent auditors noted that of the Company's recurring losses from operations, negative cash flows from operations and current maturities of convertible notes payable. The Company reported a net loss of $167.3 million on $257,000 of sales for 2010, compared with a net loss of $86.3 million on $218,000 for 2009. The Company also reported a net loss of $37.36 million on $170,000 of net product sales for the nine months ended Sept. 30, 2011, compared with a net loss of $133.43 million on $192,000 of net product sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $16.82 million in total assets, $32.13 million in total liabilities, and a $15.30 million total stockholders' deficit. Bankruptcy Warning In September 2011, the Company issued $12.7 million of units, consisting of $4.2 million of senior secured convertible notes and $8.5 million of senior secured cash collateralized convertible notes. In connection with the sale of the units, the Company also issued two types of debt warrants in an amount equal to 100% of the purchase price for each unit. The Company had direct access to $4.2 million of the proceeds, and the remaining $8.5 million of the proceeds were placed in a blocked account as collateral security for the $8.5 million senior secured cash collateralized convertible notes. Presently, with no further financing, the Company projects that it will run out of funds during the first quarter of 2012. The Company currently does not have any additional financing in place. If it is unable to raise additional funds, the Company could be required to reduce its spending plans, reduce its workforce, license one or more of its products or technologies that it would otherwise seek to commercialize itself, sell some or all of its assets, cease operations or even declare bankruptcy. There can be no assurance that the Company can obtain financing, if at all, or raise those additional funds, on terms acceptable to it. GEOEYE INC: Moody's Gives Negative Outlook Amid Contracts Issues ---------------------------------------------------------------- Moody's Investors Service has changed the outlook of GeoEye Inc.'s ratings to negative from stable based on increasing risk that the US government will seek to renegotiate the terms of its cost sharing arrangement with the company to complete the construction of the GeoEye-2 satellite, expected to be deployed in 2013. The status of Geoeye's US government contracts are intertwined with election year budget deliberations and expected delivery of a study of the entire EnhancedView satellite imagery program by the Obama administration in April. As part of the rating action, Moody's affirms the company's B1 corporate family ratings ("CFR") and probability of default rating. A possible reduction in US government revenues will adversely affect the company's liquidity, thereby increasing credit risk. Thus, due to the uncertainty of the appropriations, Moody's downgraded the company's liquidity rating to SGL-3 from SGL-1 as the company's may use a significant portion of its cash over the next 12 months to continue the construction of Geoeye-2. In August, 2010, GeoEye received a $2.8 billion National Geospatial-Intelligence Agency ("NGA") award in a series of ten one-year contracts, which includes a Service Level Agreement ("SLA") for $150 million per year for satellite imagery, increasing by $183 million to $333.4 million per year when the company's GeoEye-2 satellite is expected to become operational in the second half of 2013. More importantly, the NGA had agreed provide $337 million in cost share payments towards the build and launch of Geoeye-2. The contracts are subject to ongoing reviews by the NGA, with the budgets dependent on Congressional appropriations. Moody's estimates that GeoEye in aggregate, receives 66% of its revenues from the US Government. Issuer: GeoEye Inc. -- Corporate Family Rating, Affirmed B1 -- Probability of Default Rating, Affirmed B1 -- $400m 9.625% Gtd Sr Sr Global Notes due 10/1/2015, Affirmed Ba3 (LGD3-38%) -- $125m 8.625% Sr Secured 2nd Lien Notes due 10/1/2016, Affirmed B3 (LGD5-89%) -- Speculative Grade Liquidity Rating, Changed to SGL-3 from SGL-1 -- Outlook, Changed to Negative from Stable RATINGS RATIONALE GeoEye's B1 rating largely reflects the uncertainty of future EnhancedView appropriations and potential reduction in the company's financial flexibility over the long term. Under Moody's estimates, in addition to possible revenue reductions in the upcoming SLA renewals, GeoEye's long term liquidity position is highly dependent on the government's funding of the GeoEye-2 cost share. Moody's believes that the first installment of the GeoEye-2 cost share in the amount of $111 million has already been accounted for in prior budget appropriations and is scheduled to be paid in the first half of 2012. However, the final $226 million cost share payment due upon GeoEye-2 delivery in 2013 may be cut. Given the specialized nature of the high-resolution imagery satellites, Moody's believe that GeoEye cannot moderate the pace of the construction, and the company will continue to invest capital heavily through 2013. Therefore, without ongoing cost- share payments from the NGA, the company's liquidity will be adversely affected as it completes the construction of GeoEye-2. The company estimates that GeoEye-2 will cost between $800 and $850 million in total, before capitalized interest, of which approximately $518 million has been spent through the third quarter of 2011. The ratings are supported by the increasing needs for high resolution surveillance and mapping applications by the various arms of the US Government. Also, in the event of a budget impasse, under "continuing resolutions" provisions the contract payments revert to previous fiscal year's levels, which would preserve GeoEye's US government revenue stream through 2012. The specialized products and services provided by commercial imagery providers are difficult to replicate, and the DoD does not have spare capacity on its classified imagery satellites to replace the current service. Thus, while there is high probability that the negotiated payments beyond 2012 will be reduced, the risk of a full elimination of the EnhancedView program that governs the DoD's purchases of commercial satellite imagery is minimal. In 2010, when the EnhancedView awards were announced to GeoEye and peer commercial imagery provider DigitalGlobe, the NGA voiced strong support for the industry, as well as a desire to maintain a two private industry participants to diversify the sourcing of global imagery. However, with the escalating US budget deficit, Department of Defense ("DoD") programs are among the most visible items to cut, and Moody's is not convinced that the same support for two players exists in the current deliberations. Therefore, in addition to possible absolute contract cuts, the NGA allocations may favor one company over the other. As both companies are building new satellites, the NGA decision may render one of the two satellites commercially untenable in the near term. GeoEye's SGL-3 liquidity rating indicates adequate liquidity. Over the 4-quarter horizon to December 31, 2012 GeoEye's main source of liquidity is expected to be cash on hand, which was about $210 million at September 30, 2011. The company anticipates receiving the $111 million cost share payment from NGA in the first half of 2012 to bolster its liquidity. If the payment is not received or delayed, the company's cash position will be materially weakened as it continues to build GeoEye-2. What Could Change the Rating - Up Upward rating momentum and/or outlook stabilization will occur if the US budget deliberations result in the confirmation of the expected revenue streams and full cost share reimbursement for GeoEye-2, which carries the company over to a successful launch and deployment of the new satellite. Additionally, ratings may be raised if the company diversifies its revenue stream away from the US government, and the resulting cash flow augments the company's liquidity while free cash flow generation reaches over $100 million per year. What Could Change the Rating - Down Rating downgrades would be driven by unfavorable DoD budget outcome which would significantly curtail US government revenues, and if the company is unable to replenish those revenues from other customers. Given the high technology risk endemic in the company's business model, ratings would come under pressure if there is a significant impairment of assets in space that is not covered by insurance. The principal methodology used in rating GeoEye Inc. was the Global Aerospace and Defense Industry Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. GLOBAL SOLUTIONS: Moody's Cuts Corporate Family Rating to 'Caa1' ---------------------------------------------------------------- Moody's Investors Service downgraded Infor Global Solutions Holdings Ltd.'s debt ratings, including the corporate family rating to Caa1 from B3 and the first lien secured debt to B2 from B1. The downgrade was driven by the very high leverage and large upcoming debt maturities beginning in 2013. The outlook is stable. RATINGS RATIONALE Infor's Debt to EBITDA as of November 30, 2011 was well in excess of 9x. Though the company has shown increasing revenue and EBITDA trends for the past several quarters, the company faces challenges with about $2.6 billion of debt scheduled to mature in 2013. Current liquidity is insufficient to fund upcoming maturities without additional equity contributions. While the company is expected to be free cash flow positive on a rolling four quarter basis (free cash flow for the LTM period ended November 30, 2011 was $90 million), the free cash flow and cash on hand is insufficient to materially reduce funded debt of $4.6 billion. Infor is contemplating several capital structure alternatives which could address upcoming maturities as well as materially reduce leverage. If Infor can meaningfully reduce leverage, the ratings could be upgraded. The ratings could face further negative pressure particularly as the 2013 maturities approach. These ratings were downgraded: Corporate family rating: to Caa1 from B3 Probability of default: to Caa1 from B3 First Lien Senior Secured Revolver due 2013, to B2, LGD2 (27%) from B1, LGD2 (27%) First Lien Senior Secured Term Loan due 2013, to B2, LGD2 (27%) from B1, LGD2 (27%) This rating was affirmed and point estimate revised: Second Lien Senior Secured Term Loan due 2014, Caa2, LGD5 (78%) from LGD5 (79%) Ratings outlook: stable The individual debt instrument ratings were assigned using Moody's Loss Given Default Methodology. The B2 rating on the first lien debt is driven by its senior most position in the capital structure. The principal methodology used in rating Infor was the Global Software Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Infor Global Solutions Holdings Ltd., headquartered in Alpharetta, Georgia and a Cayman Islands exempted company, is a global provider of financial and enterprise applications software with $1.9 billion of revenues for the twelve month period ended November 30, 2011. GOLDEN TEMPLE: Files for Chapter 11, to Continue Mediation ---------------------------------------------------------- Golden Temple Management, LLC, filed a Chapter 11 petition (Bankr. D. Ore. Case No. 12-60536) on Feb. 18, 2012. Springfield, Oregon-based Golden Temple, disclosed $49 million in assets and $10.4 million in liabilities in schedules attached to the petition. Primary assets consist of the 90% ownership of Golden Temple of Oregon, LLC, valued at $40 million, and the 100% control of GTO and share in annual profits, valued at $4 million. Contingent and unliquidated claims of the Debtor include a holdback on sale of business division to Hearthside Food Solutions, LLC, valued at $5 million, and potential malpractice claims against Schwabe, Williamson & Wyatt and other professionals. The Debtor has filed with the bankruptcy court a motion to continue pending mediation sessions. Prior to the bankruptcy filing, there have been mediation sessions convened with U.S. District Court Judge Michael Hogan. There is a currently pending mediation session scheduled on Feb. 22-24, 2012 in Eugene, Oregon, involving many of the parties involved in litigation claims. The Debtor says that the mediation sessions will allow it to craft a reorganization plan that will satisfy disparate groups of creditors and provide a dividend to unsecured creditors. GREEN PLANET: Delays Form 10-Q for Fiscal Dec. 31 Quarter --------------------------------------------------------- Green Planet Group, Inc., notified the U.S. Securities and Exchange Commission that in order for the Company to complete the financial statements and narrative information for the fiscal quarter ended Dec. 31, 2011, it requires additional time to file its Form 10-Q for that fiscal quarter. About Green Planet Scottsdale, Ariz.-based Green Planet Group, Inc., is a specialty energy conservation chemical company that produces and supplies technologies to the global transportation, industrial and consumer markets. These technologies include gasoline, oil and diesel additives for engines and other transportation-related fluids and industrial lubricants. The Company also operates an industrial staffing and employment business by providing employees to the light industrial, medical, aviation maintenance and IT industries on a national basis. The Company's balance sheet at Sept. 30, 2011, showed $3.9 million in total assets, $21.0 million in total liabilities, and a stockholders' deficit of $17.1 million. As reported in the TCR on July 21, 2011, Semple, Marchal & Cooper, LLP, in Phoenix, Ariz., said that Green Planet Group's significant operating losses and negative working capital raise substantial doubt about its ability to continue as a going concern. Green Planet reported a net loss of $15.4 million for the fiscal year ended March 31, 2011, following a net loss of $15.7 million for fiscal 2010. For the six months ended Sept. 30, 2011, the Company has net income of $15.9 million on $15.4 million of sales. GREEN PLANET: ACE Limited Holds 5.3% Equity Stake ------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, ACE Limited disclosed that, as of Dec. 31, 2011, it beneficially owns 9,955,500 shares of common stock of Green Planet Group, Inc., representing 5.36% of the shares outstanding. A full-text copy of the regulatory filing is available for free at: http://is.gd/qgtX1U About Green Planet Scottsdale, Ariz.-based Green Planet Group, Inc., is a specialty energy conservation chemical company that produces and supplies technologies to the global transportation, industrial and consumer markets. These technologies include gasoline, oil and diesel additives for engines and other transportation-related fluids and industrial lubricants. The Company also operates an industrial staffing and employment business by providing employees to the light industrial, medical, aviation maintenance and IT industries on a national basis. The Company's balance sheet at Sept. 30, 2011, showed $3.9 million in total assets, $21.0 million in total liabilities, and a stockholders' deficit of $17.1 million. As reported in the TCR on July 21, 2011, Semple, Marchal & Cooper, LLP, in Phoenix, Ariz., said that Green Planet Group's significant operating losses and negative working capital raise substantial doubt about its ability to continue as a going concern. Green Planet reported a net loss of $15.4 million for the fiscal year ended March 31, 2011, following a net loss of $15.7 million for fiscal 2010. For the six months ended Sept. 30, 2011, the Company has net income of $15.9 million on $15.4 million of sales. GRUBB & ELLIS: To Sell Business to BGC via Chapter 11 ----------------------------------------------------- Grubb & Ellis Co., a U.S. real estate services company, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-10685) to sell almost all its assets to BGC Partners Inc. Grubb & Ellis said in a statement it expects business to continue without disruption as it completes the "363" sale process as expeditiously as possible. Santa Ana, California-based Grubb & Ellis, which filed for Chapter 11 protection with 16 affiliates, disclosed $150.16 million in assets and $167.2 million in liabilities as of Dec. 31, 2011. The Debtor has a secured debt of $30 million plus interest to BGC Note Acquisition Co. pursuant to 7.95% Convertible Senior Notes due 2015. It also said that preferred stock amounts to $106.2 million as of Dec. 31, 2011. Grubb & Ellis -- http://www.grubb-ellis.com/-- is one of the nation's largest commercial real estate services firms, providing transaction services, property management, facilities management and valuation services through more than 100 company-owned and affiliate offices. The Company employs over 3,000 professionals and conducts business through over 90 company-owned and affiliate locations throughout the United States, and, thorugh a network of non-debtor-affiliates, throughout the world. The company completed about 12,000 sale and lease transactions last year and manages more than 250 million square feet of property. "We determined that a partnership with BGC provides the best platform for our brokerage professionals, employees and clients," Thomas P. D'Arcy, chief executive officer of Grubb & Ellis, said in a statement Feb. 19. "We expect no disruption to the company's operations." BGC agreed to provide a loan of as much as $4.8 million to Grubb & Ellis to keep it operating during the bankruptcy process. The Debtor has engaged Togut, Segal & Segal, LLP as general bankruptcy counsel, Zuckerman Gore Brandeis & Crossman, LLP, as general corporate counsel, and Alvarez & Marsal Holdings, LLC, as financial advisor in the Chapter 11 case. Kurtzman Carson Consultants is the claims and notice agent. Road to Bankruptcy Michael J. Rispoli blamed the downturn in the U.S. real estate market between 2007 and 2009 for losses during the period that it said severely strained its liquidity and hampered its ability to keep operating. Mr. Rispoli also blamed the liabilities and losses associated with NNN Realty Advisors, Inc. and the slower than projected recovery of the real estate markets in 2010. In February 2011, Grubb & Ellis hired FBR Capital Markets & Co. to being a process to divest of its NNN tenant-in-common business. It also began a process to divest its Alescco Global Advisors mutual fund business as well as other non core business entities. In March 2011, with the assistance of JMP Securities, LLC, the Debtor began a process of actively marketing its remaining core businesses. While it engaged in negotiations with a number of parties, it was unable to reach an agreement that could be effected outside the bankruptcy process. BGC Partners, a New York-based broker of financial products, has agreed to buy the assets via the Chapter 11 process BGC owns Newmark Knight Frank, one of the largest commercial real estate service firms in the U.S. Quick Sale Grubb & Ellis wants a quick sale of the assets. The Debtor noted that brokers representing nearly 30% of the 2011 brokerage revenue have recently left Grubb & Ellis. Additionally, two of the Debtor's largest facilities management counterparties have terminated their contracts since Dec. 31, 2011. Grubb & Ellis has filed with the Bankruptcy Court a motion seeking approval of the sale procedures pursuant to 11 U.S.C. Sec. 363. The sale to BGC is subject to higher and better offers at an auction. The Debtor proposes a March 9 deadline for preliminary bids, a March 19 deadline for binding bids, an auction on March 31, 2012, and a sale hearing on March 23, 2012. Pursuant to the term sheet signed by the parties, BGC will buy the assets for $30.02 million, consisting of a credit bid the full principal amount outstanding under the (i) $30 million credit agreement dated April 15, 2011, with BGC Note, (ii) the amounts drawn under the $4.8 million facility, and (iii) the cure amounts due to counterparties. BGC can terminate the contract if the sale order has not been entered by the bankruptcy court in 25 days after the execution of the Asset Purchase Agreement. The parties expect to file the APA not later than one day prior to the hearing to consider the Bid Procedures. Included among the assets to be purchased by BGC are the Debtors' Chapter 5 avoidance actions. GULF STATES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Gulf States Protective Coatings, Inc. 201 North 16th Street La Porte, TX 77571 Bankruptcy Case No.: 12-31315 Chapter 11 Petition Date: February 20, 2012 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Karen K. Brown Debtor's Counsel: Joan Kehlhof, Esq. WIST HOLLAND & KEHLHOF 720 N Post Oak Rd, Suite 610 Houston, TX 77024 Tel: (713) 686-5444 Fax: (713) 686-0703 E-mail: jkehlhof@whkllp.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txsb12-31315.pdf The petition was signed by Jane O. McKenzie, president. HARRY ALTICK: Claim for Exemption Denied for Misleading Creditors ----------------------------------------------------------------- Bankruptcy Judge Alan Jaroslovsky denied Harry Palmer Altick's claim for exemption upon the objection of the Chapter 7 trustee appointed in Mr. Altick's case. The Court said Mr. Altick intentionally misrepresented the value of his interest in Gold Dome LLC to his creditors in his disclosure statement in order to induce them to go along with his plan. At that time, Mr. Altick knew that his interest in Gold Dome had significant value. The delay in liquidating the interest in Gold Dome resulted in a greatly diminished dividend to unsecured creditors. The Court said it would be unjust to allow Mr. Altick to benefit from the fruits of his misrepresentation by claiming an exemption in Gold Dome. Mr. Altick filed for Chapter 11 bankruptcy to stop the sale of his interest in Gold Dome LLC for $350,000 which had been ordered by a state family law court. Altick scheduled the value of his interest in Gold Dome as "unknown," but did note that it had assets worth $3 million and debts of a little under $1 million. While he was in Chapter 11, he showed his interest in Gold Dome as having a value of $900,000 on his operating reports, which were consistent with his schedules. However, his disclosure statement, filed on Feb. 6, 2009, was inconsistent with his schedules and operating reports and patently false. In it, he represented that his interest in Gold Dome was over-encumbered so that it had zero value. On April 3, 2009, the court confirmed his plan of reorganization. Three years later, Mr. Altick converted his case to Chapter 7. At the meeting under 11 U.S.C. Sec. 341, the Chapter 7 trustee, Linda Green, asked Mr. Altick about Gold Dome. He told her basically the same thing as he had represented in his disclosure statement, that his interest in Gold Dome had no value. He did not mention that at the time of his bankruptcy filing there was a sale of his interest in Gold Dome pending for $350,000. Mr. Altick's original exemption claims were not controversial. The only significant asset he claimed as exempt was his residence, which his schedules showed was over-encumbered. After conversion, Ms. Green asked the court to approve the sale of Mr. Altick's interest in Gold Dome to the other partner for $10,000. Mr. Altick then amended his schedules to delete the claim of exemption as to the residence and add an exemption of $21,000 in Gold Dome. Ms. Green objected to this claim of exemption on the grounds of bad faith and on the grounds of claim preclusion (res judicata). The court elected to decide the legal issue first, and determined that the exemption was not barred as a matter of law. It then set a hearing on whether the evidence established that Mr. Altick was barred from asserting his exemption due to bad faith. A copy of the Court's Feb. 15, 2012 Memorandum is available at http://is.gd/sIApj8from Leagle.com. Harry Palmer Altick filed his Chapter 11 petition (Bankr. N.D. Calif. Case No. 08-10419) on March 11, 2008. Bankruptcy Judge Alan Jaroslovsky presides over the case. The Law Offices of David N. Chandler -- DChandler1747@yahoo.com -- serves as the Debtor's counsel. In his petition, the Debtor estimated $1 million to $10 million in both assets and debts. HORIZON VILLAGE: Keith Harper OK'd to Provide Valuation Services ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada authorized Horizon Village Square LLC to employ Keith Harper of Valuation Consultants to provide valuation services in response to Wells Fargo Bank, N.A.'s objection to the confirmation of Debtor's Chapter 11 Plan. As reported in the Troubled Company Reporter on Jan. 27, 2012, through its objection, Wells Fargo contested to the Debtor's valuation of the real property. Prepetition, the Debtor engaged Harper to appraise real property known as the Horizon Village Square Shopping Center located near the intersection of the I-95 and Horizon Ridge Parkway, at 25 through 75 E. Horizon Ridge Parkway, Henderson, Nevada. As its appraiser and valuation expert, Mr. Harper will perform services at the rate of $500 per hour for depositions and $350 per hour for all other services, plus costs. To the best of the Debtor's knowledge, Mr. Harper is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Horizon Village Square et al. Four related Las Vegas, Nevada-based entities sought Chapter 11 bankruptcy protection on July 13, 2011. The businesses are owned or managed by local business people and firms, including Todd Nigro, Nigro Development LLC, a Nigro family trust and other investors. Horizon Village Square LLC (Bankr. D. Nev. Case No. 11-21034) owns the Vons-anchored Horizon Village Square Shopping Center near I-515 and Horizon Drive in Henderson. The property includes five retail buildings with nearly 43,000 square feet of space. Ten Saints LLC (Bankr. D. Nev. Case No. 11-21028) owns the 134- room Hampton Inn & Suites at St. Rose Parkway and Seven Hills Drive in Henderson. Beltway One Development Group LLC (Bankr. D. Nev. Case No. 11-21026) owns the Desert Canyon Business Park at Russell Road and the Las Vegas Beltway. It has two buildings and 15 acres. Nigro HQ LLC (Bankr. D. Nev. Case No. 11-21014) owns an office building at 9115 W. Russell Road occupied by Bank of George, Infinity Plus LLC and Nigro Construction Inc. Todd Nigro said the four bankruptcies were caused by threatened foreclosures -- typically related to Wells Fargo Bank demanding payments to keep loan-to-value ratios at specified levels. Judge Mike K. Nakagawa presides over the cases. Lawyers at Gordon Silver serve as the Debtors' bankruptcy counsel. The bankruptcy petitions estimated assets and debts from $1 million to $10 million each for Nigro HQ; and from $10 million to $50 million in both assets and debts for Horizon Village, Ten Saints and Beltway One. A fifth related business, Russell Boulder LLC, filed for bankruptcy (Bankr. D. Nev. Case No. 10-29724) on Oct. 19, 2010. It owns the 600-suite Siena Suites extended stay property at Boulder Highway and Russell Road. Edward M. Zachary, Esq., at Bryan Cave LLP, in Bryan Cave LLP, in Phoenix, Ariz., and Robert M. Charles, Jr., Esq., at Lewis and Roca LLP, in Las Vegas, Nev., represent Wells Fargo Bank, N.A., as counsel. HOSTESS BRANDS: Trade Groups, Others Slam Bid to Drop Pensions -------------------------------------------------------------- Hilary Russ at Bankruptcy Law360 reports that trade groups, pension advocates, ConAgra Foods Inc. and others joined the pushback Friday against Hostess Brands Inc.'s move to drop out of 24 multiemployer pension plans in its Chapter 11 case in New York bankruptcy court. Law360 relates that the companies say the move would allow Hostess to dump its $2 billion in pension obligations onto them, unfairly burdening them with increased costs while lifting the load from their competitor. As reported in the TCR on Jan. 23, 2012, a trial is set to begin March 5, 2012, on the company's bid to terminate existing pensions and retiree benefits. Hostess Brands Inc.'s official committee of unsecured creditors, which is dominated by labor unions and benefit plans, is opposing the proposal. Two baking companies have also filed an objection, arguing that the move could push smaller industry members toward insolvency. 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, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, 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. