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/raid1/www/Hosts/bankrupt/TCR_Public/120227.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, February 27, 2012, Vol. 16, No. 57 Headlines 2655 BUSH: Chapter 11 Status Conference on April 6 2655 BUSH: Sec. 341 Creditors' Meeting Set for March 13 ADINO ENERGY: Sells Interest in IFL to Pomisu XXI for $900,000 ADVANCED MEDICAL: Case Summary & 7 Largest Unsecured Creditors AIR CANADA: Machinists Union Reject 'Sub-Standard' Offer AMERICAN APPAREL: Stilotex Founder Named Independent Director AMERICAN LASER: Debtor Now Named CLA Hold After Versa Sale AMERICAN LASER: Herrick Feinstein Approved as Committee Counsel AMERICAN LASER: Ashby & Geddes OK'd as Panel's Delaware Counsel AMERICAN LASER: J.H. Cohn Okayed as Committee's Financial Advisor AMERICAN REALTY: Taps Santoro Driggs as General Bankruptcy Counsel APEX DIGITAL: Replaces Rutter Hobbs With Davidoff Gold as Attorney APEX DIGITAL: Wants to Retain Shafai as Special Litigation Counsel APEX DIGITAL: Withdraws Motion to Extend Exclusive Periods APPALACHIAN REGIONAL: Fitch Lifts Rating on $61MM Bonds to 'BB' APPLETON PAPERS: Has Tentative $3-Bil. Supply Pact With Domtar ARCTIC GLACIER: Chapter 15 Case Summary AUTOS VEGA: Euroclass Plan Disclosures Hearing Set for March 29 BEAU VIEW: Section 341(a) Meeting Rescheduled to March 21 BIG RIVERS: Bankruptcy Examiner Scolded Over Misconduct BERNARD L. MADOFF: Investors' Bid to Oust Trustee Fails BROADSTRIPE LLC: Assets Sold; To Wrap Up Case via Ch. 7 CADILLAC NURSING: Case Summary & 20 Largest Unsecured Creditors CAESARS ENTERTAINMENT: Lenders Convert $71MM Into Term B-6 Loans CAPSALUS CORP: Completes Purchase of Genewize Life Sciences CHRIST HOSPITAL: Final Hearing on HFG DIP Facility Today CLEAN BURN: Trustee Opposes Case Conversion to Chapter 7 CLEAR CHANNEL: Board Approves 2012 Supplemental Incentive Plan COMSTOCK MINING: Underwriters Exercise Over-Allotment Option CONNAUGHT GROUP: Has 5-Member Creditors Committee CONNAUGHT GROUP: March 1 Hearing on Cash Use, Sale Protocol CONNAUGHT GROUP: Wins Extension of Schedules Filing Deadline CONNAUGHT GROUP: Taps Kurtzman Carson Consultants as Claims Agent CONNAUGHT GROUP: Zygote Associates to Provide CRO CROSSOVER FINANCIAL: Opposes DeCelles' Motion to Dismiss CUMULUS MEDIA: Board Provides Criteria for Incentive Awards CUSTER ROAD: Sec. 341 Creditors' Meeting on March 2 CUSTER ROAD: Files List of 20 Largest Unsecured Creditors CUSTER ROAD: Taps Richard W. Ward as Bankruptcy Counsel CYBERDEFENDER CORP: Files for Chapter 11 to Sell to GR Match DYNEGY INC: Committee Wants to Retain ICF as Markets Advisor DYNEGY INC: U.S. Bank Says Counterclaims Barred DRYSHIPS INC: Incurs $70.1 Million Net Loss in 2011 EASTMAN KODAK: S&P Assigns 'B-' Rating to $700MM DIP Term Loan EASTMAN KODAK: Apple Asks for Lift Stay of Patent Lawsuit EASTMAN KODAK: Wins Approval to Pay Employee Obligations EASTMAN KODAK: Wins Approval to $60-Mil. Foreign Vendor Claims ENERGY FUTURE: Subsidiaries to Offer $200MM of Sr. Secured Notes ENERGY TRANSFER: Fitch Assigns 'BB' Rating to Sr. Sec. Term Loan ENIVA USA: $350,000 Post-Confirmation Financing Approved ENIVA USA: Plan Confirmed; Unsecureds to Recover 7.5% in 3 Years EVERGREEN SOLAR: Wants Exclusive Filing Period Extended to June 12 EXECUTIVE CENTER OF SIMI: Sec. 341 Creditors' Meeting on March 20 EXECUTIVE CENTER OF SIMI: Platinum Objects to Cash Collateral Use G & W ROOFING: Case Summary & 20 Largest Unsecured Creditors GASPAR PROPERTIES: Case Summary & 24 Largest Unsecured Creditors GETTY PETROLEUM: Wants to Block Suit Over Gas Station Transfers GFR ONE: Case Summary & 6 Largest Unsecured Creditors GOLD LEAF: Firm That Sells Statue of Liberty Junk in Bankruptcy GOOD SAM: Completes Offer to Purchase $7.42 Million Senior Notes GOODYEAR TIRE: Fitch Rates Proposed $700-Mil. Notes at 'B/RR5' GREAT PLAINS: Wants to Employ Dworken & Bernstein as Counsel GREAT PLAINS: Can Retain Bernstein Law Firm as Counsel GREAT PLAINS: No Unsecured Creditors Committee Formed GRUBB & ELLIS: Can Hire Grubb & Ellis Company as Claims Agent HERCULES OFFSHORE: Files Fleet Status Report as of Feb. 23 HOSTESS BRANDS: U.S. Trustee Slams $5MM Pay Package for CEO HOVENSA LLC: S&P Withdraws 'B' Rating on $355.7MM Revenue Bonds HOVENSA LLC: Fitch Withdraws 'BB-' Ratings on Sr. Secured Bonds HP COMMUNITIES: S&P Affirms 'BB+' Rating on Series 2008B Bonds IMEDICOR INC: Incurs $5.2 Million Net Loss in 2011 INTELLICELL BIOSCIENCES: Earns $2-Mil. from Sale of Securities JEFFERSON COUNTY: S&P Affirms 'B' SPUR on Various Warrant Series KOREA TECHNOLOGY: Disclosure Statement Hearing Set for March 27 KOREA TECHNOLOGY: CAR Can Hire Natural Asphalt as Sales Agent KURRANT MOBILE: Misses Payment on $385,050 Promissory Notes LA JOLLA: To Effect a 1-for-100 Reverse Common Stock Split LEHMAN BROTHERS: Claims Trades Fell to $1.9-Bil. in January LEHMAN BROTHERS: NY Atty. General to Pursue Suit vs. E&Y LEHMAN BROTHERS: LBSF Drops Winding-Up Petition vs. Wockhardt LEHMAN BROTHERS: Names New Directors for Two Subsidiaries LEHMAN BROTHERS: Dominated Claims Trading in 2011 LEHMAN BROTHERS: Law Firm Escapes Ex-Workers Malpractice Claims LEHMAN BROTHERS: Retirees Seek Class Certification in Suit vs E&Y LEVEL 3: Board Approves Amendment to By-Laws LEVI STRAUSS: Anne Rohosy Named EVP, Pres. Commercial Operations LIBERATOR INC: Names M. Kane as EVP, J. Blanchard as SVP LODGENET INTERACTIVE: Incurs $631,000 Net Loss in 2011 M WAIKIKI: $9 Million DIP Loan from Davidson Trust Gets Final OK M WAIKIKI: HallStrom Group Approved as Non-Testifying Expert M WAIKIKI: Asserts that No Party May File a Plan Until Feb. 27 MAIN ST. PERSONAL: S&P Affirms 'B-' Counterparty Credit Rating MAUI LAND: Board of Directors Reduced to Six Members MERCHANTS MORTGAGE: Judge Confirms Chapter 11 Plan MF GLOBAL: Sangani Family Sought Claims Bar Date Extension MF GLOBAL: A. Furgatch Wants Sec. 523 Administration of Cases MF GLOBAL: US Specialty Wants Lift Stay to Pay Defense Costs MF GLOBAL: NHIC Indemnity Insurance Not Estate Asset MF GLOBAL: Has Stipulation on Reimbursing MFG for Defense Costs MGM RESORTS: Incurs $19.3 Million Net Loss in Fourth Quarter MGT CAPITAL: NYSE Gets Extension Related to Plan of Compliance MICROBILT CORP: Plan Outline Hearing Scheduled for March 8 MICROBILT CORP: Oscar Marquis OK'd as Special Regulatory Counsel MOHEGAN TRIBAL: Exchange Offers Expiration Extended Until Today MORGAN'S FOODS: James Pappas Elected to Board of Directors MORGAN'S FOODS: James Pappas Discloses 12.6% Equity Stake NAVISTAR INTERNATIONAL: Jeffrey Altman Holds 5.8% Equity Stake NET ELEMENT: Mike Zoi Discloses 90.7% Equity Stake NEW LEAF: Enters Into Consulting Agreement with Fuselier NO FEAR RETAIL: Hearing on Plan Disclosures Set for March 22 NORTHCORE TECHNOLOGIES: Renews Contract of Key Enterprise Client OMNICOMM SYSTEMS: Cornelis Wit Discloses 45.7% Equity Stake OMNICOMM SYSTEMS: Guus Kesteren Retains 5.7% Equity Stake OMNICOMM SYSTEMS: Fernando Montero Discloses 8.2% Equity Stake PATIENT SAFETY: Lynne Silverstein Appointed as Class A Director PHI GROUP: Incurs $61,000 Net Loss in Dec. 31 Quarter PHOENIX COMPANIES: Fitch Affirms Issuer Default Rating at 'B' PONCE TRUST: Case Summary & 20 Largest Unsecured Creditors PROLOGIS INC: Fitch Affirms 'BB' Rating on $582-Mil. Pref. Stock QUINTILES TRANSNATIONAL: S&P Rates $300MM Sr. Sec. Loan at 'B' RESPONSE GENETICS: Regains NASDAQ Compliance ROUNDY'S SUPERMARKETS: S&P Raises Corp. Credit Rating to 'B+' RSC EQUIPMENT: S&P Keeps 'B-' Corp. Credit Rating on Watch Neg. SAVANNAH OUTLET: Can Access Lender Cash Collateral Until April 30 SAVANNAH OUTLET: Case Dismissal Hearing Moved to April 17 SEARS HOLDINGS: Incurs $2.4 Billion Net Loss in Jan. 28 Quarter SEARS HOLDINGS: Poor 2011 Results Trigger Company Transformation SEMTECH CORP: S&P Assigns Prelim. 'BB' Corporate Credit Rating SHANTA CORPORATION: Case Summary & 20 Largest Unsecured Creditors SHASTA LAKE: Files Amended Plan of Reorganization SHENGDATECH INC: Wants Plan Filing Exclusivity Until June 18 SOLYNDRA LLC: Headquarters Could Land Foreign Buyer, Brokers Say SOVRAN LLC: Court Approves Schwabe Williamson as Counsel SP NEWSPRINT: Can Pay ACE's Surety Bonds from Cash Collateral SP NEWSPRINT: Has Until June 12 to Propose Chapter 11 Plan SP NEWSPRINT: Court Establishes March 23 as Claims Bar Date SP NEWSPRINT: Lease Decision Period Extended Until June 12 ST. JUDE: Case Summary & 20 Largest Unsecured Creditors SUNGARD DATA: Fitch Lifts Issuer Default Rating to 'B+' SUPERMEDIA INC: Board Establishes 2012 STIP Plan, Cash LTI Plan SUPERMEDIA INC: Files Form 10-K, Incurs $771MM Net Loss in 2011 SUPERMEDIA INC: To Utilize up to $31 Million to Buy Back Debt TAO-SAHI LP: Plan Confirmation Hearing Continued Until April 5 TECHNEST HOLDINGS: To Borrow $100,000 from Khaldoon Aljerian TRIBUNE CO: Wins Final Approval of Wage Class Action Settlement TRIBUNE CO: File 2015.3 Report as of Dec. 31 TRIDENT MICROSYSTEMS: U.S. Trustee Objects to Incentive Plan UNITED RENTALS: S&P Assigns 'BB-' Rating to $650-Mil. Sec. Notes UNITED STATES OIL: To Pay $650,000 Trentelman P-Note on June 30 VANTIV LLC: S&P Puts 'B+' Corporate Credit Rating on Watch Pos. VIASAT INC: S&P Assigns 'B+' Rating on $275-Mil. New Sr. Notes VITRO SAB: Units Face US Bank $311MM Breach of Contract Suit WHOLE FOODS: S&P Affirms 'BB+' Corporate Credit Rating ZALE CORP: Reports $28.8 Million Net Earnings in Jan. 31 Quarter * Harb, Levy & Weiland LLP to Merge with EisnerAmper LLP * BOND PRICING -- For Week From Feb. 20 to 24, 2012 ********* 2655 BUSH: Chapter 11 Status Conference on April 6 -------------------------------------------------- The Bankruptcy Court will hold a Chapter 11 Status Conference in the Chapter 11 case of 2655 Bush LLC on April 6, 2012, at 9:30 a.m. at San Francisco Courtroom 23 -- Carlson. The Debtor is required to file a Status Conference Statement by March 30. 2655 Bush LLC filed for Chapter 11 (Bankr. N.D. Calif. Case No. 12-30388) on Feb. 8, 2012, listing $10 million to $50 million in assets and debts. Judge Thomas E. Carlson presides over the case. Michael St. James, Esq., at St. James Law, serves as the Debtor's counsel. 2655 BUSH: Sec. 341 Creditors' Meeting Set for March 13 ------------------------------------------------------- The U.S. Trustee in San Francisco, California, will convene a First Meeting of Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 bankruptcy of 2655 Bush LLC on March 13, 2012, at 9:00 a.m. at San Francisco U.S. Trustee Office. Proofs of Claim are due by June 11, 2012. 2655 Bush LLC filed for Chapter 11 (Bankr. N.D. Calif. Case No. 12-30388) on Feb. 8, 2012, listing $10 million to $50 million in assets and debts. Judge Thomas E. Carlson presides over the case. Michael St. James, Esq., at St. James Law, serves as the Debtor's counsel. ADINO ENERGY: Sells Interest in IFL to Pomisu XXI for $900,000 -------------------------------------------------------------- Adino Energy Corporation sold all of its membership interest in its wholly-owned subsidiary, Intercontinental Fuels, LLC, to Pomisu XXI S.L. The purchase price to be paid is $900,000, to be paid in two installments with the first installment of $244,824 due on Feb. 7, 2011, and the balance due not later than May 7, 2012. The balance of the purchase price will be computed as follows: $900,000 minus $244,842 minus any IFL liabilities plus any cash on deposit with Regions Bank for the benefit of IFL or cash on deposit with J.P. Morgan Bank for the benefit of the Company. About Adino Energy Based in Houston, Texas, Adino Energy Corporation (OTC BB: ADNY) -- http://www.adinoenergycorp.com/-- through its wholly owned subsidiary Intercontinental Fuels, LLC, specializes in fuel terminal operations for retail, wholesale, and governmental suppliers. The Company reported a net loss of $851,570 for the nine months ended Sept. 30, 2011, compared with a net loss of $84,134 for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $3.55 million in total assets, $6.57 million in total liabilities, and a $3.01 million total stockholders' deficit. As reported by the TCR on April 8, 2011, M&K CPAS, PLLC, in Houston, Texas, 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 and maintains a working capital deficit. ADVANCED MEDICAL: Case Summary & 7 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Advanced Medical Imaging of Stuart, L.P. 1596 SE Federal Highway Stuart, FL 34994 Bankruptcy Case No.: 12-14182 Chapter 11 Petition Date: February 22, 2012 Court: U.S. Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtor's Counsel: Eric A. Rosen, Esq. ROSEN & WINIG, P.A. 2925 PGA Boulevard, # 100 Palm Beach Gardens, FL 33410 Tel: (561) 799-6040 Fax: (561) 799-4047 E-mail: erosen@rosenwinig.com - and ? Kaleb R. Bell, Esq. ROSEN & WINIG, P.A. 2925 PGA Boulevard, # 100 Palm Beach Gardens, FL 33410 Tel: (561) 799-6040 Fax: (561) 799-4047 E-mail: kbell@rosenwinig.com Scheduled Assets: $125,864 Scheduled Liabilities: $2,363,195 The Company's list of its seven largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flsb12-14182.pdf The petition was signed by Mark Greenberg, president of MG Imaging Corp., general partner. AIR CANADA: Machinists Union Reject 'Sub-Standard' Offer -------------------------------------------------------- The Membership of the International Association of Machinists and Aerospace Workers, the largest union at Air Canada, said in a statement that after nine months of face to face bargaining, it has voted to reject a proposed tentative agreement. The union said the membership was in "no mood to accept what they considered a sub-standard offer" from Air Canada. As a result, they have also voted 78% in support of strike action. The union notes that its members across the board are earning less in real terms than they did after the CCAA hearings in 2002. In real dollars, the members have been falling behind each year for over a decade, according to the group. According to the machinists group, Robert Milton inherited a profitable company and managed Air Canada into bankruptcy. He sold off the divisions that were the most profitable and then he walked away with between $82,000,000 and $100,000,000. Montie Brewer was next at the trough and left with around $17,500,000, leaving behind a company that was again in trouble. In 2009, all of the employees of Air Canada were once again asked to save the airline. They agreed to allow the company to delay their pension payments until 2014. The statement by the union said, "Now we have Mr. Calin Rovinescu who will soon get another $5,000,000 as a retention bonus. Our members are saying this cannot continue!" The IAMAW will be meeting next week to prepare for a return to bargaining with Air Canada. About Air Canada Air Canada -- http://www.aircanada.com/-- is Canada's largest domestic and international full-service airline providing scheduled and charter air transportation for passengers and cargo to more than 180 destinations on five continents. Canada's flag carrier is the 15th largest commercial airline in the world and serves over 34 million customers annually. Air Canada provides scheduled passenger service directly to 60 Canadian cities, 57 destinations in the United States and 63 cities in Europe, the Middle East, Asia, Australia, the Caribbean, Mexico and South America. Air Canada is a founding member of Star Alliance, the world's most comprehensive air transportation network serving 1,290 destinations in 189 countries. AMERICAN APPAREL: Stilotex Founder Named Independent Director ------------------------------------------------------------- The Board of Directors of American Apparel, Inc., elected Alberto Chehebar as a Class B director and as a member of the Nominating and Corporate Governance Committee of the Board. The Board has determined that there are no matters or relationships that it reasonably believes could be considered to interfere with Mr. Chehebar's exercise of independent judgment in carrying out the responsibilities of a director of the Company, and that Mr. Chehebar meets the definition of "independent director," as defined in Section 803A of the NYSE Amex Company Guide. Mr. Chehebar is a founder of Stilotex S.A., a Colombia-based wholesale distributor of textiles, toys, home appliances, baby clothing and baby products, where he has served as a director since 1992. Additionally, since 2006, Mr. Chehebar has served as a partner and a director of Pepe Ganga, a Colombia-based a retail chain that sells toys, clothing, and household, beauty, entertainment and sports products, among others. Mr. Chehebar has also served as a partner and a director of Blu Logistics, a Colombia-based shipping and logistics company, since 2008. Mr. Chehebar is a graduate of Manhattanville College, where he received a Bachelor of Arts with a concentration in Sociology. There were no arrangements or understandings between Mr. Chehebar and any other person pursuant to which Mr. Chehebar was elected to serve as a director, and there are and have been no transactions, either since the beginning of the Company's last fiscal year or currently proposed, involving Mr. Chehebar that are required to be disclosed under Item 404(a) of Regulation S-K. As a director, Mr. Chehebar will be eligible to receive compensation in the same manner as the Company's other directors, as outlined generally in the Company's definitive proxy statement filed with the Securities and Exchange Commission on May 20, 2011. About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. The Wall Street Journal reports that Skadden, Arps, Slate, Meagher & Flom has been advising the company on its recent restructuring efforts alongside investment bank Rothschild Inc. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Going Concern Doubt Marcum LLP, in New York, in its audit report on American Apparel's financial statements for the year ended Dec. 31, 2010, expressed substantial doubt about the Company's ability to continue as a going concern. As of April 30, 2011, the Company had approximately $8,000,000 of cash, approximately $8,900,000 of availability for additional borrowings and $46,100,000 outstanding on the credit facility under the BofA Credit Agreement and $1,400,000 of availability for additional borrowings and $4,000,000 outstanding on the credit facility under the Bank of Montreal Credit Agreement. As May 10, 2011, the Company had approximately $5,941,000 available for borrowing under the BofA Credit Agreement and $1,481,000 available under the Bank of Montreal Credit Agreement. American Apparel reported a net loss of $86.31 million on $532.99 million of net sales for the year ended Dec. 31, 2010, compared with net income of $1.11 million on $558.77 million of net sales during the prior year. The Company also reported a net loss of $28.15 million on $389.76 million of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $67.01 million on $389.02 million of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $323.64 million in total assets, $267.51 million in total liabilities and $56.12 million in total stockholders' equity. Bankruptcy Warning The Company incurred a loss from operations of $20,942 for the nine months ended Sept. 30, 2011, compared to a loss from operations of $38,167 for the nine months ended Sept. 30, 2010. The current operating plan indicates that losses from operations will be incurred for all of fiscal 2011. Consequently, the Company may not have sufficient liquidity necessary to sustain operations for the next twelve months and this raises substantial doubt that the Company will be able to continue as a going concern. There can be no assurance that management's plan to improve its operating performance and financial position will be successful or that the Company will be able to obtain additional financing on commercially reasonable terms or at all. As a result, the Company's liquidity and ability to timely pay its obligations when due could be adversely affected. Any new financing also may be substantially dilutive to existing stockholders and may require reductions in exercise prices or other adjustments of the Company's existing warrants. Furthermore, the Company's vendors and landlords may resist renegotiation or lengthening of payment and other terms through legal action or otherwise. If the Company is not able to timely, successfully or efficiently implement the strategies that it is pursuing to improve its operating performance and financial position, obtain alternative sources of capital or otherwise meet its liquidity needs, the Company may need to voluntarily seek protection under Chapter 11 of the U.S. Bankruptcy Code. AMERICAN LASER: Debtor Now Named CLA Hold After Versa Sale ---------------------------------------------------------- ALC Holdings LLC, et al., filed with the U.S. Bankruptcy Court for the District of Delaware an amended notice of change of case caption to reflect that CLA Holdings LLC will be known instead as CLA Hold LLC. As reported in the Troubled Company Reporter on Feb. 21, 2012, the Debtor notified the Court that effective Feb. 3, the case caption will reflect CLA Holdings LLC, et al. On Jan. 31, 2012, the Court approved the asset purchase agreement and authorized the sale of certain assets. Pursuant to the sale order, the Debtors are authorized to change their corporate names and caption of the Chapter 11 cases. A full-text copy of the changes in the Debtors' names and caption changes is available for free at: http://bankrupt.com/misc/ALCHOLDINGS_namechange.pdf About ALC Holdings Farmington Hills, Michigan-based ALC Holdings LLC dba American Laser Centers, and American Laser Skincare, provides laser hair removal treatments. The Company and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13853) on Dec. 8, 2011. Bankruptcy Judge Mary F. Walrath presides over the case. Landis Rath & Cobb LLP represents the Debtors in their restructuring efforts. BMC Group Inc. serves as claims agent; SSG Capital Advisors, LLC serves as financial advisors; and Traverse, LLC serves as restructuring crisis manager. MBC Consulting and Melanie B. Cox serve as interim chief executive officer. Qorval and Eric Glassman serve as restructuring consultant. The Debtors disclosed total assets of $80.4 million and total liabilities including $40.3 million owing on a first-lien debt, $51 million in subordinated notes, and $17.9 million is owing to trade suppliers, as of Oct. 31, 2011. American Laser Centers of California LLC disclosed $20,988,454 in assets and $99,951,866 in liabilities as of the Chapter 11 filing. ALC Holdings LLC disclosed $14,662 in assets and $93,744,094 in liabilities. The Official Committee of Unsecured Creditors has tapped Herrick, Feinstein LLP as bankruptcy counsel; Ashby & Geddes, P.A. as Delaware counsel; and J.H. Cohn LLP as its financial advisor. American Laser Centers on Feb. 6, 2012, disclosed that it has completed a sale of substantially all of its assets to private equity investment firm Versa Capital Management, LLC. The company received Court approval of the sale on Jan. 31. Private equity lender Versa Capital is paying $39.5 million. A planned auction failed to turn up additional bids. AMERICAN LASER: Herrick Feinstein Approved as Committee Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of ALC Holdings LLC, et al., to retain Herrick, Feinstein LLP as its counsel. As reported in the Troubled Company Reporter on Feb. 13, 2012, Herrick is expected to, among other things: (a) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and of the operation of the Debtors' businesses; (b) assist the Committee in its analysis of and negotiations with, the Debtors or any third party concerning matters related to, among other things, the assumption or rejection of certain leases of non-residential real property and executory contracts, asset dispositions, financing or other transactions and the terms of one or more plans of reorganization or liquidation for the Debtors and accompanying disclosure statements and related plan documents; and (c) assist and advise the Committee as to its communications to the general creditor body regarding significant matters in the chapter 11 cases. Stephen B. Selbst, a member of Herrick, told the Court that the firm has agreed to provide a 15% discount off its regular hourly rates. The hourly rates charged by Herrick for professionals and paraprofessionals employed in its offices are: Partners and Counsel $475 - $950 Associates $275 - $590 Paraprofessionals $175 - $350 Herrick attorneys expected to have primary responsibility for providing services to the Committee are: Stephen Selbst $860 Frederick E. Schmidt, Jr. $590 Mr. Selbst assures the Court that Herrick is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About ALC Holdings Farmington Hills, Michigan-based ALC Holdings LLC dba American Laser Centers, and American Laser Skincare, provides laser hair removal treatments. The Company and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13853) on Dec. 8, 2011. Bankruptcy Judge Mary F. Walrath presides over the case. Landis Rath & Cobb LLP represents the Debtors in their restructuring efforts. BMC Group Inc. serves as claims agent; SSG Capital Advisors, LLC serves as financial advisors; and Traverse, LLC serves as restructuring crisis manager. MBC Consulting and Melanie B. Cox serve as interim chief executive officer. Qorval and Eric Glassman serve as restructuring consultant. The Debtors disclosed total assets of $80.4 million and total liabilities including $40.3 million owing on a first-lien debt, $51 million in subordinated notes, and $17.9 million is owing to trade suppliers, as of Oct. 31, 2011. American Laser Centers of California LLC disclosed $20,988,454 in assets and $99,951,866 in liabilities as of the Chapter 11 filing. ALC Holdings LLC disclosed $14,662 in assets and $93,744,094 in liabilities. The Official Committee of Unsecured Creditors has tapped Herrick, Feinstein LLP as bankruptcy counsel; Ashby & Geddes, P.A. as Delaware counsel; and J.H. Cohn LLP as its financial advisor. American Laser Centers on Feb. 6, 2012, disclosed that it has completed a sale of substantially all of its assets to private equity investment firm Versa Capital Management, LLC. The company received Court approval of the sale on Jan. 31. Private equity lender Versa Capital is paying $39.5 million. A planned auction failed to turn up additional bids. AMERICAN LASER: Ashby & Geddes OK'd as Panel's Delaware Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of ALC Holdings LLC, et al., to retain Ashby & Geddes, P.A. as its Delaware counsel. As reported in the Troubled Company Reporter on Feb. 13, 2012, Ashby & Geddes is expected to, among other things: a. provide legal advice regarding the rules and practices of the Court applicable to the Committee's powers and duties as an official committee appointed under section 1102 of the Bankruptcy Code; b. provide legal advice regarding any sale of the Debtors' assets pursuant to Section 363 of the Bankruptcy Code or otherwise; and c. provide legal advice regarding any disclosure statement and plan filed in these cases and with respect to the process for approving or disapproving a disclosure statement and confirming or denying confirmation of a plan. William P. Bowden, a member of Ashby & Geddes, told the Court that the hourly rates of Ashby & Geddes's personnel are: Professional Hourly Rate ------------ ----------- William P. Bowden, member $640 Amanda M. Winfree, associate $400 Leigh-Anne M. Raport, associate $315 Cathie B. McCloskey, paralegal $185 Mr. Bowden, added that the rates are adjusted on an annual basis and reflect an adjustment made effective Jan. 1, 2012. For work performed between Dec. 28, 2011 and Dec. 31, 2011, the standard hourly rates of these attorneys and paralegals, are: Professional Hourly Rate ------------ ----------- William P. Bowden, member $620 Amanda M. Winfree, associate $375 Leigh-Anne M. Raport, associate $290 Cathie B. McCloskey, paralegal $185 Mr. Bowden assures the Court that Ashby & Geddes is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About ALC Holdings Farmington Hills, Michigan-based ALC Holdings LLC dba American Laser Centers, and American Laser Skincare, provides laser hair removal treatments. The Company and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13853) on Dec. 8, 2011. Bankruptcy Judge Mary F. Walrath presides over the case. Landis Rath & Cobb LLP represents the Debtors in their restructuring efforts. BMC Group Inc. serves as claims agent; SSG Capital Advisors, LLC serves as financial advisors; and Traverse, LLC serves as restructuring crisis manager. MBC Consulting and Melanie B. Cox serve as interim chief executive officer. Qorval and Eric Glassman serve as restructuring consultant. The Debtors disclosed total assets of $80.4 million and total liabilities including $40.3 million owing on a first-lien