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein will head up the legal team for the committee. The bankruptcy judge on Feb. 3 gave Hostess Brands final authority for $75 million in secured financing. The day following the Jan. 11 Chapter 11 filing, Hostess had secured interim approval for a $35 million loan. HYLAND SOFTWARE: Moody's Affirms 'B2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service affirmed Hyland Software, Inc.'s B2 corporate family rating ("CFR") and the ratings for the Company's existing credit facilities. Moody's also assigned a B2 rating to the Company's proposed $80 million of tack-on first lien term loans. Hyland will use the net proceeds from the add-on term loans and cash on hand to pay special dividend to its shareholders. The outlook for ratings is stable. RATINGS RATIONALE The proposed increase in debt to finance dividends will raise Hyland's Total Debt-to-EBITDA leverage by about 1.3x to 4.3x (incorporating Moody's standard analytical adjustments). The transaction effectively reverses the deleveraging attained since the last dividend recapitalization in December 2010. The affirmation of Hyland's B2 CFR reflects Moody's expectations that leverage will again trend down toward less than 4.0x in the next 12 months from EBITDA growth driven by Hyland's projected revenue growth in the mid- to high-single digits percentages benefiting from a growing Enterprise Content Management (ECM) software market and through good sales execution. The B2 CFR is supported by Hyland's competitive market position, especially in the mid-market segment, and its well-regarded industry verticals-focused product offerings in a growing ECM software market; its high levels of recurring revenues, and the Company's good free cash flow generation prospects resulting from revenue growth and high EBITDA margins. However, the rating is constrained by the aggressive financial policies of Hyland's shareholders, and the Company's modest operating scale, particularly relative to the larger and financially stronger ECM competitors. The rating additionally considers Hyland's limited product portfolio within the ECM software segment and the expectation that the Company's financial leverage will likely remain in the 3.5x to 4.5x range in the intermediate term. The stable outlook reflects Moody's expectation that Hyland will maintain its competitive market position and generate good revenue growth in the mid-single digits percentages. The outlook also incorporates Moody's expectation that Hyland will continue to make small targeted acquisitions to build out its vertical-market focused growth strategy. Given Hyland's modest scale, narrow industry focus, and the potential for future shareholder distributions, a rating upgrade is unlikely over the near-term. However, to the extent that the Company is able to increase its scale while maintaining a conservative and predictable leverage profile and good liquidity position, the ratings or the outlook could be raised. Conversely, Moody's could downgrade Hyland's ratings if the Company's operating performance or market share experience sustained declines, and as a result the Company is unable to maintain Total Debt-to-EBITDA (Moody's adjusted) leverage below 5.5x and free cash flow falls below 10% of its adjusted debt. Additionally, deterioration in liquidity, or a material degradation in the Company's business or financial risk profile resulting from aggressive shareholder-oriented financial policies or a large, transformative acquisition could trigger a downgrade. These ratings were affirmed: Corporate Family Rating -- B2 Probability of Default Rating -- B3 $20 Million Senior Secured Revolving Credit Facility due 2015 -- B2 (LGD3 - 35%) $205 Million ($194 Million outstanding) Senior Secured Term Loan due 2016 -- B2 (LGD3 - 35%) The following rating was assigned: $80 Million of add-on Senior Secured Term Loan due 2016 -- B2 (LGD3 - 35%) The principal methodology used in rating Hyland Software, Inc. was the Global Software Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Westlake, OH, Hyland Software, Inc. provides Enterprise Content Management software solutions to enterprise customers. Private equity firm Thoma Bravo owns majority equity interest in the Company. IMPLANT SCIENCES: Incurs $3.3 Million Net Loss in Dec. 31 Qtr. -------------------------------------------------------------- Implant Sciences Corporation filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $3.29 million on $1.13 million of revenue for the three months ended Dec. 31, 2011, compared with a net loss of $9.39 million on $3.14 million of revenue for the same period a year ago. The Company also reported a net loss of $15.55 million on $6.65 million of total revenues for the year ended June 30, 2011, compared with a net loss of $15.52 million on $3.47 million of total revenues for the same period during the prior year. The Company reported a net loss of $6.36 million on $2.16 million of revenue for the six months ended Dec. 31, 2011, compared with a net loss of $10.03 million on $4.15 million of revenue for the same period during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $7 million in total assets, $33.03 million in total liabilities and a $26.03 million in total stockholders' deficit. Marcum LLP, in Boston, Massachusetts, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has had recurring net losses and continues to experience negative cash flows from operations. As of Sept. 30, 2011, the Company's principal obligation to its primary lender was approximately $23,115,000 with accrued interest of approximately $1,705,000. A full-text copy of the Form 10-Q is available for free at: http://is.gd/vTu0gz About Implant Sciences Implant Sciences Corporation (OBB: IMSC.OB) -- http://www.implantsciences.com/-- develops, manufactures and sells sensors and systems for the security, safety and defense (SS&D) industries. Bankruptcy Warning The Company's ability to comply with its debt covenants in the future depends on its ability to generate sufficient sales and to control expenses, and will require the Company to seek additional capital through private financing sources. In addition, the Company will require substantial funds for further research and development, regulatory approvals, and the marketing of its explosives detection products. The Company's capital requirements depend on numerous factors, including but not limited to the progress of the Company's research and development programs; the cost of filing, prosecuting, defending and enforcing any intellectual property rights; competing technological and market developments; changes in the Company's development of commercialization activities and arrangements; and the hiring of additional personnel, and acquiring capital equipment. There can be no assurances that the Company will achieve its forecasted financial results or that the Company will be able to raise additional capital to operate its business. Any failure to comply with the Company's debt covenants, to achieve its projections or obtain sufficient capital on acceptable terms would have a material adverse impact on the Company's liquidity, financial condition and operations and could force the Company to curtail or discontinue operations entirely or file for protection under bankruptcy laws. INTEGRATED BIOPHARMA: Delays Form 10-Q for December 31 Quarter -------------------------------------------------------------- Integrated BioPharma, Inc., informed the U.S. Securities and Exchange Commission that its quarterly report on Form 10-Q for the quarterly period ended Dec. 31, 2011, cannot be filed within the prescribed time period because the Company is experiencing delays in the collection and compilation of certain information required to be included in the Form 10-Q. The Company's Quarterly Report on Form 10-Q will be filed on or before the fifth calendar day following the prescribed due date. About Integrated BioPharma Based in Hillside, N.J., Integrated BioPharma, Inc. (INBP.OB) -- -- http://www.healthproductscorp.us/ -- is engaged primarily in manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products. The Company's customers are located primarily in the United States. The Company was previously known as Integrated Health Technologies, Inc., and, prior to that, as Chem International, Inc. The Company was reincorporated in its current form in Delaware in 1995. The Company continues to do business as Chem International, Inc., with certain of its customers and certain vendors. The Company reported a net loss of $2.28 million on $25.13 million of net sales for the fiscal year ended June 30, 2011, compared with a net loss of $5.53 million on $20.16 million of net sales during the prior fiscal year. The Company's balance sheet at Sept. 30, 2011, showed $13.41 million in total assets, $20.73 million in total liabilities, all current, and a $7.32 million total stockholders' deficiency. Friedman, LLP, in East Hanover, NJ, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a working capital deficiency, recurring net losses and has defaulted on its debt obligations. INTEGRATED ENVIRONMENTAL: McAdoo Discloses 15.9% Equity Stake ------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, McAdoo Capital, Inc., and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 21,525,579 shares of common stock of Integrated Environmental Technologies, Ltd., representing 15.9% of the shares outstanding. A full-text copy of the filing is available for free at: http://is.gd/5vbrAC About Integrated Environmental Little River, S.C.-based Integrated Environmental Technologies, Ltd., through its wholly-owned subsidiary I.E.T., Inc., designs, manufactures, and sells EcaFlo(R) equipment, which utilizes the Electro-Chemical Activation process to generate environmentally responsible EcaFlo(R) solutions - anolyte and catholyte - for use in managing and controlling bacteria, fungi, viruses and other unwanted microorganisms in an effective and economically beneficial manner over a variety of commercial and industrial applications. The Company's balance sheet at June 30, 2010, showed $1,293,820 in total assets, $988,674 in total current liabilities, and $305,146 in stockholders' equity. Following the Company's annual results for 2009, Weaver & Martin LLC, in Kansas City, Mo., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company's ability to continue as a going concern is dependent upon obtaining additional sources of capital or borrowings. In the Form 10-Q, the Company acknowledges that as a result of its deficiency in working capital at December 31, 2009 and June 30, 2010, its auditors expressed substantial doubt about its ability to continue as a going concern. The Company says its ability to continue as a going concern is dependent upon attaining profitable operations. ISAACSON STRUCTURAL: Seeks to Auction Off New Hampshire Property ---------------------------------------------------------------- Isaacson Steel, Inc., and Isaacson Structural Steel, Inc., ask the U.S. Bankruptcy Court for the District of New Hampshire for authorization to sell their real estate commonly known and numbered as 40 Jericho Road, Berlin, New Hampshire and all or substantially all of Debtor's operating assets. The Debtors relate that they had engaged in more than preliminary discussions with several qualified, potential stalking horses or bidders for the purchased assets. One has made an oral offer for the operating assets and the right to lease the real estate from BIDPA or the City of Berlin, New Hampshire due to environmental concerns that would have been allayed by the Ground Water Monitoring Report and the Phase I and II Environmental Surveys provided by Debtor. At this time, Debtor expects to enter into a stalking horse agreement. In connection with the negotiation of a stalking horse agreement, the Debtor reserves the right to include, and request the approval of the stalking horse protection for the benefit of the first stalking horse to make an offer determined to be fair and reasonable by the Debtor after considering the advice of Debtor's professionals and consulting with the Committee, New Hampshire Business Finance Authority and Passumpsic Savings. The stalking horse protection includes a break-up fee and a requirement that an initial bid exceed the purchase price offered by stalking horse, plus an amount equal to 120% of the Break-up fee. In subsequent rounds of bidding, each qualified bidder will be required to increase the highest bid by at least $25,000. If Debtor enters into one or more stalking horse agreements, the Debtor will file a separate motion which seeks approval of the sale of the real estate or operating assets to the stalking horse or horses, well as the assumption and assignment of any assigned contracts subject to higher and better bids made at an auction conducted in accordance with the bid procedures and assumption and assignment procedures, as proposed or modified by the order granting the motion. Agency's Objection New Hampshire Business Finance Authority, in its objection to the sale of certain assets, related that the motion contemplates that a portion of the proceeds from the sale will be deposited into a non-interest bearing IOLTA account, "...which shall belong to the Debtors and may be used by the Debtors to pay superpriority administrative claims, administrative claims..." BFA asserted that the unencumbered funds, as a portion of the proceeds of the sale, must be held and disbursed only in accordance with the terms of the BFA Approval Order. BFA is represented by: George J. Marcus, Esq. Jennie L. Clegg, Esq. MARCUS, CLEGG & MISTRETTA, P.A. One Canal Plaza, Suite 600 Portland, ME 04101 Tel: (207) 828-8000 About Isaacson Structural Steel Based in Berlin, New Hampshire, Isaacson Structural Steel, Inc., filed for Chapter 11 bankruptcy (Bankr. D. N.H. Case No. 11-12416) on June 22, 2011. Bankruptcy Judge J. Michael Deasy presides over the case. Isaacson Structural Steel estimated both assets and debts of $10 million to $50 million. The petition was signed by Arnold P. Hanson, Jr., president. An official committee of unsecured creditors has been appointed in Isaacson Structural Steel's case. Nixon Peabody LLP, and Mesirow Financial Consultants represents the Committee. A bankruptcy petition was also filed for Isaacson Steel, Inc. (Bankr. D. N.H. Case No. 11-12415) on June 22, 2011, estimating assets and debts of $1 million to $10 million. The petition was signed by Arnold P. Hanson, Jr., president. William S. Gannon, Esq., also represents Isaacson Steel. No trustee or examiner has been appointed in this case. J.O.C. FARMS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: J.O.C. Farms, L.L.C. 4483 US Hwy 264 East Greenville, NC 27834 Bankruptcy Case No.: 12-01285 Chapter 11 Petition Date: February 20, 2012 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Debtor's Counsel: William P. Janvier, Esq. JANVIER LAW FIRM, PLLC 1101 Haynes Street, Suite 102 Raleigh, NC 27604 Tel: (919) 582-2323 Fax: (866) 809-2379 E-mail: bill@janvierlaw.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb12-01285.pdf The petition was signed by Joseph D. Briley, Jr., member/manager. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Joseph D. Briley, Jr. 12-01284 02/20/12 JJJ HOLDING: Case Summary & Largest Unsecured Creditor ------------------------------------------------------ Debtor: JJJ Holding LLC 6995 West Grand River Brighton, MI 48114 Bankruptcy Case No.: 12-30682 Chapter 11 Petition Date: February 20, 2012 Court: United States Bankruptcy Court Eastern District of Michigan (Flint) Judge: Daniel S. Opperman Debtor's Counsel: Charles G. Hodgson, Esq. THE LAW OFFICES OF CHARLES G. HODGSON 8163 Grand River Road, Suite 100 Brighton, MI 48114 Tel: (810) 225-4377 Fax: (810) 225-2892 E-mail: carterlaw@comcast.net Estimated Assets: $0 to $50,000 Estimated Debts: $500,001 to $1,000,000 Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Charles G Jackson 10-36697 12/23/10 JDK Holdings LLC 12-30683 02/20/12 Assets: $0 to $50,000 Debts: $1,000,001 to $10,000,000 JFJ Enterprises, LLC 12-30690 02/20/12 Assets: $0 to $50,000 Debts: $1,000,001 to $10,000,000 J T Enterprises LLC 12-30691 02/20/12 In its list of 20 largest unsecured creditors, JJJ Holding placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Citizens Bank Bank Loan $756,388 328 South Saginaw Street Flint, MI 48502 In its list of 20 largest unsecured creditors, JDK Holdings placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Citizens Bank Bank loan $1,213,462 328 South Saginaw Street Flint, MI 48502 In its list of 20 largest unsecured creditors, JFJ Enterprises placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Citizens Bank Bank Loan $997,534 328 South Saginaw Street Flint, MI 48502 The petitions were signed by David C. Jackson, member. KMC REAL ESTATE: Doctor Wants Plan Disclosures Disapproved ---------------------------------------------------------- Creditor Satya Garimella filed the U.S. Bankruptcy Court for the Southern District of Indiana its objection to the Disclosure Statement explaining KMC Real Estate Investors LLC's proposed Plan of Reorganization dated Jan. 18, 2012. According to Dr. Garimella, the Disclosure Statement does not address his claim and those of similarly-situated guarantors and therefore does not contain adequate information, as defined in Section 1125(a) of the Bankruptcy Code, to allow him to make an informed judgment about the Plan. Dr. Garimella is one of approximately 30 doctors who, in 2007, signed agreements guaranteeing repayment of varying amounts of a $21.5 million construction loan made by Branch Banking and Trust Company to the Debtor KMC Real Estate Investors, LLC. BB&T subsequently assigned the construction loan to creditor RL BB Financial, LLC. Rialto's claim in this bankruptcy case is based upon the amounts due under the construction loan. The Chapter 11 Plan As reported in the Troubled Company Reporter on Feb. 10, 2012, the Debtor's ability to fund the Plan is premised on the Debtor's and the Debtor's former lessee and intended future lessee Kentuckiana Medical Center, LLC's ability to obtain exit financing, as co- makers, from a willing lender in the anticipated principal amount of $37,000,000. In addition to the $37,000,000 loan, the Debtor will obtain capital contributions from practicing physicians in the greatest-Louisville area in the cumulative value of at least $3,854,000. The $40,854,000 is believed to be sufficient to allow KMC to continue to operate the hospital and manage its assets. The Debtor and KMC have negotiated with Argenta Group LLC, doing business as Argenta Financial to function as exit lender. Under the Plan, RL BB Financial, LLC (Rialto) will receive $16,000,000 in cash in full satisfaction of its secured claim ($21,998,664). The Debtor will deliver to the holders of allowed class 3-A claim (unsecured claim of Rialto amounting to $5,997,664) a promissory note which will bear interest at a rate of 3% per annum, and will be paid 10 years after the effective date. In relation to the unsecured claim of Cardinal Health and Healthcare practice Consultants, the Debtor will commence making cash distributions to holders of allowed class 3B claims representing each holder's pro rata portion of regular payments totaling $7,765 per month for 60 months. The Debtors' liability to Divlend Equipment Leasing, LLC, under the subject guaranty will remain intact following confirmation. The payment unsecured obligations owing to Divlend will be satisfied according to the KMX Plan documents and any confirmation order entered in KMC's Chapter 11 case. Equity Interests Holders of Class 4 Interest will have their membership interests canceled. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/KMC_REAL_ESTATE_ds.pdf About KMC Real Estate Investors LLC Clarksville, Indiana-based KMC Real Estate Investors LLC owns certain real property located in Clark County, Indiana, commonly known as 4601 Medical Plaza Way, Clarksville, Indiana. The Company filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ind. Case No. 11-90930) on April 1, 2011. Gary Lynn Hostetler, Esq., and Courtney Elaine Chilcote, Esq., at Hostetler & Kowalik, P.C., in Indianapolis, Indiana, serve as the Debtor's bankruptcy counsel. The Debtor disclosed it has undetermined assets and $24,810,090 in liabilities as of the Chapter 11 filing. Affiliate Kentuckiana Medical Center, LLC, previously sought Chapter 11 protection (Bankr. S.D. Ind. Case No. 10-93039) on Sept. 9, 2010. As reported in the TCR on July 19, 2011, the Bankruptcy Court granted RL BB Financial relief from stay on the Debtor's assets. The relief from stay is effective on July 25, 2011, at the close of business. KITTS DEVELOPMENT: Judge Allows Bank to Proceed With Foreclosure ---------------------------------------------------------------- Rosalie Rayburn at Albuquerque Journal reports that the ruling by Judge Robert Jacobvitz of the U.S. Bankruptcy Court in Albuquerque, New Mexico, allows U.S. Bank to move ahead with a foreclosure sale to recoup some of the $10.3 million in loans, fees and interest it is owed by Kitts Development LLC. The report says Deron Knoner of Keleher and McLeod, the attorney representing the bank, estimated a foreclosure auction could be scheduled in about five weeks. According to the report, First Community Bank, which was acquired by U.S. Bank last year, sued Kitts in Sandoval County's 13th Judicial District Court in 2009 in an attempt to foreclose on the properties. The report says the Sandoval Court ruled in the bank's favor and U.S. Bank scheduled a foreclosure auction in September 2011. The day before the auction, Kitts manager and principal Tom Joseph filed for Chapter 11 bankruptcy protection which gave him 120 days to produce a plan to reorganize his finances so he could pay his debts. The report relates that Judge Jacobvitz supported Mr. Knoner's argument that there was good cause to allow the bank to move ahead because Kitts had produced no reorganization plan and there was no reasonable expectation that he would. Judge Jacobvitz also noted Kitts did not have any equity in Puerto del Sol, which is currently valued at $1.2 million. Based in Rio Rancho, New Mexico, Kitts Development LLC filed for Chapter 11 protection (Bankr. D. N.M. Case No. 11-14054) on Sept. 13, 2011. Judge Robert H. Jacobvitz presides over the case. William F. Davis, Esq., at William F. Davis & Associates, P.C., represents the Debtor. The Debtor disclosed assets of $1,385,261, and liabilities of $11,469,939. KURRANT MOBILE: Socius CG No Longer Owns Common Shares ------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Socius CG II, Ltd., and its affiliates disclosed that, as of Dec. 31, 2011, they do not beneficially own any shares of common stock of Cogito Media Group Inc. formerly known as Kurrant Mobile Catering, Inc. A full-text copy of the filing is available for free at http://is.gd/DGuuYG In June 2011, Kurrant issued to Socius 58,716,019 shares of common stock -- representing 9.9% of the total shares outstanding -- to settle a lawsuit filed by Socius. About Kurrant Mobile Montreal, Quebec-based Kurrant Mobile Catering, Inc., operates in a single business segment that includes the publication and distribution of books and eBooks. The Company sells its products to distributors throughout the world. The Company's balance sheet at Nov. 30, 2010, showed $1.02 million in total assets, $1.71 million in total liabilities, and a $686,774 stockholders' deficit. According to the Form 10-Q for the quarter ended Nov. 30, 2010, "The Company has incurred net losses and has negative cash flows from its operations. These factors raise substantial doubt regarding Kurrant Mobile's ability to continue as a going concern. Realization value may be substantially different from carrying values as shown and these financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should Kurrant Mobile be unable to continue as a going concern. The continuation of Kurrant Mobile as a going concern is dependent upon the continued financial support from its shareholders, the ability of Kurrant Mobile to obtain necessary equity financing to continue operations, and the attainment of profitable operations." LA JOLLA: Boxer Capital Discloses 8.6% Equity Stake --------------------------------------------------- Boxer Capital, LLC, et al., filed with the U.S. Securities and Exchange Commission an amended Schedule 13G disclosing that, as of Dec. 31, 2011, they beneficially own 6,789,077 shares of common stock of La Jolla Pharmaceutical Company representing 8.6% based on 79,141,309 common shares reported outstanding as of Nov. 9, 2011, on the Company's Quarterly Report on Form 10-Q filed on Nov. 11, 2011. A full-text copy of the regulatory filing is available for free at http://is.gd/EgHpsC About La Jolla Pharmaceutical San Diego, Calif.-based La Jolla Pharmaceutical Company (OTC BB: LJPC) -- http://www.ljpc.com/-- is a biopharmaceutical company that has historically focused on the development and testing of Riquent as a treatment for Lupus nephritis. La Jolla's balance sheet at Sept. 30, 2011, showed $5.51 million in total assets, $2.62 million in total liabilities, all current, $5.14 million in Series C-1 1 redeemable convertible preferred stock, and a $2.25 million total stockholders' deficit. The Company reported a net loss of $3.76 million on $0 of revenue from collaboration agreement for the year ended Dec. 31, 2010, compared with a net loss of $8.63 million on $8.12 million of revenue from collaboration agreement during the prior year. The Company has a history of recurring losses from operations and, as of Sept. 30, 2011, the Company had no revenue sources, an accumulated deficit of $426,306,000 and available cash and cash equivalents of $5,502,000 of which up to $5,140,000 could be required to be paid upon the exercise of redemption rights under the Company's outstanding preferred securities. That redemption was not considered probable as of Sept. 30, 2011. As reported by the TCR on April 18, 2011, BDO USA, LLP, in San Diego, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The independent auditors noted that the Company has suffered recurring losses from operations, an accumulated deficit of $428 million as of Dec. 31, 2010 and has no current source of revenues. LA JOLLA: Tang Capital Holds 9.9% Equity Stake ---------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Tang Capital Partners, LP, et al., disclosed that, as of Dec. 31, 2011, they beneficially own 8,327,088 shares of common stock of La Jolla Pharmaceuticals Company representing 9.9% of the shares outstanding. A full-text copy of the regulatory filing is available at http://is.gd/9P98EL About La Jolla Pharmaceutical San Diego, Calif.-based La Jolla Pharmaceutical Company (OTC BB: LJPC) -- http://www.ljpc.com/-- is a biopharmaceutical company that has historically focused on the development and testing of Riquent as a treatment for Lupus nephritis. La Jolla's balance sheet at Sept. 30, 2011, showed $5.51 million in total assets, $2.62 million in total liabilities, all current, $5.14 million in Series C-1 1 redeemable convertible preferred stock, and a $2.25 million total stockholders' deficit. The Company reported a net loss of $3.76 million on $0 of revenue from collaboration agreement for the year ended Dec. 31, 2010, compared with a net loss of $8.63 million on $8.12 million of revenue from collaboration agreement during the prior year. The Company has a history of recurring losses from operations and, as of Sept. 30, 2011, the Company had no revenue sources, an accumulated deficit of $426,306,000 and available cash and cash equivalents of $5,502,000 of which up to $5,140,000 could be required to be paid upon the exercise of redemption rights under the Company's outstanding preferred securities. That redemption was not considered probable as of Sept. 30, 2011. As reported by the TCR on April 18, 2011, BDO USA, LLP, in San Diego, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The independent auditors noted that the Company has suffered recurring losses from operations, an accumulated deficit of $428 million as of Dec. 31, 2010 and has no current source of revenues. LA JOLLA: RTW Investments No Longer Has Equity Stake ---------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, RTW Investments, LLC, and its affiliates disclosed that, as of Dec. 31, 2011, they do not beneficially own any shares of common stock of La Jolla Pharmaceutical Company. A full-text copy of the Schedule is available at http://is.gd/IVVrnA About La Jolla Pharmaceutical San Diego, Calif.-based La Jolla Pharmaceutical Company (OTC BB: LJPC) -- http://www.ljpc.com/-- is a biopharmaceutical company that has historically focused on the development and testing of Riquent as a treatment for Lupus nephritis. La Jolla's balance sheet at Sept. 30, 2011, showed $5.51 million in total assets, $2.62 million in total liabilities, all current, $5.14 million in Series C-1 1 redeemable convertible preferred stock, and a $2.25 million total stockholders' deficit. The Company reported a net loss of $3.76 million on $0 of revenue from collaboration agreement for the year ended Dec. 31, 2010, compared with a net loss of $8.63 million on $8.12 million of revenue from collaboration agreement during the prior year. The Company has a history of recurring losses from operations and, as of Sept. 30, 2011, the Company had no revenue sources, an accumulated deficit of $426,306,000 and available cash and cash equivalents of $5,502,000 of which up to $5,140,000 could be required to be paid upon the exercise of redemption rights under the Company's outstanding preferred securities. That redemption was not considered probable as of Sept. 30, 2011. As reported by the TCR on April 18, 2011, BDO USA, LLP, in San Diego, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The independent auditors noted that the Company has suffered recurring losses from operations, an accumulated deficit of $428 million as of Dec. 31, 2010 and has no current source of revenues. LANCE CHATKIN: Steel Firms May Pursue RICO Action ------------------------------------------------- Chief Bankruptcy Judge Thomas P. Agresti granted, with certain limitations, the request of O'Neal Steel, Inc., and Leeco Steel, LLC, for relief from the automatic stay in the bankruptcy case of Lance Chatkin to pursue RICO action. Mr. Chatkin is the President and majority shareholder of General Purpose Steel, Inc., a company engaged in the sale of steel products. On Jan. 14, 2011, prior to the filing of the Chatkin and GPS bankruptcies, O'Neal and Leeco filed a civil complaint in the United States District Court for the Northern District of Alabama at C.A. No. 11-00137-KOB. Named as defendants in the RICO Action are Mr. Chatkin, GPS, another steel sales company called Worldwide Steel Unlimited, Inc., and an individual named Bruce Adelstein. Mr. Chatkin and GPS allegedly joined with Mr. Adelstein in creating Worldwide in 2009. Mr. Chatkin's Petition at Schedule B indicates he has a 95% share interest in Worldwide, which is described as a "defunct private corporation," apparently having ceased operations in April 2010. The complaint in the RICO Action sets forth a claim under "RICO" itself (i.e., the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Sections 1961- 1968 as well as Alabama state law causes of action for fraud, misrepresentation, negligence and wantonness, civil conspiracy, and breach of contract and warranty. The RICO Action complaint alleges that since 2009 O'Neal and Leeco have bought steel on numerous occasions from Worldwide for the purpose of reselling the steel to O'Neal and Leeco's customers. Worldwide, in turn, obtained the steel from GPS. The purchases by O'Neal and Leeco from Worldwide were initiated by purchase orders indicating that the steel must meet certain quality standards established by ASTM International, a widely recognized organization that develops and publishes technical standards for products and materials, including steel. The complaint further alleges that GPS and Worldwide, through the actions of Messrs. Chatkin and Adelstein, engaged in a scheme whereby they would buy low grade steel from various mills and then sell it to O'Neal and Leeco, passing it off as higher quality steel through the use of phony or altered "certificates of conformance" and "mill test reports" that were provided to O'Neal and Leeco. The case is O'NEAL STEEL, INC. and LEECO STEEL, LLC., Movants, v. LANCE CHATKIN, Respondent, Case No. 11-21911 (Bankr. W.D. Pa.). A copy of the Court's Feb. 17, 2012 Memorandum Opinion and Order is available at http://is.gd/ojkB3kfrom Leagle.com. Lance Chatkin filed a Chapter 11 petition (Bankr. W.D. Pa. Case No. 11-21911) on March 30, 2011. Turtle Creek, Pennsylvania, General Purpose Steel, Inc., filed a separate Chapter 11 bankruptcy petition (Bankr. W.D. Pa. Case No. 11-21907) on the same day. Judge Thomas P. Agresti presides over the cases. Steven T. Shreve, Esq., serves as the Debtors' counsel. GPS estimated $1 million to $10 million in assets and debts. The GPS petition was signed by Mr. Chatkin, president. LANDAMERICA FINANCIAL: Insurers Say $38M Deal With Lloyd's Unfair ----------------------------------------------------------------- Christopher Norton at Bankruptcy Law360 reports that a $38 million settlement that a LandAmerica Financial Group Inc. trustee struck with Lloyd's of London underwriters over errors and omissions insurance policy claims would deprive other insured parties of their rights under the policy, three other insurers told a Virginia bankruptcy court Thursday. Gerard A. McHale Jr., liquidation trustee for LandAmerica 1031 Exchange Services Inc., asked the bankruptcy court to approve the settlement in January, saying it is a good alternative to a protracted legal battle for insurance coverage against the claims of 1031 Exchange, Law360 relates. About LandAmerica Financial LandAmerica Financial Group, Inc., provided real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services Inc. filed for Chapter 11 protection (Bankr. E.D. Va. Lead Case No. 08-35994) on Nov. 26, 2008. Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP served as co-counsel. Zolfo Cooper served as restructuring advisor. Epiq Bankruptcy Solutions served as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran PLC served as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan served as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG reported total assets of $3.325 billion and total debts of $2.839 billion as of Sept. 30, 2008. On March 6, 2009, March 27, 2009, March 31, 2009, July 17, 2009, Oct. 12, 2009, and Nov. 4, 2009, various LFG affiliates -- LandAmerica Assessment Corporation, LandAmerica Title Company, Southland Title Corporation, Southland Title of Orange County, Southland Title of San Diego, LandAmerica Credit Services, Inc., Capital Title Group, Inc., and LandAmerica OneStop Inc. -- also commenced voluntary Chapter 11 cases. The Chapter 11 cases of LFG, LES, and the LFG Affiliates are jointly administered under case number 08-35994. LandAmerica filed a Joint Plan of Liquidation on Sept. 9, 2009. The Court on Nov. 23, 2009, entered an order confirming the Joint Chapter 11 Plan of LFG and its Affiliated Debtors, dated Nov. 16, 2009, as to all Debtors other than OneStop. The effective date with respect to the Plan was Dec. 7, 2009. Plan trustees were appointed for LFG and LES. LEHMAN BROTHERS: Wants to Compel BLX to Comply With Subpoena ------------------------------------------------------------ Lehman Brothers Holdings Inc. asked the U.S. Bankruptcy Court in Manhattan to force Bond Logistix LLC to comply with the subpoena it served on the firm last year. Bond Logistix has served as financial adviser of Idaho Housing Finance Association in connection with its swap deals with Lehman. In May of last year, the investment advisory firm was served a subpoena to turn over documents related to the swap deals, including valuation spreadsheets, in "native file format" but it allegedly refused to do so. Bond Logistix instead produced the documents in paper form, which are "unreadable," according to Lehman lawyer, Richard Slack, Esq., at Weil Gotshal & Manges LLP, in New York. Lehman also questioned the firm's demand for reimbursement of costs it would incur for reproducing the documents, saying a provision of U.S. bankruptcy laws does not require a bankrupt company to reimburse a witness for the costs of responding to a subpoena. "BLX can much more readily bear the costs of complying with the subpoena than Lehman as Lehman is a bankrupt entity," Mr. Slack further said in court papers. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: To Sell 301 2nd Lien Loans for $3.27-Mil. ---------------------------------------------------------- Lehman Brothers Holdings Inc. announced its plan to sell to a highest bidder a portfolio of 301 second lien loans. The company expects to get $3,270,249 from the sale of the loans, which have an unpaid principal balance of $13,626,041 as of December 31, 2011. The final purchase price and number of second lien loans to be included in the sale is subject to change upon the buyers' due diligence of the asset, Lehman said in court papers. Any objection to the proposed sale were due Feb. 17, 2012. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Providence Fails in Attempt for "Customer Claims" ------------------------------------------------------------------ PEP Credit Investor L.P., Providence Equity Partners VI L.P., Providence Equity Partners VI-A L.P., and Providence TMT Special Situations Fund L.P., asked the bankruptcy court to establish a discovery and briefing schedule for their objections to the determinations of their customer claims by James W. Giddens, the trustee for the liquidation of the business of Lehman Brothers Inc. pursuant to the Securities Investor Protection Act of 1970. In the event the Court does not grant the Funds' customer claims on the papers and legal arguments, the Funds also ask that the Court schedule an evidentiary hearing to address any remaining issues by Feb. 29, 2012, or in the alternative, the Funds ask for a status conference to discuss an appropriate schedule. Bankruptcy Judge James Peck, however, denied the Motion without prejudice. Mr. Giddens filed an objection, contending that the Motion presents yet another misguided attempt by the Funds to obtain preferential treatment and disrupt the orderly resolution of the complex, interrelated claims of LBIE for billions of dollars of which their accounts are a relatively small part. He argued that the bold assertions the Funds now make that they are direct customers of LBI with respect to the assets they are claiming are refuted by their own prior statements, as well as by LBI's books and records. Private Investment Funds The Funds are private investment funds that, prior to the commencement of LBI's SIPA proceeding, entered into written prime brokerage agreements with LBI and entrusted securities to LBI for the purpose of the Funds' investment strategies. Notwithstanding this direct customer-prime broker relationship between the Funds and LBI, the LBI Trustee has denied the Funds' customer claims, asserted David J. Molton, Esq., at Brown Rudnick LLP, in New York. He notes that the LBI Trustee takes the position that the Funds are not "customers" of LBI, but instead are customers only of Lehman Brothers International (Europe). On January 30, 2009, LBIE filed an omnibus "customer" claim against LBI to recover $16.3 billion in customer property on behalf of approximately 1,100 purported LBIE prime brokerage clients, including the Funds. Mr. Molton says the Funds never authorized LBIE to file customer claims on their behalf. LBIE also filed a "House" claim that, as amended, seeks $8.9 billion in securities and cash from LBI as customer property purportedly associated with trading activity for LBIE's own account, and on behalf of LBIE's prime-broker clients. The LBIE House Claim includes a claim for the Funds' securities entrusted to LBI. In September 2010, the LBI Trustee issued a partial claim determination for LBIE's Omnibus Customer Claim, allowing the claim with respect to a specified list of securities valued at approximately $6.2 billion. The LBI Trustee also issued his determination denying LBIE's House Claim customer status, rejecting a portion of the House Claim outright and reclassifying the remainder of LBIE's House Claim as a general unsecured claim. The LBI Trustee's position that the Funds are not "customers" of LBI but are customers of LBIE is not only without merit in light of the contractual agreements between the Funds and LBI, it also causes significant and ongoing prejudice to the Funds, Mr. Molton claimed in court papers. He said that the contractual agreements creating and governing the Funds' prime brokerage relationship with LBI and the Funds' ordinary course of dealing with LBI, unequivocally support the conclusion that the Funds were customers of LBI. The Official Committee of Unsecured Creditors appointed in the Debtors' Chapter 11 cases asserts that the Funds should have their day in court. At the very least, they are entitled to a status conference in which they may obtain some visibility as to when and how they will receive the information necessary to evaluate and make progress toward resolution of their claims, the Creditors' Committee asserted. LBIE, however, asked the Court to deny the Motion without prejudice to the Funds' ability to request similar relief at a later date. LBIE says it remains engaged in discussions with the LBI Trustee regarding the Omnibus Customer Claim and LBIE's objection against the LBI Trustee's determinations of the claims. LBIE suggests that constructive, out-of-court engagement among all parties would be a more fruitful and efficient use of resources at this time than the Funds' pursuit of individual litigation in the very near term. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Proposes Gianni Origoni as Special Counsel ----------------------------------------------------------- Lehman Brothers Holdings Inc. has filed an application to employ Gianni Origoni Grippo Cappelli & Partners as its special counsel. Gianni has served as an "ordinary course" professional of the company. Its fees and expenses, however, exceeded the $1 million compensation cap for OCPs, prompting Lehman to file the application pursuant to Section 327 of the Bankruptcy Code. The firm will continue to provide the same services, which include representing Lehman Brothers Derivative Products Inc. and Lehman Brothers Special Financing Inc. in cases before the Rome Civil Court. Gianni will also advise Lehman's affiliated debtors with respect to transactions aimed at liquidating their assets in Italy. Lehman proposed to pay Gianni for its services on an hourly basis and reimburse the firm for its expenses. The hourly rate for the firm's associates range from EUR160 to EUR250 while the rate for its partners ranges from EUR340 to EUR460. Meanwhile, the firm's senior partners are paid EUR600 per hour while its senior associates and counsel are paid EUR300 per hour. In court papers, Andrea Hartley, Esq., a partner at Gianni, said her firm does not hold nor represent interest adverse to Lehman or its estate. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Allowed Claim Holders Required to Submit Docs. --------------------------------------------------------------- Creditors with allowed claims are required to submit documents to Lehman Brothers Holdings, Inc.'s claim agent, Epiq Bankruptcy Solutions LLC, to receive distributions under the payout plan. The documents include an Internal Revenue Service tax form and a document certifying that the claimant is not a person or entity with whom it is illegal for a U.S. person to transact under the Office of Foreign Assets Control sanctions regulations or the list of Specially Designated Nationals and Blocked Persons. Claimants won't receive distributions unless Epiq receives original copies of the documents by March 1, 2012. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins Nod to Settle Barclays Bank Termination Fee ----------------------------------------------------------------- Lehman Brothers Holdings Inc. obtained court approval of an agreement with creditors to settle a dispute over Barclays Bank PLC's claim of a $7.5 million termination fee connected with the company's postpetition financing. Lehman arranged a $450 million loan from the U.K. bank when it filed for bankruptcy protection but it eventually dropped its motion for approval of the loan after seeing that cash was plentiful. Prior to this, the bankruptcy court issued an interim order in September 2008, which authorized the company to borrow $200 million. In a related development, the Official Committee of Unsecured Creditors withdrew its motion to reconsider the bankruptcy court's 2008 interim order. Barclays also dropped its objection in light of the settlement and the Committee's decision to withdraw the motion. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LIBERATOR INC: Reports $39,959 Net Income in Dec. 31 Quarter ------------------------------------------------------------ Liberator, Inc., filed with the U.S. Securities and Exchange Commission a Form 10-Q reporting net income of $39,959 on $4.29 million of net sales for the quarter ended Dec. 31, 2011, compared with a net loss of $361,489 on $3.69 million of net sales for the same period during the prior year. The Company reported a net loss of $132,986 on $7.24 million of net sales for the two quarters ended Dec. 31, 2011, compared with a net loss of $604,047 on $6.32 million of net sales for the same period a year ago. The Company had a net loss of $801,252 on $17.32 million of net sales for the year ended June 30, 2011, following a net loss of $1.03 million on $11.07 million of net sales during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $4.21 million in total assets, $5.13 million in total liabilities and a $920,159 total stockholders' deficit. Gruber & Company, LLC, in Lake Saint Louis, Missouri, noted that conditions exist which raise substantial doubt about the Company's ability to continue as a going concern unless it is able to generate sufficient cash flows to meet its financing requirements and attain profitable operations. A full-text copy of the Form 10-Q is available for free at: http://is.gd/cSRA9Y About Liberator Inc. Headquartered in Atlanta, Georgia, Liberator, Inc. is a provider of goods and information to consumers who believe that sensual pleasure and fulfillment are essential to a well-lived and healthy life. The information that the Company provides consists primarily of product demonstration videos that the Company shows on its websites and instructional DVD's that the Company sells. LIQUIDMETAL TECHNOLOGIES: Bank of America Has 5.5% Equity Stake --------------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Bank of America Corporation disclosed that, as of Dec. 30, 2011, it beneficially owns 7,401,187 shares of common stock of Liquidmetal Technologies Inc. representing 5.53% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/qOBxzf About Liquidmetal Technologies Based in Rancho Santa Margarita, Calif., Liquidmetal Technologies, Inc. and its subsidiaries are in the business of developing, manufacturing, and marketing products made from amorphous alloys. Liquidmetal Technologies markets and sells Liquidmetal(R) alloy industrial coatings and also manufactures, markets and sells products and components from bulk Liquidmetal alloys that can be incorporated into the finished goods of its customers across a variety of industries. The Company also partners with third- party licensees and distributors to develop and commercialize Liquidmetal alloy products. The Company classifies operations into two reportable segments: Liquidmetal alloy industrial coatings and bulk Liquidmetal alloys. Choi, Kim & Park LLP, in Los Angeles, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The Company has experienced losses from continuing operations during the last three fiscal years and has an accumulated deficit of $165,879 as of Dec. 31, 2010. Net cash provided by continuing operations for the year ended Dec. 31, 2010 was $10,080. At Dec. 31, 2010, working capital deficit was $14,180. As of Dec. 31, 2010, the Company's principal source of liquidity is $5,049 of cash and $1,731 of trade accounts receivable. The Company's restated statement of operations reflects a net loss of $4.69 million on $30.27 million of revenue for the year ended Dec. 31, 2010, compared with net income of $251,000 on $16.94 million of revenue during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $10.50 million in total assets, $25.72 million in total liabilities and a $15.22 million total shareholders' deficiency. LOCATION BASED TECHNOLOGIES: Gemini Stake Down to 0.8% ------------------------------------------------------ Gemini Strategies, LLC, and Steven Winters jointly filed with the U.S. Securities and Exchange Commission an amended Schedule 13G disclosing that, as of Dec. 31, 2011, they beneficially own 1,562,247 shares of Location Based Technologies, Inc., common stock of representing 0.8% based upon 192,260,333 shares of common stock outstanding as of Jan. 17, 2012, as reported in the Issuer's most recent report on Form 10-Q, plus the 1,562,247 shares which are issuable to Gemini upon conversion of the Convertible Notes. A full-text copy of the amended Schedule 13G filing is available at http://is.gd/5p9jBF About Location Based Technologies Headquartered in Irvine, Calif., Location Based Technologies, Inc. (OTC BB: LBAS) -- http://www.locationbasedtech.com/-- designs, develops, and sells personal, pet, and vehicle locator devices and services. Location Based Technologies reported a net loss of $8.22 million on $16,969 of total net revenue for the year ended Aug. 31, 2011, compared with a net loss of $9.06 million on $67,090 of total net revenue during the prior year. The Company's balance sheet at Aug. 31, 2011, showed $9.40 million in total assets, $4.17 million in total liabilities, $685,500 in commitments and contingencies and $4.53 million in total stockholders' equity. Comiskey & Company, in Denver Colorado, expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 results. The independent auditors noted that the Company has incurred recurring losses since inception and has an accumulated deficit in excess of $37,000,000. There is no established sales history for the Company's products, which are new to the marketplace. LOS ANGELES DODGERS: Beaten Fan, Others Object to Plan Disclosures ------------------------------------------------------------------ Lana Birbrair at Bankruptcy Law360 reports that a group including a Syncora Holdings Ltd. unit, U.S. Bank NA and a fan who suffered severe injuries last year at a baseball game objected Wednesday to the Los Angeles Dodgers LLC's pursuit of approval of their disclosure statement as part of the team's Chapter 11 proceedings. The four separate objections, including one filed by the Los Angeles County Treasurer and Tax Collector, reacted to various perceived faults in the disclosure statement and reorganization plan, including broad third-party releases from liability without creditors' consent, Law360 relates. Pot for McCourt Sweetened Meanwhile, Dow Jones' Daily Bankruptcy Review reports that the Los Angeles Dodgers Friday tossed several million dollars worth of real estate in the vicinity of Dodger Stadium into the pile of assets going to outgoing owner Frank McCourt. Disc. Statement Hearing Today 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. 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. LPATH INC: Amends Form S-1 Registration Statement ------------------------------------------------- Lpath, Inc., filed with the U.S. Securities and Exchange Commission Amendments No. 3 and No. 4 to the Form S-1 registration statement relating to the Company's offering up to 12,500,000 Units, with each Unit consisting of one share of the Company's common stock and 0.5 of a warrant to purchase one share of the Company's Class A common stock. Units will not be issued or certificated. The shares of Class A common stock and the warrants are immediately separable and will be issued separately, but will be purchased together in this offering. The Company is also registering the shares of Class A common stock issuable upon exercise of the warrants. The Company's Class A common stock is traded on the OTC Bulletin Board under the symbol "LPTN." On Feb. 8, 2012, the closing sale price of the Company's Class A common stock on the OTC Bulletin Board was $1.01 per share. The Company does not intend to list the warrants on any exchange or other trading system. Full-text copies of the amended prospectus are available at: http://is.gd/KvCpcH http://is.gd/vQWS6I About Lpath, Inc. San Diego, Calif.-based Lpath, Inc. is a biotechnology company focused on the discovery and development of lipidomic-based therapeutics, an emerging field of medical science whereby bioactive lipids are targeted to treat human diseases. The Company reported a net loss of $4.60 million on $7.83 million of total revenues for the year ended Dec. 31, 2010, compared with net income of $3.98 million on $11.91 million of total revenues during the prior year. As reported by the TCR on March 28, 2011, Moss Adams LLP, in San Diego, Calif., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements at the end of 2009. The independent auditors noted that the Company had incurred significant cash losses from operations since inception and expects to continue to incur cash losses from operations in 2010 and beyond. In its audit report for 2010, the auditor did not issue a going concern qualification. The Company's balance sheet at Sept. 30, 2011, showed $20.04 million in total assets, $15.61 million in total liabilities, and $4.42 million in total stockholders' equity. MAJESTIC CAPITAL: Hearing on Plan Disclosures Today --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reorts that Majestic Capital Ltd. filed a revised bankruptcy reorganization plan last week in advance of today's hearing for approval of the disclosure statement explaining the Chapter 11 plan. The disclosure statement to be presented for approval Feb. 22 explains how there are more than $1 billion in claims, including 15 significant litigated disputes. As far as the assets are concerned, the primary hope for recovery by creditors comes from Majestic's surplus in two insurance subsidiaries. The disclosure statement says that fixing the liabilities of the insurance companies "may take time to resolve." Mr. Rochelle relates that the plan in substance provides for distributions according to the priorities laid out in bankruptcy law, with secured creditors first receiving their collateral. The disclosure statement makes no guess about how much creditors might recover. About Majestic Capital Headquartered in Poughkeepsie, New York City, Majestic Capital, Ltd., formerly known as CRM Holdings Ltd., has two wholly owned subsidiaries, Majestic USA and Twin Bridges, a Bermuda-based reinsurance company. Twin Bridges and Majestic Insurance, a downstream subsidiary of Majestic USA are the two principal insurance companies. The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 11-36225) on April 29, 2011. Affiliates also sought Chapter 11 protection (Bankr. S.D.N.Y. Case Nos. 11-36221 thru 11-36234) on April 29, 2011. The Debtors have tapped Murphy & King, P.C. as their general bankruptcy counsel and Genova & Malin as their local counsel. The Debtors tapped Michelman & Robinson, LLP, as special counsel, and Day Seckler, LLP, as accountants and financial advisors. The Debtor disclosed $436,191,000 in assets and $421,757,000 in liabilities as of Dec. 31, 2010. Bruce F. Smith, Esq., and Steven C. Reingold, Esq., at Jager Smith P.C., serve as counsel to the Official Committee of Unsecured Creditors. J.H. Cohn LLP is the financial advisor. MARKETING WORLDWIDE: Socius No Longer Owns Shares ------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Socius CG II, Ltd., and its affiliates disclosed that, as of Dec. 31, 2011, they do not beneficially own any shares of common stock of Marketing Worldwide Corporation. A full-text copy of the filing is available at http://is.gd/ca4aOp About Marketing Worldwide Based in Howell, Michigan, Marketing Worldwide Corporation operates through the holding company structure and conducts its business operations through its wholly owned subsidiaries Colortek, Inc., and Marketing Worldwide, LLC. Marketing Worldwide, LLC, is a complete design, manufacturer and fulfillment business providing accessories for the customization of vehicles and delivers its products to large global automobile manufacturers and certain Vehicle Processing Centers primarily in North America. MWW operates in a 23,000 square foot leased building in Howell Michigan. Colortek, Inc., is a Class A Original Equipment painting facility and operates in a 46,000 square foot owned building in Baroda, which is in South Western Michigan. MWW invested approximately $2 million into this paint facility and expects the majority of its future growth to come from this business. The Company reported a net loss of $2.27 million on $1.91 million of revenue for the year ended Sept. 30, 2011, compared with a net loss of $2.34 million on $4.02 million of revenue during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $1.50 million in total assets, $6.06 million in total liabilities, $3.49 million in Series A convertible preferred stock, and a $8.05 million total stockholders' deficiency. RBSM LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's 2011 financing results. The independent auditors noted that the Company has generated negative cash flows from operating activities, experienced recurring net operating losses, is in default of loan certain covenants, and is dependent on securing additional equity and debt financing to support its business efforts. MCCLATCHY CO: Contrarius Holds 10.7% of Class A Shares ------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Contrarius Investment Management Limited and Contrarius Investment Management (Bermuda) Limited disclosed that, as of Dec. 31, 2011, they beneficially own 6,493,431 shares of Class A common stock of The McClatchy Company representing 10.7% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/ZzVpSO About The McClatchy Company Sacramento, Calif.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The Company's balance sheet at Sept. 25, 2011, showed $2.98 billion in total assets, $2.76 billion in total liabilities and $214.83 million stockholders' equity. The Company reported net income of $54.38 million on $1.26 billion of net revenues for the year ended Dec. 25, 2011, compared with net income of $36.18 million on $1.37 billion of net revenues for the year ended Dec. 26, 2010. * * * McClatchy carries a 'Caa1' corporate family rating from Moody's Investors Service. In May 2011, Moody's changed the rating outlook from stable to positive following the company's announcement that it closed on the sale of land in Miami for $236 million. The outlook change reflects Moody's expectation that McClatchy will utilize the net proceeds to reduce debt, including its underfunded pension position, which will reduce leverage by approximately half a turn and lower required contributions to the pension plan over the next few years. MCCLATCHY CO: Paulson & Co. Does Not Own Class A Shares ------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Paulson & Co. Inc. disclosed that, as of Dec. 31, 2011, he does not beneficially own any shares of Class A common stock of McClatchy Co. A full-text copy of the filing is available for free at http://is.gd/a11F0F About The McClatchy Company Sacramento, Calif.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The Company's balance sheet at Sept. 25, 2011, showed $2.98 billion in total assets, $2.76 billion in total liabilities and $214.83 million stockholders' equity. The Company reported net income of $54.38 million on $1.26 billion of net revenues for the year ended Dec. 25, 2011, compared with net income of $36.18 million on $1.37 billion of net revenues for the year ended Dec. 26, 2010. * * * McClatchy carries a 'Caa1' corporate family rating from Moody's Investors Service. In May 2011, Moody's changed the rating outlook from stable to positive following the company's announcement that it closed on the sale of land in Miami for $236 million. The outlook change reflects Moody's expectation that McClatchy will utilize the net proceeds to reduce debt, including its underfunded pension position, which will reduce leverage by approximately half a turn and lower required contributions to the pension plan over the next few years. MCCLATCHY CO: Dimensional Fund Holds 5.3% of Class A Shares ----------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Dimensional Fund Advisors LP disclosed that, as of Dec. 31, 2011, it beneficially owns 3,217,728 shares of Class A common stock of The McClatchy Company representing 5.31% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/X4hmMB About The McClatchy Company Sacramento, Calif.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The Company's balance sheet at Sept. 25, 2011, showed $2.98 billion in total assets, $2.76 billion in total liabilities and $214.83 million stockholders' equity. The Company reported net income of $54.38 million on $1.26 billion of net revenues for the year ended Dec. 25, 2011, compared with net income of $36.18 million on $1.37 billion of net revenues for the year ended Dec. 26, 2010. * * * McClatchy carries a 'Caa1' corporate family rating from Moody's Investors Service. In May 2011, Moody's changed the rating outlook from stable to positive following the company's announcement that it closed on the sale of land in Miami for $236 million. The outlook change reflects Moody's expectation that McClatchy will utilize the net proceeds to reduce debt, including its underfunded pension position, which will reduce leverage by approximately half a turn and lower required contributions to the pension plan over the next few years. MCCLATCHY CO: BlueMountain Owns 6.7% of Class A Shares ------------------------------------------------------ In a Schedule 13G filing with the U.S. Securities and Exchange Commission, BlueMountain GP Holdings, LLC, disclosed that, as of Dec. 31, 2011, it beneficially owns 4,047,968 shares of Class A common stock of The McClatchy Company representing 6.7% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/e42Cc4 About The McClatchy Company Sacramento, Calif.