debt, $51 million in subordinated notes, and $17.9 million is owing to trade suppliers, as of Oct. 31, 2011. American Laser Centers of California LLC disclosed $20,988,454 in assets and $99,951,866 in liabilities as of the Chapter 11 filing. ALC Holdings LLC disclosed $14,662 in assets and $93,744,094 in liabilities. The Official Committee of Unsecured Creditors has tapped Herrick, Feinstein LLP as bankruptcy counsel; Ashby & Geddes, P.A. as Delaware counsel; and J.H. Cohn LLP as its financial advisor. American Laser Centers on Feb. 6, 2012, disclosed that it has completed a sale of substantially all of its assets to private equity investment firm Versa Capital Management, LLC. The company received Court approval of the sale on Jan. 31. Private equity lender Versa Capital is paying $39.5 million. A planned auction failed to turn up additional bids. AMERICAN LASER: J.H. Cohn Okayed as Committee's Financial Advisor ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of ALC Holdings LLC, et al., to retain J.H. Cohn LLP, as its financial advisor effective as of Dec. 28, 2011. As reported in the Troubled Company Reporter on Feb. 13, 2012, J.H. Cohn is expected to, among other things: (a) scrutinize the proposed sale transactions, including the assumption or rejection of executory contracts; (b) develop and evaluate alternative sale and restructuring strategies; and (c) review reasonableness of the DIP facility terms including the likelihood that Debtors will be able to comply with the terms of the order. Clifford A. Zucker, partner of J.H. Cohn, told the Court that the firm's billing rates for the accounting and financial advisory services of the nature to be rendered to the Committee are: Partners/Senior Partners $550 - $720 Director/Senior Manager/Mgr. $460 - $550 Other Professional Staff $185 - $360 Paraprofessional $155 - $175 Mr. Zucker assures the Court that to the best of his knowledge, information and belief, JH Cohn does not have or represent any interest materially adverse to the interest of the Debtors, or of any class of creditors or equity security holders of the Debtors, by reason of any direct or indirect relationship to, connection with, or interest in the Debtors. About ALC Holdings Farmington Hills, Michigan-based ALC Holdings LLC dba American Laser Centers, and American Laser Skincare, provides laser hair removal treatments. The Company and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13853) on Dec. 8, 2011. Bankruptcy Judge Mary F. Walrath presides over the case. Landis Rath & Cobb LLP represents the Debtors in their restructuring efforts. BMC Group Inc. serves as claims agent; SSG Capital Advisors, LLC serves as financial advisors; and Traverse, LLC serves as restructuring crisis manager. MBC Consulting and Melanie B. Cox serve as interim chief executive officer. Qorval and Eric Glassman serve as restructuring consultant. The Debtors disclosed total assets of $80.4 million and total liabilities including $40.3 million owing on a first-lien debt, $51 million in subordinated notes, and $17.9 million is owing to trade suppliers, as of Oct. 31, 2011. American Laser Centers of California LLC disclosed $20,988,454 in assets and $99,951,866 in liabilities as of the Chapter 11 filing. ALC Holdings LLC disclosed $14,662 in assets and $93,744,094 in liabilities. The Official Committee of Unsecured Creditors has tapped Herrick, Feinstein LLP as bankruptcy counsel; Ashby & Geddes, P.A. as Delaware counsel; and J.H. Cohn LLP as its financial advisor. American Laser Centers on Feb. 6, 2012, disclosed that it has completed a sale of substantially all of its assets to private equity investment firm Versa Capital Management, LLC. The company received Court approval of the sale on Jan. 31. Private equity lender Versa Capital is paying $39.5 million. A planned auction failed to turn up additional bids. AMERICAN REALTY: Taps Santoro Driggs as General Bankruptcy Counsel ------------------------------------------------------------------ American Realty Trust, Inc., asks the U.S. Bankruptcy Court for the District of Nevada for permission to employ Santoro, Driggs, Walch, Kearney, Holley & Thompson as general bankruptcy counsel. The hourly rates of Santoro Driggs' personnel are: Associates $160 - $310 Shareholders $330 - $550 Paraprofessionals $175 The firm received a $25,000 from the Debtor constituting the full retainer requested by the Santoro Firm. To the best of the Debtor's knowledge, Santoro Driggs is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtor set a hearing on March 14, 2012, at 9:30 a.m., on the proposed employment of the firm. About American Realty Trust Las Vegas, Nevada-based American Realty Trust, Inc., filed for Chapter 11 (Bankr. D. Nev. Case No. 12-10883) on Jan. 26, 2012, estimating assets and debts of $10 million to $50 million. The Debtor is a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101 (51B). Judge Mike K. Nakagawa presides over the case. The petition was signed by Steven A. Shelley, vice president. The Debtor's counsel can be reached at: Richard F. Holley, Esq. Ogonna M. Atamoh, Esq. SANTORO, DRIGGS, WALCH, KEARNEY, HOLLEY & THOMPSON 400 South Fourth Street, Third Floor Las Vegas, NV 89101 Tel: (702) 791-0308 Fax: (702) 791-1912 E-mail: rholly@nevadafirm.com oatamoh@nevadafirm.com APEX DIGITAL: Replaces Rutter Hobbs With Davidoff Gold as Attorney ------------------------------------------------------------------ Rosendo Gonzalez, the Chapter 11 Examiner appointed in the bankruptcy of debtor Apex Digital, Inc., has filed a notice of substitution of attorney. The new attorney to represent the Examiner will be: C. John M. Melissinos, Esq. DAVIDOFF GOLD LLP 1900 Avenue of the Stars, 20111 Floor Los Angeles, California 90067 Tel: (310) 201-7536 Fax: (213) 402-5026 E-mail: jmelissinos@davidoffgold.com As reported in the Troubled Company Reporter on Feb. 3, 2012, The Examiner had sought authorization to employ Rutter Hobbs & Davidoff Incorporated as his general bankruptcy counsel, effective as of Dec. 6, 2011. About Apex Digital Walnut, California-based Apex Digital, Inc., was a leading producer and seller of consumer electronic products, including high-definition LCD televisions, home entertainment media devices, digital set top boxes and lighting products (e.g., solar powered lights), which are carried and sold in hundreds of retail outlets nationwide. Apex Digital filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 10-44406) on Aug. 17, 2010. Juliet Y. Oh, Esq., Lindley L. Smith, Esq., Philip A. Gasteier, Esq., at Levene, Neale, Bender, Rankin & Brill LLP, in Los Angeles, California, represent the Debtor. In its schedules, the Debtor disclosed $12,782,708 in assets and $27,118,168 in liabilities, as of the Petition Date. APEX DIGITAL: Wants to Retain Shafai as Special Litigation Counsel ------------------------------------------------------------------ Apex Digital, Inc., asks the Bankruptcy Court for authorization to retain The Law Offices of John Z. Shafai as special litigation counsel. On Jan. 31, 2008, the Debtor filed a complaint in the Superior Court of the State of California in and for the County of Los Angeles, Central District against numerous defendants. Pursuant to the Complaint, the Debtor seeks damages in excess of $2 million. The Debtor requires the services of special litigation counsel to represent the Debtor in connection with the State Court Action. The Debtor requires special litigation counsel to obtain default judgments against the Defaulted Defendants, to collect on any default judgments rendered against the Defaulted Defendants, and to take collection actions against Larry R. Metz and Miranda Suen (the defendants who are currently in breach of their settlement agreements with the Debtor). The claims asserted by the Debtor in the State Court Action constitute assets of the Debtor's bankruptcy estate and may potentially be a source of funding for the Debtors'reorganization efforts. Since Shafai has represented the Debtor in connection with the State Court Action from its inception, Shafai is extremely familiar with and knowledgeable about the factual and legal issues relating to the State Court Action. Given Shafai's familiarity with the State Court Action, the Debtor believes that Shafai is the ideal counsel to represent the Debtor in connection with the State Court Action. On Aug. 20, 2007, the Debtor and Shafai entered into a written agreement formalizing the Debtor's retention of Shafai as its counsel in connection with the State Court Action. For its legal services, Shafai has agreed to accept a contingency fee equal to one-third (33.33%) of any recovery from the State Court Action, plus the reimbursement of any out-of-pocket expenses incurred by Shafai in connection with the State Court Action. In light of the fact that Shafai is being employed on a contingency fee basis, Shafai will not be maintaining time sheets or billing records in connection with its representation of the Debtor. In addition, Shafai is seeking to be excused from the need to file a formal fee application with the Court in connection with the payment of its Contingency Fee or the reimbursement of its out-of-pocket expenses. John Z. Shafai, Esq., assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. About Apex Digital Walnut, California-based Apex Digital, Inc., was a leading producer and seller of consumer electronic products, including high-definition LCD televisions, home entertainment media devices, digital set top boxes and lighting products (e.g., solar powered lights), which are carried and sold in hundreds of retail outlets nationwide. Apex Digital filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 10-44406) on Aug. 17, 2010. Juliet Y. Oh, Esq., Lindley L. Smith, Esq., Philip A. Gasteier, Esq., at Levene, Neale, Bender, Rankin & Brill LLP, in Los Angeles, California, represent the Debtor. In its schedules, the Debtor disclosed $12,782,708 in assets and $27,118,168 in liabilities, as of the Petition Date. Rosendo Gonzalez has been named Chapter 11 examiner appointed in the bankruptcy case of Apex Digital. Mr. Gonzalez has tapped C. John M. Melissinos, Esq., at Davidoff Gold LLP, as counsel. APEX DIGITAL: Withdraws Motion to Extend Exclusive Periods ---------------------------------------------------------- Apex Digital, Inc., has withdrawn its Dec. 12, 2011 motion to extend the exclusive filing and solicitation periods. The motion had requested for an extension of the exclusive filing period beyond Dec. 12, 2011, and the solicitation period beyond Feb. 13, 2012. In the motion, the Debtor said it has been engaged in extensive discussions with the Official Committee of Unsecured Creditors regarding the potential terms of a plan of reorganization. The Debtor said it intends to continue working cooperatively with the Committee to formulate and file what the Debtor hopes will be a consensual plan of reorganization in its case. About Apex Digital Walnut, California-based Apex Digital, Inc., was a leading producer and seller of consumer electronic products, including high-definition LCD televisions, home entertainment media devices, digital set top boxes and lighting products (e.g., solar powered lights), which are carried and sold in hundreds of retail outlets nationwide. Apex Digital filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 10-44406) on Aug. 17, 2010. Juliet Y. Oh, Esq., Lindley L. Smith, Esq., Philip A. Gasteier, Esq., at Levene, Neale, Bender, Rankin & Brill LLP, in Los Angeles, California, represent the Debtor. In its schedules, the Debtor disclosed $12,782,708 in assets and $27,118,168 in liabilities, as of the Petition Date. Rosendo Gonzalez has been named Chapter 11 examiner appointed in the bankruptcy case of Apex Digital. Mr. Gonzalez has tapped C. John M. Melissinos, Esq., at Davidoff Gold LLP, as counsel. APPALACHIAN REGIONAL: Fitch Lifts Rating on $61MM Bonds to 'BB' --------------------------------------------------------------- In the course of its ongoing surveillance efforts, Fitch upgrades to 'BB' from 'BB-' the following bond issued on behalf of Appalachian Regional Healthcare (ARH): -- $61,545,000 Kentucky Economic Development Finance Authority refunding and improvement revenue bonds (Appalachian Regional Healthcare, Inc.) series 1997 The Rating Outlook is Stable. Bonds are secured by a pledge of gross revenues of the system, which is weak for the rating level. IMPROVED FINANCIAL PROFILE: The upgrade is based on an improved financial profile that is more in line with the 'BB' rating level, driven by three audited years (fiscal year-end Jun. 30) of positive operating margins, which has been maintained through the six month interim period ended Dec. 31, 2011. The improved cash flow has led to a material growth in ARH's liquidity, with liquidity very solid for the rating level. PRO FORMA MADS COVERAGE ADEQUATE: Fitch expects ARH to borrow approximately $68 million over the next few years (approximately $14 million in fiscal 2012) that will fund capital projects and address critical capital needs across ARH's system. A pro forma analysis of the maximum annual debt service (MADS) shows coverage at an adequate 1.5 times (x) in the six month fiscal 2012 interim period. PHYSICIAN RECRUITMENT IMPROVING: ARH has grown its active medical staff by about 10% over the last 18 months, and a focused campaign to recruit physicians with connections to the region is beginning to show results with two general surgeons, an oncologist, and an obstetrician with ties to the area expected to join the medical staff in the near term. ARH is also growing its clinical relationship with the University of Kentucky in the areas of cardiology and oncology, which should further help in physician coverage of acute service lines and overall physician recruitment. CREDIT CONCERNS REMAIN: ARH's weak service area demographics and its high levels of Medicaid (24% of gross revenues), self pay, bad debt, and charity care continue to present a challenging operating environment. After an operating loss in fiscal 2008, ARH has posted three consecutive years of positive operating margins ARH finished fiscal 2011 with a 2.2% operating margin ($12.6 million in operating income) and a 7.2% operating EBTIDA margin. Results in fiscal 2011 were helped by a few one-time revenue items, the largest approximately $5.5 million in meaningful use funds. However, six month fiscal 2012 results show a 0.7% operating margin and a 5.2% operating EBITDA, similar to results from the same period in fiscal 2011. ARH management reports that the system enters its busy season in the first quarter of the calendar year, and early indications are that volumes are holding. ARH has managed expenses well and is under budget for both supplies and pharmaceuticals through the six month interim period. ARH is budgeting for a positive operating margin in fiscal 2012, which Fitch believes ARH will achieve. Positive operations have contributed to strong liquidity growth over the last fiscal three years, as ARH added more than $100 million of unrestricted liquidity to the balance sheet. As of December 31, 2011, ARH had $145.3 million of unrestricted cash and investments (excluding a $2.3 million draw on a line of credit and $11.4 million held as collateral for worker's compensation insurance), which equated to 107.7 days cash on hand, a 6.1x pro forma cushion ratio, and 173.5% cash to debt, all very solid for the rating level. Cash to debt drops to 95.8% on a pro forma basis factoring in the expected new debt, but remains strong for the rating level. In fiscal 2012, ARH purchased the assets of Mary Breckenridge Hospital, a critical access hospital located near Hazard. The purchase had little effect on ARH's liquidity and overall should be a credit neutral to ARH's financial profile. Growth in liquidity has been aided by the stretching of payables and deferred capital spending. Days in current liabilities stood at a very high 113.9 days at Dec. 31, 2011, much higher than the 92.3 days at year end fiscal 2009, including a $12 million rise in accounts payable from fiscal 2010 to fiscal 2011. In addition, ARH has preserved liquidity by deferring capital expenditures. Capital spending has averaged a thin 47% of depreciation over the last four years and raises concerns about ARH's competitive ability. Average age of plant has increased to 13.3 in fiscal 2011 from 10.5 in fiscal 2008. Additional stress on liquidity comes from the pension liability. ARH's pension is approximately 70% funded. The pension liability as of Dec. 31, 2011 was $65 million, and ARH is expected to make payments of $18 million in 2011 and $20 million in 2012. While these are credit concerns, Fitch believes that these concerns are manageable at the higher 'BB' rating level and that liquidity will remain stable over the near term. Fitch view positively that ARH is addressing its deferred capital spending. ARH plans to spend approximately $70 million mostly at Whitesburg, Hazard, and Beckley. The projects will include a new tower at Whitesburg, a new emergency room at Hazard, and renovations to patient rooms at Beckley. The projects will provide critical capital updates to components of the ARH system that are dated. Fitch expects ARH to finance approximately $68 million of the capital projects through a combination of United States Department of Agriculture (USDA) loans ($40 million) and bank loans with a USDA guarantee ($20 million), with the remaining portion ($6.8 million) still to be determined but likely to be a bank loan. Pro forma MADS remains manageable increasing to $23.8 million from $20.4 million and is helped by the favorable financing terms of the USDA loans which are expected to have a 40 year amortization and a 3.75% interest rate. Construction for all the projects will occur during the next two years with completion expected by fiscal year 2014. Additionally, even with the reduced capital spend, ARH was able to invest in information technology and attest to Stage 1 meaningful use. ARH has maintained a solid market position in its service areas, but utilization trends are essentially flat except for emergency room (ER) visits. Renovations to Hazard's ER should continue to strengthen ER visits. Approximately 60% of ARH's admissions come through its ER, so it is an important source of volumes. Physician recruitment and retention continue to be challenges for the system. But active staff has grown 10% in the last 18 months and ARH's program to recruit physicians with ties to the region is beginning to show benefit. Successful execution of this strategy as well a focus on growing oncology and cardiology through expanding its clinical relationship with the University of Kentucky will be critical in ARH sustaining current levels of operations. ARH service area remains challenging. Unemployment rates in the system's Kentucky service are higher than state and national averages and Median household income is below state averages. Economic statistics are similar for the system's West Virginia market, though not as severe. Sixty percent of ARH's revenue mix comes from a combination of Medicare and Medicaid and 10% of the revenues are self pay, further highlighting the area's challenges. The Stable Outlook reflects Fitch's belief that ARH's will maintain positive operating margins over the next few years which will led to further financial stability at the current rating level. Appalachian Regional Healthcare (ARH) is a not-for-profit health system serving 350,000 residents across Eastern Kentucky and Southern West Virginia. Operating ten hospitals, multi-specialty physician practices, home health agencies, homecare stores and retail pharmacies, ARH is the largest provider of care and single largest employer in southeastern Kentucky and the third largest private employer in southern West Virginia. Total operating revenue in fiscal 2011 was $578.8 million. ARH covenants to disclose only annual financial information and utilization statistics to bondholders. ARH provides timely disclosure including quarterly disclosure of income statements, balance sheets, and utilization statistics to bondholders on its secure web site. APPLETON PAPERS: Has Tentative $3-Bil. Supply Pact With Domtar -------------------------------------------------------------- Appleton Papers Inc. and Domtar Corporation announced a tentative agreement in which Domtar would supply Appleton with most of the uncoated base paper the Company needs to produce its thermal, carbonless, and other specialty paper products. The historic 15-year supply deal is valued at more than $3 billion over the life of the agreement. The proposed supply agreement would provide Appleton with reliable access to competitively-priced, high-quality base paper for all its paper segments and reduce the Company's exposure to unpredictable market costs for pulp and waste paper. Appleton would become more competitive with integrated paper companies. The proposed agreement would also enable Appleton to place greater focus on its core capabilities of coating formulations and applications, strengths on which the Company was founded more than 100 years ago. Domtar would gain significant and predictable volume for its base paper business driven by demand in Appleton's growing global thermal paper business. "We operate in a capital and resource-intensive industry," said Mark Richards, Appleton's chairman, president and chief executive officer. "Successful companies will be ones who find more efficient ways to operate and deliver value to their customers. For some that means greater and more efficient use of their assets; for others it may involve closing operations that limit efficiency." "The proposed supply agreement with Domtar involves both, and Appleton stands to gain significant operating efficiencies. We believe the proposal also demonstrates Appleton's deep commitment to our customers and to the future of the specialty paper business." John D. Williams, Domtar's president and chief executive officer, stated, "This proposed agreement provides us with an opportunity to repurpose and replace high volume communication paper capacity to specialty paper grades, while securing a growing business long- term. This innovative agreement is consistent with our strategic plan that aims to bring growth into our revenue stream capitalizing on our core competencies. We appreciate the trust and support of Appleton and their interest in further deepening our long standing business relationship." Appleton currently produces base paper at mills in West Carrollton, Ohio, and Roaring Spring, Pa. The Company purchases any additional base paper it needs from other paper producers including Domtar. Appleton also buys a large amount of waste paper and pulp, primarily for its West Carrollton mill, both of which are susceptible to significant price volatility. By purchasing the majority of its base paper supply from Domtar, Appleton would stabilize a significant expenditure and enable the Company to shed old, high-cost, non-integrated papermaking assets. Appleton is proposing to cease recycled fiber processing and paper production at its West Carrollton mill. The Company would continue to operate the world-class thermal paper coating operations installed there in 2008. The proposed supply agreement would result in a reduction of approximately 330 jobs at the West Carrollton mill. Assuming the plan is finalized, approximately 100 employees would be retained to continue to operate the thermal paper coating facility. Carbonless paper coating currently conducted at West Carrollton would be shifted to the Company's converting plant in Appleton, Wis., and result in an increase of approximately 50 jobs at that facility. Employment and operations at Appleton's integrated pulp and paper mill in Roaring Spring, Pa., would be unaffected by the agreement. The agreement is pending discussions with representatives of West Carrollton's Local 266 of the United Steelworkers regarding the reasons the company chose to pursue the agreement. "We believe our proposal to discontinue papermaking operations at West Carrollton is a competitive necessity and not a reflection of the talent or commitment of our mill employees," Richards said. "Our employees have never wavered in their dedication to excellence and to serving our customers. What has changed is the economics of the industry in which we compete." He added that non-integrated paper mills, those not capable of producing pulp from logs or wood chips, are distinctly disadvantaged and no longer competitive. Worldwide demand for pulp has driven its market price to historic highs. "Because we buy pulp on the open market, it costs Appleton considerably more to make base paper than it costs a producer like Domtar, which can supply its own pulp. Our proposed operational changes, as difficult as they may be for many of our employees in West Carrollton, are needed for our company to remain competitive," Richards said. The West Carrollton mill was built in 1948 by the American Envelope Company. Appleton purchased the mill in 1984 and has made substantial investments to improve the mill's capabilities and productivity. The most significant investment occurred in 2008 when the company completed a $100-million expansion that included the installation of a state-of-the-art coater to produce thermal paper and construction of related facilities. Richards said the Company will continue thermal paper coating operations at the mill and that the new coater remains the foundation on which Appleton will expand its leadership in the growing, global thermal paper business. On Feb. 22, 2012, in connection with its approval of the Supply Agreement, and subject to any obligations of decision making bargaining with representatives of Local 266 of the United Steelworkers Union, the Board of Directors authorized a plan for Appleton to dispose of papermaking assets at its facility in West Carrollton, Ohio and move more carbonless coating to Appleton's converting plant in Appleton, Wisconsin. The Company plans to continue its thermal coating operations at the facility in West Carrollton. The plan is expected to result in pre-tax charges associated with the manufacturing capacity rationalization. The Board has delegated authority to the company's management to determine the final plan with respect to these initiatives, which are expected to include employee termination costs, accelerated depreciation on certain equipment and other associated costs. About Appleton Papers Appleton, Wisconsin-based Appleton Papers Inc. -- http://www.appletonideas.com/-- produces carbonless, thermal, security and performance packaging products. Appleton has manufacturing operations in Wisconsin, Ohio, Pennsylvania, and Massachusetts, employs approximately 2,200 people and is 100% employee-owned. Appleton Papers is a 100%-owned subsidiary of Paperweight Development Corp. The Company's balance sheet at Oct. 2, 2011, showed $638.30 million in total assets, $764.66 million in total liabilities, $101.06 million in redeemable common stock, $139.94 million in accumulated deficit and a $87.47 million accumulated other comprehensive loss. * * * Appleton Papers carries a 'B' corporate credit rating from Standard & Poor's. ARCTIC GLACIER: Chapter 15 Case Summary --------------------------------------- Chapter 15 Petitioner: Philip J. Reynolds ALVAREZ & MARSAL CANADA INC., as monitor and foreign representative Chapter 15 Debtor: Arctic Glacier Inc. aka Ice Perfection System Packaging in Tune with Nature Guy Herbert Glace North Star Ice & Design Arctic Glacier Glace Andre Laplante Arctic Ice Services Vintage Cubed Ice Crystal Ice Mfg. Co. Chilliwack Crystal Ice Titanic Ice Ice is Nice Leisure Time Koldkist Gacier Arctic Pacific Ice The Ice Pedler Viva Flam & Flame Design Northern Ice Leisure Time Ice and Design Eagle Merchandising Crystal Ice 625 Henry Avenue Winnipeg, MB R3A 0V1 Canada Chapter 15 Case No.: 12-10603 Type of Business: The Debtor is a company based in Canada that manufactures packaged ice for distribution in Canada and the United States. Chapter 15 Petition Date: February 22, 2012 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Kevin Gross Petitioner's Counsel: Robert S. Brady, Esq. YOUNG, CONAWAY, STARGATT & TAYLOR, LLP 1000 North King Street Wilmington, DE 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 E-mail: bankfilings@ycst.com Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $100,000,001 to $500,000,000 The Debtor did not file a list of creditors together with its petition. Affiliates that simultaneously filed Chapter 15 petitions: Debtor Case No. ------ -------- Arctic Glacier Income Fund 12-10604 Assets: $100 million to $500 million Debts: $100 million to $500 million Arctic Glacier International Inc. 12-10605 Arctic Glacier California Inc. 12-10606 Diamond Newport Corporation 12-10607 Mountain Water Ice Company 12-10608 Jack Frost Ice Service, Inc. 12-10609 Glacier Ice Company, Inc. 12-10610 Arctic Glacier Vernon Inc. 12-10611 Arctic Glacier Michigan Inc. 12-10612 Arctic Glacier Grayling Inc. 12-10613 Arctic Glacier Lansing Inc. 12-10614 Arctic Glacier Party Time Inc. 12-10615 Knowlton Enterprises, Inc. 12-10616 R & K Trucking, Inc. 12-10617 Wonderland Ice, Inc. 12-10618 Winkler Lucas Ice and Fuel Company 12-10619 Arctic Glacier Minnesota Inc. 12-10620 Arctic Glacier Nebraska Inc. 12-10621 Arctic Glacier New York Inc. 12-10622 Arctic Glacier Rochester Inc. 12-10623 Diamond Ice Cube Company Inc. 12-10624 Arctic Glacier Newburgh Inc. 12-10625 Arctic Glacier Oregon Inc. 12-10626 Arctic Glacier Services Inc. 12-10627 Arctic Glacier Texas Inc. 12-10628 Arctic Glacier Wisconsin Inc. 12-10629 Arctic Glacier Pennsylvania Inc. 12-10630 Ice Perfection Systems Inc. 12-10631 ICEsurance Inc. 12-10632 AUTOS VEGA: Euroclass Plan Disclosures Hearing Set for March 29 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Puerto Rico has set a hearing on March 29, 2012, at 9:00 a.m., to consider approval of the disclosure statement for the Chapter 11 plan of Euroclass Motors, Inc., a debtor-affiliate of Autos Vega, Inc. Objections to the adequacy of the information in the Disclosure Statement should be filed no later that March 15, 2012. The proposed Chapter 11 Plan dated Jan. 30, 2012, provides for the full payment of the secured claim of the Debtor's lender, Reliable Finance Holding Company, estimated at $1.67 million. Holders of general unsecured claims, estimated at $1.49 million, are expected to have a 13% recovery. Equity interests in the Debtor will be retained. Holders of administrative expense claims, estimated at $114,500, and allowed priority tax claims, estimated at $16,000, are unimpaired under the Plan. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/EUROCLASS_DSJan30.PDF About Autos Vega Autos Vega, Inc., is a car dealership engaged in the sales of new and used cars and trucks car parts, accessories and providing vehicle repair and maintenance, based in San Juan, Puerto Rico. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. P.R. Case No. 11-05773) on July 6, 2011. The Debtor disclosed $22,959,296 in assets and $34,224,323 in liabilities. Charles Alfred Cuprill, Esq., at Charles A Curpill, PSC Law Office, in San Juan, Puerto Rico, serves as counsel to the Debtor. Luis R. Carrasquillo Ruiz, CPA, is the Debtor's accountant. Affiliate Euroclass Motors, Inc. filed for Chapter 11 protection (Bankr. D. P.R. Case No. 11-05772) on July 6, 2011. Autos Vega disclosed $22,959,296 in assets and $34,224,323 in liabilities as of the Chapter 11 filing. BEAU VIEW: Section 341(a) Meeting Rescheduled to March 21 --------------------------------------------------------- The U.S. Trustee for Region 5 has rescheduled to March 21, 2012, at 10:30 a.m., the meeting of creditors in the Chapter 11 case of Beau View of Biloxi, LLC. The meeting was originally set for March 14. This is the first Sec. 341 meeting of creditors. The Debtor's representative must be present at the meeting to be questioned under oath by the United States Trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be continued and concluded at a later date without further notice. About Beau View of Biloxi Beau View of Biloxi, LLC, filed a bare-bones Chapter 11 petition (Bankr. S.D. Miss. Case No. 12-50141) on Jan. 26, 2012. The Mandeville, Louisiana-based debtor disclosed that it is a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101 (51B) with assets and debts of $10 million to $50 million. Judge Katharine M. Samson presides over the case. J. Walter Newman, IV, Esq., at Newman & Newman, serves as the Debtor's counsel. The petition was signed by Richard L. Landry, III, designated representative. According to the case docket, Beau View of Biloxi is required to file a Chapter 11 Plan and disclosure statement by May 25, 2012. Proofs of claim are due in the case by May 25, 2012. Government proofs of claim are due July 24, 2012. BIG RIVERS: Bankruptcy Examiner Scolded Over Misconduct ------------------------------------------------------- Amanda Bransford at Bankruptcy Law360 reports that the Supreme Court of Kentucky publicly reprimanded an attorney Thursday for trying to negotiate side deals for fees for his role as examiner in the Big Rivers Electric Corp. bankruptcy in the late 1990s. Law360 says the Kentucky Bar Association had found J. Baxter Schilling, who was forced by the federal court to disgorge the $2.7 million he received in fees, guilty of five counts of professional misconduct, and the Supreme Court on Thursday agreed on four counts and issued the reprimand on the bar association's request. BERNARD L. MADOFF: Investors' Bid to Oust Trustee Fails ------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that a New York federal judge on Thursday said a bankruptcy judge was right not to remove the Bernard L. Madoff Investment Securities LLC liquidation trustee, despite investors' claims he withheld information about a $220 million settlement with a Madoff associate's heirs. Law360 relates that the investors, led by Marsha Peshkin, had based their April 11 appeal on their claim that BLMIS trustee Irving H. Picard had concealed material information that, had it been known, should have caused U.S. Bankruptcy Judge Burton R. Lifland to reject the settlement. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of Feb. 8, 2012, Mr. Picard has recovered $8.7 billion for investors. A total of $325.5 million has been distributed to investors. Mr. Picard has filed 1,000 lawsuits seeking $100 billion from banks such as HSBC Holdings Plc and JPMorgan Chase & Co. The trustee has seen more than $28 billion of his claims tossed by district judges. BROADSTRIPE LLC: Assets Sold; To Wrap Up Case via Ch. 7 ------------------------------------------------------- Maria Chutchian at Bankruptcy Law360 reports that Broadstripe Capital LLC requested Wednesday that a Delaware bankruptcy court transfer its Chapter 11 bankruptcy proceedings to a Chapter 7, two months after the court approved the cable operator's modified reorganization plan. According to its motion, the reorganization plan contemplated that Capital's Chapter 11 case would eventually be converted to a liquidating Chapter 7 case, Law360 relates. The bankruptcy judge previously entered an order confirming Broadstripe's First Modified Plan of Reorganization. The Plan contemplates the transfer of substantially all of the Debtors' assets to the prevailing bidder at an auction. The Court approved the sale of Broadstripe's assets to Martell Cable Services on Nov. 15, 2011. About Broadstripe LLC Headquartered in Chesterfield, Missouri, Broadstripe LLC -- http://www.broadstripe.com/-- provides videos and telephone services to consumers and business in Maryland, Michigan, Washington and Oregon. The Company and five of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-10006) on Jan. 2, 2009. Attorneys at Ashby & Geddes, and Gardere Wynne Sewell LLP represented the Debtors in their restructuring efforts. The Debtors tapped FTI Consulting Inc. as their restructuring consultant, and Epiq Bankruptcy Consultants LLC as their claims agent. In its petition, Broadstripe estimated assets and debts between $100 million and $500 million. CADILLAC NURSING: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Cadillac Nursing Home, Inc. dba St. Francis Nursing Center 721 Elmwood Troy, MI 48083 Bankruptcy Case No.: 12-43957 Chapter 11 Petition Date: February 22, 2012 Court: U.S. Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Thomas J. Tucker Debtor's Counsel: Brendan G. Best, Esq. SCHAFER AND WEINER, PLLC 40950 Woodward Avenue, Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 E-mail: bbest@schaferandweiner.com - and ? Michael E. Baum, Esq. SCHAFER AND WEINER, PLLC 40950 Woodward Avenue, Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 E-mail: mbaum@schaferandweiner.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/mieb12-43957.pdf The petition was signed by Bradley Mali, president. Affiliates that filed separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Shanta Corporation 12-43956 02/22/12 St. Jude Nursing Center, Inc. 12-43959 02/22/12 St. Michael Nursing Center, Inc. 10-52146 04/13/10 CAESARS ENTERTAINMENT: Lenders Convert $71MM Into Term B-6 Loans ---------------------------------------------------------------- Caesars Entertainment Corporation reported that in connection with the previously announced amendment of the senior secured credit agreement of its wholly owned subsidiary, Caesars Entertainment Operating Company, Inc., lenders under the credit agreement: (i) elected to convert approximately $71 million of existing revolving commitments maturing on Jan. 28, 2014, into Term B-6 Loans with a maturity of Jan. 28, 2018; and (ii) elected to extend the maturity of approximately $31.3 million of revolving commitments from Jan. 28, 2014, to Jan. 28, 2017. As previously announced, the Term B-6 Loans will have a springing maturity to April 14, 2017, if more than $250.0 million of the Borrower's 11.25% Senior Secured Notes due 2017 remain outstanding on April 14, 2017. Upon the effectiveness of the amendment, the Borrower will repay a portion of the Term B-6 Loans of the converting lenders and will permanently reduce 20% of the revolver commitments of the extending lenders. After taking into account those repayments and reductions and the previously reported extension of existing term loans into Term B-6 Loans, there will be approximately $1.8 billion of Term B-6 Loans outstanding, $25 million of extended revolver commitments with a maturity of Jan. 28, 2017, approximately $2.1 billion of original maturity B- 1, B-2 and B-3 term loans outstanding with a maturity of Jan. 28, 2015, and $1.1 billion of existing revolving commitments outstanding with a maturity of Jan. 28, 2014. The effectiveness of the amendment and the extension or conversion of the loans or commitments thereunder is subject to customary closing conditions, including receipt of required gaming regulatory approvals and the reaffirmation of the security under the Credit Agreement. In addition to the foregoing, the Borrower may elect to extend or convert additional term loans or revolver commitments from time to time. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. --http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. The Company also reported a net loss of $471.30 million for the nine months ended Sept. 30, 2011, compared with a net loss of $629.30 million for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $28.86 billion in total assets, $27.62 billion in total liabilities, $36 million in redeemable non-controlling interests, and $1.20 billion total stockholders' equity. Harrah's announced its re-branding to Caesar's on mid-November 2010. * * * The TCR reported on Feb. 10, 2012, Moody's Investors Service placed the ratings of Caesars Entertainment Corporation's and Caesars Entertainment Operating Company's, collectively Caesars, on review for possible upgrade, including CET's Caa2 Corporate Family and Caa2 Probability of Default ratings. Moody's also assigned a B2 rating to the proposed $1.250 billion first lien note offering by Caesars Operating Escrow LLC and Caesars Escrow Corporation both wholly owned subsidiaries of CEOC. The rating on the proposed first lien note offering is subject to review of final terms and conditions. CAPSALUS CORP: Completes Purchase of Genewize Life Sciences ------------------------------------------------------------- Capsalus Corp. has completed the acquisition of the stock of GeneWize Life Sciences, Inc., the wholly-owned direct-selling subsidiary of GeneLink Biosciences, Inc. Capsalus paid GeneLink cash consideration in an amount equal to $500,000 on the Closing Date. Capsalus borrowed $500,000 from Gene Elite LLC, the Company's affiliate of Capsalus, to make the payment. The loan bears interest at 10%, is convertible into Capsalus stock at $0.02 per share, and has a warrant attached to purchase 25,000,000 shares of Capsalus common stock at $0.08 per share. From the outset, GeneWize is expected to be a key driver in significantly enhancing Capsalus shareholder value in the near term. The acquisition of GeneWize adds to Capsalus' track record of sourcing opportunities and consummating investments in promising enterprises offering innovative products and services in fast-growing segments of the health and wellness sectors. "Considering their current outstanding performance in the market combined with our operating capabilities, professional resources and financial support, we are well-positioned for rapid expansion," said Steven M. Grubner, interim CEO of Capsalus, which provides operating infrastructure, strategic pathways and financial support to developing visionary partners in the health and wellness multi-level marketing arena. Added GeneWize's COO Sharon Tahaney, "What we had hoped for when we embarked on this exploration is being realized in terms of overall business optimization potential. With this deal we are bringing together extraordinary science and business expertise to take our company to the next level through a distinctly robust strategy combining consumer genetics with social marketing." About Capsalus Corp. Atlanta, Ga.-based Capsalus Corp. offers a broad range of solutions to global health problems. WhiteHat Holdings, LLC, was acquired on April 14, 2010. In combining with WhiteHat, the Company is creating a new, consumer-driven business unit, the Nutritional Products Division, focused on healthy food and beverages. The Company reported a net loss of $16.02 million in 2010 and a net loss of $10.89 million in 2009. The Company also reported a net loss of $2.09 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $4.60 million in total assets, $6.77 million in total liabilities, and a $2.16 million total stockholders' deficit. As reported by the TCR on April 21, 2011, Moquist Thorvilson Kaufmann Kennedy & Pieper LLC, in Edina, Minnesota, 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 losses from operations since its inception. CHRIST HOSPITAL: Final Hearing on HFG DIP Facility Today -------------------------------------------------------- Christ Hospital will return to the Bankruptcy Court today, Feb. 27, 2012, for a final hearing on its request to obtain postpetition secured financing from HFG Healthco-4 LLC and Healthcare Finance Group LLC. The Debtors will also seek final authority to use cash collateral. The DIP Facility will provide the Hospital with immediate and ongoing access to borrowing availability to pay expenses relating to on-going operations thereby allowing the Debtor to preserve the value of the Hospital for the benefit of its estate and creditors. HFG has committed to provide up to $20 million in revolving loans and up to $4 million in term loans. HF-4 is the revolving lender and HFG is the term lender. HFG also acts as agent for the Revolving Loan and the Term Loan. On Feb. 7, Christ Hospital was granted interim permission to borrow up to $8.828 million under the revolving facility and up to $3 million from the term loans facility. HFG provided secured loans to the Debtor pre-bankruptcy. As of the bankruptcy filing date, the Debtor owed HFG $6.828 million in revolving loans. The Debtor also owed $10.6 million under prepetition term loans with HFG. Prime Healthcare Services Inc. holds last-out participation interests in the prepetition term loan of roughly $5.6 million. The Debtor's assets, however, are also encumbered by claims of the Pension Benefit Guaranty Corporation. As a result of the Hospital's failure to meet minimum funding requirements on its defined benefit pension plan, beginning in 2007, and continuing through 2011, the PBGC filed liens totaling $25,964,520, which served to perfect the PBGC's interests in the Hospital's assets as collateral security for unfunded, minimum funding requirements owed by the hospital to the PBGC and the Internal Revenue Service. On Aug. 9, 2011, Christ Hospital filed a distressed termination application with the PBGC, which triggered termination liability subsuming and eclipsing the unpaid minimum funding obligations. That termination liability is estimated at roughly $130 million. On Oct. 10, 2011, the PBGC granted the hospital's request, terminated the plan, and now serves as statutory trustee of the plan as of Jan. 4, 2012. On March 27, 2008, HFG, HF-4 and the PBGC entered into a subordination agreement pursuant to which PBGC agreed that all of its claims and liens will remain at all times subject and subordinate to the HFG/HF-4 liens up to the amount of $22 million. The maturity date for the DIP loan will be Aug. 6, 2012, provided that so long as there are no continuing Events of Default the Maturity Date may be extended to Nov. 6, 2012, if as of July 31, 2012, the Debtor can establish to the reasonable satisfaction of the Lender Parties that it has sufficient liquidity (including from proceeds of the DIP Facility) to fund its operations in the ordinary course of business through Nov. 6, 2012. Interest rate for the Revolving Loan will be LIBOR (subject to a 3% floor) plus 7.75% and the interest rate for the Term Loan will be equal to the effective yield under the Revolving Loan. The Debtor is also required to pay additional fees, including a $175,000 facility fee and a $175,000 exit fee, which is earned on the Initial Funding Date and which is payable on the earlier of the Maturity Date and the Termination Date. In December 2011, the Debtor struck a deal to sell its assets to Prime Healthcare Services. Melanie Evans at ModernHealthcare.com reported that Prime offered $35 million for the not-for-profit Christ Hospital. Weeks later, the Debtor received an unsolicited offer from Hudson Hospital Holdco, LLC an affiliate of the entity that had purchased both Bayonne Medical Center and Hoboken University Medical Center out of Bankruptcy Court. On Jan. 20, 2012, the Debtor received an unsolicited offer from Community Healthcare Associates, the entity that had purchased the Barnert Hospital out of bankruptcy. CHA's proposal was joined in by Jersey City Medical Center/Liberty Health, who would become a tenant for a portion of the Christ Hospital premises if CHA was selected as the successful purchaser. Beth Fitzgerald at NJSpotlight reported that CHA has made a tentative proposal to buy Christ Hospital for $104 million. According to the Debtor's filings, CHA and the Debtor also discussed a loan of $10 million outside of bankruptcy, conditioned upon moving towards an asset purchase agreement with CHA to be consummated outside of bankruptcy. Hudson Holdco, by contrast, proposed a $10 million debtor-in-possession loan. The Debtor did not receive a written proposal (limited to financing only) from CHA. As to Hudson Holdco, the Debtor was concerned that the covenants and events of default might be used by Hudson Holdco to gain a level of control over the Debtor and the sale process or gain a leg up in an auction (or, at minimum, another bidder might be concerned about that possibility). The Debtor ultimately chose to seek Chapter 11 relief without a strategic partnership at this time. HFG is represented in the Debtor's case by: Benjamin Mintz, Esq. KAYE SCHOLER LLP 425 Park Avenue New York, NY 10022 E-mail: bmintz@kayescholer.com - and - Paul R. De Filippo, Esq. WOLLMUTH MAHER & DEUTSCH LLP One Gateway Center Newark, NJ 07102 About Christ Hospital Christ Hospital filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 12-12906) on Feb. 6, 2012. Judge Morris Stern presides over the case. Lawyers at Porzio, Bromberg & Newman, P.C., serve as the Debtor's counsel. Christ Hospital, founded in 1872 by an Episcopalian priest, is a 367-bed acute care hospital located in Jersey City, New Jersey at 176 Palisade Avenue, serving the community of Hudson County. The Debtor is well-known for its broad range of services from primary angioplasty for cardiac patients to intensity modulated radiation therapy for those battling cancer. Christ Hospital is the only facility in Hudson County to offer IMRT therapy, which is the most significant breakthrough in cancer treatment in recent years. As of Dec. 31, 2011, the Debtor has total assets of at least $38,000,000 and total liabilities of $115,000,000, at book values. CLEAN BURN: Trustee Opposes Case Conversion to Chapter 7 -------------------------------------------------------- Martin Bricketto at Bankruptcy Law360 reports that the Chapter 11 trustee for Clean Burn Fuels LLC, appointed after Perdue BioEnergy LLC's defeated bid for a Chapter 7 conversion, said Wednesday that there was no good reason to change the North Carolina proceeding into a Chapter 7 liquidation. About Clean Burn Fuels Founded in 2005, Clean Burn Fuels LLC is the first company to produce ethanol in North Carolina. It completed the construction of its ethanol plant in August 2010 and started producing and selling ethanol and dried distillers grains with solubles (DDGS) shortly thereafter. Clean Burn filed for Chapter 11 bankruptcy protection (Bankr. M.D.N.C. Case No. 11-80562) on April 3, 2011. John A. Northen, Esq., at Northen Blue, L.L.P., in Chapel Hill, N.C., represents the Debtor. Anderson Bauman Tourtellot Vos & Co. serves as financial consultant and chief restructuring officer. Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP, is counsel for the Debtor in various lawsuits pending in Hoke County, North Carolina. The Debtor disclosed $79,516,062 in assets and $79,218,681 in liabilities as of the Chapter 11 filing. Charles M. Ivey, Esq., at Ivey McClellan Gatton, in Greensboro, N.C., serves as counsel to the official committee of unsecured creditors. Since the petition date, the Debtor has not operated its ethanol plant. CLEAR CHANNEL: Board Approves 2012 Supplemental Incentive Plan -------------------------------------------------------------- The compensation committee of the board of directors of CC Media Holdings, Inc., and the Compensation Committee of the board of directors of Clear Channel Outdoor Holdings, Inc., an indirect subsidiary of CCMH and Clear Channel Communications, Inc., approved a supplemental incentive plan pursuant to which a limited number of employees of CCMH and its subsidiaries are eligible to receive an additional bonus opportunity for 2012 based on their respective achievement of supplemental performance criteria to be established for each participant by the applicable Compensation Committee. The supplemental performance criteria will be in addition to the annual performance criteria established by the applicable Compensation Committee for each participant pursuant to either CCMH's 2008 Annual Incentive Plan or CCOH's 2006 Annual Incentive Plan, as applicable, but will consist of the types of business criteria specified in the definition of "Performance Goals" under CCMH's 2008 Annual Incentive Plan or in the "Performance Criteria" section of CCOH's 2006 Annual Incentive Plan, as applicable. Following the conclusion of 2012, based on that supplemental performance criteria, the applicable Compensation Committee, in its sole discretion, will determine the bonus amount, if any, earned, which will be paid 36 months after the date of approval of the supplemental performance criteria by the applicable Compensation Committee. To receive payment of an award under the SIP, a participant must be an active employee of CCMH or its subsidiaries at the time of payment. Thomas W. Casey, Executive Vice President and Chief Financial Officer of CCMH, CCU and CCOH, is a participant in the SIP and is eligible to receive an additional bonus opportunity from CCMH of between $0 and $200,000, based on achievement of the supplemental performance criteria to be approved by CCMH's Compensation Committee for Mr. Casey. A percentage of any amounts paid to Mr. Casey by CCMH pursuant to the SIP will be allocated to CCOH in recognition of Mr. Casey's services to CCOH, pursuant to the Corporate Services Agreement entered into between CCOH and a subsidiary of CCMH and CCU in connection with CCOH's initial public offering. On Feb. 23, 2012, Clear Channel Broadcasting, Inc., an indirect wholly-owned subsidiary of CCMH and CCU, and John E. Hogan entered into an amendment to Mr. Hogan's amended and restated employment agreement dated Nov. 15, 2010. Pursuant to the terms of the Amendment: (1) the term of Mr. Hogan's Employment Agreement was extended by two years to Dec. 31, 2015, with automatic extensions from year to year thereafter unless either CCB or Mr. Hogan gives written notice of non-renewal on or before Oct. 1, 2015, or annually, on each October 1 thereafter; (2) Mr. Hogan was promoted to the position of Chairman and Chief Executive Officer -- Clear Channel Media & Entertainment; (3) Mr. Hogan was provided with the opportunity to earn an incremental bonus during calendar year 2012 pursuant to the SIP, with a target of $900,000, based upon performance criteria to be approved by CCMH's Compensation Committee; and (4) Mr. Hogan will receive a restricted stock unit award with respect to the Class A common stock of CCMH on Dec. 31, 2015, that will vest on Dec. 31, 2016, if the Target Amount is less than $5,000,000 on Dec. 31, 2015, and if he remains employed on both of those dates. The Fair Market Value of the restricted stock unit award will equal $5,000,000 minus the Target Amount. The Target Amount as of a particular date means 251,223 times the excess, if any, of (a) the Fair Market Value of the Shares on such date, over (b) $10.00. In addition, the provisions of Section 8(D) of Mr. Hogan's Employment Agreement were revised to provide that Mr. Hogan will be eligible to receive an additional equity value preservation payment calculated as provided in the Amendment if his employment is terminated by the Company without Cause, by the Company following its notice of non-renewal or by Mr. Hogan for Good Cause and Mr. Hogan provides certain releases. About CC Media and Clear Channel San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) -- http://www.ccmediaholdings.com/-- is the parent company of Clear Channel Communications, Inc. CC Media Holdings is a global media and entertainment company specializing in mobile and on-demand entertainment and information services for local communities and premier opportunities for advertisers. The Company's businesses include radio and outdoor displays. CC Media has three reportable business segments: Radio Broadcasting; Americas Outdoor Advertising; and International Outdoor Advertising. Approximately half of CC Media's revenue is generated from its Radio Broadcasting segment. The Company reported a net loss of $302.09 million in 2011, a net a net loss of $479.08 million in 2010, and a net loss of $4.03 billion in 2009. The Company's balance sheet at Dec. 31, 2011, showed $16.54 billion in total assets, $24.01 billion in total liabilities and a $7.47 billion total member's deficit. Bankruptcy Warning The Company said its ability to restructure or refinance its debt will depend on the condition of the capital markets and the Company's financial condition at that time. Any refinancing of the Company's debt could be at higher interest rates and increase the Company's debt service obligations and may require it to comply with more onerous covenants, which could further restrict its business operations. The terms of existing or future debt instruments may restrict the Company from adopting some of these alternatives. These alternative measures may not be successful and may not permit the Company to meet its scheduled debt service obligations. If the Company cannot make scheduled payments on its indebtedness, it will be in default under one or more of its debt agreements and, as a result the Company could be forced into bankruptcy or liquidation. * * * As reported by the Troubled Company Reporter on Dec. 16, 2011, Standard & Poor's revised its rating outlook on CC Media Holdings Inc., and Clear Channel, which S&P views on consolidated basis, to negative from positive. "We affirmed our ratings on the company, including the corporate credit rating of 'CCC+'," S&P said. "The outlook revision reflects our view that softening ad demand and global economic uncertainty could slow the pace of revenue growth at CC Media over the intermediate term, heightening refinancing risk around its 2014 and 2016 debt maturities," explained Standard & Poor's credit analyst Michael Altberg. "The 'CCC+' corporate credit rating reflects the risks surrounding the longer-term viability of the company's capital structure in particular, refinancing risk relating to sizable secured and unsecured debt maturities in 2014 ($2.9 billion) and 2016 ($12.3 billion). We view CC Media's financial risk profile as 'highly leveraged' (based on our criteria), given the company's significant refinancing risk, very slim EBITDA coverage of interest expense, and minimal discretionary cash flow compared to its debt burden. In our view, the company has a 'fair' business risk profile, because of its position as the largest U.S. radio and global outdoor advertising operator," S&P said. COMSTOCK MINING: Underwriters Exercise Over-Allotment Option ------------------------------------------------------------ Comstock Mining Inc. announced that the underwriters of its previously completed public offering of common stock have exercised their option to purchase an additional 1,184,211 shares to cover over-allotments at a public offering price of $1.90 per share. As a result, the company will issue a total of 9,078,948 shares in the offering and will receive aggregate net proceeds, after underwriting discounts and commissions, before expenses, of approximately $16.2 million. The exercise of the over-allotment option is expected to close on Feb. 24, 2012, subject to the satisfaction of customary closing conditions. Global Hunter Securities, LLC, Moelis & Company LLC and Aegis Capital Corp. acted as joint-book running managers for the offering. The offering is being made pursuant to the Company's shelf registration statement previously declared effective by the Securities and Exchange Commission. A prospectus supplement relating to the offering has been filed with the SEC. Copies of the prospectus supplement and the accompanying prospectus may be obtained by contacting: Global Hunter Securities, LLC, 777 Third Avenue, New York, NY 10017, 646-264-5600. 