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The Company's balance sheet at Sept. 25, 2011, showed $2.98 billion in total assets, $2.76 billion in total liabilities and $214.83 million stockholders' equity. The Company reported net income of $54.38 million on $1.26 billion of net revenues for the year ended Dec. 25, 2011, compared with net income of $36.18 million on $1.37 billion of net revenues for the year ended Dec. 26, 2010. * * * McClatchy carries a 'Caa1' corporate family rating from Moody's Investors Service. In May 2011, Moody's changed the rating outlook from stable to positive following the company's announcement that it closed on the sale of land in Miami for $236 million. The outlook change reflects Moody's expectation that McClatchy will utilize the net proceeds to reduce debt, including its underfunded pension position, which will reduce leverage by approximately half a turn and lower required contributions to the pension plan over the next few years. MEDCLEAN TECHNOLOGIES: Manatuck Hill Discloses 6.4% Equity Stake ---------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Manatuck Hill Partners, LLC, disclosed that, as of Dec. 31, 2011, it beneficially owns 106,619,669 shares of common stock of Medclean Technologies, Inc., representing 6.41% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/yyxL5d About MedClean Technologies Based in Bethel, Connecticut, MedClean Technologies, Inc., provides solutions for managing medical waste on site including designing, selling, installing and servicing on site (i.e. "in- situ") turnkey systems to treat regulated medical waste. The Company also reported a net loss of $3.69 million on $1.38 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $3.50 million on $707,450 of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.01 million in total assets, $1.88 million in total liabilities, and a $874,617 total stockholders' deficit. As reported in the TCR on April 6, 2011, Child, Van Wagoner & Bradshaw, PLLC, in Salt Lake City, Utah, expressed substantial doubt about the MedClean Technologies' ability to meet its obligations and to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has incurred substantial recurring losses. Bankruptcy Warning The Company has available cash and cash equivalents of approximately $102,515 at Sept. 30, 2011, which it intends to utilize for working capital purposes and to continue developing its business. To supplement its cash resources, the Company has secured alternative financing arrangements with two investment entities. While the acquisition of cash through these programs is related to company performance, the Company believes it will have access to the necessary funds for its to execute its business plan. However, the Company continues to incur significant operating losses that will result in the reduction of its cash position. The Company cannot assure that it will be able to continue to obtain funding through the alternative financing arrangements and the lack thereof would have a material adverse impact on its business. Moreover, any equity funding could be substantially dilutive to existing stockholders. The aforementioned factors raise doubt about the Company's ability to continue as a going concern. In the event the Company is unable to continue as a going concern, it may pursue a number of different options, including, but not limited to, filing for protection under the federal bankruptcy code. MF GLOBAL: Trustee Asked to Support "Corporate Personhood" Motion ----------------------------------------------------------------- James Giddens, the Trustee for the failed commodity brokerage MF Global, Inc., has been formally asked to support a court motion that seeks to recover a reported $1.2 billion in missing customer funds by arguing the unusual, but legitimate, legal issue of "corporate personhood" as it applies to the Bankruptcy Code. Adam Furgatch, the former MF Global client who recently filed the "corporate personhood" motion in Federal Bankruptcy Court, submitted a letter to Mr. Giddens, asking him to fulfill his publicly stated promise to "use all legal avenues available...in recovering the customer funds, including litigation." The Court has scheduled a hearing on the matter for March 6, 2012. "I look forward to Mr. Giddens' co-operation and assistance in helping all of us aggrieved customers to reclaim our stolen funds," said Mr. Furgatch in a radio interview. "We accept Mr. Giddens at his word to use all legal avenues available. My motion cites Supreme Court decisions and Bankruptcy Code statutes, as written. So it certainly is a legitimate legal avenue to pursue." The Furgatch Motion asserts that because the U.S. Supreme Court has ruled that corporations are to be treated as "persons", then the "parent" company, MF Global Holdings, by definition, must have a "child" company, the subsidiary brokerage, MF Global, Inc. After establishing the parent-child relationship, the argument then cites clear, specific statutes in the Bankruptcy Code that mandate 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," added Mr. Furgatch. "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 of the parent will just have to get in line...the Child comes first." The letter to the Trustee also makes the analogy that "the parent corporation, MF Global Holdings, has looted the child/subsidiary corporation's trust fund in order to engage in a disastrous gambling spree in the European bond market casinos. One might even say that the parent broke into the child's piggy bank to support its gambling habit. Under the Bankruptcy Code, as it applies to a natural person, this irresponsible and selfish behavior would not be allowed to stand, and rightly so. Our laws protect dependent, helpless children from such predatory actions." The Furgatch Motion also cites Bankruptcy Code statutes that empower 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. Mr. Giddens is expected to respond in a timely manner to Mr. Furgatch's request for support so as to best prepare for the court hearing on March 6th. Mr. Furgatch, like most ex-MF Global customers, is currently missing at least 28% of his pre-bankruptcy MF Global account funds. Mr. Furgatch, a resident of Hawaii and a fresh, creative voice in financial and political commentary, has published a copy of his letter to Trustee Giddens, as well as a copy of the filed motion and additional background information concerning this legal action on his website: http://www.AdamFurgatch.com/ The Furgatch Motion has been assigned Court Docket #424 in the case of MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan). 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) MF GLOBAL: SIPA Trustee Wants Until May 29 to Decide on Leases -------------------------------------------------------------- James W. Giddens, trustee for the liquidation of the business of MF Global Inc. under the Securities Investor Protection Corporation, asks Judge Martin Glenn to further extend the time within which he may assume or reject executory contracts and unexpired leases on behalf of the MFGI estate, through and including May 29, 2012. As of January 26, 2012, the Debtor is lessee under two unexpired leases: one is a lease for the property located at 440 South LaSalle Street, in Chicago, Illinois, and the other is a lease for the property located at 21800 South Cicero Avenue, in Matteson, Illinois. The SIPA Trustee's deadline to assume or reject those leases will expire on February 27, 2012. Unless the Lease Decision Deadline is extended, the SIPA Trustee will be required to make decisions concerning all of the Unexpired Leases within three weeks, James B. Kobak, Jr., Esq., at Hughes Hubbard & Reed LLP, in New York, notes. The SIPA Trustee's failure to take any action to assume or reject the Unexpired Leases or obtain an extension of the current deadline would result in the Unexpired Leases being deemed rejected, Mr. Kobak stresses. At best, the proposed extension would mitigate the risk of an improvident rejection or assumption of each of the Unexpired Leases by the SIPA Trustee as to the MFGI estate, Mr. Kobak maintains. Pending the SIPA Trustee's election to assume or reject each of the Unexpired Leases, unless agreed otherwise, the SIPA Trustee will perform all obligations arising under the Unexpired Leases from and after the Petition Date in a timely fashion, including by paying postpetition rent due, as required by Section 365(d)(3) of the Bankruptcy Code, he assures the Court. 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. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. 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. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: Virginia Retirement to Lead Investors Suit vs. Corzine ----------------------------------------------------------------- Judge Victor Marrero of the U.S. District Court for the Southern District of New York consolidated 12 lawsuits against MF Global Holdings Ltd.'s former chief executive Jon S. Corzine, putting The Virginia Retirement System and Canada's Alberta province as lead plaintiffs in the consolidated lawsuit, Bloomberg News reported on January 27. The lead plaintiffs' combined investment losses of $19 million give them a larger stake in the lawsuit than seven other applications for lead plaintiff, the district judge said in a Jan. 20, 2012 signed order. Joseph DeAngelis alleged in the first of the similar lawsuits that MF Global executives led by Mr. Corzine made "materially misleading" statements about liquidity and financial controls, Bloomberg recalled. Mr. DeAngelis also named Henri Steenkamp, the firm's chief financial officer, and Bradley Abelow, its president, the report noted. Meanwhile, certain MF Global Inc. customers are competing to lead a lawsuit against Mr. Corzine over the alleged theft of $1.2 billion of their assets, according to a separate Feb. 3 Bloomberg report. On Jan. 18, 2012, Judge Marrero extended to January 30, 2012, the deadline to file applications for appointment of lead plaintiff in the customer action. Bloomberg noted that court filings show at least seven actions against Mr. Corzine by future customers in Manhattan. Plaintiffs who seek to lead a potential group lawsuit include Sapere CTA Fund LP, which sued Mr. Corzine and other former MFGH executives for $90 million; Seattle money manager William Fleckenstein, along with Kay P. Tee LLC, a firm with a trading account at MF Global; and David Accomazzo and Roberto Calle, who said in court papers they filed the first action on behalf of futures customers, according to Bloomberg. According to Hagens Berman Sobol Shapiro LLP's January 26, 2012 statement, certain customers' cases are now consolidated with Joseph Deangelis, et al., v Jon S. Corzine, et al., No. 1:11-cv- 07866-VM. The filed cases include: * David Accomazzo and Roberto E. Calle v. Corzine, No.1:11-cv- 8467 (the "Accomazzo Action"), which asserts claims under the Commodities Exchange Act on behalf of a proposed Class consisting of: persons, other than Defendants, their employees, affiliates and agents, who held money or other assets in MF Global customer accounts as of any time during the period October 24th through October 31, 2011. * Summit Trust Company v. Corzine, No. 1: 12-cv-0087 (the "Summit Action"), asserting claims under the Commodity Exchange Act on behalf of a Class consisting of: persons, other than Defendants, their employees, affiliates and agents, who as of October 31, 2011, had one or more open commodity futures trading or derivative contract with MF Global and/or had money, securities or other property on deposit with MF Global as of that date for the purpose of transacting in commodity futures trading or derivative contracts, and who have sustained damage as a result of MF Global's failure to properly segregate customer funds. * Kay P. Tee, LLC v. Corzine, No. 1: 12-cv-195 (the "KPT Action"), bringing claims under common law, the Racketeer Influenced Corrupt Organization Act ("RICO"), and the Commodities Exchange Act on behalf of a Class consisting of: all MF Global commodity account holders or customers who held open futures positions and/or cash collateral or cash deposits for future collateral in their MF Global accounts and had not received a return of 100% of their funds as of close of business on November 2, 2011. "While other actions have been filed around the country, we believe they will all be consolidated in New York," said Reed R. Kathrein, Esq. -- MFGlobal@hbsslaw.com -- partner at Hagens Berman Sobol Shapiro LLP "Once consolidated, an amended complaint will be filed considering the claims against the various defendants, including those against banks and auditors who are alleged in some cases to have participated." Futures customers are trying to persuade Judge Marrero that their lawsuits should not be consolidated with an investor lawsuit led by the Virginia Retirement System, Bloomberg relayed. Contrary to the investors' claims, futures customers allege that he and other executives misappropriated customer funds, according to court papers obtained by Bloomberg. Even the defendants and the laws they are alleged to have violated are different, lawyers for Kay P. Tee said in a Feb. 1 letter to the court, Bloomberg noted. CME Group Inc. and JPMorgan Chase & Co., banker to MF Global, are also named in futures customer lawsuits, the report noted. Separately, Mr. Corzine was sued under U.S. racketeering law by commodity customers alleging he and other MF Global executives unlawfully took money from their accounts and failed to segregate their money as the law requires, according to a separate report by Linda Sandler of Bloomberg News on February 3, 2012. The lawsuit, filed in New York on behalf of Robert Marcin and other MFGI segregated account holders by Grant & Eisenhofer PA, commodity, further alleged that JPMorgan as MFGI's banker should have noticed the "depletion" of customer money, and should have investigated, the report relayed. The case is Marcin v. Corzine, 12-cv-0499, U.S. District, Southern District of New York. The main case is DeAngelis v. Corzine, 11-cv-7866, U.S. District Court, Southern District of New York (Manhattan). Plaintiffs Compete to Lead Plaintiffs, including funds and retirement systems, were competing to lead a lawsuit against Jon Corzine, MF Global Holdings Ltd.' former chief executive officer, over the collapse of the firm, according to reporting by Linda Sandler and Patricia Hurtado of Bloomberg News, MF Global Bankruptcy News, Issue No. 10, said. Mr. Corzine is the defendant in at least nine lawsuits before Judge Victor Marrero of the U.S. District Court in Manhattan, seeking compensation for losses arising from the company's bankruptcy, the report related. The cases have been consolidated into one based on similar claims that the former CEO and other company officials made misleading statements about MF Global's financial condition prior to its bankruptcy, Bloomberg noted. Banyon Capital Master Fund Ltd., Virginia and Arkansas retirement systems and the Building Trades United Pension Trust Fund all filed separate requests in court to serve as lead plaintiff, Bloomberg disclosed. The Virginia Retirement System, which wants to lead the lawsuit together with Canada's Province of Alberta, wrote in a filing the two together lost more than $19 million on MF Global stock and debt, the report continued. They asked court approval of their hiring law firms Bernstein Litowitz Berger & Grossman LLP, and Labaton Sucharow LLP, as co-lead counsel for investors suing Mr. Corzine, the report added. Henri Steenkamp, the New York-based company's chief financial officer, and Bradley Abelow, its president were also named as defendants in the lawsuit. Another lawsuit against Mr. Corzine was filed by three farmers and a cattle-raising operation in Montana seeking to represent a nationwide group of commodities future customers whose money went missing when MF Global collapsed, Bloomberg reported on Jan. 10. Multiple Suits vs. Corzine MF Global Bankruptcy News, Issue No. 8, reported that Jon Corzine, former chief executive of MF Global Holdings Ltd., is facing nine lawsuits before a federal judge in Manhattan that are seeking compensation for losses from the company's collapse, Linda Sandler and Patricia Hurtado of Bloomberg News reported. The plaintiffs, including an electricians' union, allege that Mr. Corzine and other officials of the failed firm made misleading statements about MF Global's financial condition before its collapse on October 31, the report noted. U.S. District Court Judge Victor Marrerro consolidated the cases, saying that they make similar claims about similar facts and events, Bloomberg related, citing a court filing. Mr. Corzine, the former governor of New Jersey, and senior MF Global officers touted the company's internal financial controls and liquidity levels in statements that were "materially misleading or untrue," Joseph DeAngelis on behalf of himself and other MF Global shareholders wrote on a Nov. 3 complaint, the report relayed. Mr. DeAngelis also named Henri Steenkamp, the New York-based company's chief financial officer, and Bradley Abelow, its president in the complaint, the report added. "Defendants had the power and influence -- and exercised such power and influence -- as to cause MF Global to engage in the unlawful conduct and practices," Mr. DeAngelis alleged in the complaint, Bloomberg cited. "Each of the defendants is liable as a participant in a fraudulent scheme and course of business that operated as a fraud or deceit on purchasers of MF Global common stock." The lawsuit also wrote that an Oct. 25 release on second-quarter results "falsely stated" that MF Global had strengthened its capital and liquidity, the report noted. Mr. Corzine said in the release he was confident the company had "the resources and expertise to continue to successfully manage these exposures," the lawsuit said. 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. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. 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. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: Drafted Contingency Plan in Case of Downgrade -------------------------------------------------------- Senior Executives at MF Global Holdings Ltd., anticipating collateral calls on European debt trades, raised the possibility of removing the transactions from central clearinghouses designed to reduce risk, Silla Brush and Phil Mattingly of Bloomberg News reported. The 23-page "break-the-glass" plan prepared by the broker's treasury, finance and risk divisions at the request of the board of directors weeks before the firm's collapse said the bets on European debt were "the biggest draw on cash" as the company confronted a possible credit crunch, according to a copy obtained by Bloomberg News. The undated document indicates the plan was designed to address the effects of a credit-rating downgrade on the company's solvency and liquidity, Bloomberg disclosed. The document further instructed employees to maintain daily records of segregated customer funds and "communicate to key clients about safety of their excess and margin balances," the report noted In the plan, the company questioned if the firm should hedge the bets, known as "repo-to-maturity," or RTM, transactions, for up to three months and move them out of clearinghouses run by LCH.Clearnet Group Ltd., Bloomberg relayed. The plan concluded that the company needed "a clear strategy and plan for RTM portfolio," the report said "How will LCH respond, how much in excess margin will be required, time period, can/will they force us out?" the plan asked in a part of the document marked "immediate decision making required," Bloomberg relayed. The plan, according to the report, indicated the company could move some of the cleared positions to the over-the-counter market because of more favorable terms. Bloomberg recalled that MF Global's former chairman and chief executive officer Jon S. Corzine bet $6.3 billion on Italian, Spanish and other European debt in an effort to transform the commodity brokerage into an investment bank. When the firm collapsed, as much as $1.2 billion in client funds set aside as collateral for futures trades went missing, the report noted. Michael G. Stockman, MF Global's chief risk officer at the time, testified before a congressional panel on Feb. 2, that the contingency plan had been prepared in October at the board's request, Bloomberg relayed. The plan was provided to lawmakers, who have not made the document public. The House Financial Services Subcommittee on Oversight and Investigations conducted the hearing to explore the role of the rating agencies in the demise of MF Global. The Subcommittee Chairman U.S. Representative Randy Neugebauer said the plan represented "much more aggressive scenarios" than had been considered by the firm in the months before, Bloomberg relayed. Michael Roseman, predecessor of Mr. Stockman, also testified before the Congressional panel, saying that he and Mr. Stockman warned the firm's top executives and directors about the danger of the European bets months before the firm's collapse, according to a separate report by Ben Protess of the New York Times. "In my view, the board and senior management were highly sophisticated; they knew and understood how the European debt bets worked," Mr. Stockman told the panel. Lawmakers however were dubious noting that while the positions were the brainchild of Mr. Corzine, it is up to the risk chiefs to control their boss's risk-taking, The New York Times noted. Mr. Roseman said he raised concerns in September 2010 when the bond buys jumped to $2 billion from $1.5 billion, The New York Times relayed. In November, when the positions grew to nearly $5 billion, Mr. Roseman outlined the risks to the board, saying the bets hinged on the European countries not defaulting, the report noted. "The risk scenarios I presented were challenged as being implausible," Mr. Roseman was quoted as saying to the lawmakers. The board sided with Mr. Corzine and about the same time, MF Global began a search to replace Mr. Roseman also from Goldman, the report noted. In December, the House Agriculture Committee asked Mr. Corzine whether he was involved in the decision to have Mr. Roseman leave his post in early 2011, Reuters stated in another report. Mr. Corzine responded that he believed the firm needed someone who had more knowledge with the broker-dealer side of MF Global's business, and that there were personnel issues, the report relayed. The lawmakers were blunt in saying that Mr. Roseman was replaced because of his views on the European debt bets, The New York Times noted. It appeared that "Mr. Stockman was hired to tell Mr. Corzine what he wanted to hear," U.S. Representative Bill Posey voiced during the hearing. When Mr. Stockman joined MF Global, he did not immediately adopt his predecessor's unease with the European positions, according to the New York Times. The report stated that he began working in January but did not raise concerns about the European bets until July. "For the first several months of my tenure, based on analyses performed by my department, I believed that the risk profile associated with the company's European sovereign debt position was acceptable in light of then-prevailing market conditions," Mr. Stockman told the Congressional panel. However, "As credit markets deteriorated in the summer of 2011, I came to the view that it would be prudent for the company to mitigate the increased risks," Mr. Stockman was quoted as saying. The board eventually heeded the concerns but it was too late, The New York Times said. "I am, of course, aware of and deeply saddened by numerous press reports that more than $1 billion in customer funds are missing and unaccounted for," Mr. Stockman said, The New York Times relayed. He however insists that he does not personal knowledge of any missing funds or unreconciled customer accounts, the report added. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. 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. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. 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. The New York Stock Exchange Has Removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: "Never Been Stronger," CFO Told S&P Before Collapse -------------------------------------------------------------- A week before MF Global Holdings Ltd. collapsed, the firm's chief financial officer told Standard & Poor's in an e-mail that the futures broker had "never been stronger," Bill Rochelle of Bloomberg News reported. On Feb. 2, the House Financial Services Subcommittee on Oversight and Investigations turned to ratings agencies to explain their role in the demise of MF Global. S&P provided the Subcommittee with an excerpt of the e-mail from MF Global CFO Henri Steenkamp, the report said. S&P also told the panel that Jon Corzine, former MF Global chief executive officer, met with its analysts on Oct. 20 to reassure them that his $6.3 billion bet on European sovereign debt was no threat to the firm, according to a Jan. 17 letter obtained by Bloomberg News. S&P previously ranked MF Global as investment grade until its failure, while Moody's downgraded it to junk status four days earlier, the report recalled. "MF Global is in its strongest position ever," Mr. Steenkamp told S&P on Oct. 24, according to a letter from Craig Parmelee, a managing director at S&P to U.S. Representative Randy Neugebauer obtained by Bloomberg. S&P said in the letter that it relied on MF Global's public filings for information on the positions, Bloomberg relayed. "S&P does not purport to audit the issuers it rates and does not undertake to police issuers for fraudulent activity or misconduct," Mr. Parmelee wrote in the letter. In a separate letter dated Jan. 17, 2012 to Mr. Neugebauer, Steven Ross, Esq., a partner at Akin Gump Strauss Hauer & Feld LLP, in Washington, D.C. -- sross@akingump.com -- counsel to Moody's, said the rating agency's analysts believed that MF Global was increasing its trading activity "for the primary purpose of facilitating customer transactions," Bloomberg relayed. Mr. Ross further wrote that MFGI's presentations before October 21 "did not describe or reflect" the European positions, Bloomberg cited. 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. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. 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. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: CME Group Sets Up $100-Mil. Fund for Ranchers -------------------------------------------------------- CME Group said on February 2, 2012 that it will establish a $100 million fund designed to provide further protection of customer segregated funds for U.S. family farmers and ranchers who hedge their business in CME Group futures markets. "In light of the recent MF Global failure, in which a clearing firm violated CFTC regulations and misused customer monies that should have been kept segregated, CME Group is adding this extra security measure to protect the country's food producers who are using CME Group futures markets to hedge their crops and livestock that feed the world," according to the statement. Under the Family Farmer and Rancher Protection Fund, expected to be in effect by March 1, 2012, farmers and ranchers using CME Group products will be eligible for up to $25,000 per account in the case of losses resulting from the future insolvency of a clearing member or other market participant. Farming and ranching cooperatives also will be eligible for up to $100,000 per cooperative. If losses in a future failure total more than $100 million, participants will be eligible for a pro- rata share of the fund, up to $100 million. This new fund is expected to be backed by an insurance policy and will not be available retroactively. "Many have been hurt by MF Global's bankruptcy," said CME Group Executive Chairman Terry Duffy. "... We believe this targeted first step is important to reassure hedgers so they can appropriately manage their risks and avoid business disruptions." The Family Farmer and Rancher Protection Fund will serve as an additional layer of customer protection in addition to current CFTC regulations and CME Group exchange rules. CME spokesperson Michael Shore told Reuters that the exchange based "the fund size on what they are still missing following MF Global." Another CME source said that the exchange arrived at the $100 million figure based on the average size of accounts held by farmers and ranchers with MF Global, Reuters disclosed. Farmers and ranchers however said the $100 million amount to "window dressing," the report noted. Indeed, many farmers saw the move as an effort to lure back customers or soothe their anger after the exchange, MF Global's main regulator, drew criticism over its oversight on the now bankrupt firm, the report added. On February 8, 2012, Standard & Poor's cut CME's long-term issuer credit rating from 'AA' to 'AA'. S&P also affirmed its 'A-1+' short-term rating on the company. The outlook on the long-term rating is negative reflecting S&P's view of the potential legal and reputational fall-out from the MF Global bankruptcy. "We do not believe that the MF Global guarantee and the Farmer Fund, even if fully called, present significant financial risk to CME Group," S&P said. "The potential financial impact of the MF Global guarantee and the Farmers Fund likely will not be a rating issue. But we believe that the ramifications of CME Group's support of its clearing members' customers expand the firm's long-standing mandate of guaranteeing trades among its clearing members." According to S&P, CME Group has no legal or contractual obligation to support the customers of its clearing members, and it had never supported the customers of a failed clearing member in the past. "We believe that it is doing so for business reasons. MF Global's customers, who number in the thousands, have been very vocal about not having full access to their segregated funds or frozen cash balances. This appears to be affecting volumes on CME Group's exchanges, which were down in fourth-quarter 2011 and in January 2012. While we believe CME Group is making a rational business decision to support the liquidity and integrity of its market, such support raises incremental risks that were not previously factored into our ratings on the company." To recall, CME said it would provide a $250 million guarantee, which later increased to $550 million, to help the MFGI trustee in releasing the customers' segregated funds and frozen cash balances. Ranchers Dismiss Fund Members of the National Cattlemen's Beef Association said the CME fund amounted to little more than a pile of chickenfeed, Elizabeth Campbell of Bloomberg News reported on Feb. 9. All it takes is some "third-grade math," Peter Bonds, a member of the association, told CME Chief Operating Officer Bryan Durkin, to understand that given its limit of $25,000 per individual account, the fund would cover only farmers with about 1,200 feeder cattle -- a fraction of a typical rancher's herd, Bloomberg related. More than half the cattle sold in 2010 came from feedlots with a capacity of at least 24,000 cattle, according to the U.S. Agriculture Department, Bloomberg noted. Farmer cooperatives will be eligible for as much as $100,000 in the event of a brokerage failure, Bloomberg Businessweek reported in its Feb. 13 issue. 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. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. 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. The New York Stock Exchange has removed MFGI securities from listing. 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) MORRIER RANCH: Proposes James P. Hurley as Bankruptcy Counsel ------------------------------------------------------------- Morrier Ranch, Inc., asks the U.S. Bankruptcy Court for the Eastern District of Washington for permission to employ James P. Hurley, Esq., as counsel. Mr. Hurley has represented the Debtor prepetition. He received $13,000 for work performed between March 2011, and Dec. 31, 2011. Mr. Hurley also received $2,000 which was placed in trust. The hourly rate of Mr. Hurley is $300. To the best of the Debtor's knowledge, Mr. Hurley does not hold or represent an interest adverse to the estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Hurley can be reached at: HURLEY & LARA Attorney at Law 411 North 2nd Street Yakima, WA 98901 Tel: (509) 248-4282 About Morrier Ranch, Inc. Yakima, Washington-based Morrier Ranch, Inc., aka Morrier Hop Storage, filed for Chapter 11 bankruptcy (Bankr. E.D. Wash. Case No. 12-00179) on Jan. 17, 2012. Judge Patricia C. Williams presides over the case, taking the assignment from Judge Frank L. Kurtz. James P. Hurley, Esq., at Hurley & Lara, serves as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets, and $1 million to $10 million in debts. The petition was signed by Joseph R. Morrier, president. MORRIER RANCH: Files Schedules of Assets and Liabilities -------------------------------------------------------- Morrier Ranch, Inc., filed with the U.S. Bankruptcy Court for the Eastern District of Washington its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $11,170,000 B. Personal Property $8,508,866 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $4,893,346 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $1,128,740 ----------- ----------- TOTAL $19,678,866 $6,022,086 A full-text copy of the schedules is available for free at http://bankrupt.com/misc/MORRIER_RANCH_sal.pdf About Morrier Ranch, Inc. Yakima, Washington-based Morrier Ranch, Inc., aka Morrier Hop Storage, filed for Chapter 11 bankruptcy (Bankr. E.D. Wash. Case No. 12-00179) on Jan. 17, 2012. Judge Patricia C. Williams presides over the case, taking the assignment from Judge Frank L. Kurtz. James P. Hurley, Esq., at Hurley & Lara, serves as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets, and $1 million to $10 million in debts. The petition was signed by Joseph R. Morrier, president. MORRIS SEARS: National Park Service Debt Declared Nondischargeable ------------------------------------------------------------------ Bankruptcy Judge Margaret A. Mahoney issued an order granting the United States a judgment declaring Morris Sears' debt owed to the National Park Service nondischargeable. The United States is also granted a judgment declaring the debt nondischargeable owed to the United States for bond premiums paid in conjunction with various government contracts. On July 8, 2009, the United States filed an adversary proceeding seeking a determination of nondischargeability as to its losses stemming from the Debtor's alleged fraud. The United States bases its request for relief on a string of bond surety agreements that the Debtor entered into between October 2005 and November 2008. Specifically, the Debtor acted as surety for numerous government agencies by issuing payment, performance, and bid bonds. In connection with every bond issued, the Debtor submitted an Affidavit of Individual Surety in which he pledged collateral to secure the bonds. The Debtor did business as ABBA Bonding Company. The case is In the UNITED STATES OF AMERICA, Plaintiff, v. MORRIS SEARS d/b/a ABBA BONDING, Defendant, Adv. Proc. No. 09-01070. A copy of the Court's Feb. 16, 2012 Order is available at http://is.gd/jNc4xWfrom Leagle.com. Morris Sears filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ala. Case No. 09-11053) on March 5, 2009. MOUNTAIN COUNTRY: Involuntary Chapter 11 Case Summary ----------------------------------------------------- Alleged Debtor: Mountain Country Partners, LLC 9799 St. Augustin Road Jacksonville, FL 32257 Case Number: 12-20094 Involuntary Chapter 11 Petition Date: February 17, 2012 Court: Southern District of West Virginia (Charleston) Judge: Ronald G. Pearson Petitioner's Counsel: Joseph W. Caldwell, Esq. CALDWELL & RIFFEE P.O. Box 4427 Charleston, WV 25364-4427 Tel: (304) 925-2100 Fax: (304) 925-2193 E-mail: jcaldwell@caldwellandriffee.com Mountain Country's petitioners: Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ April Baltzell Note plus Interest $100,000 21 Terraza del Mar Dana Point, CA 92629 Robert O. Buck Note plus Interest $200,000 1663 Carruthers Memphis, TN 38112 Kenneth Ervin Young Note plus Interest $150,000 43555 Green Hills Way Fremont, CA 94539 Richard Davis Note plus Interest $100,000 P.O. Box 542 Dunedin, FL 34697 J. J. Bradshaw Note plus Interest $160,937 26893 Boquet Lyn Road, Ste. C-248 Santa Clarita, CA 91350 Josette Y. Jones Note plus Interest $100,000 354 Blaidell Drive Claremont, CA 91711-3111 Nan Murphy Note plus Interest $100,000 985 Comanche Trail Anniston, AL 36206 MSGI SECURITY: Enable Global Discloses 9.9% Equity Stake -------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Enable Global Capital, LLC, et al., disclosed that, as of Dec. 31, 2011, they beneficially own 10,486,384 shares of common stock of MSGI Security Solutions, Inc., representing 9.99% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/RFqJ1r About MSGI Security MSGI Security Solutions, Inc., now known as MSGI Technology Solutions, Inc., (Other OTC: MSGI) -- http://www.msgisecurity.com/ -- is a provider of proprietary solutions to commercial and governmental organizations. The Company is developing a global combination of innovative emerging businesses that leverage information and technology. The Company is headquartered in New York City where it serves the needs of counter-terrorism, public safety, and law enforcement and is developing new technologies in nanotechnology and alternative energy as a result of its recently formed relationship with The National Aeronautics and Space Administration. The Company was delayed in filing its Quarterly Report for the period ended March 31, 2011. MSGI Technology's balance sheet at Dec. 31, 2010, showed $166,549 in total assets, $29.32 million in total liabilities, all current, and a $29.15 million total stockholders' deficit. Amper, Politziner & Mattia, LLP, in Edison, New Jersey, expressed substantial doubt about MSGI Security Solutions, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended June 30, 2009, and 2008. The auditing firm reported that the Company has suffered recurring losses from operations, and negative cash flows from operations, and has a substantial amount of notes payable due on demand or within the next 12 months and has very limited capital resources. MSR RESORT: Asks Judge Approval on Deal With Marriott ----------------------------------------------------- Max Stendahl at Bankruptcy Law360 reports that MSR Resort Golf Course LLC on Friday urged a New York federal judge to sign off on a property management settlement with Marriott International Inc. that would remove a major roadblock to the Company's restructuring. According to Law360, MSR asked the court to approve the stipulation, announced Feb. 13, which would resolve Marriott's claims for damages after it was terminated as a property manager of MSR's Doral Golf Resort & Spa. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. The resorts have agreement with lenders allowing the companies to remain in Chapter 11 at least until September 2012. Donald Trump has a contract to buy the Doral Golf Resort and Spa in Miami for $170 million. There will be an auction to learn if there is a better bid. The resorts have said that Trump's offer price implies a value for all the properties "significantly" exceeding the $1.5 billion in debt. The Official Committee of Unsecured Creditors is represented by Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP, in New York. MUSCLEPHARM CORP: Files Form S-1, Registers 194.8-Mil. Shares ------------------------------------------------------------- Musclepharm Corporation filed with the U.S. Securities and Exchange Commission a Form S-1 registration statement relating to the resale of 194,833,333 shares of the Company's common stock, par value $0.001 per share, by Iconic Hospitality, Ltd., Jim Sjoerdsma,Gordon Burr, et al., underlying outstanding common stock purchase warrants, including (i) 119,833,333 shares underlying warrants held by certain shareholders who purchased common stock purchase warrants in private transactions and (ii) 75,000,000 shares underlying warrants issued to a consultant for services rendered pursuant to a consulting agreement. The Company is not selling any shares of common stock in this offering and, as a result, will not receive any proceeds from this offering. All of the net proceeds from the sale of the Company's common stock will go to the Selling Security Holders. The Company's common stock is quoted on the OTCBB under the symbol "MSLP.OB." On Feb. 13, 2012, the closing bid price of the Company's common stock was $0.01 per share. These prices will fluctuate based on the demand for the Company's common stock. A full-text copy of the prospectus is available for free at: http://is.gd/xJeMJg About MusclePharm Headquartered in Denver, Colorado, MusclePharm Corporation (OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life- style company that develops and manufactures a full line of National Science Foundation approved nutritional supplements that are 100% free of banned substances. MusclePharm is sold in over 120 countries and available in over 5,000 U.S. retail outlets, including GNC and Vitamin Shoppe. MusclePharm products are also sold in over 100 online stores, including bodybuilding.com, Amazon.com and Vitacost.com. Berman & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about MusclePharm's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company had a net loss of $19.6 million and net cash used in operations of $3.8 million for the the year ended Dec. 31, 2010; and a working capital deficit and stockholders' deficit of $2.8 million and $1.7 million, respectively, at Dec. 31, 2010. The Company also reported a net loss of $12.33 million on $13.07 million of sales for the nine months ended Sept. 30, 2011, compared with a net loss of $8.67 million on $3.13 million of sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $5.71 million in total assets, $10.86 million in total liabilities, and a $5.14 million total stockholders' deficit. MUSCLEPHARM CORP: Socius CG No longer Owns Common Shares -------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Socius CG II, Ltd., et al., disclosed that, as of Dec. 31 2011, they do not beneficially own any shares of common stock of MusclePharm Corporation. A full-text copy of the regulatory filing is available for free at http://is.gd/ybgyQ3 About MusclePharm Headquartered in Denver, Colorado, MusclePharm Corporation (OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life- style company that develops and manufactures a full line of National Science Foundation approved nutritional supplements that are 100% free of banned substances. MusclePharm is sold in over 120 countries and available in over 5,000 U.S. retail outlets, including GNC and Vitamin Shoppe. MusclePharm products are also sold in over 100 online stores, including bodybuilding.com, Amazon.com and Vitacost.com. Berman & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about MusclePharm's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company had a net loss of $19.6 million and net cash used in operations of $3.8 million for the the year ended Dec. 31, 2010; and a working capital deficit and stockholders' deficit of $2.8 million and $1.7 million, respectively, at Dec. 31, 2010. The Company also reported a net loss of $12.33 million on $13.07 million of sales for the nine months ended Sept. 30, 2011, compared with a net loss of $8.67 million on $3.13 million of sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $5.71 million in total assets, $10.86 million in total liabilities, and a $5.14 million total stockholders' deficit. NATIONAL HOLDINGS: Incurs $1-Mil. Net Loss in Dec. 31 Quarter ------------------------------------------------------------- National Holdings Corporation filed with the U.S. Securities and Exchange Commission a Form 10-Q reporting a net loss of $1 million on $25.39 million of total revenues for the three-month period ended Dec. 31, 2011, compared with net income of $886,000 on $34.97 million of total revenues for the same period a year ago. The Company had a net loss of $4.7 million on $126.5 million of total revenues for fiscal year ended Sept. 30, 2011, compared with a net loss of $6.6 million on $111.0 million on total revenues for fiscal 2010. The Company's balance sheet at Dec. 31, 2011, showed $15.43 million in total assets, $17.45 million in total liabilities, $20,000 in noncontrolling interest, and a $2.04 million total National Holdings Corporation stockholders' deficit. Sherb & Co., LLP, in Boca Raton, Florida, expressed substantial doubt about National Holdings' ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses and has a working capital deficit as of Sept. 30, 2011. A full-text copy of the Form 10-Q is available for free at: http://is.gd/yU6Jst About National Holdings New York, N.Y.-based National Holdings Corporation is a financial services organization, operating primarily through its wholly owned subsidiaries, National Securities Corporation, Finance Investments, Inc., and EquityStation, Inc. The Broker-Dealer Subsidiaries conduct a national securities brokerage business through their main offices in New York, New York, Boca Raton, Florida, and Seattle, Washington. NATIONAL HOLDINGS: Bedford Oak Discloses 8.5% Equity Stake ---------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Bedford Oak Capital, L.P., Bedford Oak and Harvey P. Eisen Advisors, LLC, disclosed that, as of Dec. 31, 2011, they beneficially own 1,859,650 shares of common stock of National Holdings Corporation representing 8.5% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/s4v3JQ About National Holdings New York, N.Y.-based National Holdings Corporation is a financial services organization, operating primarily through its wholly owned subsidiaries, National Securities Corporation, Finance Investments, Inc., and EquityStation, Inc. The Broker-Dealer Subsidiaries conduct a national securities brokerage business through their main offices in New York, New York, Boca Raton, Florida, and Seattle, Washington. The Company reported a net loss of $4.7 million on $126.5 million of total revenues for fiscal 2011, compared with a net loss of $6.6 million on $111.0 million on total revenues for fiscal 2010. The Company's balance sheet at Dec. 31, 2011, showed $15.43 million in total assets, $17.45 million in total liabilities, $20,000 in noncontrolling interest, and a $2.04 million total National Holdings Corporation stockholders' deficit. Sherb & Co., LLP, in Boca Raton, Florida, expressed substantial doubt about National Holdings' ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses and has a working capital deficit as of Sept. 30, 2011. NATIONAL SLAVERY: To Repay Back Taxes Under Exit Plan ----------------------------------------------------- Chelyen Davis at fredericksburg.com reports that U.S. National Slavery Museum has filed a reorganization plan that counts on $900,000 per year in donations and would repay the city of Fredericksburg $15,000 per quarter for back taxes. According to documents filed with the federal bankruptcy court, the museum's lawyer, Sandra Robinson, said the museum's reorganization plan is based on an expectation that the museum will be able to raise charitable donations. The museum is working to regain its state authority to raise funds. The report relates that Ms. Robinson said the museum "conservatively estimates" that it can raise $900,000 in its first full year of fundraising, and that donations in subsequent years will increase by 50%. If that held true, the museum would plan to repay its two secured creditors, starting this October, over the next four years. The report adds that Fredericksburg is one of those secured creditors, and Ms. Robinson said the plan calls for the city tax bill to be repaid in full over four years, with payments of $15,000 per quarter being made. At this time, the city of Fredericksburg has not agreed to the proposed plan, says the report. The other secured creditor is Pei Partnership Architects, listed in the bankruptcy documents as being owed $3.68 million. The plan calls for the remainder of Pei's court judgment to be repaid over four years. The report says the museum also has a number of unsecured creditors, and the plan calls for those to be repaid in annual installments. According to the report, Ms. Robinson argued in the document that this reorganization plan is the best option for creditors, because if the museum were moved into liquidation, creditors would not be fully repaid. Ms. Robinson said she did file two documents to remove two unsecured creditors -- Hirschler Fleischer and Lexington Acquisition Inc. -- from the list of creditors, arguing that both filed after the expiration of a statute of limitations. A status hearing of the museum's case was set for Feb. 20, 2012. The United States National Slavery Museum, based in Richmond, Virginia, filed for Chapter 11 protection (Bankr. E.D. Va. Case No. 11-36013) on Sept. 21, 2011. Judge Douglas O. Tice, Jr., presides over the case. Sandra Renee Robinson, Esq., at Robinson Law & Consulting Firm, P.C., represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. NEOMEDIA TECHNOLOGIES: Colonel Baer Appointed CFO ------------------------------------------------- Colonel Barry S. Baer has been appointed as NeoMedia Technologies, Inc.'s Chief Financial Officer. Colonel Baer will be based in NeoMedia's headquarters in Boulder, Colorado. Colonel Baer brings more than 40 years of extensive experience as an International Finance Leader delivering superior growth, liquidity and profitability within dynamic high-growth public and start-up entities. He has served as both CFO and CEO to a wealth of public, privately held and not for profit companies and prior to this served as an officer in the U.S. Army for 27 years, retiring at the rank of Colonel. Colonel Baer succeeds James Doran, who has left NeoMedia to pursue other interests. "We are delighted to welcome Barry to the NeoMedia team. His superior track record as a CFO and his hands-on business leadership experience make him the perfect candidate to step into this key role on the NeoMedia executive leadership team," said Laura Marriott, CEO, NeoMedia. "The next 12 months will be a time of critical growth for NeoMedia and with the addition of Barry to our leadership team, we are more confident than ever that we will deliver strong financial results and increase shareholder value." "This is a great time to be joining a company that focuses on innovating and driving mobile barcode technology forward," said Colonel Baer. "The industry is more competitive than ever before and I'm looking forward to taking on this new challenge and contributing to NeoMedia's continued success." About NeoMedia Technologies Atlanta, Ga.-based NeoMedia Technologies, Inc., provides mobile barcode scanning solutions. The Company's technology allows mobile devices with cameras to read 1D and 2D barcodes and provide "one click" access to mobile content. The Company has historically incurred net losses from operations and expects it will continue to have negative cash flows as it implements its business plan. The Company said there can be no assurance that its continuing efforts to execute its business plan will be successful and that it will be able to continue as a going concern. The Company's balance sheet at Sept. 30, 2011, showed $8.02 million in total assets, $65.98 million in total liabilities, all current, $5.43 million in Series C convertible preferred stock, $2.36 million in Series D convertible preferred stock, and a $65.75 million total shareholders' deficit. Kingery & Crouse, P.A, in Tampa, Fla., expressed substantial doubt about the Company's ability to continue as a going concern. The accounting firm noted that the Company has suffered recurring losses from operations and has ongoing requirements for additional capital investment. NEOMEDIA TECHNOLOGIES: JMC Holdings Discloses 5% Equity Stake ------------------------------------------------------------- JMC Holdings, L.P., and Michael J. Cline filed with the U.S Securities and Exchange Commission an amended Schedule 13G disclosing that, as of Dec. 31, 2011, they beneficially own 22,704,791 shares of common stock of NeoMedia Technologies, Inc., representing 4.99% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/gnxs2o On Nov. 8, 2011, the Reporting Persons received a Convertible Debenture with a $40,750 outstanding principal balance, which November Debenture was originally issued by the Issuer on Aug. 24, 2006. All or any portion of the outstanding principal amount of the November Debenture and accrued but unpaid interest thereon is convertible into Common Stock of the Issuer at a conversion rate, at the sole option of the holder, equal to either (i) twenty cents ($0.20) or (ii) 90% of the lowest closing Bid Price during the 125 trading days immediately preceding the date of conversion. The November Debenture prohibits the Reporting Persons from converting any portion thereof to the extent that conversion would result in the Reporting Persons beneficially owning in excess of 4.99% of the outstanding shares of Common Stock following such conversion or receipt of shares as payment of interest. About NeoMedia Technologies Atlanta, Ga.-based NeoMedia Technologies, Inc., provides mobile barcode scanning solutions. The Company's technology allows mobile devices with cameras to read 1D and 2D barcodes and provide "one click" access to mobile content. The Company has historically incurred net losses from operations and expects it will continue to have negative cash flows as it implements its business plan. The Company said there can be no assurance that its continuing efforts to execute its business plan will be successful and that it will be able to continue as a going concern. The Company's balance sheet at Sept. 30, 2011, showed $8.02 million in total assets, $65.98 million in total liabilities, all current, $5.43 million in Series C convertible preferred stock, $2.36 million in Series D convertible preferred stock, and a $65.75 million total shareholders' deficit. Kingery & Crouse, P.A, in Tampa, Fla., expressed substantial doubt about the Company's ability to continue as a going concern. The accounting firm noted that the Company has suffered recurring losses from operations and has ongoing requirements for additional capital investment. NEUROLOGIX INC: Marc Panoff Resigns as Chief Financial Officer -------------------------------------------------------------- Marc L. Panoff, the Chief Financial Officer of Neurologix, Inc., resigned and his employment with the Company was terminated on Feb. 10, 2012. The Company entered into a Severance Agreement and General Release, dated Feb. 10, 2012, with Mr. Panoff. Under the terms of the Panoff Agreement, Mr. Panoff will receive a severance payment equal to up to five weeks' salary. Mr. Panoff agrees to release and forever discharge the Company, its affiliates, subsidiaries, officers, directors, employees and agents from any and all claims and causes of action whether known or unknown. Mr. Panoff further agrees not to make communications that have the effect of damaging the reputation of the Company and not to disclose, use or otherwise make available any confidential information at any time for any purpose. About Neurologix, Inc. Fort Lee, N.J.-based Neurologix, Inc. (OTC Bulletin Board: NRGX) -- http://www.neurologix.net/-- is a clinical-stage biotechnology company dedicated to the discovery, development, and commercialization of gene transfer therapies for serious disorders of the brain and the central nervous system. The Company's current programs address such conditions as Parkinson's disease, epilepsy, depression and Huntington's disease, all of which are large markets not adequately served by current therapeutic options. The Company reported a net loss of $10.16 million on $0 of revenue for the year ended Dec. 31, 2010, compared with a net loss of $13.46 million on $0 of revenue during the prior year. The Company's balance sheet at June 30, 2011, showed $4.96 million in total assets, $13.62 million in total liabilities, and a $8.66 million total stockholders' deficit. BDO USA, LLP, in New York, raised substantial doubt about the Company's ability to continue as a going concern. BDO noted that the Company has suffered recurring losses from operations, expects to incur future losses for the foreseeable future and has deficiencies in working capital and capital. NEVEL PROPERTIES: Agriprocessors Buyer's Plan Objection Nixed ------------------------------------------------------------- Bankruptcy Judge Thad J. Collins overruled objections filed by Agri Star Meat & Poultry LLC and SHF Industries, LLC n/k/a SHF Holdings, LLC, to the Third Modified Chapter 11 Plan filed by Nevel Properties Corporation. Nevel owns parcels of property in Postville, Iowa, that it leased to Agriprocessors, Inc. After entering into the leases, Agriprocessors filed bankruptcy and SHF purchased substantially all of Agriprocessors' assets. Nevel has now also filed Chapter 11 bankruptcy. Nevel has filed a plan to which no creditors object. SHF, however, as an interested party, objected. The objections stem from SHF's claimed rights in two properties that Nevel leased to Agriprocessors. SHF argues that the Plan has not been proposed in good faith and is not feasible. SHF wants the Court to require a new plan that protects the property interests SHF claims. Among other things, the Court held that Nevel has presented enough to establish feasibility. Nevel has secured a loan for $540,000 by offering creditors shares of the company. The fact that Nevel has already received a portion of these funds, and is holding them in escrow, provides further support that the Plan has a reasonable likelihood of success, the Court said. A copy of the Court's Feb. 17, 2012 Order is available at http://is.gd/hLll5Mfrom Leagle.com. Nevel Properties Corporation filed for Chapter 11 bankruptcy protection(Bankr. N.D. Iowa Case No. 09-00415) on March 2, 2009. Nevel estimated less than $50,000 in assets and more than $1 million in liabilities. Nevel is a rental property company owned by the Rubashkin family, which also owns the Agriprocessors slaughterhouse. NEW LEAF: Lorraine DiPaolo Discloses 19.1% Equity Stake ------------------------------------------------------- Lorraine DiPaolo filed with the U.S. Securities and Exchange Commission a Schedule 13G disclosing that, as of Feb. 14, 2012, she beneficially owns 40,604,334 shares of common stock of New Leaf Brands, Inc., representing 19.1% of the shares outstanding, A full-text copy of the filing is available for free at: http://is.gd/2kcKeX About New Leaf Brands Old Tappan, New Jersey-based New Leaf Brands, Inc., develops, markets and distributes healthy and functional ready-to-drink ("RTD") beverages. The Company distributes its products through independent distributors both internationally and domestically. For the nine months ended Sept. 30, 2011, the Company reported a net loss of $4.82 million on $1.47 million of net sales, compared with a net loss of $7.18 million on $3.67 million of net sales for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $3.03 million in total assets, $5.83 million in total liabilities and a $2.80 million total stockholders' deficit. As reported by the TCR on June 2, 2011, Eisner Amper LLP, in New York, N.Y., expressed substantial doubt about the Company'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 the Company has suffered recurring losses from operations, has a working capital deficiency, was not in compliance with certain financial covenants related to debt agreements, and has a significant amount of debt maturing in 2011. OASIS PETROLEUM: Moody's Affirms 'B3' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service changed Oasis Petroleum Inc.'s (Oasis) outlook to positive from stable and affirmed the company's B3 Corporate Family Rating (CFR), Caa1 senior unsecured note ratings, and SGL-2 Speculative Grade Liquidity (SGL) rating. RATINGS RATIONALE "The positive outlook reflects the company's increased scale and longer track record of operations in the Williston Basin, with continuing strong returns driven by oil production and modest F&D costs," commented Jonathan Kalmanoff, Moody's Analyst. The B3 CFR reflects the company's small but improving scale, single basin concentration, and relatively early stage of operations. The rating is supported by very strong returns with oil representing 96% of production, a high quality Williston Basin asset base with a large drilling inventory, and leverage which is low on a net debt basis. Gross leverage is expected to decline over the course of 2012 as the large cash balance from 2011 debt issuances is deployed to fund production growth. The SGL-2 rating indicates good liquidity through the end of 2012. While Moody's expects significant negative free cash flow in 2012, the company's December 31, 2011 cash balance of $491 million and credit facility availability of $350 million will provide ample cushion to fund the out-spend of cash flow. The credit facility, which matures in 2016, has a total commitment of $1 billion and a borrowing base of $350 million as of October 1, 2011. The borrowing base is subject to redetermination twice per year in April and October. Financial covenants under the facility are net debt to EBITDAX of no more than 4.0x, and a current ratio of at least 1.0x. Moody's expects Oasis to remain in compliance with these covenants during 2012. There are no debt maturities prior to 2016 when the credit facility matures. Substantially all of the company's assets are pledged as collateral for the revolving credit facility. Any asset sales with proceeds in excess of 5% of the borrowing base then in effect automatically reduce the borrowing base. Therefore, depending on usage at the time, an asset sale may or may not provide additional liquidity to Oasis. The Caa1 senior unsecured note rating reflects both the overall probability of default of Oasis, to which Moody's assigns a PDR of B3, and a loss given default of LGD4-65%. The size of the senior secured revolver's priority claim relative to the senior unsecured notes results in the notes being rated one notch beneath the B3 CFR under Moody's Loss Given Default Methodology. We could upgrade the ratings if Oasis continues to grow its scale in the Williston Basin while maintaining a leveraged full-cycle ratio (LFCR) of at least 3.0x and reducing leverage (on a gross debt basis) in line with expectations. Moody's could downgrade the ratings if Oasis experiences a deterioration of operating performance resulting in a LFCR below 3.0x. Moody's could also downgrade the ratings if the ratio of retained cash flow (RCF) to debt is expected to be sustained below 20% due to a deterioration in returns, a leveraging acquisition, distributions, or share repurchases. The principal methodology used in rating Oasis Petroleum Inc was the Global Independent Exploration and Production 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. Oasis Petroleum Inc. is an independent E&P company headquartered in Houston, Texas. OVERLAND STORAGE: Stephens Industry Holds 7.4% Equity Stake ----------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Stephens Industry 2, L.P., et al., disclosed that, as of Dec. 31, 2011, they beneficially own 805,503 shares of common stock of Overland Storage, Inc., representing 7.4% of the shares outstanding. The calculation of percentage of beneficial ownership was derived from the Issuer's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on Nov. 12, 2010, in which the Issuer stated that the number of shares of common stock, $0.0001 par value per share, outstanding as of Nov. 2, 2010 was 10,952,312 shares. A full-text copy of the Schedule is available for free at http://is.gd/dvBtB8 About Overland Storage San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) -- http://www.overlandstorage.com/-- is a global provider of unified data management and data protection solutions designed to enable small and medium enterprises (SMEs), corporate departments and small and medium businesses (SMBs) to anticipate and respond to change. The Company reported a net loss of $14.50 million on $70.19 million of net revenue for the fiscal year ended June 30, 2011, compared with a net loss of $12.96 million on $77.66 million of net revenue during the prior fiscal year. Moss Adams LLP, in San Diego, California, noted that the Company's recurring losses and negative operating cash flows raise substantial doubt about the Company's ability to continue as a going concern. OVERLAND STORAGE: Columbus Capital Discloses 5.2% Equity Stake -------------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Columbus Capital Management, LLC, and Matthew D. Ockner disclosed that, as of Dec. 31, 2011, they beneficially own 1,241,100 shares of common stock of Overland Storage, Inc., representing 5.2% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/9W6b2H About Overland Storage San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) -- http://www.overlandstorage.com/-- is a global provider of unified data management and data protection solutions designed to enable small and medium enterprises (SMEs), corporate departments and small and medium businesses (SMBs) to anticipate and respond to change. The Company reported a net loss of $14.50 million on $70.19 million of net revenue for the fiscal year ended June 30, 2011, compared with a net loss of $12.96 million on $77.66 million of net revenue during the prior fiscal year. Moss Adams LLP, in San Diego, California, noted that the Company's recurring losses and negative operating cash flows raise substantial doubt about the Company's ability to continue as a going concern. PALACIO DEL SOL: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Palacio Del Sol, LLC 305 S. Mac Cadden Pl Los Angeles, CA 90020 Bankruptcy Case No.: 12-15857 Chapter 11 Petition Date: February 20, 2012 Court: United States Bankruptcy Court Central District of California (Los Angeles) Debtor's Counsel: Kyungsoo Ken Park, Esq. LAW OFFICES OF PARK & ASSOCIATES 3600 Wilshire Blvd Ste 1722 Los Angeles, CA 90010 Tel: (213) 427-9727 Fax: (213) 427-9757 E-mail: kspark_law@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Sol Feiner, managing member. PATIENT SAFETY: Kinderhook Capital Has 18.4% Equity Stake --------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Kinderhook Capital Management, LLC, disclosed that, as of Dec. 31, 2011, it beneficially owns 6,266,666 shares of common stock of Patient Safety Technologies, Inc., representing 18.4% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/INDaAF About Patient Safety Technologies Patient Safety Technologies, Inc. (OTC: PSTX) -- http://www.surgicountmedical.com/-- through its wholly owned operating subsidiary SurgiCount Medical, Inc., provides the Safety-Sponge(TM) System, a system designed to improve the standard of patient care and reduce health care costs by preventing the occurrence of surgical sponges and other retained foreign objects from being left inside patients after surgery. RFOs are among one of the most common surgical errors. The Company reported a net loss of $1.02 million on $6.72 million of revenue for the nine months ended Sept. 30, 2011, compared with net income of $1.32 million on $10.25 million of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $13.25 million in total assets, $2.93 million in total liabilities, all current, and $10.32 million in total stockholders' equity. In its March 31, 2010 report, Squar, Milner, Peterson, Miranda & Williamson, LLP, in San Diego, California, noted that the Company's significant recurring net losses through Dec. 31, 2009, and significant working capital deficit as of Dec. 31, 2009, raise substantial doubt about the Company's ability to continue as a going concern. PEACHCREST GARDENS: Case Summary & 13 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Peachcrest Gardens Partners, LLC P.O. Box 941970 Atlanta, GA 31141 Bankruptcy Case No.: 12-54372 Chapter 11 Petition Date: February 20, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Michael D. Robl, Esq. THE SPEARS & ROBL LAW FIRM, LLC 104 Cambridge Avenue Decatur, GA 30030 Tel: (404) 373-5153 E-mail: mdrobl@tsrlaw.com Scheduled Assets: $2,394,140 Scheduled Liabilities: $2,918,592 A list of the Company's 13 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb12-54372.pdf The petition was signed by Douglas M. Linneman, manager. PHI GROUP: Delays Form 10-Q for Dec. 31 Quarter ----------------------------------------------- PHI Group, Inc., was unable to file, without unreasonable effort and expense, its Form 10-Q for the fiscal quarter ended Dec. 31, 2011, due to the requirement for additional time by the auditors to review its financial information to be included in the referenced Form 10-Q. About PHI Group Huntington Beach, Calif.