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 in 2010 and a net loss of $6.06 million in 2009. 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 for the nine months ended Sept. 30, 2011. 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. CONNAUGHT GROUP: Has 5-Member Creditors Committee ------------------------------------------------- Tracy Hope Davis, the United States Trustee for Region 2, has appointed five members to the Official Committee of Unsecured Creditors of The Connaught Group, Ltd.: 1. Yuen Hing Fashion Co. Flat A, 2/F Wong King Industrial Building 2 Tai Yau Street, San Po Kong Kowloon, Hong Kong Attention: Ngai Woon Kwai, Director Tel: (+852) 2323-8172 Fax: (+852) 2323-4281 2. Fashion Trend Development Ltd. Flat/RM 2701, 27th Floor New Treasure Centre San Po Kong Kowloon, Hong Kong Attention: Wan Ming (William) Tse General Manager Tel: (212) 391-6500, ext. 14 New York Representative: Norman T. Chan 7 Brewster Drive Lake Carmel, NY 10512 Tel: (646) 750-7218 3. Sandy Duftler Designs Ltd. 775 Brooklyn Avenue Baldwin, NY 11510 Attention: Irwin Duftler, President Tel: (516) 379-3084 Fax: (516) 379-4156 4. Royal Spirit Ltd. 7/F., Dragon Industrial Bldg. 93 King Lam Street Hong Kong Attention: Thomas Hans Hebestreit Tel: (+852) 2786-7660 Fax: (+852) 3904-6015 5. Body Fashion Company Limited Unit A, 20/F Chiap King Industrial Building 114 King Fuk Street, San Po Kong Kowloon, Hong Kong Attention: Raymond So Yuen Chen, Director Tel: (+852) 2322-1276 Fax: (+852) 3188-0136 The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler, PC. About Connaught Group The Connaught Group, Ltd. and four of its affiliates, Limited Editions for Her of Nevada LLC; Limited Editions for Her of Branson LLC; Limited Editions for Her LLC; and WDR Retail Corp. filed separate Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-10512) on Feb. 9, 2012. New York-based Connaught Group designs and has manufactured high- end women's wear and then sells the finished clothing through an innovative sales system outside the normal retail chain originally created in 1981 by the Debtors' founder and iconic designer, William D. Rondina. The Company's sales are made primarily through independent contractors who sell the clothing to their own clients in private showings. Through the Wardrobe Consultants, the Debtors are able to offer the personalized service and attention to detail absent from the conventional shopping experience. As of the Petition Date, the Debtors are affiliated with more than 1,300 Wardrobe Consultants. The Debtors also operate 10 outlet stores throughout the country, but the Debtors primarily only sell last season's clothing and other merchandise to be liquidated at these stores. A non-debtor Canadian subsidiary, The Connaught Group ULC, sells the Debtors' clothing to be liquidated in eight outlet stores in Canada. Three of the Canadian stores are leased by The Connaught Group, Ltd. Judge Stuart M. Bernstein presides over the case. David L. Barrack, Esq., Paul Jacobs, Esq., and Warren J. Nimetz, Esq., at Fulbright & Jaworski L.L.P., serve as the Debtors' counsel. Maury Satin at Zygote Associates serves as the CRO. Richter Consulting acts as financial advisor and Consensus Advisory Services and Consensus Securities LLC serve as financial advisors, consultants and investment bankers. Kurtzman Carson Consultants LLC serves as administrative agent, and claims and noticing agent. JPMorgan Chase is represented in the case by Andrew C. Gold, Esq., at Herrick, Feinstein LL. Citibank is represented by Boris I. Mankovetskiy, Esq., at Sills Cummis & Gross P.C. CONNAUGHT GROUP: March 1 Hearing on Cash Use, Sale Protocol ----------------------------------------------------------- The Connaught Group, Ltd., will appear before the Bankruptcy Court Thursday, March 1, to seek a second interim order for the use of cash collateral and granting of adequate protection. The Court will also consider procedures for the sale of the Debtors' assets at Thursday's hearing. On Feb. 17, the Court issued an order authorizing the Debtors to use cash collateral on an interim basis. The Debtors said their need for cash collateral is critical to preserve their remaining business operations and maximize the value of their assets for the benefit of all stakeholders through a sale of their businesses as a going concern and to maintain their relationships with so-called wardrobe consultants, independent contractors that sell the Debtors' clothing to their own clients in private showings. As of the Petition Date, the Debtors are in the early stages of the Spring selling season. The Debtors said they need cash collateral to fund working capital needs in the 30 days post- filing to conduct the season's sales and secure the balance of inventory requirements for Spring 2012 to fulfill orders, without which the Debtors cannot meet their sales targets. Pursuant to their request, the Debtors seek to use Cash Collateral through the earlier of (A) March 2, 2012 at 5:00 p.m. (New York City Time), or such further date if so extended by written consent of the Debtors' prepetition lenders or court order, or (B) the date of any order terminating the Debtors' use of Cash Collateral. As of the Petition Date, the Debtors had outstanding secured obligations in the aggregate amount of $12,395,949 consisting of amounts outstanding in respect of a $7 million line of credit with JPMorgan Chase Bank, N.A., Chase Supplemental Lines of $2,700,000, $353,917 in issued and outstanding letters of credit, a balance of $1,994 on a corporate credit card, a $4 million line of credit with Citibank, N.A. The Debtors also had outstanding an aggregate of $29,512,888 in respect of unsecured loans by their sole shareholder, William D. Rondina. The Debtors propose to grant their prepetition lenders a valid, perfected and enforceable security interest in and lien upon all of the Debtors' property and assets. However, claims or causes of action arising under sections 544, 547, 548, 549, 550 and 553 of the Bankruptcy Code and related proceeds will not constitute the Collateral of the Prepetition Lenders. The adequate protection liens will be subject to a so-called "Carve-Out" for (a) any allowed unpaid and accrued professional fees and disbursements, to the extent provided in the budget, incurred by the Debtors' or Committee professionals retained, plus allowed professional fees and disbursements in the aggregate amount not to exceed $150,000 subsequent to an Event of Default; (b) statutory fees and interest, if any, required to be paid pursuant to 28 U.S.C. Sec. 1930(a)(6) and 31 U.S.C. Sec. 3717 and any fees payable to the Clerk of the Bankruptcy Court; (c) the payment of fees and expenses of any chapter 7 trustee and any chapter 7 professionals in an aggregate amount not to exceed $25,000; (d) in the event that all or substantially all of the Debtors' assets are sold pursuant to Section 363 of the Bankruptcy Code or confirmation of a plan of reorganization or liquidation, the allowed professional fees of Consensus Advisors; and (e) the reasonable expenses of Committee members (excluding fees and expenses of professionals employed by such committee members individually). The cash collateral use is subject to a timeline concerning the sale of the Debtors' assets: (i) Within five business days of the Petition Date, the Debtors must seek approval of bidding procedures for the sale of all, or substantially all, of the Debtors' assets; (ii) Within seven business days of the Petition Date, the Debtors must obtain the entry of the Bidding Procedures Order. (iii) Within 15 days of the Petition Date, the Debtors must seek permission to hire an inventory consultant. (iv) Within 30 days of the Petition Date, the Debtors must conduct an auction, to the extent that the Debtors receive more than one qualified bid pursuant to the Bidding Procedures Order. (v) Within 35 days of the Petition Date, the Debtors must obtain the entry of the Sale Order. (vi) Within 45 days of the Petition Date, the Debtors must close on the Asset Sale. About Connaught Group The Connaught Group, Ltd. and four of its affiliates, Limited Editions for Her of Nevada LLC; Limited Editions for Her of Branson LLC; Limited Editions for Her LLC; and WDR Retail Corp. filed separate Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-10512) on Feb. 9, 2012. New York-based Connaught Group designs and has manufactured high- end women's wear and then sells the finished clothing through an innovative sales system outside the normal retail chain originally created in 1981 by the Debtors' founder and iconic designer, William D. Rondina. The Company's sales are made primarily through independent contractors who sell the clothing to their own clients in private showings. Through the Wardrobe Consultants, the Debtors are able to offer the personalized service and attention to detail absent from the conventional shopping experience. As of the Petition Date, the Debtors are affiliated with more than 1,300 Wardrobe Consultants. The Debtors also operate 10 outlet stores throughout the country, but the Debtors primarily only sell last season's clothing and other merchandise to be liquidated at these stores. A non-debtor Canadian subsidiary, The Connaught Group ULC, sells the Debtors' clothing to be liquidated in eight outlet stores in Canada. Three of the Canadian stores are leased by The Connaught Group, Ltd. Judge Stuart M. Bernstein presides over the case. David L. Barrack, Esq., Paul Jacobs, Esq., and Warren J. Nimetz, Esq., at Fulbright & Jaworski L.L.P., serve as the Debtors' counsel. Maury Satin at Zygote Associates serves as the CRO. Richter Consulting acts as financial advisor and Consensus Advisory Services and Consensus Securities LLC serve as financial advisors, consultants and investment bankers. Kurtzman Carson Consultants LLC serves as administrative agent, and claims and noticing agent. JPMorgan Chase is represented in the case by Andrew C. Gold, Esq., at Herrick, Feinstein LL. Citibank is represented by Boris I. Mankovetskiy, Esq. -- bmankovetskiy@sillscummis.com -- at Sills Cummis & Gross P.C. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler, PC. CONNAUGHT GROUP: Wins Extension of Schedules Filing Deadline ------------------------------------------------------------ At the behest of The Connaught Group, Ltd., and its debtor- affiliates, the Bankruptcy Court extended the deadline by which the Debtors must file schedules of assets and liabilities, schedules of executory contracts and unexpired leases, and statements of financial affairs. Pursuant to section 521 of the Bankruptcy Code and Bankruptcy Rule 1007(c), the Debtors ordinarily would be required to file the Schedules and Statements within 14 days after the Petition Date. The Court has extended that deadline by an additional seven days -- for a total of 21 days without prejudice to the Debtors' ability to request additional time for cause shown. The Debtors said they have a large number of potential creditors and their business operations require them to maintain voluminous records and complex accounting systems. Combined with the pressure incident to the commencement of the chapter 11 cases and the fact that the Debtors have yet to receive or enter certain prepetition invoices into their financial accounting system, the Debtors have begun, but have not yet completed, compiling the information required to complete the Schedules and Statements. As a result, the Debtors anticipate they will be unable to complete the Schedules and Statements in the time required under Bankruptcy Rule 1007(c). About Connaught Group The Connaught Group, Ltd. and four of its affiliates, Limited Editions for Her of Nevada LLC; Limited Editions for Her of Branson LLC; Limited Editions for Her LLC; and WDR Retail Corp. filed separate Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-10512) on Feb. 9, 2012. New York-based Connaught Group designs and has manufactured high- end women's wear and then sells the finished clothing through an innovative sales system outside the normal retail chain originally created in 1981 by the Debtors' founder and iconic designer, William D. Rondina. The Company's sales are made primarily through independent contractors who sell the clothing to their own clients in private showings. Through the Wardrobe Consultants, the Debtors are able to offer the personalized service and attention to detail absent from the conventional shopping experience. As of the Petition Date, the Debtors are affiliated with more than 1,300 Wardrobe Consultants. The Debtors also operate 10 outlet stores throughout the country, but the Debtors primarily only sell last season's clothing and other merchandise to be liquidated at these stores. A non-debtor Canadian subsidiary, The Connaught Group ULC, sells the Debtors' clothing to be liquidated in eight outlet stores in Canada. Three of the Canadian stores are leased by The Connaught Group, Ltd. Judge Stuart M. Bernstein presides over the case. David L. Barrack, Esq., Paul Jacobs, Esq., and Warren J. Nimetz, Esq., at Fulbright & Jaworski L.L.P., serve as the Debtors' counsel. Maury Satin at Zygote Associates serves as the CRO. Richter Consulting acts as financial advisor and Consensus Advisory Services and Consensus Securities LLC serve as financial advisors, consultants and investment bankers. Kurtzman Carson Consultants LLC serves as administrative agent, and claims and noticing agent. JPMorgan Chase is represented in the case by Andrew C. Gold, Esq., at Herrick, Feinstein LL. Citibank is represented by Boris I. Mankovetskiy, Esq., at Sills Cummis & Gross P.C. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler, PC. CONNAUGHT GROUP: Taps Kurtzman Carson Consultants as Claims Agent ----------------------------------------------------------------- The Connaught Group, Ltd., sought and obtained permission from the Bankruptcy Court to hire Kurtzman Carson Consultants LLC as administrative agent, and claims and noticing agent. Although the Debtors have not yet filed their schedules of assets and liabilities, they anticipate that there will be in excess of 1,000 entities to be noticed. In view of the number of anticipated claimants and the complexity of the Debtors' businesses, the Debtors submit that the appointment of a claims and noticing agent is both necessary and in the best interests of both the Debtors' estates and their creditors. By appointing KCC as the claims and noticing agent, the distribution of notices and the processing of claims will be expedited, and the clerk's office will be relieved of the administrative burden of processing what may be an overwhelming number of claims. Prior to the Petition Date, the Debtors provided KCC a $10,000 retainer. The Debtors also paid $11,000 in fees to KCC for prepetition invoices. KCC seeks to first apply the retainer to all remaining prepetition invoices, and thereafter, to have the retainer replenished to the original retainer amount, and thereafter, to hold the retainer under the KCC Agreement during the chapter 11 cases as security for the payment of fees and expenses incurred under the KCC Agreement. Albert Kass, the Vice President of Corporate Restructuring Services of Kurtzman Carson Consultants, attests that the firm neither holds nor represents any interest adverse to the Debtors' estates in connection with any matter on which it would be employed and that it is a "disinterested person," as referenced in Bankruptcy Code Sec. 327(a) and as defined in Sec. 101(14), as modified by Sec. 1107(b). About Connaught Group The Connaught Group, Ltd. and four of its affiliates, Limited Editions for Her of Nevada LLC; Limited Editions for Her of Branson LLC; Limited Editions for Her LLC; and WDR Retail Corp. filed separate Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-10512) on Feb. 9, 2012. New York-based Connaught Group designs and has manufactured high- end women's wear and then sells the finished clothing through an innovative sales system outside the normal retail chain originally created in 1981 by the Debtors' founder and iconic designer, William D. Rondina. The Company's sales are made primarily through independent contractors who sell the clothing to their own clients in private showings. Through the Wardrobe Consultants, the Debtors are able to offer the personalized service and attention to detail absent from the conventional shopping experience. As of the Petition Date, the Debtors are affiliated with more than 1,300 Wardrobe Consultants. The Debtors also operate 10 outlet stores throughout the country, but the Debtors primarily only sell last season's clothing and other merchandise to be liquidated at these stores. A non-debtor Canadian subsidiary, The Connaught Group ULC, sells the Debtors' clothing to be liquidated in eight outlet stores in Canada. Three of the Canadian stores are leased by The Connaught Group, Ltd. Judge Stuart M. Bernstein presides over the case. David L. Barrack, Esq., Paul Jacobs, Esq., and Warren J. Nimetz, Esq., at Fulbright & Jaworski L.L.P., serve as the Debtors' counsel. Maury Satin at Zygote Associates serves as the CRO. Richter Consulting acts as financial advisor and Consensus Advisory Services and Consensus Securities LLC serve as financial advisors, consultants and investment bankers. Kurtzman Carson Consultants LLC serves as administrative agent, and claims and noticing agent. JPMorgan Chase is represented in the case by Andrew C. Gold, Esq., at Herrick, Feinstein LL. Citibank is represented by Boris I. Mankovetskiy, Esq., at Sills Cummis & Gross P.C. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler, PC. CONNAUGHT GROUP: Zygote Associates to Provide CRO ------------------------------------------------- The Connaught Group, Ltd., is looking to Zygote Associates L.L.C. is provide the Debtors with a chief restructuring officer. Pursuant to an Engagement Letter dated Dec. 30, 2011, Maury Satin, the President of Zygote Associates, will serve as CRO. Mr. Satin has been involved with restructuring and positioning of firms needing direct management or advice. He has been involved in the out-of-court restructuring of half a dozen companies and was the President of the Northeast Division of Vistage International, a leading chief executive leadership organization. He served as Vice President of Giuliani Partners LLC, a consulting and investment firm, where he advised domestic and international corporations on critical strategic issues and crisis management. He has also served as the President of New York City Off-Track Betting Corporation where he instituted cost cutting and re- structuring measures to improve financial performance and successfully re-position the corporation for sale. In addition, Mr. Satin was Executive Vice President and Chief Operating Officer of the New York City Economic Development Corporation as well as the Chief of Staff of the New York City Department of Citywide Administrative Services. Mr. Satin is also familiar with the fashion and garment business and the Debtors' business operations, financial affairs, and capital structure in particular. The Debtors are seeking approval of Mr. Satin's engagement, asserting that his services will substantially enhance their attempts to successfully reorganize and maximize the value of their estates. The Debtors believe Zygote Associates is a "disinterested person," as that term is defined in section 101(14) of the Bankruptcy Code. The Debtors propose to pay Zygote for the services of the CRO, Mr. Satin, at the weekly billing rate of $5,000. He was paid a $10,000 retainer which he still holds. In addition to compensation for professional services rendered by Mr. Satin, Zygote will seek reimbursement for reasonable and necessary expenses incurred in connection with the Debtors' chapter 11 cases. The Debtors will also indemnify the CRO. About Connaught Group The Connaught Group, Ltd. and four of its affiliates, Limited Editions for Her of Nevada LLC; Limited Editions for Her of Branson LLC; Limited Editions for Her LLC; and WDR Retail Corp. filed separate Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-10512) on Feb. 9, 2012. New York-based Connaught Group designs and has manufactured high- end women's wear and then sells the finished clothing through an innovative sales system outside the normal retail chain originally created in 1981 by the Debtors' founder and iconic designer, William D. Rondina. The Company's sales are made primarily through independent contractors who sell the clothing to their own clients in private showings. Through the Wardrobe Consultants, the Debtors are able to offer the personalized service and attention to detail absent from the conventional shopping experience. As of the Petition Date, the Debtors are affiliated with more than 1,300 Wardrobe Consultants. The Debtors also operate 10 outlet stores throughout the country, but the Debtors primarily only sell last season's clothing and other merchandise to be liquidated at these stores. A non-debtor Canadian subsidiary, The Connaught Group ULC, sells the Debtors' clothing to be liquidated in eight outlet stores in Canada. Three of the Canadian stores are leased by The Connaught Group, Ltd. Judge Stuart M. Bernstein presides over the case. David L. Barrack, Esq., Paul Jacobs, Esq., and Warren J. Nimetz, Esq., at Fulbright & Jaworski L.L.P., serve as the Debtors' counsel. Maury Satin at Zygote Associates serves as the CRO. Richter Consulting acts as financial advisor and Consensus Advisory Services and Consensus Securities LLC serve as financial advisors, consultants and investment bankers. Kurtzman Carson Consultants LLC serves as administrative agent, and claims and noticing agent. JPMorgan Chase is represented in the case by Andrew C. Gold, Esq., at Herrick, Feinstein LL. Citibank is represented by Boris I. Mankovetskiy, Esq., at Sills Cummis & Gross P.C. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler, PC. CROSSOVER FINANCIAL: Opposes DeCelles' Motion to Dismiss -------------------------------------------------------- Crossover Financial I, LLC, objects to the Second Motion to Dismiss filed by First Regional Bank, c/o Trust Administrative Services Corporation FBO Philip P. DeCelles, Account #xxx797, by and through Philip P. DeCelles, note holders, and The DeCelles Trust dated January 10, 2006. The DeCelles Group is arguing the Debtor's bankruptcy case was filed without requisite authority. The DeCelles Group relies on a Membership Pledge and Security Agreement granted to each of the Note Holders in connection with the promissory notes under the Private Placement Memorandum. On behalf othe Debtor, Stephen C. Nicholls, Esq., at Nicholls & Associates, P.C., notes that the root of the DeCelles Group's argument is that the security interest is self executing, and upon a default of any respective promissory note, divested the control of Debtor's management from its sole member, Mitchell Yellen. Mr. Nicholls submits that the exercise of rights set forth in the Membership Pledge and Security Agreement is permissive and voluntary. No allegation is made in the motion or elsewhere that any of the beneficiaries of security interests foreclosed upon the membership interests. About Crossover Financial Crossover Financial I, LLC, based in Elizabeth, Colorado, was formed on Aug. 12, 2005. Mitchell B. Yellen is the manager and sole member. The Company was formed for the purpose of raising funds through a Private Placement Memorandum to be loaned to an entity known as HPR, LLC, in connection with the acquisition and development of 440 acres of real property located in El Paso County. HPR consisted of three members: Colorado Commercial Builders, Inc. (37.5%); DJT, LLC (20.0%); and Yellen Family Partnership, LLLP (42.5%). Mitchell Yellen held an interest in the Yellen Family Partnership, LLLP. The project stalled primarily as a result of a collapse in the residential real estate development market in 2007 and potential developers pulled out of the project. There has been no further development activity on the Real Property since 2007. Faced with the prospect of a lengthy foreclosure proceeding, the Debtor entered into to an agreement with HPR whereby the Real Property was transferred to the Debtor by way of a deed-in-lieu of foreclosure. Upon acquiring the Real Property, the Debtor attempted to bring in additional developers to continue the project but those efforts were unsuccessful. The Company filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 11-24257) on June 15, 2011. Judge Sidney B. Brooks presides over the case. Stephen C. Nicholls, Esq., at Nicholls & Associates, P.C., in Denver, serves as bankruptcy counsel. In its petition, the Debtor estimated assets and debts of $10 million to $50 million. The petition was signed by Mitchell B. Yellen. Karen McClaflin of Home Source Realty, LLC, Colorado acts as real estate broker for the Estate. An official unsecured creditors committee has not been appointed. CUMULUS MEDIA: Board Provides Criteria for Incentive Awards ----------------------------------------------------------- The compensation committee of the Board of Directors of Cumulus Media Inc. established performance criteria for annual non-equity incentive awards payable to the Company's named executive officers pursuant to their respective employment agreements. For Lewis W. Dickey, Jr., Chairman, President and Chief Executive Officer, payment of the award at the target level is based upon achievement of certain revenue and earnings targets. For J.P. Hannan, Senior Vice President, Treasurer and Chief Financial Officer, payment of the award at the target level is subject to the Company's achievement of certain earnings targets and other financial and operational measures in 2012. For Jon G. Pinch, Executive Vice President and Co-Chief Operating Officer, and John W. Dickey, Executive Vice President and Co-Chief Operating Officer, payment of the award at the target level is subject to the Company's achievement of certain revenue and earnings targets, and operational achievements. Payment of bonus awards above the target level established in each officer's respective employment agreement is subject to the Committee's discretion based on its assessment of factors relevant to each individual's performance. In addition, and also on Feb. 16, 2012, the Committee reviewed certain previously established performance criteria relating to 800,000 outstanding shares of performance-based restricted stock previously awarded to and held by Mr. L. Dickey pursuant to his employment agreement. The Committee determined that, in light of, among other things, the significant transactions undertaken and successfully completed by the Company in 2011 including, but not limited to, the Company's acquisitions of Citadel Broadcasting Corporation and the equity interests of Cumulus Media Partners, LLC, that the Company did not own, and the related refinancing transactions, that previously established performance criteria were no longer applicable, and that it was appropriate to waive the remaining performance targets related to those awards. Accordingly, the 800,000 shares of performance-based restricted stock vested, effective Feb. 16, 2012. About Cumulus