-based PHI Group, Inc., through its wholly owned and majority-owned subsidiaries, is engaged in a number of business activities, the scope of which includes consulting and merger and acquisition advisory services, real estate and hospitality development, mining, natural resources, energy, and investing in special situations. The Company invests in various business opportunities within its chosen scope of business, provides financial consultancy and M&A advisory services to U.S. and foreign companies, and acquires selective target companies under special situations to create additional long-term value for its shareholders. The Company reported a net loss of $1.2 million on $409,317 of revenue for the fiscal year ended June 30, 2011, compared with a net loss of $3.6 million on $83,990 of revenue for the fiscal year ended June 30, 2010. The Company's balance sheet at June 30, 2011, showed $1.6 million in total assets, $9.2 million in total liabilities, and a stockholders' deficit of $7.6 million. Dave Banerjee CPA, in Woodland Hills, Calif., expressed substantial doubt about PHI Group's ability to continue as a going concern. The independent auditors noted that the Company has accumulated deficit of $28,177,788 and net loss amounting $1,178,297 for the year ended June 30, 2011. PIONEER CHRISTIAN: Case Summary & 3 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Pioneer Christian Academy, Inc. dba Jonathan Edwards Classical Academy 4216 Cecil Court S Nashville, TN 37207 Bankruptcy Case No.: 12-01545 Chapter 11 Petition Date: February 20, 2012 Court: United States Bankruptcy Court Middle District of Tennessee (Nashville) Judge: Marian F. Harrison Debtor's Counsel: Steven L. Lefkovitz, Esq. LAW OFFICES LEFKOVITZ & LEFKOVITZ 618 Church St Ste 410 Nashville, TN 37219 Tel: (615) 256-8300 Fax: (615) 255-4516 E-mail: slefkovitz@lefkovitz.com Scheduled Assets: $2,489,649 Scheduled Liabilities: $620,500 A list of the Company's three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/tnmb12-01545.pdf The petition was signed by Samuel Gage, president. PRECISION OPTICS: Incurs $324,875 Net Loss in Dec. 31 Quarter ------------------------------------------------------------- Precision Optics Corporation, Inc., filed with the U.S. Securities and Exchange Commission a Form 10-Q reporting a net loss of $324,875 on $493,774 of revenue for the three months ended Dec. 31, 2011, compared with a net loss of $330,950 on $435,770 of revenue for the same period during the prior year. The Company reported net income of $1.67 million on $998,523 of revenue for the six months ended Dec. 31, 2011, compared with a net loss of $488,796 on $1.12 million of revenue for the same period a year ago. The Company reported a net loss of $1.05 million for the fiscal year ended June 30, 2011, compared with a net loss of $660,882 in the preceding year. Precision Optics' balance sheet at Dec. 31, 2011, showed $1.67 million in total assets, $501,023 in total liabilities, all current, and $1.17 million in total stockholders' equity. As reported in the TCR on Sept. 27, 2010, Stowe & Degon LLC, in Westborough, Mass., expressed substantial doubt about Precision Optics' ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2010. The independent auditors noted that the Company has suffered recurring net losses and negative cash flows from operations. A full-text copy of the Form 10-Q is available for free at: http://is.gd/6PYOP0 About Precision Optics Headquartered in Gardner, Massachusetts, Precision Optics Corporation, Inc., has been a developer and manufacturer of advanced optical instruments since 1982. The Company designs and produces high-quality micro-optics, medical instruments and other advanced optical systems. The Company's medical instrumentation line includes laparoscopes, arthroscopes and endocouplers and a world-class product line of 3-D endoscopes for use in minimally invasive surgical procedures. RALPH LEO BRUTSCHE: Court Lifts Stay, Denies Cash Collateral Use ---------------------------------------------------------------- Bankruptcy Judge James S. Starzynski granted the requests of Los Alamos National Bank and the Grevey-Liberman creditors for relief from the automatic stay in the Chapter 11 case of Ralph Leo Brutsche. The Court denied Mr. Brutsche's request to use cash collateral to fund his case. The Court noted there is a substantial overlap in the collateral of the two creditors. The Court said there is no equity in the Summit and that there is no reasonable prospect of a reorganization in sight. A copy of the Court's Feb. 16, 2012 Memorandum Opinion is available at http://is.gd/YckSPdfrom Leagle.com. Ralph Leo Brutsche filed his voluntary individual Chapter 11 petition (Bankr. D. N.M. Case No. 11-13326) on July 22, 2011. Mr. Brutsche is a residential subdivision developer that has worked in the Santa Fe, New Mexico area for at least 20 years of his 50+ years in the business. Since 1991 he has worked on a high-end subdivision that lies between the City of Santa Fe and the Santa Fe Ski Basin. Over the years, the project has consisted of different names and phases, e.g. Summit North, South Side, High Summit, but all basically are stages of one grand project under the umbrella name of Santa Fe Summit, or "Summit." Mr. Brutsche owns 31 lots that are "fully developed," meaning that all plats have been approved and filed, all infrastructure work is done, and utilities are available. He also owns 18 "partially developed" lots which plats have been approved and filed, but require about $225,000 in additional infrastructure work to be fully developed. RAY ANTHONY: Case Dismissed; Collection Remedies Reinstated ----------------------------------------------------------- The Hon. Thomas P. Agresti of the U.S. Bankruptcy Court for the Western District of Pennsylvania dismissed the Chapter 11 case of Ray Anthony International, Inc. The Court also ordered that: -- creditor collection remedies are reinstated; -- a creditor's lawsuit must be filed by the later of (1) the time deadline prescribed by state law, or (2) thirty days after the date of the order; -- the Debtor remains legally liable for all of their debts as if the bankruptcy petition had not been filed. About Ray Anthony International West Mifflin, Pennsylvania-based Ray Anthony International, Inc., before liquidating substantially all of its assets, owned and operated a crane rental/leasing company. The Company filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 10- 26576) on Sept. 15, 2010. The Debtor estimated assets and debts at $50 million to $100 million as of the Chapter 11 filing. Affiliate Ray G. Anthony filed a separate Chapter 11 petition (Bankr. W.D. Pa. Case No. 10-26552) on Sept. 14, 2010. Robert O. Lampl, Esq., John P. Lacher, Esq., and Elsie R. Lampl, Esq., at the Law Offices of Robert O. Lampl, in Pittsburgh, Pa., represent the Debtor as counsel. The Debtor has sold a large portion of its assets by way of the B&G Crane Service, LLC and Red White and Blue Crane, LLC sales. Certain funds from various sales of assets, including but not limited to, B&G Crane Service, LLC, and Red White and Blue Crane, LLC, have been placed in to escrow subject to being released and paid only upon an order of the Bankruptcy Court or agreement by the parties holding lien claims. These funds will remain in escrow under the same terms and conditions and will not be released without Huntington's written consent. REDCO DEVELOPMENT: Disclosure Statement Conditionally Approved -------------------------------------------------------------- Redco Development Co., LLC, is set to seek confirmation of the Chapter 11 plan and affirmation that the disclosure statement contains adequate information at a combined hearing on March 15, 2012 at 1:30 p.m. The combined hearing was scheduled after the Debtor obtained conditional approval of the Third Amended Disclosure Statement dated Jan. 17, 2012. Under the Plan, the Debtor will continue to own and operate the Miller Building and McCall Condominiums to generate the maximum revenue possible from those properties while maintaining the condition of the buildings. Those banks holding claims secured by the buildings will be paid from that revenue. The reduction in the interest paid to each bank will result in the Debtor generating some net revenue. The net revenue will be retained for other payments required by the plan. With the reduction in monthly payments and greater revenue from the new tenants in the McCall Condominiums, the Debtor should be generating net revenue and will need no further cash contributions from Russ Dale, the owner. However, Mr. Dale has demonstrated his ability to make contributions to the Debtor during the course of this case. If funds are needed, Mr. Dale will contribute funds from the Plaza Building, an apartment building in downtown Medford that through the first three months of 2011 has generated net revenue of $31,176.14. The Debtor will collect the Northgate Note when due, and pay the claims of Class 2 and Class 4, the administrative claim of its attorneys as approved by the Court (estimated to be $110,000), and any balance owing on the Class 1 claims. The Debtor will retain $662,500 as a reserve to pay the state and federal taxes associated with the payoff of the Note. The remaining balance of the Northgate Note will be paid pro-rata on Class 9 claims. Primarily because of the reputation and financial strength of Guy Farthing, its partner in Northgate LLC, the Debtor anticipates that the Northgate Note will be paid when due, and, if not, the Debtor will be successful in legal action to collect the Note. The guarantors have significant real estate and other business holdings. Also, work continues on building the Northgate Mall, and recently the City approved Amendments to the Conditions of Approval to the Northgate Map Amendment to allow "big box" stores to be built in Northgate Mall and allow the builder to "phase-in" the off-site traffic mitigation improvements required as part of the approval. The balance remaining owing to the Class 9 creditors will be paid from the additional revenues generated from operations. However, if the additional revenues fall short, the Debtor can use funds from the payoff of the Archerd & Dresner Note to make up the shortfall. Furthermore, any funds left after payment of taxes from the tax reserve created by the payment of the Northgate Note will be held and used to pay the Class 9 claims. A copy of the Third Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/REDCO_DEVELOPMENT_ds_3rdamended.pdf About Redco Development Co., LLC Redco Development Co., LLC, in Medford, Oregon, filed for Chapter 11 bankruptcy protection (Bankr. D. Ore. Case No. 10-64783) on Aug. 3, 2010. James Ray Streinz, Esq., in Portland, Oregon, assists the Debtor in its restructuring effort. The Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million. ROBERTS BROADCASTING: Plans to Sell Stations to Repay Creditors --------------------------------------------------------------- Lisa Brown at St. Louis Today reports that Roberts Broadcasting said it is considering the sale of the stations to repay creditors. According to the report, a valuation of each of Roberts Broadcastings' stations, including their Federal Communications Commission licenses, is in progress. A. Thomas DeWoskin, an attorney representing Roberts Broadcasting in the bankruptcy, said the company is considering selling one or more of the TV stations. The report relates that Roberts Broadcasting will seek to sell the out-of-town stations first before seeking to sell the St. Louis station. The four TV stations are WRBU-Channel 46 in St. Louis, WZRB in Columbia, S.C.; WRBJ in Jackson, Miss.; and WAZE in Evansville, Ind. The report notes that Warner Bros. holds a $635,369 claim against the company from a judgment related to programming fees; King World Productions holds a $565,846 claim; and CBS Studios holds a $302,538 claim. Roberts Broadcasting Company, aka WRBU-TV, filed for Chapter 11 bankruptcy in St. Louis, Missouri, (Bankr. E.D. Mo. Case No. 11-50744) on Oct. 7, 2011. The Company discloed assets total $639,623 and its liabilities total $3.19 million. Affiliates that filed for Chapter 11 on the same day are Roberts Broadcasting Company of Jackson, MS, LLC (Bankr. E.D. Mo. Case No. 11-50745); Roberts Broadcasting Company of Evansville, IN, LLC (Bankr. E.D. Mo. Case No. 11-50746); and Roberts Broadcasting Company of Columbia, SC, LLC (Bankr. E.D. Mo. Case No. 11-50747), each listing under $1 million in assets. ROTHSTEIN ROSENFELDT: Trustees Inks $70MM Bank Settlement --------------------------------------------------------- Erica Teichert at Bankruptcy Law360 reports that a Florida bank has reached a tentative $70 million settlement with three bankruptcy trustees stemming from the bank's involvement in a $1.2 billion Ponzi scheme orchestrated by attorney Scott Rothstein, according to a court filing Thursday. Gibraltar Private Bank & Trust and its insurers agreed to pay $20 million upfront with an additional $50 million on the line to trustees of Rothstein's now-defunct law firm, Rothstein Rosenfeldt Adler PA and two bankrupt investment funds, Banyon 1030-32 LLC and Banyon Income Fund LP, according to the motion obtained by Law360. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. ROYAL HOSPITALITY: Ch. 11 Trustee Taps Kruth Stein as Accountant ---------------------------------------------------------------- Stephen D. Gerling, Esq., the Chapter 11 trustee for the estates of Royal Hospitality LLC ask the U.S. Bankruptcy Court for the Northern District for permission to employ Kruth, Stein, Squadrito, Liberman and Silverman, LLP as its accountant. To the best of the trustee's knowledge, Kruth does not hold any interest adverse to the estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Royal Hospitality LLC Royal Hospitality LLC, dba Comfort Suites, has been operating the Comfort Suites in Lake George, New York since May 2007. It filed for Chapter 11 protection (Bankr. N.D.N.Y. Case No. 10-13090) on Aug. 19, 2010. The Debtor disclosed $13,432,001 in assets and $11,154,770 in liabilities as of the Petition Date. Richard L. Weisz, Esq., at Hodgson Russ LLP, in Albany, N.Y., represents the Debtor as counsel. SALON MEDIA: Incurs $997,000 Net Loss in December 31 Quarter ------------------------------------------------------------ Salon Media Group, Inc., filed with the U.S. Securities and Exchange Commission a Form 10-Q reporting a net loss of $997,000 on $1.03 million of net revenues for the three months ended Dec. 31, 2011, compared with a net loss of $724,000 on $962,000 of net revenues for the same period a year ago. The Company reported a net loss attributable to common stockholders of $2.58 million on $4.57 million of net revenues for the year ended March 31, 2011, compared with a net loss attributable to common stockholders of $4.86 million on $4.29 million of net revenues during the prior year. The Company also reported a net loss of $1.54 million on $1.95 million of net revenues for the six months ended Sept. 30, 2011, compared with a net loss of $1.34 million on $2.52 million of net revenues for the same period a year ago. The Company reported a net loss of $2.54 million on $2.98 million of net revenues for the nine months ended Dec. 31, 2011, compared with a net loss of $2.06 million on $3.48 million of net revenues for the same period during the prior year. Salon Media's balance sheet at Dec. 31, 2011, showed $1.65 million in total assets, $12.94 million in total liabilities and a $11.29 million total stockholders' deficit. Burr Pilger Mayer, Inc., in San Francisco, California, Salon's independent registered public accounting firm for the years ended March 31, 2009, 2010, and 2011, included a "going-concern" audit opinion on the consolidated financial statements for those years. As reported by the TCR on July 4, 2011, Burr Pilger expressed substantial doubt about the Company's ability to continue as a going concern following the fiscal 2011 results. The independent auditors noted that the Company has suffered recurring losses and negative cash flows from operations and has an accumulated deficit of $108.4 million at March 31, 2011. A full-text copy of the Form 10-Q is available for free at: http://is.gd/u2Dqgp About Salon Media San Francisco, Calif.-based Salon Media Group (OTC BB: SLNM.OB) -- http://www.Salon.com/-- is an online news and social networking company and an Internet publishing pioneer. SECUREALERT INC: Incurs $1.6 Million Net Loss in Dec. 31 Quarter ---------------------------------------------------------------- SecureAlert, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $1.61 million on $5.55 million of total revenues for the three months ended Dec. 31, 2011, compared with a net loss of $2.06 million on $3.67 million of total revenues for the same period a year ago. The Company reported a net loss of $9.85 million on $17.96 million of total revenues for the fiscal year ended Sept. 30, 2011, compared with a net loss of $13.92 million on $12.45 million of total revenues during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $24.50 million in total assets, $9.70 million in total liabilities and $14.80 million in total equity. For Fiscal 2011, the Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, noted that the Company has incurred losses, negative cash flows from operating activities and has an accumulated deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/QyE18q About SecureAlert Inc. Sandy, Utah-based SecureAlert, Inc. (OTC BB: SCRA) -- http://www.securealert.com/-- is an international provider of electronic monitoring systems, case management and services widely utilized by more than 650 law enforcement agencies worldwide. The Company's balance sheet at June 30, 2011, showed $15.18 million in total assets, $10.48 million in total liabilities, and $4.70 million in total equity. SHERWOOD BRANDS: Bankruptcy Asset Auction Scheduled for Feb. 29 --------------------------------------------------------------- By order of the U.S. Bankruptcy Court, the assets of mass-market confectioner Sherwood Brands, Inc., and its affiliates will be liquidated through auctions that will get under way this week and next. The intellectual property, inventory, machinery and equipment, and related items are being auctioned by Tiger Group's Remarketing Services Division, while real estate specialists Tranzon Fox (VAAF 423) will be handling the auction of the company's manufacturing plant in Chase City and distribution center in Keysville. Sealed bids for the intellectual property are due at 5:00 p.m. (EST) on Friday, Feb. 24. The intellectual property includes trademarks, domain names, customer lists and product designs associated with such popular brands as Asher Candy Canes, Cows, Wanderfalls, and Fruitburst. For a sealed bid package, go to http://www.soldtiger.com/ Live bidding on the real estate, inventory, machinery and equipment, rolling stock, and office equipment will get under way at 11:00 a.m. (EST), on Wednesday, Feb. 29, at 807 S. Main St. in Chase City. For online bidding, go to: http://www.soldtiger.com/ Property inspections for the Keysville property, located at 350 Shaw Dr., and the Chase City site have begun. While the company had moved its manufacturing operations overseas, its Virginia facilities continued to house former manufacturing equipment, as well as packaging equipment used to process and package its confectionary products, seasonal gift sets and general merchandise. In addition to manufacturing, plant support and material handling equipment, the auction sale will include Sherwood's component inventory, which includes plush animals, mugs, toys, as well as finished chocolate and hard candy goods. The Chase City property provides 91,652 +/- sq. ft. of enclosed space and is located on 10 +/- acres zoned M1. The fully- sprinklered property has clear ceiling heights of approximately 14 ft. in the original section and approximately 21 ft. in the expansion. Public water and sewer are available. The Keysville property offers 74,687 +/- sq. ft. on 14.9 +/- acres zoned M1. The fully-sprinklered property has clear ceiling heights of approximately 13 ft. Once a major producer of niche-market candies and confections, and a primary U.S. manufacturer of seasonal candies and gift baskets, Sherwood Brands, Inc., and its affiliates, eventually succumbed to the effects of challenging economy. This led to a Chapter 11 bankruptcy filing for the formerly publicly-traded company that generated annual sales in excess of $50 million and employed approximately 600 people. As a result of the filing, the U.S. Bankruptcy Court in Greenbelt, Md. ordered the liquidation of some of the most valuable assets of a brand that once sold its wares on the shelves of such major retailers as Walgreens, CVS, Rite-Aid, Kroger, Winn-Dixie, Safeway, Wal-Mart, K-mart, and Target. "When a company like this falls, there is much lost by employees and the business community it touches; however, out of the ashes come many opportunities for buyers," said Jeff Tanenbaum, president of Tiger Remarketing Services. "This sale is no exception, with assets being auctioned ranging from confectionary and packaging equipment, to gift and candy related products, to real estate, trademarks, office equipment and so much more." For more information about the intellectual property, equipment, and inventory, visit http://www.SoldTiger.com For complete details about the real estate auction, including inspection dates and times, visit: http://www.tranzon.com and search "FX1670-71," or call Steve Fox at (757) 373-3151, or sfox@tranzon.com About Tiger Remarketing Services Division Tiger Remarketing Services and its affiliates at Tiger Group -- http://www.TigerGroupLLC.com-- provide advisory, restructuring, valuation, disposition and auction services within a broad range of retail, wholesale, and industrial sectors. Tiger maintains offices in Boston, Los Angeles, New York and Atlanta. About Tranzon Fox Tranzon Fox -- http://www.tranzon.com-- is a member company of Tranzon, L.L.C., and is a full-service auction and real estate disposition company. Tranzon has completed over $1.6 billion of real estate auction sales since its founding in 2000. About Sherwood Brands Sherwood Brands LLC, Sherwood Brands Inc., Sherwood Brands of Rhode Island, Inc., Sherwood Brands of Virginia, LLC, and Sherwood Brands Zip, LLC, filed separate Chapter 11 petitions (Bankr. D. Md. Case Nos. 11-23807, 11-23809, 11-23812, 11-23813 and 11- 23814) on July 1, 2011. James M. Greenan, Esq. at McNamee, Hosea, Jernigan, Kim Greenan & Lynch, P.A., serves as bankruptcy counsel. In its petition, Sherwood Brands LLC estimated assets of $1 million to $10 million and debts of $10 million to $50 million. SNEAKERS SPORTS: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Sneakers Sports Grille Point Meadows, Inc. 4334 Tradewinds Drive Jacksonville Beach, FL 32250 Bankruptcy Case No.: 12-00968 Chapter 11 Petition Date: February 18, 2012 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Brett A. Mearkle, Esq. LAW OFFICE OF BRETT A. MEARKLE, PA 8777 San Jose Blvd., Suite 801 Jacksonville, FL 32217 Tel: (904) 352-1342 Fax: (904) 352-1814 E-mail: bmearkle@mearklelaw.com Scheduled Assets: $2,936,600 Scheduled Liabilities: $5,253,503 A list of the Company's nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb12-00968.pdf The petition was signed by Nicholas D. Pratt, president. SP NEWSPRINT: PwC Approved to Audit 2011 Financial Statements ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized SP Newsprint Holdings LLC, et al., to employ PricewaterhouseCoopers LLP as independent accountants. As reported in the Troubled Company Reporter on Feb. 8, 2012, PwC will audit the consolidated financial statements of the Debtors as of and for the year ended Dec. 31, 2011, and provide other necessary auditing services as requested by the Debtors. Steven H. Baker, Esq., a partner at PwC, told the Court that PwC and the Debtors have agreed to a fixed fee for work to be performed in connection with the audit services in the amount of $395,000. If extraordinary circumstances arise that would cause the fixed amount to increase, PwC will advise the Debtors in advance of incurring any additional fees. Mr. Baker assures the Court that the firm is a "disinterested person", as that term is defined in Section 101(14), of the Bankruptcy Code. About SP Newsprint Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers, Southeastern Paper Recycling and SP Newsprint Merger LLC -- and three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011. SP Newsprint Holdings LLC is a newsprint company controlled by polo-playing mogul Peter Brant. It is one of the largest producers of newsprint in North America. SP Recycling Corporation, a Georgia corporation and the Debtors' other operating company, was established in 1980 as a means for SP to secure a ready supply of recycled fiber, a key raw material for its newsprint. SP Newsprint is the second Brant-owned newsprint company to tumble into bankruptcy proceedings in recent years. Current and former affiliated entities are Bear Island Paper Company, L.L.C., Brant Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint, Inc., White Birch Paper Company. Judge Christopher S. Sontchi presides over the case. Joel H. Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr., Esq. -- jlevitin@cahill.com , mpeleg@cahill.com and rstieglitz@cahill.com -- at Cahill Gordon & Reindel LLP serve as the Debtors' lead counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq. -- kaufman@rlf.com and collins@RLF.com -- at Richards, Layton & Finger, P.A., serve as the Debtors' Delaware counsel. AlixPartners LLP serves as the Debtors' financial advisors and The Garden City Group Inc. serves as the Debtors' claims and noticing agent. SP Newsprint Co., LLC, disclosed $317,992,392 in assets and $322,674,963 in liabilities as of the Chapter 11 filing. The petitions were signed by Edward D. Sherrick, executive vice president and chief financial officer. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler PC. Ashby & Geddes, P.A., serves as its Delaware counsel, and BDO Consulting serves as its financial advisor. STANFORD FINANCIAL: Victims Aren't Eligible For Payouts, SIPC Says ------------------------------------------------------------------ Amanda Bransford at Bankruptcy Law360 reports that the Securities Investor Protection Corp. told a Washington federal judge Wednesday that it was not required to compensate the victims of R. Allen Stanford's alleged $7 billion Ponzi scheme because his Antigua-based Stanford International Bank Ltd. was not a member of the corporation. About Stanford International Bank Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On February 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. The U.S. Securities and Exchange Commission, on Feb. 17, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi- billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him in June before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money- laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. The criminal case is U.S. v. Stanford, H-09-342, U.S. District Court, Southern District of Texas (Houston). The civil case is SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District Court, Northern District of Texas (Dallas). STERLING CHEMICALS: Brings Retiree Premium Fight to Supreme Court ----------------------------------------------------------------- Amanda Bransford at Bankruptcy Law360 reports that Sterling Chemicals Inc. asked the U.S. Supreme Court last week to find that it was allowed to raise premiums for a class of retired workers acquired in a merger because Sterling had rejected the merger contract during its Chapter 11 bankruptcy proceedings. Sterling asked the high court on Feb. 10 to review the Fifth Circuit's October ruling that, while Sterling may have ended its obligations to Cytec Industries Inc. under a 1996 asset purchase agreement, according to Law360. About Sterling Chemicals Sterling Chemicals Holdings, a manufacturer of petrochemicals, acrylic fibers, and pulp chemicals, filed for Chapter 11 protection on July 16, 2001 in the Southern District of Texas Bankruptcy Court. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom, represents the Debtors in their restructuring effort. SUPERMEDIA INC: Restructuring Capital Owns 11.3% Equity Stake ------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Restructuring Capital Associates, L.P., and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 1,745,090 shares of common stock of Supermedia Inc. representing 11.3% of the shares outstanding. A full-text copy of the filing is available at http://is.gd/UuowsP About SuperMedia Inc. DFW Airport, Texas-based SuperMedia Inc. and its subsidiaries sells advertising solutions to its clients and places their advertising into its various advertising media. The Company's advertising media include Superpages yellow page directories, Superpages.com, its online local search resource, the Superpages.com network, an online advertising network, Superpages direct mailers, and Superpages mobile, its local search application for wireless subscribers. The Company is the official publisher of Verizon Communications Inc. print directories in the markets in which Verizon is currently the incumbent local telephone exchange carrier. The Company also has agreements with FairPoint Communications, Inc., and Frontier Communications Corporation in various Northeast and Midwest markets in which FairPoint and Frontier are the local exchange carriers. On March 31, 2009, SuperMedia Inc., formerly known as Idearc Inc., and all of its domestic subsidiaries filed voluntary petitions for Chapter 11 relief (Bankr. N.D. Tex. Lead Case No. 09-31828). On Sept. 8, 2009, the Company filed its First Amended Joint Plan of Reorganization with the Bankruptcy Court, which was later modified on Nov. 19, 2009, and on Dec. 22, 2009, the Bankruptcy Court entered an order approving and confirming the Amended Plan. On Dec. 31, 2009 (the "Effective Date"), the Debtors consummated the reorganization and emerged from the Chapter 11 bankruptcy proceedings. On Dec. 29, 2011, the Bankruptcy Court entered final decrees closing the bankruptcy cases for the Debtors. SuperMedia Inc. and subsidiaries reported a net loss of $909.0 million on $1.258 billion of operating revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $252.0 million on $750.0 million of operating revenue for the same period of 2010. The Company's balance sheet at Sept. 30, 2011, showed $1.834 billion in total assets, $2.758 billion in total liabilities, and a stockholders' deficit of $924.0 million. * * * As reported in the TCR on Dec. 27, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Dallas-based SuperMedia Inc. to 'CCC+' from 'SD' (selective default). The rating outlook is negative. SUPERMEDIA INC: Schultze Asset Discloses 9.2% Equity Stake ---------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Schultze Asset Management, LLC, and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 1,429,093 shares of common stock of Supermedia Inc. representing 9.2% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/A5rOhl About SuperMedia Inc. DFW Airport, Texas-based SuperMedia Inc. and its subsidiaries sells advertising solutions to its clients and places their advertising into its various advertising media. The Company's advertising media include Superpages yellow page directories, Superpages.com, its online local search resource, the Superpages.com network, an online advertising network, Superpages direct mailers, and Superpages mobile, its local search application for wireless subscribers. The Company is the official publisher of Verizon Communications Inc. print directories in the markets in which Verizon is currently the incumbent local telephone exchange carrier. The Company also has agreements with FairPoint Communications, Inc., and Frontier Communications Corporation in various Northeast and Midwest markets in which FairPoint and Frontier are the local exchange carriers. On March 31, 2009, SuperMedia Inc., formerly known as Idearc Inc., and all of its domestic subsidiaries filed voluntary petitions for Chapter 11 relief (Bankr. N.D. Tex. Lead Case No. 09-31828). On Sept. 8, 2009, the Company filed its First Amended Joint Plan of Reorganization with the Bankruptcy Court, which was later modified on Nov. 19, 2009, and on Dec. 22, 2009, the Bankruptcy Court entered an order approving and confirming the Amended Plan. On Dec. 31, 2009 (the "Effective Date"), the Debtors consummated the reorganization and emerged from the Chapter 11 bankruptcy proceedings. On Dec. 29, 2011, the Bankruptcy Court entered final decrees closing the bankruptcy cases for the Debtors. SuperMedia Inc. and subsidiaries reported a net loss of $909.0 million on $1.258 billion of operating revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $252.0 million on $750.0 million of operating revenue for the same period of 2010. The Company's balance sheet at Sept. 30, 2011, showed $1.834 billion in total assets, $2.758 billion in total liabilities, and a stockholders' deficit of $924.0 million. * * * As reported in the TCR on Dec. 27, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Dallas-based SuperMedia Inc. to 'CCC+' from 'SD' (selective default). The rating outlook is negative. SYNAGRO TECHNOLOGIES: Moody's Cuts Corp. Family Rating to Caa2 -------------------------------------------------------------- Moody's Investors Service has downgraded ratings of Synagro Technologies, Inc., including the corporate family rating to Caa2 from Caa1. The rating outlook is stable. RATINGS RATIONALE The downgrade reflects a very high debt to revenue ratio, and a liquidity profile that Moody's views to have weakened because of the approaching April 2013 revolving credit maturity. A soft U.S. economy is causing low municipal tax revenues, which directly pressures Synagro's sales prospects. When fiscally stretched, municipalities more readily forego wastewater treatment system upgrades and the bidding environment for services also intensifies. Additionally, the Alternative Mixture Fuel Credit (AMFC), a key source of income and cash flow for Synagro in 2011, which arose from the U.S. fiscal stimulus legislation of 2009, has now expired. The stable rating outlook anticipates that the company may maintain financial ratio covenant compliance in 2012. Also, some receivables from AMFC income booked in 2011 remain outstanding; collection in 2012, should give extra cash to lessen the likelihood that working capital and maintenance spending requirements may increase revolver borrowings from current levels. Moody's does not expect a material improvement in primary demand for wastewater treatment services near-term. But efforts by Synagro's new executive management to boost core earnings could enable covenant compliance beyond 2012, and also factor into the outlook. Upward rating momentum would depend on expectation of EBIT to interest above 1x and a sustained adequate liquidity profile. Downward rating pressure could grow if the potential for default were to become more certain than not. Ratings changes: Corporate family, to Caa2 from Caa1 Probability of default, to Caa2 from Caa1 $100 million first lien revolver due April 2013, to Caa1 LGD3, 37% from B3 LGD3, 35% $290 million first lien term loan due April 2014, to Caa1 LGD3, 37% from B3 LGD3, 35% $150 million second lien term loan due October 2014, affirmed at Caa3 LGD5, to 87% from 85% Outlook, Stable The principal methodology used in rating Synagro Technologies, Inc. was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Synagro Technologies, Inc., based in Houston, Texas, is a recycler of bio-solids and other organic residuals in the U.S. Over the twelve months ended September 30, 2011, revenues were $284 million. The company is majority-owned by entities of The Carlyle Group. TALON INTERNATIONAL: Lonnie Schnell Discloses 10.7% Equity Stake ---------------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Lonnie D. Schnell disclosed that, as of Dec. 31, 2011, he beneficially owns 2,475,000 shares of common stock of Talon International, Inc., representing 10.7% based on a total of 21,000,808 shares of the Issuer's common stock issued and outstanding on Nov. 9, 2011, as reported on the Issuer's Quarterly Report on Form 10-Q filed on Nov. 10, 2011. A full-text copy of the Schedule is available for free at http://is.gd/IhA6hk About Talon International Woodland Hills, Calif.-based Talon International, Inc. (OTC BB: TALN) -- http://www.talonzippers.com/-- is a global supplier of apparel fasteners, trim and interlining products to manufacturers of fashion apparel, specialty retailers, mass merchandisers, brand licensees and major retailers. Talon manufactures and distributes zippers and other fasteners under its Talon(R) brand, known as the original American zipper invented in 1893. Talon also designs, manufactures, engineers, and distributes apparel trim products and specialty waistbands under its trademark names, Talon, Tag-It and TekFit, to more than 60 apparel brands and manufacturers including Wal-Mart, Kohl's, J.C. Penney, Victoria's Secret, Tom Tailor, Abercrombie and Fitch, Polo Ralph Lauren, Phillips-Van Heusen, Reebok and Juicy Couture. Talon has offices and facilities in the United States, United Kingdom, Hong Kong, China, and Bangladesh. The Company reported a net loss of $1.46 million on $41.46 million of net sales for the year ended Dec. 31, 2010, compared with a net loss of $2.69 million on $38.67 million of net sales during the prior year. The Company also reported net income of $129,377 on $31.38 million of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $1.44 million on $32.48 million of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $15.37 million in total assets, $9.41 million in total liabilities, $19.89 million in Series B Convertible Preferred Stock, and a $13.93 million total stockholders' deficit. TALON INTERNATIONAL: Larry Dyne Discloses 9.2% Equity Stake ----------------------------------------------------------- Larry Dyne filed with the U.S. Securities and Exchange Commission an amended Schedule 13G disclosing that, as of Dec. 31, 2011, he beneficially owns 2,089,600 shares of common stock of Talon International, Inc., representing 9.2% based on a total of 21,000,808 shares of the Issuer's common stock issued and outstanding on Nov. 9, 2011, as reported on the Issuer's Quarterly Report on Form 10-Q filed on Nov. 10, 2011. A full-text copy of the amended filing is available at http://is.gd/sVvWZK About Talon International Woodland Hills, Calif.-based Talon International, Inc. (OTC BB: TALN) -- http://www.talonzippers.com/-- is a global supplier of apparel fasteners, trim and interlining products to manufacturers of fashion apparel, specialty retailers, mass merchandisers, brand licensees and major retailers. Talon manufactures and distributes zippers and other fasteners under its Talon(R) brand, known as the original American zipper invented in 1893. Talon also designs, manufactures, engineers, and distributes apparel trim products and specialty waistbands under its trademark names, Talon, Tag-It and TekFit, to more than 60 apparel brands and manufacturers including Wal-Mart, Kohl's, J.C. Penney, Victoria's Secret, Tom Tailor, Abercrombie and Fitch, Polo Ralph Lauren, Phillips-Van Heusen, Reebok and Juicy Couture. Talon has offices and facilities in the United States, United Kingdom, Hong Kong, China, and Bangladesh. The Company reported a net loss of $1.46 million on $41.46 million of net sales for the year ended Dec. 31, 2010, compared with a net loss of $2.69 million on $38.67 million of net sales during the prior year. The Company also reported net income of $129,377 on $31.38 million of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $1.44 million on $32.48 million of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $15.37 million in total assets, $9.41 million in total liabilities, $19.89 million in Series B Convertible Preferred Stock, and a $13.93 million total stockholders' deficit. TALON THERAPEUTICS: Samuel Isaly Ceases to Hold 5% Equity Stake --------------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Samuel D. Isaly and his affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 869,644 shares of common stock of Talon Therapeutics, Inc., representing 3.84% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/ZoHzLS About Talon Therapeutics Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc. (TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical company dedicated to developing and commercializing new, differentiated cancer therapies designed to improve and enable current standards of care. The company's lead product candidate, Marqibo, potentially treats acute lymphoblastic leukemia and lymphomas. The Company has additional pipeline opportunities some of which, like Marqibo, improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity. Effective Dec. 1, 2010, Hana Biosciences Inc. changed its name to Talon Therapeutics Inc. The name change was effected by merging Talon Therapeutics, Inc., a wholly-owned subsidiary of the Company, with and into the Company, with the Company as the surviving corporation in the merger. The Company reported a net loss of $25.98 million for the year ended Dec. 31, 2010, compared with a net loss of $24.14 million during the prior year. The Company also reported a net loss of $17.17 million for the nine months ended Sept. 30, 2011, compared with a net loss of $19.71 million for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $5.66 million in total assets, $32.66 million in total liabilities, $30.64 million in 10 million shares authorized, and a $57.64 million total stockholders' deficit. The Company does not generate any recurring revenue and will require substantial additional capital before it will generate cash flow from its operating activities, if ever. The Company does not currently have sufficient capital to fund its entire development plan beyond 2011. The Company's continued operations depend entirely upon obtaining additional capital. The Company will be unable to continue development of its product candidates unless it is able to obtain additional funding through equity or debt financings or from payments in connection with potential strategic transactions. The Company can give no assurances that any additional capital that it is able to obtain, if any, will be sufficient to meet its needs. Moreover, there can be no assurance that such capital will be available to the Company on favorable terms or at all, especially given the current economic environment which has severely restricted access to the capital markets. If anticipated costs are higher than planned or if the Company is unable to raise additional capital, it will have to significantly curtail planned development to maintain operations through 2011. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. As reported by the TCR on April 1, 2011, BDO USA, LLP, in San Francisco, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. BDO noted that the Company suffered recurring losses from operations and has a net capital deficiency. TANNIN INC: Files for Chapter 11, Has $42.8MM BP Claim ------------------------------------------------------ Tannin, Inc., filed a Chapter 11 petition (Bankr. S.D. Ala. Case No. 12-00593) in Mobile, Alabama, on Feb. 20, 2012. Baldwin, Alabama-based Tannin disclosed $54.4 million in assets and $2.4 million in liabilities as of the Chapter 11 filing. Tannin owns properties facing the Gulf of Mexico. According to the schedules attached to the petition, Tannin owns more than 30 acres of properties in Alabama. Reports last year say that the Debtor, which is the developer of the 60-acre Village of Tanin in Orange Beach, Alabama, has asserted claims against BP PLC. A massive offshore oil spill spread in the Gulf of Mexico after an April 2010 explosion of Deepwater Horizon, which was drilling oil for BP. The Debtor included in its list of personal property a 'BP Claim' worth $42.8 million as "other contingent and unliquidated claims" of the Debtor. Gross income of the business during the previous 12 months prior to the filing was $199,900. Aside from the petition and the schedules, the Debtor has filed an application to employ Silver, Voit & Thompson as attorney. Objections are due March 12. George A. Gounares, who owns 100% of the stock, signed the Chapter 11 petition. TELECONNECT INC: Delays Form 10-Q for Dec. 31 Quarter ----------------------------------------------------- Teleconnect Inc. informed the U.S. Securities and Exchange Commission that it will be late in filing its Quarterly Report on Form 10-Q for the period ended Dec. 31, 2011. About Teleconnect Inc. Based in Breda, in The Netherlands, Teleconnect Inc. (OTC BB: TLCO) Teleconnect Inc. (initially named Technology Systems International Inc.) was incorporated under the laws of the State of Florida on November 23, 1998. Serving as a telecommunications service provider in Spain for almost 9 years, the Company never fully reached expectations and decided late in 2008 to change its course of business. In November 2009, 90% of the Company's telecommunication business was sold to a Spanish group of investors, and on October 15, 2010, the Company completed the acquisition of Hollandsche Exploitatie Maatschappij BV (HEM), a Dutch entity established in 2007. HEM's core business involves the age validation of consumers when purchasing products which cannot be sold to minors, such as alcohol or tobacco. The Company regards this age validation business as its new strategic direction. The Dutch companies acquired in 2007 (Giga Matrix, The Netherlands, 49% and Photowizz, The Netherlands, 100%) are considered to function complementary to this new service offering. Through the purchase of HEM and its ownership in Photowizz and Giga Matrix the Company now controls all four pillars under its business model: the manufacturing and leasing of electronic age validation equipment, the performance of age validation transactions remotely, the performance of market surveys and the broadcasting of in-store commercial messages using the age validation equipment in between age checks. The Company reported a net loss of $3.26 million on $112,722 of sales for the year ended Sept. 30, 2011, compared with net income of $1.97 million on $254,446 of sales during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $7.98 million in total assets, $10.66 million in total liabilities, all current, and a $2.68 million total stockholders' deficit. Coulter & Justus, P.C., in Knoxville, Tenn., expressed substantial doubt about the Company's ability to continue as a going concern following the fiscal 2011 financial results. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency in addition to a working capital deficiency. TELETOUCH COMMUNICATIONS: Lazarus Holds 10.5% Equity Stake ---------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Lazarus Investment Partners LLLP and its affiliates disclosed that, as of Feb. 14, 2012, they beneficially own 5,140,850 shares of common stock of Teletouch Communications, Inc., representing 10.5% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/x5smn4 About Teletouch Teletouch Communications, Inc., offers a comprehensive suite of wireless telecommunications solutions, including cellular, two-way radio, GPS-telemetry and wireless messaging. Teletouch is an authorized provider of AT&T (NYSE: T) products and services (voice, data and entertainment) to consumers, businesses and government agencies, as well as an operator of its own two-way radio network in Texas. Recently, Teletouch entered into national agency and distribution agreements with Sprint (NYSE: S) and Clearwire (NASDAQ: CLWR), providers of advanced 4G cellular network services. Teletouch operates a chain of 26 retail and agent stores under the "Teletouch" and "Hawk Electronics" brands, in conjunction with its direct sales force, customer care (call) centers and various retail eCommerce Web sites including: http://www.hawkelectronics.com/and http://www.hawkexpress.com/ Through its wholly-owned subsidiary, Progressive Concepts, Inc., Teletouch operates a national distribution business, PCI Wholesale, primarily serving large cellular carrier agents and rural carriers, as well as auto dealers and smaller consumer electronics retailers, with product sales and support available through http://www.pciwholesale.com/and http://www.pcidropship.com/among other B2B oriented Web sites. The Company's balance sheet at Nov. 30, 2011, showed $19.72 million in total assets, $23.17 million in total liabilities and a $3.45 million total shareholders' deficit. As reported by the TCR on Sept. 1, 2011, BDO USA, LLP, in Houston, Texas, noted that the Company has increasing working capital deficits, significant current debt service obligations, a net capital deficiency along with current and predicted net operating losses and negative cash flows which raise substantial doubt about its ability to continue as a going concern. THERMOENERGY CORP: Empire Capital Discloses 4.9% Equity Stake ------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Empire Capital Management, L.L.C., and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 3,003,571 shares of common stock and 2,132,729 shares of Series B Convertible Preferred Stock convertible into 21,327,290 shares of common stock of 3,003,571 shares of common stock and 2,132,729 shares of Series B Convertible Preferred Stock convertible into 21,327,290 shares of common stock representing 4.99% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/uX0tQX About ThermoEnergy Corporation Little Rock, Ark.-based ThermoEnergy Corporation is a clean technologies company engaged in the worldwide development of advanced municipal and industrial wastewater treatment systems and carbon reducing clean energy technologies. As reported by the TCR on April 7, 2011, Kemp & Company, a Professional Association, in Little Rock, Arkansas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred net losses since inception and will require substantial capital to continue commercialization of the Company's technologies and to fund the Companies liabilities. The Company reported a net loss of $9.85 million on $2.87 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $12.98 million on $4.01 million of revenue during the prior year. The Company also reported a net loss of $11.87 million on $3.57 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $8.49 million on $2.05 million of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $4.27 million in total assets, $11.09 million in total liabilities and a $6.81 million total stockholders' deficiency. TRAILER BRIDGE: Seeks More Exclusivity as Insurance Policy ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Trailer Bridge Inc. is seeking an expansion of the exclusive right to propose a reorganization if the Chapter 11 plan doesn't win approval at the currently-scheduled March 16 confirmation hearing. If the motion is granted at a March 8 hearing, the exclusive right to propose a plan will be pushed out to May 14. Trailer Bridge said it's "optimistic" the plan will secure approval on March 16. Earlier this month, Trailer Bridge filed a revised plan reflecting negotiations with the creditors' committee and the U.S. Maritime Administration regarding liens on vessels. Secured noteholders owed $86.3 million will receive a new secured note for $65 million plus some of the new stock, for a projected 75% recovery. About Trailer Bridge Headquartered in Jacksonville, Florida, Trailer Bridge, Inc. -- http://www.trailerbridge.com/-- provides integrated trucking and marine freight service to and from all points in the lower 48 states and Puerto Rico and Dominican Republic. This total transportation system utilizes its own trucks, drivers, trailers, containers and U.S. flag vessels to link the mainland with Puerto Rico via marine facilities in Jacksonville, San Juan and Puerto Plata. Trailer Bridge filed a voluntary Chapter 11 petition (Bankr. M.D. Fla. Case No. 11-08348) on Nov. 16, 2011, one day after its $82.5 million 9.25% Senior Secured Notes became due. Judge Jerry A. Funk presides over the case. Gardner F. Davis, Esq., at Foley & Lardner LLP, and DLA Piper LLP (US) serve as the Debtor's counsel. Global Hunter Securities LLC serves as the Debtor's investment banker. RAS Management Advisors LLC serves as the Debtor's financial advisor. Kurtzman Carson Consultants LLC serves as claims, noticing, and balloting agent. The Debtor disclosed $97,345,981 in assets, and $112,538,934 in liabilities. The petition was signed by Mark A. Tanner, co-chief executive officer. The Court will hold a combined hearing on the Plan and Disclosure Statement on March 16, 2012. The Plan, which was filed in January, proposes to give noteholders control of the company and provide some recovery for shareholders. On Dec. 6, 2011, the U.S. Trustee appointed the Official Committee of Unsecured Creditors in the Debtor's case. TRANSUNION CORP: Moody's Lowers Corporate Family Rating to 'B2' --------------------------------------------------------------- Moody's Investors Service lowered the Corporate Family Rating (CFR) of TransUnion Corp. (TransUnion) to B2 from B1. Concurrently, Moody's assigned a Caa1 rating to $600 million of new senior unsecured notes to be held at a holding company (HoldCo). The rating on the senior secured credit facilities was raised to Ba2 from Ba3 and the B3 rating on the existing $645 million of senior unsecured notes held at the operating company was affirmed. An SGL-2 Speculative Grade Liquidity rating was assigned and the ratings outlook is stable. RATINGS RATIONALE The downgrade in the CFR to B2 from B1 reflects an increase in financial leverage (total debt / EBITDA) to about 6 times on a pro forma basis for an incremental $600 million in proposed debt. Going forward, Moody's expects that excess cash will be used to make product investments and acquisitions, rather than debt reduction, and financial leverage will remain above 5.5 times over the next 12-18 months. "Free cash flow and interest coverage will weaken as a result of the higher interest burden, providing less financial flexibility, with free cash flow to debt expected to be in the low single digits", stated Moody's AVP-Analyst Suzanne Wingo. The CFR is further constrained by additional regulatory oversight of consumer credit bureaus and the company's vulnerability to swings in U.S. consumer activity. Nonetheless, in the near-term Moody's expects positive trends in average daily credit report volumes and consumer subscription rates to continue, which has been driven in particular by increasing automobile loan and credit card originations. The B2 rating is further supported by TransUnion's good liquidity profile, high profit margins, and strong market position as one of the three dominant players in the global consumer credit bureau industry. Moody's has assigned an SGL-2 Speculative Grade Liquidity Rating, reflecting Moody's expectations that TransUnion will maintain a good liquidity profile over the next twelve months. Moody's expects internal cash generation to cover working capital needs, capital expenditures, and minimal term loan amortization. The company may modestly draw on the $210 (proposed upsize from $200) million revolver as part of the transaction financing, but any outstanding balance is expected to be repaid by mid-year. Cushion on financial covenants contained within the credit facility is expected to remain ample. These covenants are measured at the operating company level and are not expected to be impacted by the incremental HoldCo debt. The stable outlook reflects Moody's expectation that revenue and EBITDA will grow modestly over the next 12-18 months, in line with GDP projections in the regions in which TransUnion operates. The ratings could be upgraded if the company successfully executes its growth strategy while reducing financial leverage to below 5 times and increasing free cash flow to debt to above 5% on a sustained basis. Conversely, the ratings could be downgraded if the company loses market share, experiences a deterioration in margins or liquidity, or incurs incremental debt such that financial leverage is sustained above 6.5 times. Rating (LGD assessment) assigned to TransUnion Holding Company: Proposed $600 million sr. unsecured notes due 2018, Caa1 (LGD6, 90%) Rating assigned to TransUnion Corp.: Speculative Grade Liquidity Rating, SGL-2 Ratings lowered at TransUnion Corp.: Corporate Family Rating, to B2 from B1 Probability of Default Rating, to B2 from B1 Ratings (LGD assessments) upgraded at TransUnion LLC: $25 million sr. secured revolver due 2015, to Ba2 (LGD2, 19%) from Ba3 (LGD3, 30%) $175 million sr. secured revolver due 2016, to Ba2 (LGD2, 19%) from Ba3 (LGD3, 30%) $943 (originally $950) million sr. secured term loan due 2018, to Ba2 (LGD2, 19%) from Ba3 (LGD3, 30%) Rating (LGD assessment) affirmed at TransUnion LLC: $645 million sr. unsecured notes due 2018, B3 (to LGD4, 64% from LGD5, 84%) For additional information, refer to the Credit Opinion to be posted on moodys.com. The ratings are contingent upon closing of the proposed transaction and Moody's review of final documentation. The principal methodology used in rating TransUnion Corp. 