Media Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ: CMLS) -- http://www.cumulus.com/-- is the second largest radio broadcaster in the United States based on station count, controlling 350 radio stations in 68 U.S. media markets. In combination with its affiliate, Cumulus Media Partners, LLC, the Company believes it is the fourth largest radio broadcast company in the United States when based on net revenues. The Company's balance sheet at Sept. 30, 2011, showed $4.07 billion in total assets, $3.65 billion in total liabilities, $110.93 million in total redeemable preferred stock, and $306.39 million in total stockholders' equity. Cumulus Media put AR Broadcasting Holdings Inc. and three other units to Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13674) after struggling to pay off debts that topped $97 million as of June 30, 2011. Holdings estimated debts between $50 million and $100 million but said assets are worth less than $50 million. AR Broadcasting are Missouri and Texas radio stations. * * * Standard & Poor's Ratings Services said April it raised its corporate credit rating on Atlanta-based Cumulus Media Inc. to 'B' from 'B-'. "The rating remains on CreditWatch, where we placed it with positive implications Feb. 18, 2011," S&P stated. Moody's Investors Service in April upgraded Cumulus Media's Corporate Family Rating to 'B1' from 'Caa1' due to the company's pending acquisition of CMP Susquehanna Corp. in the second quarter of 2011 followed by the announced $2.4 billion acquisition of Citadel Broadcasting Corporation later this year. CUSTER ROAD: Sec. 341 Creditors' Meeting on March 2 --------------------------------------------------- The United States Trustee will convene a Meeting of Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of Custer Road Marketplace, Ltd., on March 2, 2012, at 1:30 p.m. at Southfork Hotel 341 meeting. Proofs of Claim are due by May 31, 2012. Government Proofs of Claim are due by Aug. 6, 2012. Custer Road Marketplace, Ltd., filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case no. 12-40312) on Feb. 7, 2012, listing $10 million to $50 million in assets and debts. Judge Brenda T. Rhoades presides over the case. Richard W. Ward, Esq., serves as the Debtor's bankruptcy counsel. CUSTER ROAD: Files List of 20 Largest Unsecured Creditors --------------------------------------------------------- Custer Road Marketplace, Ltd., filed with the Bankruptcy Court a list of creditors holding 20 largest unsecured claims: Entity Amount and Nature of Claim ------ -------------------------- CoServ Roughly $2,000 P.O. Box 650785 Electric Utilities Provider Dallas, TX 75265-0785 City of Frisco Roughly $2,000 P.O. Box 2730 Water and Trash Utilities Frisco, TX 75034 C.N.A Insurance $359 for property insurance P.O. Box 790094 St. Louis, MO 63179-009 Environmental Tree Design Disputed debt regarding 23544 Coons Road breached contract for sale Tomball, TX 77375 and installation of trees David Wideman Claim of $40,669 for alleged d/b/a Davco Development brokerage fees; claim is disputed 851 Stoddard Rd. Fairview, TX 75069-9332 Custer Road Marketplace, Ltd., filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case no. 12-40312) on Feb. 7, 2012, listing $10 million to $50 million in assets and debts. Judge Brenda T. Rhoades presides over the case. Richard W. Ward, Esq., serves as the Debtor's bankruptcy counsel. CUSTER ROAD: Taps Richard W. Ward as Bankruptcy Counsel ------------------------------------------------------- Custer Road Marketplace, Ltd., filed an application to employ Richard W. Ward, Esq., as bankruptcy counsel under a general retainer in accordance with Mr. Ward's normal hourly rate of $350 per hour. Mr. Ward attests he is disinterested and does not represent any interest that is materially adverse to the interests of the bankruptcy estate of the Debtor. In December 2011, Mr. Ward was contacted by representatives of Custer Road Marketplace regarding issues related to loans from Legacy Texas Bank to CRM and the possibility of resolving issues with Legacy through bankruptcy proceedings. Mr. Ward provided legal services to CRM through the bankruptcy filing date, including drafting of a plan of reorganization that was transmitted to Premier's counsel in an effort to settle matters without a bankruptcy filing. Mr. Ward was paid $3,500 for the pre-petition services rendered to CRM. The payment was made from a retainer delivered to me on behalf of CRM in the amount of $30,000. The payment is a capital contribution to CRM from Stan Graff, manger of CRM/GP LLC, general partner of Curter Road Marketplace. In addition to the payment of Mr. Ward's pre-petition fees, he was reimbursed the filing fee of $1,046 for CRM's chapter 11. Custer Road Marketplace, Ltd., filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case no. 12-40312) on Feb. 7, 2012, listing $10 million to $50 million in assets and debts. Judge Brenda T. Rhoades presides over the case. CYBERDEFENDER CORP: Files for Chapter 11 to Sell to GR Match ------------------------------------------------------------ CyberDefender Corporation filed for Chapter 11 protection (Bankr. D. Del. Case No. 12-10633) on Feb. 23, 2012. The Company, which estimated up to $10 million in assets and up to $50 million in liabilities as of the Chapter 11 filing, concurrently announced that it has entered into an asset purchase agreement with GR Match, an affiliate of Guthy-Renker, to sell substantially all of its assets to GR Match. The acquisition is subject to certain conditions, including approval by the Court, higher and better offers, customary closing conditions and any required government approvals. The Company emphasized that its daily operations, including software, data storage and LiveTech remote technical support services, would continue without interruption during the sale process. GR Match has committed to provide up to $4.6 million in debtor-in- possession financing to facilitate the transaction and sale. This financing will allow the Company's operations to continue normally while completing the sale. This additional liquidity will enable the Company to satisfy customary obligations associated with the daily operations of its business, including the timely payment for post-petition services, employee wages and other obligations. In conjunction with the Chapter 11 filing and pursuant to Section 363 of the Bankruptcy Code, the Company will file a motion for the establishment of bidding procedures to allow other qualified bidders to submit higher and better offers for its assets. XRoads Solutions Group, LLC serves as financial advisor to the Company and Pachulski Stang Ziehl & Jones LLP (James E. O'Neill) serves as bankruptcy counsel. 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. In regulatory filings, the Company disclosed $7.96 million in total assets, $42.54 million in total liabilities, and a $34.58 million total stockholders' deficit, as of Sept. 30, 2011. DYNEGY INC: Committee Wants to Retain ICF as Markets Advisor ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Dynegy Holdings LLC asks the Court for authority to retain ICF Resources LLC as energy markets advisor, nunc pro tunc to February 9, 2012. ICF International will provide assessments of power market, power plant, and valuation issues relating to Dynegy Inc. and the Debtors' generation portfolio, review proposed business plans and associated view of the markets and assets, review the Debtors' proposed plan of reorganization and various other related matters, provide advisory services in connection with the litigation involving the Debtors and U.S. Bank, as well as other services that may be reasonably requested by the Committee or by the Committee's counsel. The Services ICF International will provide to the Committee are necessary to enable the Committee to acquit its fiduciary duties to the Debtors' unsecured creditor constituency and to seek to maximize the value of recoveries to unsecured creditors, the Committee tells the Court. The Committee asserts that the Services will not duplicate the services provided by the other professionals that the Committee has retained or will seek to retain in these Chapter 11 cases. ICF International will be paid on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date the services are rendered, subject to Section 330 of the Bankruptcy Code. The current hourly rates charged by ICF International professionals are: Managing Director $590 Director $500 Principal $460 Senior Manager $395 Manager $355 Senior Consultant $295 Consultant $270 Analyst $250 Researcher $195 Administrator $165 Assistant $145 ICF will be reimbursed for necessary out-of-pocket expenses. The Debtors will be obligated to indemnify and hold ICF International and certain related persons and entities harmless and to provide contribution against liabilities arising out of or in connection with the retention of ICF International by the Committee except for any liability for losses, claims, damages or liabilities incurred in connection with ICF International's engagement that are finally judicially determined by a court of competent jurisdiction to have primarily resulted from the willful misconduct, bad faith or gross negligence of ICF International. Judah L. Rose, a managing director of ICF Resources, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7 to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 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: U.S. Bank Says Counterclaims Barred ----------------------------------------------- U.S. Bank National Association, as successor indenture trustee under the Indenture of Trust, Mortgage, Assignment of Leases and Rents and Security Agreement related to Roseton Units 1 and 2 and successor indenture trustee under the Indenture of Trust, Mortgage, Assignment of Leases and Rents and Security Agreement related to Danskammer Units 3 and 4, answers the counterclaims asserted by Dynegy Holdings LLC, Dynegy Danskammer LLC and Dynegy Roseton LLC. George A. Davis, Esq., at Cadwalader Wickersham & Taft LLP, in New York, argues that the Counterclaims fail to state a claim upon which relief may be granted and that they are barred in whole or in part by the Personal Property Leases, Real Property Leases and Real Property Subleases, which describe the assets covered by the Personal Property Leases as personal property. Dynegy Holdings and the other plaintiffs previously contended that U.S. Bank's $919 million claim must be disallowed and noted that the Certificate Holders on whose behalf U.S. Bank acts are owed only $550.4 million. The Court granted previously Dynegy, Inc.'s request to intervene in the Adversary Proceeding so that it can monitor the proceeding. In a separate filing, the Official Committee of Unsecured Creditors certified that no objections were filed to its request to intervene in the Adversary Proceeding as of February 3, 2012. As reported in the TCR on Jan. 27, 2012, U.S. Bank National Association, as successor indenture trustee under the Indenture of Trust, Mortgage, Assignment of Leases and Rents and Security Agreement related to Roseton Units 1 and 2 and successor indenture trustee under the Indenture of Trust, Mortgage, Assignment of Leases and Rents and Security Agreement related to Danskammer Units 3 and 4, filed an adversary proceeding against debtors Dynegy Holdings LLC, Dynegy Roseton LLC, and Dynegy Danskammer LLC. A final pre-trial conference will be held on June 6, 2012, at 10:15 a.m., at the Poughkeepsie Office, in connection with the Adversary Proceeding. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7 to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 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) DRYSHIPS INC: Incurs $70.1 Million Net Loss in 2011 --------------------------------------------------- Dryships, Inc., reported net loss attributable to the Company of US$6.22 million on US$328.18 million of revenue for the three months ended Dec. 31, 2011, compared with net income attributable to the Company of US$97.93 million on US$215.82 million of revenue for the same period a year ago. The Company reported a net loss attributable to the Company of US$70.12 million on US$1.07 billion of revenue for the year ended Dec. 31, 2011, compared with net income attributable to the Company of US$188.32 million on US$859.74 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2011, showed US$8.62 billion in total assets, US$4.68 billion in total liabilities and US$3.93 billion in total equity. George Economou, Chairman and Chief Executive Officer of the Company commented: "We are pleased to report DryShips' earnings for the fourth quarter of 2011. This last quarter of 2011 was a significant period for our offshore drilling unit because it generated profits in spite of downtime associated with mobilizing our rigs to drilling locations. More importantly, it marked the beginning of our next growth stage as we continue to build on our revenue backlog." A full-text copy of the press release is available for free at: http://is.gd/K4B6Cp 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. EASTMAN KODAK: S&P Assigns 'B-' Rating to $700MM DIP Term Loan -------------------------------------------------------------- Standard & Poor's Rating Services assigned ratings to U.S.-based Eastman Kodak Co. (Kodak)'s $950 million debtor-in-possession (DIP) credit facility, comprising a $250 million revolving credit facility and a $700 million term loan due July 2013. "We rate the revolver 'B+' and the term loan 'B-'. The company's corporate credit rating remains 'D'. Kodak filed a voluntary petition under Chapter 11 of the Bankruptcy Code on Jan. 19, 2012," S&P said. "The higher rating on the DIP revolver reflects its senior repayment position and borrowing base restrictions with regard to cash, accounts receivable, inventory, machinery, and equipment relative to the DIP term loan under a liquidation scenario. It also reflects our expectation that the revolving facility has likely full repayment prospects even in a liquidation scenario," S&P said. "The ratings reflect Standard & Poor's view of the likelihood of repayment of the DIP loans in full upon the company's reorganization and emergence from bankruptcy, as well as our assessment of the lenders' prospect for full recovery in the event that liquidation becomes necessary. The DIP loan ratings are point-in-time ratings we assigned on the date we performed the analysis, based on information provided and available at such time and the assumptions that we outline in this report. We will withdraw these ratings shortly after publishing and Standard & Poor's will not review, modify, or monitor the ratings based on subsequent information or changes to market conditions," S&P said. The $250 million asset-based DIP revolver (ABL) consists of $225 million available to Kodak and $25 million available to Kodak Canada Inc. Kodak is the sole borrower under the term loan. The ABL is guaranteed by Kodak's direct and indirect domestic subsidiaries, and Kodak Canada's direct and indirect wholly owned Canadian subsidiaries in the case of the Canadian revolver. The ABL has a first-priority security interest on cash, accounts receivable, inventory, and machinery and equipment and a second- priority lien on the collateral securing the term loan. The term loan has a first-priority security interest on essentially the rest of the assets, including real property, intellectual property, and a 65% stock pledge of first-tier foreign subsidiaries. It has a second-priority security interest on the ABL collateral. Availability under the revolver is governed by a borrowing base, which consists of 1) 85% of eligible trade receivables, plus 2) the lesser of 65% of cost of eligible inventory and 85% of the net orderly liquidation value of eligible inventory, plus 3) the lesser of $35 million and 75% of net orderly liquidation value of eligible machinery and equipment, minus reserves, which include a permanent availability block that holds U.S. borrowing capacity $25 million below the stated commitment amount. Financial covenants include minimum consolidated adjusted EBITDA starting from a shortfall of $105 million as of April 30, 2012, with gradual step-ups turning into a surplus requirement of $40 million as of Feb. 28, 2013, and finally ending in a minimum of $175 million as of June 30, 2013. There is a minimum U.S. liquidity covenant of $250 million until March 31, 2012, then $150 million until Sept. 30, 2012, and any day after $100 million. "Although Kodak has certain legacy businesses that are profitable and generate positive cash flow, we believe its ability to reorganize and raise sufficient capital to fully repay the DIP loans at emergence could be complicated by film's ongoing secular decline, prospects for continued large cash expenditures in printing markets targeted for growth, costs to restructure and revive core businesses, and uncertainty regarding the ability to monetize noncore intellectual property (IP)," S&P said. "In our opinion, the company's value as a going concern is a result of its profitable core businesses, which are Prepress Solutions, Document Scanners, and Kiosk business lines. Kodak plans to grow by building its businesses in the consumer and commercial print markets. However, Kodak currently has low-single- digit consumer ink jet printer market share and relatively modest collective consumer and commercial printing revenues in growth markets of about $1.2 billion. Growing these businesses in competitive markets while restructuring its core operations, exiting noncore markets, and funding its significantly underfunded employee benefit obligations is likely to continue to produce operating losses and cash flow deficits in 2012," S&P said. "In recent years, Kodak has relied on significant proceeds from licensing noncore IP and the sale of noncore assets to fund its plan to transform itself from a traditional film manufacturer into a digital technology company. However, this cash source shrank dramatically in 2011 and legal ruling on the validity of key patents remains unsettled. The DIP facility provides the company interim liquidity relief, however, the factors that drove Kodak into bankruptcy remain. Absent a large monetary settlement of its digital patents, we believe that there are risks surrounding Kodak's liquidity and ability to meet its covenants. In particular, we are concerned that the company's cash flow drain would lead to a violation of its minimum U.S. liquidity covenant in the later part of this year," S&P said. "Ultimately, we expect proceeds from additional licensing agreements or the outright sale of Kodak's noncore IP portfolio to help address its liquidity needs and enhance lender recovery prospects. Nonetheless, there is a wide range of possible outcomes, given a history of favorable and unfavorable patent validity rulings and it is difficult for us to predict the actual nominal value and timing of monetization. In light of these uncertainties, we characterize Kodak's ability to fully repay the DIP through a timely reorganization as high risk and note that DIP lenders could be incentivized to force liquidation if there is no clear path to a successful and timely IP settlement," S&P said. "As part of our DIP loan rating analysis, we assessed the DIP lenders' prospect for full recovery of principal in the event that the company's efforts to reorganize are unsuccessful and that bankruptcy converts to liquidation. For the purposes of this analysis, we consider the orderly liquidation value of the company's assets for the collateral securing the DIP loans. This analysis also contemplates that a liquidation scenario is most likely in the event that the monetization of its noncore IP assets falls well short of its expectations," S&P said. S&P applied these estimated advance rates to the company's Dec. 31, 2011, balance- sheet values: Trade receivables 70% Inventory 50% Machinery & equipment 20% Real property 10% Other assumptions of the liquidation analysis include: * A fully drawn ABL revolver less $25 million of U.S. availability block. * "About $50 million of cash remain on the balance sheet, which coincides with our assessment that the company would violate its minimum U.S. liquidity covenant," S&P said. * An estimated distressed patent sale value of about $220 million (approximately 10% of third-party valuations) under the assumption that the IP monetization plan is unsuccessful. "We view the IP monetization plan as subject to a wide range of possible outcomes. Our liquidation scenario considers an unsuccessful outcome," S&P said. * Estimated liquidation and administrative expenses of 7% of the gross proceeds. "No residual value available from the stock pledge of the U.K. and Germany subsidiaries due to structurally senior foreign indebtedness and liabilities, including $1.2 billion of U.K. pension liabilities and about $80 million of German notes. For the rest of first-tier foreign subsidiaries that provide a 65% stock pledge, we assigned similar advance rates to their liquid assets," S&P said. "Given these assumptions, the net proceeds available for distribution of about $951 million would provide for substantial overcollateralization of the DIP revolver and about 1x coverage for the DIP term loan. Given the priority position of the asset- based revolver over the term loan, the DIP revolver rating is enhanced at 'B+', while the DIP term loan rating is unenhanced at 'B-'," S&P said. Ratings List Eastman Kodak Co. Corporate Credit Rating D/--/-- New Ratings Eastman Kodak Co. $250M revolving credit facility due 2013 B+ $700M term loan due 2013 B- EASTMAN KODAK: Apple Asks for Lift Stay of Patent Lawsuit --------------------------------------------------------- Apple Inc. asked the U.S. Bankruptcy Court in Manhattan to lift the automatic stay that was applied to a pending patent- infringement lawsuit against Eastman Kodak Co. The move comes after Eastman Kodak showed an indication to sell its digital imaging patents. Apple expressed concern that the patent for which it said it is the rightful owner may be included in the sale block. "Until this ownership dispute is decided, any such sale that includes the...patent would be inappropriate and harm Apple irreparably," said Apple's lawyer, Brian Lennon, Esq., at Kirkland & Ellis LLP, in New York. Apple accused Eastman Kodak of obtaining the disputed patent by secretly taking its innovations and claiming them as Eastman Kodak's own. "Kodak has misappropriated Apple's technology and has announced that it will seek authority from this court to sell that technology despite Apple having title to the technology," Mr. Lennon said in a court filing. In the same filing, Mr. Lennon also requested that the patent- infringement lawsuit be transferred to the U.S. Bankruptcy Court in Manhattan. The hearing to consider approval of the request is scheduled for February 28, 2012. Objections are due by February 23, 2012. 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: Wins Approval to Pay Employee Obligations -------------------------------------------------------- Judge Allan Groper entered a final order authorizing Eastman Kodak Co. and its affiliates to pay and honor all prepetition obligations associated with their employees. Company Workforce As of January 9, 2012, the Debtors employed 9,100 employees, 8,000 of which are full time workers. They regularly supplement their workforce through the use of temporary employees and independent contractors. The Workforce performs a variety of functions, including sales, customer service, information technology, research and development, engineering, purchasing and a variety of administrative, legal, accounting, finance and management-related tasks. Accordingly, to provide benefits to the Workforce, the Debtors pay and incur a number of obligations (including employee contributions, claims and administrative fees to benefit providers) such as compensation; deductions and payroll taxes; cash incentive programs; equity plans; termination allowance programs; reimbursement expenses; relocation and expatriates expenses; health benefits; workers' compensation benefits; vacation time; life insurance; accidental death and disability benefits; retirement and savings benefits and other benefits, which are collective referred to as the "Employee Obligations." A summary of the immediate relief the Debtors sought in relation to the payment of Employee Obligations is as follows: Estimated Estimated Prepetition Request Participants Amounts ------- ------------ ----------- Wages, Salaries, Commissions and other Compensation Unpaid Prepetition Compensation 9,100 $6,000,000 Payroll Providers 9,100 $100,000 Payroll Taxes and Deductions 9,100 $600,000 Staffing Agency Compensation 175 - 425 $4,800,000 Independent Contractor Compensation 28 $170,000 Reimbursable Expenses 9,100 $250,000 Employee Benefits Health Care Plans 63,600 $4,400,000 Flexible Benefit Plans 21,100 $720,000 Workers' Compensation 9,100 -- Vacation Time 9,100 -- Life Insurance Benefits 35,000 $2,800,000 Disability Benefits 10,000 $900,000 Accident Benefits 9,100 $4,000 Employee Savings & Retirement Plans * Kodak Employees' Savings & Investment Plan (SIP) 29,700 -- * Kodak Subsidiaries' Savings Plan 28 -- (KSSP) * Kodak Imaging Network, Inc. 95 -- 401(k) Salary Savings Plan (KIN) * Qualex Inc 401(k) Plan 97 -- * Laser-Pacific Media Corp. 9 -- Employees 401(k) Retirement Plan * Kodak Retirement Income Plan 55,000 -- (KRIP) * Qualex Pension Plan 9,000 -- * Local 966 Pension Plan -- -- Other Employee Benefit Programs 9,100 -- The Debtors assert that payment of the prepetition wages, employee benefits and similar items will benefit the Debtors' estates and their creditors by allowing their business operations to continue without interruption. The Court clarified in an Interim Order that the Debtors may not pay (i) any Employee more than $11,725 in the aggregate on account of Unpaid Prepetition Compensation and prepetition accrued but unused Vacation Time until entry of a final order, or (ii) any Independent Contractor more than $11,725 on account of Independent Contractor Compensation, and (iii) more than 50% of the outstanding prepetition Staffing Agency Compensation. The Debtors, under the Interim Order, are also not authorized to pay and honor amounts related to the Director Obligations, Employee Cash Incentive Programs, Equity Plans or Termination Allowance Programs prior to the final hearing or entry of a final order. Prior to the approval, Eastman Kodak revised the terms of the final order upon request from the Official Committee of Unsecured Creditors. The revised terms require Eastman Kodak to limit postpetition accruals under non-qualified defined benefit plans to accruals based on actual post-petition service under the standard terms of such plans. The revised terms also provide that payments to insiders will be carved out from the approved incentive plans. Eastman Kodak's request for authorization to continue the "director obligations" will be considered at the hearing scheduled for February 28, 2012. 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: Wins Approval to $60-Mil. Foreign Vendor Claims -------------------------------------------------------------- Eastman Kodak Co. won final court approval to pay the pre- bankruptcy claims of foreign suppliers, up to an aggregate cap of $60 million in accordance with its procurement policy. Prior to the approval, the company made revisions to the final order upon request from the Official Committee of Unsecured Creditors. The revised terms require Eastman Kodak to consult the committee prior to declaring a foreign supplier in breach, and prohibit the company from paying a supplier that has not executed a so-called foreign vendor agreement without the committee's consent. The revised terms also grant the committee the benefit of the same reservation of rights as Eastman Kodak with respect to challenges to the validity of any claims paid. Given the size, sophistication and global nature of their businesses, the Debtors regularly transact business with vendors located outside of the United States and its territories, and therefore the Debtors' supply chain is dependent upon a number of foreign suppliers that provide goods and services that are essential to the Debtors' businesses, said Andrew G. Dietderich, Esq., at Sullivan & Cromwell LLP, in New York. Based on their books and records as of the Petition Date, the Debtors estimate that they have approximately 2,000 vendors with outstanding prepetition claims in the aggregate amount of approximately $332 million. The Debtors' Foreign Vendors generally, but not exclusively, fall into these categories: (A) Raw materials Suppliers. Raw materials are the lifeblood of several of the Debtors' businesses. Even a short delay in their delivery could damage the health of the Debtors' operations. The Debtors estimate that they have spent approximately $460 million on raw materials during fiscal year 2011. (B) Custom Chemical Vendors. The Debtors also have commissioned and continue to use many custom-made chemicals that are essential to the manufacture of film, photographic paper and other products. The Debtors estimate that they have spent approximately $115 million on chemical suppliers during fiscal year 2011. (C) Merchandise Vendors. Certain of the Debtors' consumer electronics, such as digital still and video cameras, digital picture frames, desktop inkjet printers, ink cartridges, and batteries are purchased "retail-ready" on open credit from manufacturers and re-sold to customers, while other products are purchased in a substantially finished form but require final assembly. The Debtors estimate that they have spent approximately $640 million on merchandise vendors in fiscal year 2011. (D) Component Vendors. The Debtors use components in the manufacture of digital cameras and devices, consumer and commercial printers, and other devices. The Debtors estimate that they have spent approximately $110 million on component vendors in fiscal year 2011. The Debtors said they seek to pay prepetition claims of certain identified Foreign Vendors who are essential to their business operations, up to the Foreign Vendor Cap, and only payment actually is necessary to ensure that the particular vendor will provide necessary goods and services to the Debtors on a postpetition basis. To that end, the Debtors have not identified any pre-authorized list of Essential Foreign Vendors whose claims may be paid. To further ensure that the Debtors' business operations will be minimally impacted during the Debtors' Chapter 11 cases, the Debtors proposed a Procurement Policy, which seeks to condition payments to Essential Foreign Vendors upon an agreement by such Essential Foreign Vendor to provide normal, reasonable and customary price, service, quality and payment terms to the Debtors on a postpetition basis. Pursuant to the Procurement Policy, the Debtors intend to condition the receipt of payment by a Foreign Vendor on an agreement that the Foreign Vendor also continue to extend Customary Trade Terms to the Debtors' non-debtor foreign subsidiaries -- and that the Foreign Vendor will not attempt to recover from the Debtors' Foreign Affiliates any prepetition amounts due to such vendor from the Debtors. A full-text copy of the Debtors' Procurement Policy is available for free at: http://bankrupt.com/misc/EastmanKodak_ProcurementPolicy.pdf The Debtors estimate that about 30% of the total amount of Foreign Vendor Claims is on account of goods that were received during the 20-day period before the Petition Date, and thus, may be afforded administrative priority under Section 503(b)(9) of the Bankruptcy Code. As a result, for this subset of the Foreign Vendor Claims, the Debtors' Motion will only affect the timing, but not the amount, of payment. 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). ENERGY FUTURE: Subsidiaries to Offer $200MM of Sr. Secured Notes ---------------------------------------------------------------- Energy Future Intermediate Holding Company LLC and EFIH Finance Inc., both wholly-owned subsidiaries of Energy Future Holdings Corp., intend to commence a private offering of $200 million principal amount of additional 11.750% Senior Secured Second Lien Notes due 2022. The Issuers intend to use the net proceeds from the offering to pay a dividend to EFH Corp., which will use the proceeds of the dividend to repay a portion of the demand notes payable by EFH Corp. to its wholly-owned subsidiary Texas Competitive Electric Holdings Company LLC that have arisen from cash loaned by TCEH to EFH Corp. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. The Company reported a net loss of $1.91 billion in 2011 compared with a net loss of $2.81 billion in 2010. The Company's balance sheet at Dec. 31, 2011, showed $44.07 billion in total assets, $51.83 billion in total liabilities and a $7.75 billion total deficit. * * * In April 2011, Moody's Investors Service affirmed the 'Caa2' Corporate Family Rating, 'Caa3' Probability of Default Rating and SGL-4 Speculative Grade Liquidity Ratings of EFH. Outlook is stable. EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed company with limited financial flexibility; its capital structure appears to be untenable, calling into question the sustainability of the business model; and there is no expectation for any meaningful debt reduction over the next few years, beyond scheduled amortizations. At the end of February 2011, Fitch Ratings it does not expect to take any immediate rating action on EFH's Texas Competitive Electric Holdings Company LLC or their affiliates based on recent default allegations from lender Aurelius. EFH carries a 'CCC' corporate rating, with negative outlook, from Fitch. ENERGY TRANSFER: Fitch Assigns 'BB' Rating to Sr. Sec. Term Loan ---------------------------------------------------------------- Fitch Ratings has assigned a 'BB' rating to Energy Transfer Equity, L.P.'s (ETE) proposed senior secured term loan facility (Term Loan). ETE's Issuer Default Rating (IDR) is 'BB-' and its Rating Outlook is Stable. The Term Loan, which has a maximum size of $2.3 billion, will be used to pay a portion of the cash consideration for ETE's acquisition of Southern Union Company (SUG; IDR 'BBB-' on Rating Watch Negative by Fitch). the SUG merger agreement, SUG shareholders can elect to exchange each share of SUG common stock they own for either $44.25 in cash or 1 common unit of ETE. The aggregate cash consideration will be capped at 60% of the $5.7 billion aggregate merger consideration, and the aggregate ETE common unit consideration will be capped at 50% of the aggregate merger consideration. ETE mailed the cash election forms to SUG shareholders on Feb. 17, 2012, who have until March 19, 2012 to make their election. ETE plans to fund approximately $1.45 billion of the cash portion with part of the proceeds received from the acquisition of SUG's 50% interest in Citrus Corp. by Energy Transfer Partners, L.P. (ETP; IDR 'BBB-' Rating Outlook Negative). Proceeds from ETPs' January 2012, $2.0 billion senior note financing will be used to fund its Citrus acquisition. Depending on the SUG shareholder election, the size of the Term Loan should be between $1.7 billion and $2.3 billion. ETE expects to close the SUG merger in mid-to- late March 2012, pending approval by the Missouri Public Service Commission (MPSC). A stipulation between SUG, ETE, and the MPSC staff recommending approval of the merger was filed with the MPSC on Feb. 16, 2012. By funding with the Term Loan ETE will not need to draw on its Oct. 17, 2011, 364-day $3.7 billion senior bridge loan facility. The Term Loan will be secured by a first-priority interest in all tangible and intangible assets of ETE, including the limited partner and general partner ownership interests in ETP and Regency Energy Partners LP (RGNC) and its interests in SUG. The collateral documents will secure ETE's outstanding $1.8 billion senior notes due 2020 and borrowings under its amended $200 million secured revolving credit facility due 2015 on a pari passu basis with the Term Loan, but subject to a 'first out' right in favor of the revolver. The Term Loan is expected to have two financial covenants, a leverage ratio and a fixed charge coverage ratio. In addition, the Term Loan is expected to require a value to loan ratio for ETE to incur debt. The revolving credit agreement is expected to mirror the Term Loan agreement in all material respects. Ample cushion is expected under the proposed financial ratios. Rating Rationale: Fitch expects ETE's credit profile to remain consistent with its current ratings pro forma the transaction. 2012 Fitch projects ETE's standalone adjusted debt to EBITDA, which measures ETE parent company debt against the distributions it receives from SUG, ETP and RGNC less expenses, to range between 3.5x and 4.5x depending on the size of the Term Loan, the date of the transaction close and the amount of operating synergies the merger provides. On a fully consolidated basis 2012 debt to EBITDA is expected to approach 6.0x. ETE's leverage ratios are expected to improve in future periods with the benefit of a full year's ownership of SUG, increasing distributions from ETP and RGNC, and potentially from the use of proceeds from SUG asset sales, including dropdowns, to pay down debt. SUG Will Diversify ETE's Cash Flow: ETE's cash flow will increase by more than 50% following the SUG merger. Furthermore, the stability of ETE's cash flow should improve with the addition of SUG's pipeline assets combined with the January 2012 sale by ETP of its retail propane operations to AmeriGas Partners L.P. A higher percentage of revenues will be attributable to contractually supported fee-based operations and sensitivity to weather and commodity prices will be reduced. Catalysts for Future Rating Actions: Possible catalysts for negative rating actions include increasing leverage at ETE and weakening credit quality at ETP, SUG, and RGNC. Possible catalysts for positive rating actions include reduced leverage at ETE and improving credit quality at ETP, SUG, and RGNC. ETE currently owns 50.2 million ETP limited partner (LP) units and ETP's 1.6% general partner (GP) interest and 26.3 million Regency Energy Partners LP (RGNC) LP units and RGNC's 1.9% GP interest. ETE's investment in RGNC was completed on May 26, 2010. ENIVA USA: $350,000 Post-Confirmation Financing Approved -------------------------------------------------------- Bankruptcy Judge Robert J. Kressel authorized Eniva USA, Inc., to enter into a $350,000 post-confirmation financing with Plymouth Investments, LLC. The Post-Confirmation Credit Facility is secured by a lien in all assets of the Debtor subordinate to the lien of Home Federal Home Federal Savings Bank. Prior to the entry of the Court's order, Home Federal filed a conditional objection pending execution of an appropriate subordination agreement. Federal Home asserted that the collateral to the proposed financing documents is subject to its prior security interest. The conditional objection was subsequently withdrawn. About Eniva USA Headquartered in Plymouth, Minnesota, Eniva USA, Inc., fka Eniva, Inc., in engaged in the business of development, production and sale of nutritional supplements. It is a wholly owned subsidiary of Wellspring International, Inc. It sells its products throughout the U.S. through a network of approximately 25,000 active independent sales representatives, each under non-exclusive membership contract with the Debtor. It also sells its products in Mexico, Puerto Rico, Bermuda, Canada and the U.K. through non- Debtor affiliates owned by Wellspring. Eniva USA filed for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case No. 11-41414) on March 1, 2011. Michael F. McGrath, Esq., and Will R. Tansey, Esq., at Ravich Meyer Kirkman Mcgrath Nauman and Tansey, in Minneapolis, serve as the bankruptcy counsel. Leslie A. Anderson, Ltd., is special counsel in connection with the appeal or amendment of prior year sales tax returns. GuideSource serves as financial consultant. The Debtor estimated its assets and debts at $10 million to $50 million. Habbo G. Fokkena, the U.S. Trustee for Region 12, appointed three members to the official committee of unsecured creditors in the Chapter 11 cases. Richard D. Anderson, Esq., at Briggs and Morgan, P.A., in Minneapolis, Minn., represents Home Federal Savings and Loan as counsel. ENIVA USA: Plan Confirmed; Unsecureds to Recover 7.5% in 3 Years ---------------------------------------------------------------- Judge Robert J. Kressel confirmed Eniva USA, Inc.' Modified Plan of Reorganization dated Feb. 21, 2012. Under the Plan, general unsecured creditors will receive 7.5% of the allowed amount of the claim, without interest, payable in three years. The distributions will amount to roughly $500,000. The Home Federal Claim totaling $178,000 as of the Effective Date will be treated as a fully secured claim. Home Federal will retain all of its pre- and post-petition lien and security interests in all collateral previously pledged to it by the Debtor. As holders of the equity interests, Andrew Baechler and Benjamin Baechler will hold 100% of the common stock of the Reorganized Debtor. The Equity Interests will be pledged to the Post- Confirmation Lender to secure the personal guarantees of the Post- Confirmation Credit Facility. The board of directors of Eniva will consist of the following members: Andrew Baechler and Benjamin Baechler. Management of Eniva will consist of: Andrew Baechler as chief executive officer and Benjamin Baechler as chief medical officer. The annual compensation paid to Andrew Baechler and Benjamin Baechler is $120,000 and $120,000 respectively, and will not be increased until all payments under the Plan have been completed. The Debtor will continue to operate its business in the ordinary course. Payments required by the Plan will be made from the cash flow generated by the operation of the business and from the $350,000 Post-Confirmation Credit Facility secured by a lien in all assets of the Debtor subordinate to the lien of Home Federal and made available to the Debtor as of the Effective Date. Prior to the entry of the Court's Order, Austin Mutual Insurance Company filed an objection to confirmation on the grounds that the Plan does not meet the requirements for confirmation because: (a) the Plan is not proposed in good faith, (b) the Debtor will likely be unable to pay administrative claims in full on the effective date, (c) the Plan is not feasible, and (d) the Plan is not fair and equitable to unsecured creditors. A full-text copy of the Confirmed Plan is available for free at: http://bankrupt.com/misc/ENIVAconfirmedPlan.pdf About Eniva USA Headquartered in Plymouth, Minnesota, Eniva USA, Inc., fka Eniva, Inc., in engaged in the business of development, production and sale of nutritional supplements. It is a wholly owned subsidiary of Wellspring International, Inc. It sells its products throughout the U.S. through a network of approximately 25,000 active independent sales representatives, each under non-exclusive membership contract with the Debtor. It also sells its products in Mexico, Puerto Rico, Bermuda, Canada and the U.K. through non- Debtor affiliates owned by Wellspring. Eniva USA filed for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case No. 11-41414) on March 1, 2011. Michael F. McGrath, Esq., and Will R. Tansey, Esq., at Ravich Meyer Kirkman Mcgrath Nauman and Tansey, in Minneapolis, serve as the bankruptcy counsel. Leslie A. Anderson, Ltd., is special counsel in connection with the appeal or amendment of prior year sales tax returns. GuideSource serves as financial consultant. The Debtor estimated its assets and debts at $10 million to $50 million. Habbo G. Fokkena, the U.S. Trustee for Region 12, appointed three members to the official committee of unsecured creditors in the Chapter 11 cases. Richard D. Anderson, Esq., at Briggs and Morgan, P.A., in Minneapolis, Minn., represents Home Federal Savings and Loan as counsel. EVERGREEN SOLAR: Wants Exclusive Filing Period Extended to June 12 ------------------------------------------------------------------ BankruptcyData.com reports that Evergreen Solar, Inc., filed with the Bankruptcy Court a motion to extend the exclusive period during which the Company can file a Chapter 11 plan and solicit acceptances thereof through and including June 12, 2012 and Aug. 13, 2012, respectively. The Court scheduled a March 8, 2012 hearing on the matter. About Evergreen Solar Evergreen Solar, Inc. -- http://www.evergreensolar.com/-- developed, manufactured and marketed String Ribbon solar power products using its proprietary, low-cost silicon wafer technology. The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge Mary F. Walrath. The Company's balance sheet at April 2, 2011, showed $373,972,000 in assets, $455,506,000 in total liabilities, and a stockholders' deficit of $81,534,000. Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham McCutchen LLP, serve as general bankruptcy counsel to the Debtor. Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as co-counsel. Hilco Industrial LLC serves as exclusive marketing and sales agent. Klehr Harrison Harvey Branzburg serves as special conflicts counsel. Zolfo Cooper LLC is the financial advisor. UBS Securities, LLC, serves as investment banker. Epiq Bankruptcy Solutions has been tapped as claims agent. In conjunction with the Chapter 11 filing, the Company entered into a restructuring support agreement with certain holders of more than 70% of the outstanding principal amount of the Company's 13% convertible senior secured notes. As part of the bankruptcy process the Company will undertake a marketing process and will permit all parties to bid on its assets, as a whole or in groups pursuant to 11 U.S.C. Sec. 363. An entity formed by the supporting noteholders, ES Purchaser, LLC, entered into an asset purchase agreement with the Company to serve as a 'stalking-horse" and provide a "credit-bid" pursuant to the Bankruptcy Code for assets being sold. The supporting noteholders are represented by Michael S. Stainer, Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York. An official committee of unsecured creditors has retained Pepper Hamilton and Kramer Levin Naftalis & Frankel as counsel. The Committee tapped Garden City Group as communications services agent. Evergreen Solar is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are start-up Spectrawatt Inc., which also filed in August, Solyndra Inc., which filed early in September, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. Evergreen sold the assets piecemeal in three auctions. Max Era Properties Ltd. from Hong Kong paid $6 million cash and $3.2 million in stock of China Private Equity Investment Holdings Ltd. for the company name, intellectual property, and wafermaking assets. Kimball Holdings LLC paid $3.8 million for solar panel inventory while the secured lenders exchanged $21.5 million of their $165 million claim for a $171 million claim against Lehman Brothers Holdings Inc. Max Era Properties Limited and Sovello AG bought equipment and machinery located at the Debtor's Devens, Massachusetts facility for $8.9 million. EXECUTIVE CENTER OF SIMI: Sec. 341 Creditors' Meeting on March 20 ----------------------------------------------------------------- The U.S. Trustee in Woodland Hills, California, will convene a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a) meeting in the Chapter 11 case of Executive Center of Simi Valley LLC on March 20, 2012, at 11:00 a.m. at RM 105, 21051 Warner Center Lane, in Woodland Hills. Meanwhile, the Debtor is required to file its schedules of assets and liabilities and statement of financial affairs as well as a Venue Disclosure Form on March 1. The Debtor faces dismissal of the case if the documents aren't delivered to the Court. Executive Center of Simi Valley LLC, which operates the Agoura Hills Corporate Center, filed for Chapter 11 (Bankr. C.D. Calif. Case No. 12-11527) on Feb. 16, 2012. Judge Victoria S. Kaufman presides over the case. Janet A. Lawson, Esq., in Ventura, California, serves as the Debtor's counsel. The Debtor scheduled $29,576,254 in assets and $19,093,382 in debts. The petition was signed by Arnold A. Klein, managing partner. EXECUTIVE CENTER OF SIMI: Platinum Objects to Cash Collateral Use ----------------------------------------------------------------- Platinum Courtyard, LLC, has informed the Bankruptcy Court it objects to any attempt by Executive Center of Simi Valley, LLC, to use cash collateral. Platinum Courtyard said the Debtor owes it at least $13,893,280 as of Sept. 21, 2011 plus accruing default interest, fees and costs. The debt is secured by certain assets that include 30077 and 30101 Agoura Court, Agoura Hills CA and an assignment of rents and leases from the property. Platinum demands segregation, sequestration and an accounting for any proceeds and any other income derived from Collateral as required pursuant to 11 U.S.C. Sec. 363(c)(4). Platinum is represented by: Lewis R. Landau, Esq. 23564 Calabasas Road, Suite 104 Calabasas, CA 91302 Fax: (888) 822-4340 E-mail: Lew@Landaunet.com Executive Center of Simi Valley LLC, which operates the Agoura Hills Corporate Center, filed for Chapter 11 (Bankr. C.D. Calif. Case No. 12-11527) on Feb. 16, 2012. Judge Victoria S. Kaufman presides over the case. Janet A. Lawson, Esq., in Ventura, California, serves as the Debtor's counsel. The Debtor scheduled $29,576,254 in assets and $19,093,382 in debts. The petition was signed by Arnold A. Klein, managing partner. G & W ROOFING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: G & W Roofing and Sheet Metal, Inc. 129 West Marion Avenue Edgewater, FL 32132 Bankruptcy Case No.: 12-01052 Chapter 11 Petition Date: February 22, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Armistead W Ellis, Jr., Esq. ARMISTEAD W. ELLIS, JR., P.A. P.O. Box 127 Daytona Beach, FL 32115 Tel: (386) 255-2433 Fax: (386) 310-4956 E-mail: Pleadings.EllisLaw@gmail.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-01052.pdf The petition was signed by Paul Weiss, president. GASPAR PROPERTIES: Case Summary & 24 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Gaspar Properties, Inc. 45 Davis Boulevard Tampa, FL 33606 Bankruptcy Case No.: 12-02347 Chapter 11 Petition Date: February 22, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Leon A. Williamson, Jr., Esq. LEON A. WILLIAMSON, JR., P.A. 306 S. Plant Avenue, Suite B Tampa, FL 33606 Tel: (813) 253-3109 Fax: (813) 253-3215 E-mail: leon@lwilliamsonlaw.com Scheduled Assets: $5,558,960 Scheduled Liabilities: $17,598,494 The Company's list of its 24 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-02347.pdf The petition was signed by Hamilton H. Jones, president. GETTY PETROLEUM: Wants to Block Suit Over Gas Station Transfers --------------------------------------------------------------- Steven Melendez at Bankruptcy Law360 reports that Getty Petroleum Marketing Inc. filed suit Tuesday asking the judge handling its New York bankruptcy proceeding to block several lawsuits, including a dispute over a 2009 transfer of gas stations from Getty to then-sister company Lukoil North America LLC. Law360 relates that Lukoil Americas Corp. owned Getty and Lukoil North America at the time of the transfer, which Getty's current CEO Bjorn Q. Aaserod has said was "a fraudulent transfer that must be unwound" and part of the reason the company had to file for Chapter 11 bankruptcy. About Getty Petroleum A remnant of J. Paul Getty's oil empire, Getty Petroleum Marketing markets gasolines, hydraulic fluids, and lubricating oils through a network of gas stations owned and operated by franchise holders. A former subsidiary of Russian oil giant LUKOIL, the company operates in the Mid-Atlantic and Northeastern US states. Getty Petroleum Marketing's primary asset is the more than 800 gas stations in the Mid-Atlantic states which are located on properties owned by Getty Realty. After scaling back the company's operations to cut debt, in 2011 LUKOIL sold Getty Petroleum Marketing to investment firm Cambridge Petroleum Holding for an undisclosed price. Getty Petroleum and three affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case Nos. 11-15606 to 11-15609) on Dec. 5, 2011. Judge Shelley C. Chapman presides over the case. Loring I. Fenton, Esq., John H. Bae, Esq., Kaitlin R. Walsh, Esq., and Michael J. Schrader, Esq., at Greenberg Traurig, LLP, in New York, N.Y., serve as Debtors' counsel. Ross, Rosenthal & Company, LLP, serves as accountants for the Debtors. Getty Petroleum Marketing, Inc., disclosed $46,592,263 in assets and $316,829,444 in liabilities as of the Petition Date. The petition was signed by Bjorn Q. Aaserod, chief executive officer and chairman of the board. The Official Committee of Unsecured Creditors is represented by Wilmer Cutler Pickering Hale and Dorr LLP. Alvarez & Marsal North America, LLC, serves as the Committee's financial advisors. GFR ONE: Case Summary & 6 Largest Unsecured Creditors ----------------------------------------------------- Debtor: GFR One Corp 231 Douglas Road East Oldsmar, FL 34677 Bankruptcy Case No.: 12-02396 Chapter 11 Petition Date: February 22, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Barbara M. Brown-Emery, Esq. EMERY LAW AND MEDIATION, P.A. 12718 DuPont Circle Tampa, FL 33626 Tel: (813) 289-8485 Fax: (813) 855-8485 E-mail: barbara@emerylaw.org Scheduled Assets: $1,503,000 Scheduled Liabilities: $1,161,023 The Company's list of its six largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-02396.pdf The petition was signed by Gene Roefaro, president. GOLD LEAF: Firm That Sells Statue of Liberty Junk in Bankruptcy --------------------------------------------------------------- Katy Stech, writing for Dow Jones' Daily Bankruptcy Review, reports that Gold Leaf Corp., a Tennessee company that sold off chunks of the Statue of Liberty, filed for bankruptcy protection earlier this month after a judge determined that the company owed $315,855.95 to a Florida man whose loan kept the company operating. DBR notes Gold Leaf spent years trying to make money selling the scraps it salvaged from the monument's renovation in the 1980s. According to DBR, in the lawsuit that triggered the judgment, the lender accused the company of improperly transferring the monument's materials, including metal support bars that were extracted from within the original Statue of Liberty and bricks from the Ellis Island immigration house. Gold Leaf Corp., based in Fayetteville, Tenn., filed for Chapter 11 bankruptcy (Bankr. E.D. Tenn. Case No. 12-10816) on Feb. 16, 2012. Judge Shelley D. Rucker presides over the case. David J. Fulton, Esq., at Scarborough, Fulton & Glass, serves as the Debtor's counsel. The Debtor scheduled assets of $12,600 and liabilities of $1,096,541. The petition was signed by Richard W. Stocks, president-CEO. GOOD SAM: Completes Offer to Purchase $7.42 Million Senior Notes ---------------------------------------------------------------- Good Sam Enterprises, LLC, announced the completion of an offer to purchase up to $7,425,000 in principal amount of the Company's outstanding 11.50% Senior Secured Notes due 2016. The Offer to Purchase was made pursuant to the terms of the indenture governing the Notes and expired at 5:00 p.m., New York City time, on Feb. 17, 2012. The amount tendered exceeded the maximum aggregate amount of the Offer to Purchase by $203,000. Therefore, the tendered Notes have been accepted on a pro rata basis, such that the aggregate amount of the Notes purchased does not exceed the aggregate amount of the Offer to Purchase. The Notes will be purchased by the Company and retired on Feb. 27, 2012. "We are pleased at the outcome of the Offer to Purchase and the corresponding debt reduction of the company," stated Marcus Lemonis, CEO of Good Sam Enterprises, LLC. "On a pro forma basis, the retirement of the Notes under this Offer to Purchase, in the amount of $7,422,000, will reduce annualized interest expense by $854,000." About Affinity Group Ventura, Calif.