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. TransUnion is a leading provider of information and risk management solutions to businesses across multiple industries and to individual consumers. In 2011, revenues exceeded $1 billion. TransUnion announced that Advent International and GS Capital Partners VI Fund, LP and certain of its affiliates have signed a definitive agreement to purchase all of TransUnion's shares outstanding from current shareholders Madison Dearborn Partners and the Pritzker family business interests for over $3 billion. The transaction will add about $600 million of debt to the capital structure and is expected to close early in the second quarter. TRANSWEST RESORT: Court Rejects Bid for Stay Relief, Examiner ------------------------------------------------------------- Bankruptcy Judge Eileen W. Hollowell issued a written order and memorandum on account of its Dec. 16, 2011 ruling denying the request of JPMCC 2007-C1 Grasslawn Lodging, L.L.C. for relief from the automatic stay under 11 U.S.C. Sections 362(d)(1)-(3) or, in the alternative, for (1) dismissal under 11 U.S.C. Section 1112(b) or (2) the appointment of an examiner under 11 U.S.C. Section 1104 in the bankruptcy cases of Transwest Resort Properties, Inc., Transwest Tucson Property, L.L.C., Transwest Hilton Head Property, L.L.C., Transwest Tucson II, L.L.C., and Transwest Hilton Head II, L.L.C. In the Dec. 16 Ruling, the Court also denied Pim Ashford Subsidiary I, LLC's motion for relief from stay on Ashford's secured claims against Transwest Tucson II LLC and Transwest Hilton Head II LLC. Grasslawn on Jan. 3, 2012, filed a notice of intent to appeal the Court's oral ruling. Grasslawn asserts it is the assignee of Ashford's claims. A copy of the Court's Feb. 15 Memorandum is available at http://is.gd/Y71Dq8from Leagle.com. About Transwest Resort Tucson, Arizona-based Transwest Resort Properties, Inc., indirectly owns an interest in two companies, Transwest Tucson Property, L.L.C., and Transwest Hilton Head Property, L.L.C. These two companies each own and manage a resort hotel: the Westin La Paloma Resort and Country Club in Tucson, Arizona, which is owned and managed by Transwest Tucson Property, L.L.C., and the Westin Hilton Head Island Resort and Spa on Hilton Head Island in South Carolina, which is owned and managed by Transwest Hilton Head Property, L.L.C. TRP, Transwest Tucson Property, and Transwest Hilton Head property are affiliates of Transwest Partners, a real estate development and investment firm which has been active in the hospitality sector in Southern Arizona and Sonora, Mexico. Transwest Tucson Property is a wholly owned subsidiary of Transwest Tucson II, L.L.C. Transwest Hilton Head Property is a wholly owed subsidiaryof Transwest Hilton Head II, L.L.C. TRP filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 10-37134) on Nov. 17, 2010. Kasey C. Nye, Esq., Susan g. Boswell, Esq., and Elizabeth S. Fella, Esq., at Quarles & Brady LLP, in Tucson, Ariz., assist the Debtor in its restructuring effort. TRP estimated its assets at up to $50,000 and debts at $10 million to $50 million. Affiliates Transwest Hilton Head Property, L.L.C. (Bankr. D. Ariz. Case No. 10-37170), Transwest Tucson Property, L.L.C. (Bankr. D. Ariz. Case No. 10-37160), Transwest Tucson II, L.L.C. (Bankr. D. Ariz. Case No. 10-37151), and Transwest Hilton Head II, L.L.C. (Bankr. D. Ariz. Case No. 10-37145) filed separate Chapter 11 petitions on Nov. 17, 2010. BeachFleischman PC serves as tax preparer and advisor, accountant and auditor. Hundley & Company, LLC, serves as financial restructuring and interest rate experts, and Hospitality Real Estate Counselors as valuation consultant and expert. Transwest Hilton Head Property estimated assets at $10 million to $50 million and debts at $100 million to $500 million. Transwest Tucson Property estimated assets at $50 million to $100 million and debts at $100 million to $500 million. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors. TRAVELODGE: Denies Bankruptcy Risk, Gets Financing -------------------------------------------------- Travelodge will get financing from two New York-based hedge funds as the UK budget hotel chain owned by Dubai International Capital restructures debt. Avenue Capital Group and GoldenTree Asset Management have underwritten a medium-term facility of GBP60 million (US$95 million), James Leviton, a spokesman for Travelodge, said after the Sunday Times reported the company had six weeks to raise the money or it could face bankruptcy. "All the lenders are working together to find a sensible solution to the debt structure," Leviton said. "Travelodge is not going into administration." Avenue Capital and GoldenTree, which have held Travelodge's debt since 2006, may ask the senior lenders Royal Bank of Scotland Group, Investec, Barclays and Babson Capital Management to participate in the fundraising, Leviton said. "GoldenTree has been a very supportive lender to Travelodge for many years and continues to work closely with the company and management," the hedge fund said in a statement on Sunday. About Travelodge The first budget hotel brand to launch in the UK in 1985, Travelodge now operates over 490 hotels and over 35,400 rooms across the UK, Ireland (11) and Spain (4). TRIUS THERAPEUTICS: Wellington Stake Down to 2.91% -------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Wellington Management Company, LLP, disclosed that, as of Dec. 31, 2011, it beneficially owns 831,910 shares of common stock of Trius Therapeutics, Inc., representing 2.91% of the shares outstanding. As previously reported by the TCR on Feb. 15, 2012, Wellington Management disclosed beneficial ownership of 4,477,216 common shares. A full-text copy of the amended filing is available for free at http://is.gd/RSiasv About Trius Therapeutics San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) -- http://www.triusrx.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of innovative antibiotics for serious, life-threatening infections. The Company's first product candidate, torezolid phosphate, is an IV and orally administered second generation oxazolidinone being developed for the treatment of serious gram-positive infections, including those caused by MRSA. In addition to the company's torezolid phosphate clinical program, it is currently conducting two preclinical programs using its proprietary discovery platform to develop antibiotics to treat infections caused by gram-negative bacteria. The Company has incurred losses since its inception and it anticipates that it will continue to incur losses for at least the next several years. The Company does not anticipate that its existing working capital, including the funds received on Aug. 6, 2010, from its IPO, alone will be sufficient to fund its operations through the successful development and commercialization of torezolid phosphate or any other products it develops. As a result, the Company says it will need to raise additional capital to fund its operations and continue to conduct clinical trials to support potential regulatory approval of torezolid phosphate and any other product candidates. The Company reported a net loss of $23.86 million on $8.03 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $22.68 million on $5.01 million of total revenues during the prior year. The Company also reported a net loss of $5.73 million on $36 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $15.11 million on $5.51 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $77.02 million in total assets, $15.64 million in total liabilities and $61.38 million in total stockholders' equity. UNI-PIXEL INC: Revelation Special Discloses 7.4% Equity Stake ------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Revelation Special Situations Fund Ltd and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 534,411 shares of common stock Uni-Pixel, Inc., representing 7.48% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/LBoJxs About Uni-Pixel Inc. The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL) -- http://www.unipixel.com/-- is a production stage company delivering its Clearly Superior(TM) Performance Engineered Films to the Lighting & Display, Solar and Flexible Electronics market segments. The Company reported a net loss of $3.81 million on $243,519 of thin film revenue for the year ended Dec. 31, 2010, compared with a net loss of $5.37 million on $0 of thin film revenue during the prior year. The Company also reported a net loss of $6.69 million on $190,297 of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $2.94 million on $140,037 of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $9.71 million in total assets, $143,600 in total liabilities and $9.57 million in total shareholders' equity. PMB Helin Donovan, LLP, in Houston, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has sustained losses and negative cash flows from operations since inception. VIGOR: Moody's Reviews 'B1' Ratings for Possible Downgrade ---------------------------------------------------------- Moody's has placed under review for possible downgrade the long- term ratings for Vigor, following JBS' (B1 stable) announcement of a voluntary exchange offering to spin-off the dairy subsidiary to its shareholders . The transaction is still dependent on the approval, as well as exemptions from compliance with certain regulatory provisions, by the Brazilian Securities and Exchange Commission (CVM). In addition, JBS will need the consent of holders of the bonds issued by (i) JBS USA LLC and JBS USA Finance Inc., maturing in May 2014; (ii) JBS and JBS Finance Ltd., maturing in August 2016; and (iii) JBS S.A. (as the successor of Bertin S.A.), maturing in October 2016. These ratings have been place under review for possible downgrade: S.A. Fabrica de Produtos Alimenticios Vigor ("Vigor") - Corporate Family Rating: B1 (global scale) - US$100 million senior unsecured notes due 2017: B1 (foreign currency) RATINGS RATIONALE "The review process was triggered by the fact that, upon the approval and conclusion of the proposed share swap, Vigor will operate independently, without the operating and financial support of its parent company", says local market analyst Marianna Waltz. The action is also taking into consideration that Vigor's US$100 million 2017 bonds are not guaranteed by JBS. Vigor was rated B2 until its acquisition by JBS in 2009, when the rating was raised to B1, the same level as JBS, reflecting anticipated benefit from JBS' scale and bargaining power, and access to capital. This rating lift will not exist after the proposed share swap. Accordingly, besides the removal of JBS' support, the review will take into consideration Vigor's high financial leverage, as measured by Debt/EBITDA, and its relative small size in a consolidating market that tends to favor larger players. With annual revenues of BRL 1.2 billion in fiscal year 2011, the company operates in the competitive dairy business against well capitalized and larger international and local peers, including Nestl�, Danone and Brasil Foods. On the other hand, the review will consider the business profile of the dairy segment, which can provide higher and more stable margins than the protein industry. In addition, Vigor has a portfolio of leading and well recognized brands with focus on value-added products targeting different social classes. In Moody's views, Vigor's corporate governance standards should improve with the share swap, since upon the conclusion of the transaction it will be listed in the Novo Mercado of BM&FBovespa. Moreover, the company should benefit from having a dedicated professional management team, as opposed to being a minor business segment of JBS. Vigor will also have a Board of Directors with five independent members and a Fiscal Council. Moody's expects to conclude the review process by the time the share swap has been approved and concluded. The principal methodology used in this rating was Global Packaged Goods Industry published in July 2009. Founded in 1917 and headquartered in S?o Paulo, Vigor is currently 100% owned by JBS. With annual revenues of BRL 1.2 Billion the company is a manufacturer of dairy products and vegetable oils, having under its portfolio the brands Vigor, Leco, Faixa Azul, Danubio and Serrabella. About 61% of revenues come from value added dairy products, while only 8% come from UHT milk. Vigor is a relevant player in the Southeast of Brazil, with approximately 75% of its revenues coming from this region, principally from S?o Paulo, which accounts for 65% of the group's revenues on a standalone basis. VIKING SYSTEMS: DAFNA Capital Discloses 5.2% Equity Stake --------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, DAFNA Capital Management, LLC, and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 3,781,468 shares of common stock of Viking Systems, Inc., representing 5.2% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/FIUGtT About Viking Systems Based in Westborough, Massachusetts, Viking Systems, Inc. (OTCBB: VKNG.OB) -- http://www.vikingsystems.com/-- is a developer, manufacturer and marketer of visualization solutions for complex minimally invasive surgery. The Company partners with medical device companies and healthcare facilities to provide surgeons with proprietary visualization systems enabling minimally invasive surgical procedures, which reduce patient trauma and recovery time. The report from Viking Systems, Inc.'s independent registered public accounting firm, Squar, Milner, Peterson, Miranda & Williamson, LLP, dated February 22, 2010, includes a going concern explanatory paragraph which states that factors relating to the Company's net losses and working capital concerns raise substantial doubt the Company's ability to continue as a going concern. Viking Systems said it will need to generate significant additional revenue to achieve profitability and it may require additional financing during 2010. "The going concern explanatory paragraph in the independent auditor's report emphasizes the uncertainty related to our business as well as the level of risk associated with an investment in our common stock," Viking Systems said. The Company also reported a net loss of $1.87 million on $8.59 million of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $1.37 million $5.75 million of net sales for the same period a year ago. The Company reported a net loss applicable to common shareholders of $2.44 million on $8.04 million of sales for the year ended Dec. 31, 2010, compared with a net loss applicable to common shareholders of $1.07 million on $7.22 million of sales during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $6.26 million in total assets, $2.59 million in total liabilities, all current, and $3.66 million in total stockholders' equity. VILLAGE AT CAMP: 3rd Amended Plan of Reorganization Wins Court OK ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas confirmed Village at Camp Bowie I, L.P.'s Third Amended Plan of Reorganization. As reported in the Troubled Company Reporter on Dec. 6, 2011, the Plan contemplates that the Debtor will pay its creditors 100% of the Allowed Amount of their Claims. Funds for the payments will come from cash on hand plus $1,500,000 from the Preferred Equity to be issued to participating Interest Holders of the Debtor or other third party investors and from future revenue of the Reorganized Debtor. A copy of the Third Amended Plan of Reorganization is available at: http://bankrupt.com/misc/VILLAGE_thirdamendedplan.pdf About Village at Camp Bowie I Dallas, Texas-based Village at Camp Bowie I, L.P. owns a low-rise, mixed-use development in southwest Fort Worth, Texas, known eponymously as the Village at Camp Bowie. The Property occupies 23.08 acres in an excellent location in one of the busier areas of the city. Space in the Property is leased for office, retail, restaurant and entertainment purposes. The Property is presently slightly less than 80% occupied. Village at Camp Bowie I filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-45097) on Aug. 2, 2010. J. Mark Chevallier, Esq., at McGuire, Craddock & Strother, P.C., in Dallas, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. VISUALANT INC: Gemini Master Discloses 8.7% Equity Stake -------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Gemini Master Fund, Ltd., and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 5,230,722 shares of common stock of Visualant, Inc., representing 8.7% of the shares outstanding. A full-text copy of the Form 10-Q is available at http://is.gd/eYT1Dx About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on October 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant reported a net loss of $2.39 million on $9.13 million of revenue for the year ended Sept. 30, 2011, compared with a net loss of $1.14 million on $2.54 million of revenue during the previous year. The Company's balance sheet at Dec. 31, 2011, showed $4.23 million in total assets, $5.96 million in total liabilities, $39,504 in noncontrolling interest and a $1.76 million in total stockholders' deficit. "The Company anticipates that it will record losses from operations for the foreseeable future. As of December 31, 2011, our accumulated deficit was $11.7 million. The Company has limited capital resources, and operations to date have been funded with the proceeds from private equity and debt financings. These conditions raise substantial doubt about our ability to continue as a going concern." In its report Visualant's 2011 results, Madsen & Associates CPA's, Inc., in Salt Lake City Utah, noted that the Company will need additional working capital for its planned activity and to service its debt, which raises substantial doubt about its ability to continue as a going concern. Bankruptcy Warning The Company had cash of $71,000, a net working capital deficit of approximately $3.3 million and total indebtedness of $2.6 million as of Dec. 31, 2011. The Company will need to obtain additional financing to implement its business plan, service its debt repayments and acquire new businesses. There can be no assurance that the Company will be able to secure funding, or that if such funding is available, whether the terms or conditions would be acceptable to the Company. Volatility and disruption of financial markets could affect the Company's access to credit. The current difficult economic market environment is causing contraction in the availability of credit in the marketplace. This could potentially reduce or eliminate the sources of liquidity for the Company. If the Company is unable to obtain additional financing, the Company may need to restructure its operations, divest all or a portion of its business or file for bankruptcy. WASHINGTON MUTUAL: Plan Could Be Implemented as Soon as March 8 --------------------------------------------------------------- Bankruptcy Judge Mary Walrath said at the confirmation hearing on Friday that she will approve the reorganization plan of Washington Mutual Inc., thus concluding the three and one-half year-old bankruptcy. Under the plan, WaMu will establish a liquidating trust to make distributions to parties-in-interest on account of their allowed claims, which are expected to total more than $7 billion. In addition, the plan includes significant recoveries for creditors and distribution of substantially all of the stock in the reorganized company to current equity holders. It will become effective after the court enters a written order reflecting this ruling and other conditions have been satisfied. According to Bill Rochelle, the bankruptcy columnist for Bloomberg News, a WaMu lawyer told the judge that the plan could be implemented and the first distribution made to creditors as soon as March 8. Mr. Rochelle notes that there is urgency to implement the plan because interest accruing in favor of secured creditors is cutting into the distribution remaining for lower-ranked creditors. Judge Walrath wrote opinions more than a hundred pages in length explaining why prior versions of the plan had fatal defects precluding court approval, even though they were supported by a majority of creditors. The ultimately successful plan incorporated changes Judge Walrath demanded when she nixed the prior version in September. According to Mr. Rochelle, confirmation remained uncertain when the hearing began last week because the class of preferred shareholders voted against the plan by a narrow margin. But he says confirmation became possible with negotiation of a settlement with holders of so-called trust-preferred securities who decided to changes their votes to "yes" given $18 million carved out for them by JPMorgan Chase & Co., the purchaser of the failed bank subsidiary. 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. Records filed Jan. 24, 2012, say that WaMu, former owner of the biggest U.S. bank to fail, has spent $232.8 million on bankruptcy professionals since its Chapter 11 filing. WAVE2WAVE COMMUNICATIONS: Files for Bankruptcy Protection --------------------------------------------------------- Wave2Wave Communications Inc., a provider of voice and data services to businesses, filed for bankruptcy (Bankr. D. N.J. Case No. 12-13896) on Feb. 17. Wave2Wave, which estimated up to $100 million assets and debts, says it sought Chapter 11 protection, after access provider Verizon Communications Inc. threatened to cut off its service. "In light of the company's current financial condition and the threat of Verizon entities to terminate service," bankruptcy is in the company's best interest, Chairman Steven Asman said in the filing. Affiliates RNK Inc. and RNK VA LLC also filed petitions. Wave2Wave was founded in 1999, the company said in November. According to the docket, incomplete filings, including the schedule of assets and liabilities and the list of all creditors, are due March 2, 2012. A status conference is scheduled for April 16, 2012 at 2:00 p.m. WAVE2WAVE COMMUNICATIONS: Voluntary Chapter 11 Case Summary ----------------------------------------------------------- Debtor: Wave2Wave Communications, Inc. Continental Plaza, 6th Floor 433 Hackensack Avenue Hackensack, NJ 07601 Bankruptcy Case No.: 12-13896 Chapter 11 Petition Date: February 17, 2012 Court: U.S. Bankruptcy Court District of New Jersey (Newark) Judge: Donald H. Steckroth Debtor's Counsel: Michael D. Sirota, Esq. COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A. 25 Main Street Hackensack, NJ 07601 Tel: (201) 489-3000 E-mail: msirota@coleschotz.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $50,000,001 to $100,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Steven Asman, president & chairman of the board. Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- RNK, Inc 12-13899 RNK VA, LLC 12-13900 WAYTRONX INC: Further Amends Form S-1 Registration Statement --------------------------------------------------------------- CUI Global, Inc., filed with the U.S. Securities and Exchange Commission Amendment No.6 to Form S-1 registration statement relating to the Company's offering of an indeterminate shares of common stock. The Company's common stock is currently quoted on the OTC Bulletin Board under the symbol "CUIG.OB." On Aug. 17, 2011, the Company filed an application for listing its common stock on the Nasdaq Capital Market tier of The Nasdaq Stock Market which application has not yet been approved. A full-text copy of the amended prospectus is available at: http://is.gd/4Ny49Z About CUI Global Tualatin, Ore.-based CUI Global, Inc., formerly known as Waytronx, Inc., is a platform company dedicated to maximizing shareholder value through the acquisition, development and commercialization of new, innovative technologies. The Company reported a net loss of $7.5 million on $40.9 million of revenues for 2010, compared with a net loss of $16.0 million on $28.9 million of revenues for 2009. The Company also reported consolidated net profit of $177,961 on $30.14 million of total revenue for the nine months ended Sept. 30, 2011, compared with a consolidated net loss of $3.41 million on $26.28 million of total revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $32.78 million in total assets, $20.07 million in total liabilities, and $12.70 million in total stockholders' equity. As reported by the TCR on April 8, 2011, Webb & Company, in Boynton Beach, Florida, expressed substantial doubt about CUI Global's ability to continue as a going concern. The independent auditors noted that the Company has a net loss of $7,015,896, a working capital deficiency of $675,936 and an accumulated deficit of $73,596,738 at Dec. 31, 2010. W.R. GRACE: Realigns Business Segments, Has New Officers -------------------------------------------------------- W. R. Grace & Co. (NYSE: GRA) announced early this month a realignment of its business into three operating segments: Grace Catalysts Technologies, Grace Materials Technologies and Grace Construction Products. Reporting to Grace's President and Chief Operating Officer Gregory Poling will be: Shawn Abrams, President of Grace Catalysts Technologies. Mr. Abrams most recently served as Vice President, Refining Technologies within the former Grace Davison operating segment. The new Grace Catalysts Technologies segment includes catalysts and related technologies used in refining, petrochemical and other chemical manufacturing applications. 2011 revenues for this segment were approximately $1.4 billion. Grace's Advanced Refining Technologies joint venture is managed in this segment. Joanne Green, President of Grace Materials Technologies. Ms. Green most recently served as Vice President, Discovery Sciences within the former Grace Davison operating segment. The new Grace Materials Technologies segment includes engineered materials, coatings and sealants used in consumer, industrial, packaging and pharmaceutical applications. 2011 revenues for this segment were approximately $800 million. Andrew Bonham, President of Grace Construction Products. Mr. Bonham continues in his current role. Grace Construction Products includes specialty construction chemicals and specialty building materials used in commercial, infrastructure and residential construction. 2011 revenues for this segment were approximately $1.0 billion. "This new business segment structure allows us to align our segments more closely with our markets and to pursue operational efficiencies and reduce overhead costs," said Chairman and Chief Executive Officer Fred Festa. "We are excited about the opportunities that lie ahead, and are as committed as ever to supporting and anticipating the needs of our customers." Grace will report its financial results using the new operating structure beginning in 2012. Also, the Grace Board of Directors elected Bill Dockman and Elyse Filon officers of the corporation. Bill Dockman, Vice President, Controller and Chief Accounting Officer, has served as a Vice President and in other senior finance and accounting roles at Grace for more than ten years. Elyse Filon, Vice President and Treasurer, has served as a Vice President and in other senior tax and treasury roles at Grace for more than ten years. Dockman's SEC Filing In a Form 3 filing with the Securities and Exchange Commission on February 14, 2012, Mr. Dockman disclosed that he directly owns 100 shares of Grace common stock. Mr. Dockman also beneficially owns employee stock options, rights to buy Grace common stock, that will expire on these dates: Price of Derivative Expiration Date # of Shares Security --------------- ----------- ---------- 09/11/2013 11,180 19.710 05/07/2014 9,710 9.785 05/05/2015 12,250 27.745 05/05/2016 10,000 42.255 About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: FMR LLC Has 12.45% Equity Stake ------------------------------------------- FMR LLC disclosed in a February 14, 2012, Schedule 13G/A filing with the U.S. Securities and Exchange Commission that it is deemed to beneficially own 9,194,298 shares of W.R. Grace & Co. common stock. The amount represents 12.454% of the 73,826,771 Grace shares outstanding as of October 31, 2011. Fidelity Management & Research Company, a wholly-owned subsidiary of FMR and an investment adviser, is the beneficial owner of 9,155,093 shares or 12.401% of the Common Stock outstanding of Grace. Edward C. Johnson 3d and FMR, through its control of Fidelity, and the funds each has sole power to dispose of the 9,155,093 shares owned by the Funds. Members of the family of Mr. Johnson, Chairman of FMR, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR, representing 49% of the voting power of FMR. Neither FMR nor Mr. Johnson has the sole power to vote or direct the voting of the shares owned directly by the Fidelity Funds, which power resides with the Funds' Boards of Trustees. Fidelity carries out the voting of the shares under written guidelines established by the Funds' Boards of Trustees. Pyramis Global Advisors Trust Company, an indirect wholly-owned subsidiary of FMR, is the beneficial owner of 39,205 shares or 0.053% of the outstanding Common Stock of Grace. Mr. Johnson and FMR, through its control of PGATC, each has sole dispositive power over 39,205 shares and sole power to vote or to direct the voting of 39,205 shares of Common Stock owned by the institutional accounts managed by PGATC. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Vanguard Group Has 5.1% Equity Stake ------------------------------------------------ The Vanguard Group, Inc., disclosed in a February 10, 2012 Schedule 13G filing with the U.S. Securities and Exchange Commission that it is deemed to beneficially own 3,770,188 shares of W.R. Grace & Co. common stock. The amount represents 5.4% of the 73,826,771 Grace shares outstanding as of October 31, 2011. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 45,565 shares or 0.06% of the Common Stock outstanding of the Company as a result of its serving as investment manager of collective trust accounts. VFTC directs the voting of these shares. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ZOO ENTERTAINMENT: Socius Capital Discloses 9.9% Equity Stake ------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Socius Capital Group, LLC, and Terren S. Peizer disclosed that, as of Dec. 31, 2011, they beneficially own 397,067 shares of common stock of Zoo Entertainment, Inc., representing 9.9% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/38Y45z About Zoo Entertainment Cincinnati, Ohio-based Zoo Entertainment, Inc. (NASDAQ CM: ZOOG) is a developer, publisher and distributor of interactive entertainment for Internet-connected consoles, handheld gaming devices, PCs, and mobile devices. The Company reported a net loss of $19.74 million on $8.59 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $837,000 on $43.71 million of revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $6.19 million in total assets, $13.03 million in total liabilities and a $6.84 million total stockholders' deficit. As reported in the TCR on April 26, 2011, EisnerAmper LLP, in Edison, N.J., expressed substantial doubt about Zoo Entertainment's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has both incurred losses and experienced net cash outflows from operations since inception. ZOO ENTERTAINMENT: Focus Capital Discloses 6.8% Equity Stake ------------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Focus Capital Partners, LLC, and Terren S. Peizer disclosed that, as of Dec. 31, 2011, they beneficially own 543,060 shares of common stock of Zoo Entertainment, Inc., representing 6.8% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/S5Zo8c About Zoo Entertainment Cincinnati, Ohio-based Zoo Entertainment, Inc. (NASDAQ CM: ZOOG) is a developer, publisher and distributor of interactive entertainment for Internet-connected consoles, handheld gaming devices, PCs, and mobile devices. The Company reported a net loss of $19.74 million on $8.59 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $837,000 on $43.71 million of revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $6.19 million in total assets, $13.03 million in total liabilities and a $6.84 million total stockholders' deficit. As reported in the TCR on April 26, 2011, EisnerAmper LLP, in Edison, N.J., expressed substantial doubt about Zoo Entertainment's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has both incurred losses and experienced net cash outflows from operations since inception. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- April 3-5, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Grand Hyatt Atlanta, Atlanta, Ga. Contact: http://www.turnaround.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 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 ***