-based Affinity Group Holding, Inc., now known as Good Sam Enterprises, LLC, is a holding company and the direct parent of Affinity Group, Inc. The Company is an indirect wholly- owned subsidiary of AGI Holding Corp, a privately-owned corporation. The Company is a member-based direct marketing organization targeting North American recreational vehicle owners and outdoor enthusiasts. The Company operates through three principal lines of business, consisting of (i) club memberships and related products and services, (ii) subscription magazines and other publications including directories, and (iii) specialty merchandise sold primarily through its 78 Camping World retail stores, mail order catalogs and the Internet. The Company also reported net income of $4.57 million on $362.26 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $6.24 million on $361.65 million of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $233.96 million in total assets, $487.09 million in total liabilities and a $253.12 million total stockholder's or member's deficit. * * * Affinity Group Inc. carries 'B3' long term corporate family and probability of default ratings, with 'stable' outlook, from Moody's Investors Service. As reported in the Troubled Company Reporter on November 9, 2010, Standard & Poor's Ratings Services assigned Affinity Group Inc.'s proposed $325 million senior secured notes due 2016 its preliminary 'B-' issue-level rating. Following the close of the proposed transaction, S&P expects to assign a 'B-' corporate credit rating to Affinity Group Inc., and withdraw S&P's current 'D' corporate credit rating on Affinity Group Holding Inc. A portion of the proceeds of the new notes will be used, in conjunction with cash contributions from Holding's parent, to repay in full $88 million of senior notes that are currently outstanding at Holding. S&P said the expected 'B-'corporate credit rating on Affinity Group reflects S&P's expectation that, following the proposed refinancing transaction, adjusted debt leverage will be reduced by about 1x, the company will not have any meaningful near-term debt maturities, and the company will generate some discretionary cash flow (albeit minimal). Still, credit measures will remain relatively weak, as adjusted debt leverage will remain above 6.0x (S&P's operating lease adjustment adds about a turn to leverage), and S&P expects interest coverage to remain in the low- to mid- 1.0x area over the intermediate term. GOODYEAR TIRE: Fitch Rates Proposed $700-Mil. Notes at 'B/RR5' -------------------------------------------------------------- Fitch Ratings has assigned a rating of 'B/RR5' to The Goodyear Tire & Rubber Company's (GT) proposed issuance of $700 million of new senior unsecured notes due 2022. GT's issuer default rating (IDR) is 'B+' and the Rating Outlook is 'Stable'. The Recovery Rating of 'RR5' on the proposed notes reflects estimated recovery prospects in the 10% to 30% range in a distressed scenario. The proposed notes rank pari passu with GT's existing senior unsecured notes and are guaranteed on a senior unsecured basis by the company's same U.S. and Canadian subsidiaries that guarantee its secured bank credit facilities and its existing senior unsecured notes. GT has the option to redeem all or a portion of the notes at any time on or after May 17, 2017, at 100% of the principal amount plus a make-whole premium. In addition, prior to May 15, 2015, GT may redeem up to 35% of the notes using proceeds from certain equity offerings. Proceeds from the proposed notes will be used to redeem GT's $650 million of 10.5% senior unsecured notes due 2016. Although the issuance of the proposed notes will increase the company's debt outstanding by $50 million, it will move the company's note maturities further into the future and will presumably reduce the company's cash interest expense, given the high coupon on the 2016 notes. Following the redemption of the 2016 notes, the consolidated company will have no note maturities until 2019, when the EUR250 million of 6.75% senior unsecured notes issued by GT's Goodyear Dunlop Tires Europe B.V. (GDTE) subsidiary come due. GT does, however, have several significant bank debt maturities before then, including its $1.2 billion second-lien term loan, which matures in 2014. GT's ratings reflect its strong competitive position as a leading brand in the global replacement and original equipment (OE) tire segments and ongoing market acceptance its premium tire offerings, set against a backdrop of a persistently negative free cash flow performance and substantially underfunded pension obligations. Leverage declined meaningfully in 2011 as pricing and mix overcame high raw material costs, resulting in significant EBITDA growth. GT's debt level rose, however, as negative working capital pressured free cash flow. Looking ahead, GT has outlined a multi- year plan to increase margins and strengthen its balance sheet, but higher capital spending and heavy cash pension requirements are likely to keep free cash flow relatively weak or negative over the intermediate term. As mentioned above, the recovery rating of 'B/RR5' on the proposed notes reflects Fitch's expectation that recovery on the notes would be below average, in the 10% to 30% range, in a distressed scenario. The relatively low level of expected recovery is due, in part, to the substantial amount of higher-priority secured debt in GT's capital structure. Fitch also notes that in a distressed scenario, the company's substantial pension obligations could potentially depress recovery prospects further for unsecured creditors. Fitch could revise GT's Rating Outlook to 'Positive' or the ratings could be upgraded in the intermediate term if stronger margins result in positive free cash flow generation on a sustainable basis and leverage continues to decline. A meaningful reduction in debt also could result in a positive rating action, but this is unlikely in the near term, given the expected pressure on the company's free cash flow. A substantial improvement in the funded status of GT's pension plans would also contribute to a positive rating action. On the other hand, GT's Rating Outlook could be revised to 'Negative' or the ratings downgraded if a decline in tire demand or an increase in production costs results in a prolonged period of negative free cash flow generation and a significant weakening in the company's credit protection metrics. Of particular focus would be any decline in the company's cash balance below $1 billion for an extended period. GREAT PLAINS: Wants to Employ Dworken & Bernstein as Counsel ------------------------------------------------------------ Great Plains Exploration, LLC, asks the Bankruptcy Court for authorization to employ Dworken & Bernstein Co., L.P.A., as special counsel in various corporate, regulatory and litigation matters. The professional services that Dworken & Bernstein are to render include giving Great Plains legal advice with respect to corporate and regulatory matters in the normal course of its business. The corporate and regulatory matters are often complex, requiring specialized knowledge and experience with the debtor and related companies. The individuals presently designated to represent Great Plains and their hourly rates as of January 1, 2012 are: Name Position Hourly Rate ------------------------ -------- ----------- Richard N. Selby, II Attorney $250 Melvyn E. Resnick Attorney $350 Jodi Littman Tomaszewski Attorney $275 Erik L. Walter Attorney $250 Howard S. Rabb Attorney $300 About Great Plains Exploration, Oz Gas and John D. Oil Mentor, Ohio-based Great Plains Exploration LLC engaged primarily in the acquisition, development, production, exploration, and sale of oil and gas. Great Plains primarily sells its oil and gas products to gas marketing companies and refiners. Oz Gas, LTD. and Great Plains filed voluntary Chapter 11 petitions (Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10059) on Jan. 11, 2012. John D. Oil and Gas Company filed a voluntary Chapter 11 petition (Bankr. W.D. Pa. Case No. 12-10063) on Jan. 13, 2012. Judge Thomas P. Agresti oversees the cases. Robert S. Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to the Debtors. Each of Great Plains and Oz Gas estimated $10 million to $50 million in assets and debts. The petitions were signed by Richard M. Osborne, CEO. John D. Oil, also based in Mentor, Ohio, was in the business of acquiring, exploring, developing, and producing oil and natural gas in Northeast Ohio. It had 58 producing wells. Its balance sheet at Sept. 30, 2011, showed $8.12 million in total assets, $12.92 million in total liabilities and a $4.79 million total deficit. GREAT PLAINS: Can Retain Bernstein Law Firm as Counsel ------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Pennsylvania has authorized Great Plains Exploration LLC to retain Bernstein Law Firm, P.C., as its Chapter 11 counsel. The individuals presently designated to represent the Debtor and their hourly rates are: Professionals Hourly Rate ------------- ----------- Robert S. Bernstein, Esq. $465 Nicholas D. Krawec, Esq. $360 Kirk B. Burkley, Esq. $340 Peter J. Ashcroft, Esq. $250 Shawn Mcclure, Esq. $245 Kit F. Pettit, Esq. $270 Jodi L. Hause, Esq. $250 Lara E. Shipkovitz, Esq. $185 Maribeth Thomas $170 Susan Harding (Paralegal) $115 Tiffiany Waldschmidt (Administrative Assistant) $100 Robert S. Bernstein, Esq., attests that his firm has no connection with any creditors, or any other party-in-interest, or their attorneys. About Great Plains Exploration, Oz Gas and John D. Oil Mentor, Ohio-based Great Plains Exploration LLC engaged primarily in the acquisition, development, production, exploration, and sale of oil and gas. Great Plains primarily sells its oil and gas products to gas marketing companies and refiners. Oz Gas, LTD. and Great Plains filed voluntary Chapter 11 petitions (Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10059) on Jan. 11, 2012. John D. Oil and Gas Company filed a voluntary Chapter 11 petition (Bankr. W.D. Pa. Case No. 12-10063) on Jan. 13, 2012. Judge Thomas P. Agresti oversees the cases. Robert S. Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to the Debtors. Each of Great Plains and Oz Gas estimated $10 million to $50 million in assets and debts. The petitions were signed by Richard M. Osborne, CEO. John D. Oil, also based in Mentor, Ohio, was in the business of acquiring, exploring, developing, and producing oil and natural gas in Northeast Ohio. It had 58 producing wells. Its balance sheet at Sept. 30, 2011, showed $8.12 million in total assets, $12.92 million in total liabilities and a $4.79 million total deficit. GREAT PLAINS: No Unsecured Creditors Committee Formed ----------------------------------------------------- The United States Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed because no unsecured creditor responded to the U.S. Trustee's communication for service on the committee. About Great Plains Exploration, Oz Gas and John D. Oil Mentor, Ohio-based Great Plains Exploration LLC engaged primarily in the acquisition, development, production, exploration, and sale of oil and gas. Great Plains primarily sells its oil and gas products to gas marketing companies and refiners. Oz Gas, LTD. and Great Plains filed voluntary Chapter 11 petitions (Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10059) on Jan. 11, 2012. John D. Oil and Gas Company filed a voluntary Chapter 11 petition (Bankr. W.D. Pa. Case No. 12-10063) on Jan. 13, 2012. Judge Thomas P. Agresti oversees the cases. Robert S. Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to the Debtors. Each of Great Plains and Oz Gas estimated $10 million to $50 million in assets and debts. The petitions were signed by Richard M. Osborne, CEO. John D. Oil, also based in Mentor, Ohio, was in the business of acquiring, exploring, developing, and producing oil and natural gas in Northeast Ohio. It had 58 producing wells. Its balance sheet at Sept. 30, 2011, showed $8.12 million in total assets, $12.92 million in total liabilities and a $4.79 million total deficit. GRUBB & ELLIS: Can Hire Grubb & Ellis Company as Claims Agent ------------------------------------------------------------- BankruptcyData.com reports that Grubb & Ellis Company filed with the U.S. Bankruptcy Court motions to retain: -- Zukerman Gore Brandeis & Crossman (Contact: Clifford A. Brandeis) as corporate counsel at these hourly rates: partner at $525 to 625, of-counsel at 450 to 575 and associate at 325 to 425; -- Alvarez & Marsal North America and Alvarez & Marsal Securities (Contact: Shawn Hassel and Marc Liebman) as restructuring advisor and investment banker at these hourly rates: managing director at $650to 850, director at 450 to 650 and analyst/associate at 250 to 450; -- Togut, Segal & Segal (Contact: Frank A. Oswald) as counsel at these following hourly rates: partner at $800 to $935; associate and counsel at 185 to 715 and paralegal and law clerk at $145 to $285. Separately, the Court approved the Company's motion to retain Kurtzman Carson Consultants as claims and noticing agent. About Grubb & Ellis 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, through 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. Grubb & Ellis Co., along with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-10685) on Feb. 2012, with a deal to sell its assets to BGC Partners Inc. The Debtor is seeking expedited sale as it faces $30 million in debt that matures on March 1 and insufficient cash to make it through the first quarter of 2012. BGC Partners, owner of large commercial real estate service firm Newmark Knight Frank, has agreed to provide a loan of as much as $4.8 million to Grubb & Ellis to keep it operating during the bankruptcy process. The Debtors have 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. 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 and the amounts drawn under the DIP facility. HERCULES OFFSHORE: Files Fleet Status Report as of Feb. 23 ---------------------------------------------------------- Hercules Offshore, Inc., posted on its Web site at http://www.herculesoffshore.com/a report entitled "Hercules Offshore Fleet Status Report". The Fleet Status Report includes the Hercules Offshore Rig Fleet Status (as of Feb. 23, 2012), which contains information for each of the Company's drilling rigs, including contract dayrate and duration. The Fleet Status Report also includes the Hercules Offshore Liftboat Fleet Status Report, which contains information by liftboat class for January 2012, including revenue per day and operating days. The Fleet Status Report is available for free at http://is.gd/dxuBNM About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. The Company reported a net loss of $76.12 million in 2011 and a net loss of $134.59 million in 2010. Hercules Offshore's balance sheet at Dec. 31, 2011, showed $2 billion in total assets, $1.09 billion in total liabilities, and $908.55 million stockholders' equity. * * * The Troubled Company Reporter said on Nov. 17, 2010, Moody's Investors Service downgraded the Corporate Family Rating of Hercules Offshore Inc. and the Probability of Default Rating to Caa1 from B2. Moody's also downgraded Hercules' 10.5% senior secured notes due 2017, its senior secured revolving credit facility due 2012, and its senior secured term loan B due 2013, all to Caa1 with LGD3, 45%. The outlook remains negative. "The inability of Hercules to generate meaningful free cash flow despite limited reinvestment in its aging fleet of rigs is cause for concern," commented Stuart Miller, Moody's Senior Analyst. "Without a significant de-leveraging of its balance sheet, Hercules is following a path that could lead to financial hardship at the first sign of a market softening." Hercules' Caa1 CFR rating reflects its highly leveraged balance sheet and limited ability to generate free cash flow. The Caa1 rating on the senior secured notes reflects their pari passu secured position in Hercules' capital structure relative to the senior secured credit facilities. As reported by the TCR on Jan. 23, 2012, Standard & Poor's Ratings Services revised its outlook on Houston-based Hercules Offshore Inc. to stable from negative and affirmed its 'B-' corporate credit rating on the company. "The rating on the company's senior secured credit facility remains 'B-' (the same as the corporate credit rating on the company) with a recovery rating of '3', indicating our expectation of a meaningful (50% to 70%) recovery in the event of payment default," S&P said. "Our ratings on Hercules reflect its participation in the highly volatile and competitive shallow-water drilling and marine services segments of the oil and gas industry. The ratings also incorporate our expectation that day rates and utilization for the company's jack-up rigs in the U.S. Gulf of Mexico will remain robust throughout 2012. Moreover, we expect the company's domestic offshore operations will provide the majority of EBITDA generation in 2012, since its international offshore segment will perform more weakly compared with 2011 due to lower contract renewal day rates reflecting current market conditions. The ratings also incorporate the company's geographic and product diversification (provided by the its liftboat segments) and adequate liquidity, as well as the risks associated with the Securities and Exchange Commission's investigation into possible violations of securities law, including possible violations of the Foreign Corrupt Practices Act. The company is also the subject of a review by the U.S. Department of Justice (DOJ)," S&P said. HOSTESS BRANDS: U.S. Trustee Slams $5MM Pay Package for CEO ----------------------------------------------------------- Steven Melendez at Bankruptcy Law360 reports that U.S. Trustee Tracy Hope Davis slammed a bid by Hostess Brands Inc. to authorize more than $5 million in potential payments to its CEO, saying Wednesday that the payments appear to be unauthorized retention awards and severance payments. U.S. Trustee Tracy Hope Davis said Hostess, which filed for Chapter 11 bankruptcy protection on Jan. 11, is trying to circumvent legal limits on retention and severance payments by calling them incentive bonuses and compensation for a noncompete agreement, even while the company tries to void union contracts, according to Law360. 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. HOVENSA LLC: S&P Withdraws 'B' Rating on $355.7MM Revenue Bonds --------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B' project rating and '2' recovery rating on U.S. Virgin Islands-based petroleum refinery HOVENSA LLC's $355.7 million in senior secured revenue bonds. "On Jan. 18, 2012, the project announced that it will shut down its 350,000 barrel per day (bpd) facility in St. Croix, citing losses of $1.3 billion over the past three years, and its expectation of continued poor financial performance as the reasons for closing the refinery. It launched a tender offer which concluded Feb. 17, 2012, and all but a nominal amount has been tendered. We are therefore withdrawing the ratings and ending surveillance," S&P said. HOVENSA LLC: Fitch Withdraws 'BB-' Ratings on Sr. Secured Bonds --------------------------------------------------------------- Fitch Ratings has affirmed and subsequently withdrawn HOVENSA L.L.C.'s (HOVENSA) senior secured debt ratings of 'BB-' as follows: -- $362 million senior secured bank revolver; -- $126.8 million series 2002 senior secured tax-exempt bonds due 2021; -- $74.2 million series 2003 senior secured tax-exempt bonds due 2022; -- $50.7 million series 2004 senior secured tax-exempt bonds due 2022; and -- $104.1 million series 2007 senior secured tax-exempt bonds due 2022. Fitch notes that the issuer of the senior secured bonds is the Virgin Islands Public Finance Authority and HOVENSA is the obligor. Fitch has withdrawn the ratings due to the expiration of HOVENSA's cash tender offer for all outstanding senior secured revenue bonds and full repayment and termination of the bank revolver. HOVENSA announced that it has completed a shutdown of its refinery operations. The complex will operate as an oil storage terminal. HOVENSA cited losses of $1.3 billion in the last three years that were projected to continue, caused primarily by weakness in demand for refined petroleum products amidst the global economic slowdown and the addition of new refining capacity in emerging markets. The cash tender offer for all outstanding senior secured revenue bonds expired on Feb. 17, 2012 with 99.94% of bonds tendered. Tendered bonds will receive the par value plus an amount equal to accrued interest on the settlement date. HOVENSA L.L.C. was formed as a joint venture between subsidiaries of Hess Corporation (Hess; Issuer Default Rating 'BBB', Stable Outlook by Fitch) and Petroleos de Venezuela, SA (PDVSA; IDR 'B+', Stable Outlook) to own and operate a refinery located in St. Croix, U.S. Virgin Islands. PDVSA supplied up to 75% of crude to the project at market prices, while the remaining crude supplies were mainly sourced through West African markets. Hess and PDVSA each purchased 50% of the project's refined products, after any spot sales, at market prices. Approximately 80% of HOVENSA's products were sold into the U.S. East & Gulf Coasts, while the remaining 20% was mainly sold into the Caribbean and U.S. Virgin Islands. The refinery has experienced increasing financial stress since 2008. HP COMMUNITIES: S&P Affirms 'BB+' Rating on Series 2008B Bonds -------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on HP Communities LLC, Colo.'s series 2008B and 2008C military housing revenue bonds to stable from negative. At the same time, Standard & Poor's affirmed its 'A-' long-term rating on HP Communities' series 2008A military housing revenue bonds, its 'BB+' long-term rating on HP Communities' series 2008B bonds, and its 'BB' long-term rating on HP Communities' series 2008C bonds. The outlook on all ratings is stable. "The outlook revision and ratings reflect our view of improved debt service coverage, the moderate-to-high essentiality of various air force bases in the project area, improved occupancy at the bases, and timely construction at all the bases," said Standard & Poor's credit analyst Lawrence Witte. IMEDICOR INC: Incurs $5.2 Million Net Loss in 2011 -------------------------------------------------- iMedicor, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss attributable to common shareholders of $5.20 million on $438,122 of revenue for the year ended June 30, 2011, compared with a net loss attributable to common shareholders of $11.40 million on $295,132 of revenue during the prior year. The Company's balance sheet at June 30, 2011, showed $2.70 million in total assets, $5.27 million in total liabilities, and a $2.57 million total stockholders' deficit. Demetrius & Company, L.L.C., expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 financial results. 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-K is available for free at: http://is.gd/ib5TcA About iMedicor Inc. Nanuet, N.Y.-based iMedicor, Inc., formerly Vemics, Inc., builds portal-based, virtual work and learning environments in healthcare and related industries. The Company's focus is twofold: iMedicor, the Company's web-based portal which allows Physicians and other healthcare providers to exchange patient specific healthcare information via the internet while maintaining compliance with all Health Insurance Portability and Accountability Act of 1996 ("HIPAA") regulations, and; recently acquired ClearLobby technology, the Company's web-based portal adjunct which provides for direct communications between pharmaceutical companies and physicians for the dissemination of information on new drugs without the costs related to direct sales forces. The Company's solutions allow physicians to use the internet in ways previously unavailable to them due to HIPAA restrictions to quickly and cost- effectively exchange and share patient medical information and to interact with pharmaceutical companies and review information on new drugs offered by these companies at a time of their choosing. INTELLICELL BIOSCIENCES: Earns $2-Mil. from Sale of Securities -------------------------------------------------------------- Intellicell Biosciences, Inc., in February 2012, entered into securities purchase agreements with accredited investors, as defined in Regulation D promulgated under the Securities Act of 1933, as amended, pursuant to which the Company sold (i) an aggregate of 2,040,000 shares of the Company's common stock, par value $0.001 per share, (ii) class A warrants to purchase an aggregate of 4,080,000 shares of Common Stock, and (iii) class B warrants to purchase an aggregate of 4,080,000 shares of Common Stock, for aggregate gross proceeds of $2,040,000, which consisted of $1,540,000 of cash and the exchange and cancellation of a promissory note and a warrant. The Class A Warrants are exercisable for a period of five years from the date of issuance at an initial exercise price of $2.00, subject to adjustment. The Class B Warrants are exercisable for a period of five years from the date of issuance at an initial exercise price of $3.75, subject to adjustment. The exercise price of the Warrants are subject to anti-dilution adjustment for subsequent lower price issuances by the Company, as well as customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like. The investors may exercise the Warrants on a cashless basis anytime after the six month anniversary of the initial exercise date of the Warrants if the shares of common stock underlying the Warrants are not then registered pursuant to an effective registration statement. In the event the investors exercise the Warrants on a cashless basis, the Company will not receive any proceeds. Until the earlier of either (i) a registration statement covering the resale of shares of Common Stock is effective under the Securities Act for a continuous six month period, or (ii) the shares of Common Stock have been eligible for sale under Rule 144 for a continuous six month period, the per share purchase price for the shares of Common Stock is subject to anti-dilution adjustment for subsequent issuances by the Company at a price lower than $1.00 per share. The investors have contractually agreed to restrict their ability to exercise the Warrants such that the number of shares of the Company common stock held by the investors and their respective affiliates after that exercise does not exceed 9.99% of the Company's then issued and outstanding shares of Common Stock. About Intellicell Biosciences Intellicell BioSciences, Inc., headquartered in New York, N.Y., was formed on Aug. 13, 2010, under the name "Regen Biosciences, Inc." as a pioneering regenerative medicine company to develop and commercialize regenerative medical technologies in large markets with unmet clinical needs. On Feb. 17, 2011, the company changed its name from "Regen Biosciences, Inc." to "IntelliCell BioSciences Inc". To date, IntelliCell has developed proprietary technologies that allow for the efficient and reproducible separation of stromal vascular fraction (branded "IntelliCell(TM)") containing adipose stem cells that can be performed in tissue processing centers and in doctors' offices. The Company's balance sheet at Sept. 30, 2011, showed $1.0 million in total assets, $21.2 million in total current liabilities, and a stockholders' deficit of $20.2 million. "The Company has incurred losses since inception resulting in an accumulated deficit of $20.1 million and a working capital deficit of $21.0 million as of Sept. 30, 2011, respectively, however, if the non-cash expense related to the Company's derivative liability is excluded the accumulated deficit amounted to $3.1 million and working capital deficit amounted to $3.7 million, respectively,? the Company said in the filing. "Further losses are anticipated in the continued development of its business, raising substantial doubt about the Company's ability to continue as a going concern." JEFFERSON COUNTY: S&P Affirms 'B' SPUR on Various Warrant Series ---------------------------------------------------------------- Standard & Poor's Ratings Services removed its underlying rating (SPUR) on Jefferson County, Ala.'s series 2004A, series 2005 A-1, series 2005 A-2, series 2005A-3, series 2005 A-4, and series 2005B warrants from CreditWatch with developing implications, where they were placed on Nov. 11, 2011, and affirmed its 'B' SPUR on the warrants. The outlook is developing. "The 'B' rating continues to reflect our view of the county's fiscal stress as evident in the November Chapter 9 bankruptcy filing," said Standard & Poor's credit analyst Brian Marshall. "The CreditWatch placement reflected the likelihood that we could lower or raise the rating in the short term depending on the timely payment of these rated obligations, but according to the trustee for the aforementioned rated warrants, the scheduled payments for all issues due Jan. 1, 2012 were made. County officials are reportedly committed to honoring obligations on the warrants until the warrants are all retired," S&P said. KOREA TECHNOLOGY: Disclosure Statement Hearing Set for March 27 --------------------------------------------------------------- Korea Technology Industry America, Inc., et al., filed with the U.S. Bankruptcy Court for the District of Utah a proposed disclosure statement for the Joint Plan of Reorganization dated Feb. 17, 2012. Generally, the Plan provides for the following means to satisfy the claims of creditors: (1) closing of a sale of substantially all of the assets of the Debtors to Rutter & Wilbanks Corporation, the purchaser under an asset purchase agreement approved by the Court; (2) sales of tar sands for use in paving for road construction purposes; and (d) distribution of the proceeds of sale to holders of allowed claims and interests. Following satisfaction of all creditors' Claims in the Debtors' cases, the Reorganized Debtor will have conveyed to it a mineral royalty going forward. The equity interests in one of the Debtors, Crown Asphalt Ridge, LLC, will be sold to the Purchaser. Uintah Basin Resources, LLC, and its parent Utah Hydrocarbon, Inc., which is not a debtor in bankruptcy, will be merged or consolidated into the reorganized KTIA. The Debtors believe that the Plan is in the best interests of creditors and equity security holders. The Debtors maintain that conversion of their cases to Chapter 7 could result in claims being created or ripening or in compromised Claims reverting to a potentially much larger Claim accruing interest at extremely high default interest rate. The Debtors will seek to confirm the Plan notwithstanding the rejection by any of Classes of Claims or Interests. A hearing to consider the approval of the Disclosure Statement will be held on March 27, 2012, at 2:00 p.m. Objections are due March 19. A full-text copy of the Disclosure Statement is available at: http://bankrupt.com/misc/KOREATECHNOLOGY_DS.pdf About Korea Technology Korea Technology Industry America, Inc., is a subsidiary of Seoul-based Korea Technology Industry Co. that tried to squeeze crude oil from Utah's sandy ridges. Korea Technology Industry America, Uintah Basin Resources LLC, and Crown Asphalt Ridge L.L.C., filed separate Chapter 11 bankruptcy petitions (Bankr. D. Utah Case Nos. 11-32259, 11-32261, and 11-32264) on Aug. 22, 2011. The cases are jointly administered under KTIA's case. Steven J. McCardell, Esq., and Kenneth L. Cannon II, Esq., at Durham Jones & Pinegar, P.C., in Salt Lake City, serve as the Debtors' counsel. The Debtors tapped DBH Consulting, LLC, as their accountant. The Debtors disclosed US$35,246,360 in assets and US$38,751,528 in debts. Mark D. Hashimoto, in his capacity as examiner in the Debtors cases, retained George Hofmann and the firm of Parsons Kinghorn Harris, P.C., as his counsel, and Piercy Bowler Taylor & Kern as his accountants and financial advisors. Richard A. Wieland, the United States Trustee for Region 19, has appointed three members to the Official Committee of Unsecured Creditors. KOREA TECHNOLOGY: CAR Can Hire Natural Asphalt as Sales Agent ------------------------------------------------------------- Debtor Crown Asphalt Ridge, L.L.C., sought and obtained permission from the Bankruptcy Court to employ Natural Asphalt Solutions as marketing and sales agent. NAS will: (a) identify potential customers, market and sale oil sands from the Debtor's mine in Vernal, Utah, on an exclusive basis; (b) develop projections for sales to facilitate needs for mining of oil sands from the Debtor's mine; (c) work with the Debtor to extend regulatory approval for existing paving products and to develop new asphalt road paving products and obtain regulatory approval and paving company interest therein; and (d) provide follow up expert testimony, if needed, related to the marketing and sale of paving products by the Debtor. To the best of the Debtor's knowledge, NAS does not have any connection with or hold or represent any interest adverse to the Debtor, its creditors, or any other party-in-interest, or the attorneys or other professionals for the Debtor. The Debtor proposes to pay NAS on the basis of commission and to pay NAS from the sale proceeds as sales of oil sands are closed. A schedule of commission percentages was filed under seal with the Court. About Korea Technology Korea Technology Industry America, Inc., is a subsidiary of Seoul-based Korea Technology Industry Co. that tried to squeeze crude oil from Utah's sandy ridges. Korea Technology Industry America, Uintah Basin Resources LLC, and Crown Asphalt Ridge L.L.C., filed separate Chapter 11 bankruptcy petitions (Bankr. D. Utah Case Nos. 11-32259, 11-32261, and 11-32264) on Aug. 22, 2011. The cases are jointly administered under KTIA's case. Steven J. McCardell, Esq., and Kenneth L. Cannon II, Esq., at Durham Jones & Pinegar, P.C., in Salt Lake City, serve as the Debtors' counsel. The Debtors tapped DBH Consulting, LLC, as their accountant. The Debtors disclosed US$35,246,360 in assets and US$38,751,528 in debts. Mark D. Hashimoto, in his capacity as examiner in the Debtors cases, retained George Hofmann and the firm of Parsons Kinghorn Harris, P.C., as his counsel, and Piercy Bowler Taylor & Kern as his accountants and financial advisors. Richard A. Wieland, the United States Trustee for Region 19, has appointed three members to the Official Committee of Unsecured Creditors. KURRANT MOBILE: Misses Payment on $385,050 Promissory Notes ----------------------------------------------------------- Cogito Media Group, Inc., formerly known as Kurrant Mobile Catering, Inc., defaulted, on May 5, 2011, on a series of convertible promissory notes in various principal amounts with Dimitrios Liakopoulos, Theodore Argyrakis, Kristine McNally, et al. The aggregate amount represented in principal loaned to the Corporation from the Creditors is $385,050. A full-text copy of the Form 8-K disclosure is available at: http://is.gd/NDmFBo 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: To Effect a 1-for-100 Reverse Common Stock Split ---------------------------------------------------------- La Jolla Pharmaceutical Company, on Feb. 17, 2012, amended its Certificate of Incorporation to effect a 1-for-100 reverse split of its outstanding common stock. The Reverse Split was approved by the Company's Board of Directors, pursuant to authority delegated to the Board by the Company's stockholders on Aug. 12, 2010. The Reverse Split was effected with the filing of a Certificate of Amendment with the Delaware Secretary of State. No fractional shares will be issued in the Reverse Split and stockholders will instead be entitled to receive the cash value of any fractions of shares that would have been issued as a result of the Reverse Split. On March 30, 2011, the Company filed a Certificate of Designations, Preferences and Rights of Series C-1 1 Convertible Preferred Stock, Series C-2 1 Convertible Preferred Stock, Series D-11 Convertible Preferred Stock and Series D-2 1 Convertible Preferred Stock with the Secretary of State of the State of Delaware. No shares of the Preferred Stock are currently outstanding and the Company is permitted under the Delaware General Corporation Law to file a certificate of elimination to remove from its certificate of incorporation references to any class or series of stock when no shares of that class or series of stock remain outstanding. Accordingly, on Feb. 21, 2012, the Company filed a Certificate of Elimination of the Preferred Stock with the Secretary of State of Delaware. 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 in 2010 and a net loss of $8.63 million in 2009. 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. LEHMAN BROTHERS: Claims Trades Fell to $1.9-Bil. in January ----------------------------------------------------------- Lehman Brothers Holdings Inc. investors traded about $1.9 billion of the company's debt last month, down about 47% from more than $3.6 billion in December, according to a February 14 report by Bloomberg News. Lehman debt accounted for 85% of all trading in claims on bankrupt companies in January, Bloomberg News reported, citing a report released by SecondMarket Holdings Inc. There were 597 trades in Lehman debt last month. Basement LLC had the second most trades, at 71, for a total face value of $2.2 million. Meanwhile, there were eight trades in claims on Los Angeles Dodgers LLC, totaling $142,431, according to SecondMarket's report. All amounts refer to the face value of the claims, not the trading prices, which reflect payment prospects and are not disclosed. DBSD North America Inc. placed second on the list of largest amounts traded, with a single transaction of $110.4 million, Bloomberg News reported. December trades in Lehman debt exceeded $3.6 billion, out of $3.8 billion of total claims traded during the month, according to the report. 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: NY Atty. General to Pursue Suit vs. E&Y -------------------------------------------------------- New York Attorney General Eric Schneiderman asked the U.S. District Court in Manhattan to let him pursue a lawsuit against Ernst & Young LLP for the firm's role in the collapse of Lehman Brothers. E&Y should "disgorge" $125 million in fees earned in an alleged fraud involving so-called Repo 105 transactions that concealed tens of billions of dollars in debt, the New York attorney general said, according to Linda Sandler in a Feb. 19 Bloomberg News report. E&Y has previously asked for the dismissal of case asserting that the state, represented by the Attorney General, is limited by law from recovering the fees for itself or for Lehman's former shareholders. Mr. Schneiderman argued that E&Y is wrong and that it is well- settled that the state can, and frequently does, obtain disgorgement of ill-gotten gains under public enforcement statutes. Bloomberg, citing Lehman's Chapter 11 Examiner, explains that Repo 105 transactions are a form of short-term financing that Lehman used to move as much as $50 billion off its balance sheet temporarily to show investors it wasn't carrying too much debt. E&Y has maintained that its work for Lehman met all applicable professional standards and applied rules that existed at the time. The case is People of the State of New York v. Ernst & Young LLP, 11-cv-00384, U.S. District Court, Southern District of New York (Manhattan). 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: LBSF Drops Winding-Up Petition vs. Wockhardt ------------------------------------------------------------- Lehman Brothers Special Financing has withdrawn its winding-up petition against Mumbai-based Wockhardt after Wockhardt's European subsidiary reached an out-of-court settlement with Lehman in a case related to derivative loss of $24 million, Business Standard reported on Feb. 18. LBSF's withdrawal of the winding-up petition clears the way for Wockhardt to sell its nutrition business to Danone, the report noted. According to the report, LBSF filed the winding-up petition against Wockhardt at the Bombay High Court in March 2011. The winding-up petition arose when Wockhardt EU defaulted in loan payments to LBSF and LBSF ran after the parent company, which acted as a guarantor to the loans. 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: Names New Directors for Two Subsidiaries --------------------------------------------------------- Lehman Brothers Holdings Inc. named new directors for its two subsidiaries. The directors were selected pursuant to LBHI's Chapter 11 plan confirmed by the U.S. Bankruptcy Court in Manhattan late last year. The company named David Pauker, Ronald Tanemura and Matthew Cantor as new directors for Lehman Brothers Special Financing Inc. Meanwhile, the board of directors of Lehman Brothers Commercial Paper Inc. will be presided over by Frederick Arnold, Thomas Knott and Michael Schmertzler. Mr. Pauker was a former chief restructuring officer of Refco Inc. while Mr. Tanemura was the former managing director and head of Goldman Sachs Group Inc.'s Credit Derivatives Group. Both are members of the Lehman parent's board of directors. Meanwhile, Mr. Cantor, the founding principal of distressed credit investment firm Normandy Hill Capital L.P., was a former partner in restructuring practices of Kirkland & Ellis and Weil, Gotshal & Manges LLP. LCPI's new directors Messrs. Arnold and Knott are also members of the Lehman parent's board of directors. Mr. Arnold has served as vice-president and chief financial officer of Capmark Financial Group, Inc. while the other director is the founder of hedge fund Akasha Capital Management. The third LCPI director, Mr. Schmertzler, is the chief executive officer and president of Kolltan Pharmaceuticals Inc. 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: Dominated Claims Trading in 2011 ------------------------------------------------- The lion's share of the $36 billion in bankruptcy claims that traded hands in 2011 was debt held by Lehman Brothers Holdings Inc.'s creditors, according to a report by The Wall Street Journal. Lehman creditors traded $32.4 billion claims in 6,155 transactions last year, The Journal said, citing a report released by claims-market operator SecondMarket Inc. In December, more than 400 claims totaling more than $4 billion changed hands in the company's bankruptcy cases, court filings show. Lehman's bankruptcy is also responsible for the biggest number and dollar amount of claims traded in SecondMarket's history, according to Andrew Gottesman, head of the firm's bankruptcy- claims market. Mr. Gottesman said that while Lehman won court approval of its $65 billion payout plan in December and continues working to wrap up its case, buyers of bankruptcy claims will continue to be attracted to the chance to get in on the payout. Mr. Gottesman further said the company "will still drive trading in 2012." "It may slow down some but it will still be a major driver," The Journal quoted him as saying. Bankruptcy law allows creditors to sell the claims they hold against a company. The claims are scooped up by investors for less than face value, with buyers betting that a company's payment plan will allow them to recover more than what they paid for. While the trades -- including the buyer, seller and claim amount -- are disclosed to the bankruptcy court, the purchase price does not have to be disclosed. After Lehman, other active cases for claims traders last year were Perkins & Marie Callender's Inc. with 455 trades; Great Atlantic & Pacific Tea Co., 402 trades; Tribune Co., 291 trades; and Nortel Networks with 286 trades, the Journal reported. 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: Law Firm Escapes Ex-Workers Malpractice Claims --------------------------------------------------------------- Acting Supreme Court Justice Eileen A. Rakower of the Supreme Court New York County dismissed a malpractice suit filed by a former Lehman employee against the law firm he hired to represent him in a wrongful termination case against the bankrupt financial institution. Angelo Meimeteas, represented by Carter Ledyard & Milburn, sued Lehman in 2005 alleging he was fired for refusing to engage in unethical behavior, Brendan Pierson of the New York Law Journal reported on January 26. In his complaint, he alleges that the law firm told him he could easily win his case against Lehman if he agrees to testify in a different case involving the company. He said he agreed to this, but the law firm never communicated with him regularly until Lehman filed for bankruptcy in 2008. Mr. Meimeteas filed a claim against Lehman's bankrupt estate but that claim was denied. He then filed the malpractice case against the law firm. In her Jan. 19 decision, Justice Rakower said the complaint failed to explain the unethical practices claims against Lehman that he said should have led to a settlement. "Proof of unethical practices is vaguely referred to in his allegations that he testified truthfully at a deposition regarding these practices and disclosed them. Nevertheless, the precise information plaintiff possessed for purposes of his whistleblower claim is never delineated," Justice Rakower held. LEHMAN BROTHERS: Retirees Seek Class Certification in Suit vs E&Y ----------------------------------------------------------------- The Alameda County Employees' Retirement Association asked the U.S. District Court for the Southern District of New York to certify a class-action lawsuit against Lehman Brothers Holdings Inc.'s former auditor Ernst & Young LLP over investment losses, Linda Sandler of Bloomberg News reported. According to the report, the retirement system is seeking to lead the group suit on behalf of investors who lost money on bankrupt Lehman's common stock and options. The group alleges that E&Y helped to mislead investors by making false and misleading statements in regulatory reports about Lehman's finances before its 2008 bankruptcy. The suit was originally filed against Lehman and its former executives, adding E&Y as a defendant in 2010. Since 2010, the group has settled with many of the Lehman executive defendants while continuing to litigate against E&Y and a UBS AG unit that sold Lehman structured products. E&Y, the report noted, is also named defendant in a suit filed by the New York attorney general relating to Lehman's collapse. Charlie Perkins, an Ernst & Young spokesman, declined to comment on the filing but maintained that the firm's work for Lehman has met all applicable professional standards and applied rules that existed at the time, Bloomberg pointed out. 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) LEVEL 3: Board Approves Amendment to By-Laws -------------------------------------------- The Board of Directors of Level 3 Communications, Inc., approved an amendment to the Company's Amended and Restated By-Laws to (1) change the name of the government security committee of the Board of Directors to classified business and security committee and (2) change the Company's registered office in the State of Delaware and registered agent in the State of Delaware to: 1209 Orange Street, Wilmington, New Castle County, Delaware 19801 and the Corporation Trust Company, respectfully. The role of the Classified Business and Security Committee did not change. The Amended and Restated By-Laws are available for free at: http://is.gd/ZqD240 About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. The Company reported a net loss of $756 million in 2011 and a net loss of $622 million in 2010. Level 3's balance sheet at Dec. 31, 2011, showed $13.20 billion in total assets, $12.01 billion in total liabilities and $1.19 billion in stockholders' equity. * * * Level 3 Communications carries a 'Caa1' corporate family rating, and 'Caa2' probability of default rating, with negative outlook from Moody's, a 'B-' issuer default rating from Fitch, and 'B-' long term issuer credit ratings from Standard & Poor's. LEVI STRAUSS: Anne Rohosy Named EVP, Pres. Commercial Operations ---------------------------------------------------------------- Levi Strauss & Co. made certain organizational changes affecting certain of its named executive officers. Anne Rohosy, the Company's Executive Vice President and President, Global Dockers, will take on the newly-created role of Executive Vice President and President, Commercial Operations Americas and Europe, effective immediately. Ms. Rohosy will continue to lead the Dockers brand in addition to her new responsibilities until a successor to that role is determined. Ms. Rohosy, 53, became the Company's Executive Vice President and President, Global Dockers in May, 2011. She joined the Company in October 2009 as Senior Vice President, Levi's North America Commercial Operations, and then served as Senior Vice President, Levi's Wholesale, Americas, before being named President of the Global Dockers brand. Ms. Rohosy's professional experience in the apparel industry spans more than 20 years with such global brands as Swatch, Liz Claiborne and 15 years with Nike, where she led the Company's commercial strategy development and apparel sales in the United States and Europe. In connection with her new role, Ms. Rohosy will receive an annual base salary of $675,000. Ms. Rohosy is eligible to participate in the Company's Annual Incentive Program at a target participation rate of 80% of her base salary. She will also continue to be eligible for other benefits that she received as Executive Vice President and President, Global Dockers, including participation in the Company's 2006 Equity Incentive Plan, receipt of standard healthcare, life insurance and long-term savings program benefits, and a cash allowance of $15,000 per year under the Company's executive perquisite program. Ms. Rohosy's employment is at-will and may be terminated by the Company or by Ms. Rohosy at any time. There is no understanding or arrangement between Ms. Rohosy and any other person or persons with respect to her employment as the Executive Vice President and President, Commercial Operations Americas and Europe and there are no family relationships between Ms. Rohosy and any director or other executive officer or person nominated or chosen by the Company to become a director or executive officer. There have been no transactions, nor are there any currently proposed transactions, to which the Company was or is to be a participant in which Ms. Rohosy or any member of her immediate family had, or will have, a direct or indirect material interest. The Company also has adjusted the role of Aaron Boey, its Executive Vice President and President, Global Denizen brand, to formalize his leadership of commercial operations for the Company's Asia Pacific division. As a result his title, effective immediately, is Executive Vice President and President, Commercial Operations Asia Pacific and President, Global Denizen brand. About Levi Strauss & Co. Headquartered in San Francisco, California, Levi Strauss & Co. -- http://www.levistrauss.com/-- is one of the world's leading branded apparel companies. The Company designs and markets jeans, casual and dress pants, tops, jackets and related accessories, for men, women and children under the Levi's(R), Dockers(R) and Signature by Levi Strauss & Co.(TM). The Company markets its products in three geographic regions: Americas, Europe, and Asia Pacific. The Company's balance sheet as of Nov. 27, 2011, showed $3.27 billion in total assets, $3.42 billion in total liabilities, $7 million in temporary equity, and a $156.83 million total stockholders' deficit. * * * The Company carries a 'B+' corporate credit rating from Standard & Poor's, a 'B1' corporate family rating from Moody's Investors Service and a 'B+' issuer default rating from Fitch Ratings. As reported by the TCR on March 24, 2011, Fitch Ratings downgraded its Issuer Default Rating on Levi Strauss & Co. to 'B+' from 'BB-'. The downgrade of the IDR reflects Levi's soft operating trends and margin compression, continued high financial leverage, and Fitch's expectation that Levi's financial profile will not show meaningful improvement in the next one to two years. LIBERATOR INC: Names M. Kane as EVP, J. Blanchard as SVP -------------------------------------------------------- Liberator, Inc., has enhanced its management team with the appointment of Michael Kane to the position of Executive Vice President, as well as the appointment of James Blanchard to Senior Vice President - Business Development. "We are pleased to strengthen Liberator with the appoint of Michael Kane and James Blanchard to our senior management team," said Louis Friedman, President and CEO of Liberator, Inc. "Michael and Jim bring a considerable wealth of knowledge and strong backgrounds in marketing, sales and business development, and we are confident they will make valuable contributions to the company in these expanded roles." With decades of experience in sales and marketing, Mr. Kane is currently Chief Marketing Officer for Liberator, and will be expanding his role as Executive Vice President with a concentration of international brand expansion. Prior to joining Liberator in 2009, Mr. Kane was President and Founder of The Sellutions Group, LLC, a sales consulting firm specializing in early stage technology companies. Before this, Mr. Kane developed sales and marketing strategy as VP of Sales at Pricing Dynamics, as well as Ormandy, Inc., a marketer of enterprise level software solutions to the communications industry. Also advancing to an expanded role at Liberator, Mr. Blanchard was formerly Vice President - Sales and Channel Development and first joined the Company in December 2010. Prior to that, he was President and Managing Partner of Inspedia, Inc., an Atlanta-based company that specialized in international logistics. From 1998 to 2001, Mr. Blanchard was President of Avana Communications, a technology company focused on Internet communications. "Today we are witnessing a rapid shift to mainstream demand for sexual products and Liberator is precisely positioned to take advantage of this shift with its highly marketable lovestyle image and unique positioning furniture. I am delighted to expand my role on the Liberator team as we strive to build a true market leader in the sexual wellness industry," said Mr. Kane. Mr. Blanchard added, "I believe the strong reputation of the Liberator brand, driven in large part by our new strategic awareness initiatives and various ad campaigns that we are planning, will lead Liberator to higher sales and ultimately profitability in 2012 and beyond. I look forward to working with Michael and the rest of the Liberator team as we achieve these goals." 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 Web sites and instructional DVD's that the Company sells. The Company had a net loss of $801,252 for the year ended June 30, 2011, following a net loss of $1.03 million 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. LODGENET INTERACTIVE: Incurs $631,000 Net Loss in 2011 ------------------------------------------------------ LodgeNet Interactive Corporation reported a net loss of $631,000 on $421.26 million of total revenues in 2011, a net loss of $11.68 million on $452.17 million of total revenue in 2010, and a net loss of $10.15 million on $484.49 million of total revenues in 2009. The Company's balance sheet at Dec. 31, 2011, showed $408.67 million in total assets, $459.61 million in total liabilities and a $50.94 million total stockholders' deficiency. "2011 was an important transformational year for us," said LodgeNet Chairman and CEO Scott C. Petersen. "First, we launched several strategic growth initiatives, including our 'Four Screen' strategy, our Mobile App and our Envision interactive platform, which we believe will power our growth in 2012 and beyond. Second, Hospitality revenue per room increased year over year -- a first since 2007 -- which signals the growing success of the revenue diversification strategy we started several years ago. Lastly, the positive impact of this transformation is being reflected in our profitability metrics as Operating Income was up 22% and the Net to Common per share improved 65% over 2010." A full-text copy of the press release is available for free at: http://is.gd/lnisLl About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET), formerly LodgeNet Entertainment Corp. -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. * * * Lodgenet carries a 'B3' long term corporate family rating and a 'Caa1' probability of default rating, with 'stable' outlook, from Moody's. It has 'B' long term foreign and local issuer credit ratings, with 'stable' outlook, from Standard & Poor's. "In Moody's opinion, continued cautious investment from LodgeNet's hotel customers will hamper intermediate term growth in its core hospitality services business, and over the long term competing forms of entertainment will pressure this revenue stream as the company seeks to defend its relevance to both hotel operators and hotel guests. The B3 corporate family rating incorporates these weak growth prospects, mitigated somewhat by the company's moderately high financial risk profile and demonstrated capacity to generate positive free cash flow throughout challenging economic conditions, along with a measure of stability from the monthly fees it receives from hotels regardless of occupancy," Moody's said in October 2010. M WAIKIKI: $9 Million DIP Loan from Davidson Trust Gets Final OK ---------------------------------------------------------------- The Hon. Robert J. Faris of the U.S. Bankruptcy Court for the District of Hawaii, in a final order, authorized M Waikiki LLC to: -- enter into an amended and restated loan and security agreement with the Davidson Family Trust; and -- incur additional secured, second priority postpetition financing in an aggregate principal amount up to $9 million. The Debtor will use the loan to finance orderly operation of its business and pay the necessary, critical expenses. The Debtor was unable to obtain additional financing on more favorable terms from sources other than the DIP lender under the amended unsecured credit. As reported in the Troubled Company Reporter on Feb. 8, 2012, the $9 million of superpriority DIP financing would have to be paid on the effective date of any Plan or April 30, 2012. About M Waikiki M Waikiki owns the Modern Honolulu, a world-class, luxury hotel property located close to Waikiki Beach in Hawaii. The hotel is being managed by Modern Management Services LLC, an affiliate of Aqua Hotels and Resorts. M Waikiki is a Hawaii limited liability company with its principal place of business located in San Diego, California. It is a special purpose entity, having roughly 75 indirect investors, which was formed to acquire the Hotel. The Company filed for Chapter 11 protection (Bankr. D. Hawaii Case No. 11-02371) on Aug. 31, 2011. Judge Robert J. Faris presides over the case. Patrick J. Neligan, Esq., and James P. Muenker, Esq., at Neligan Foley LLP, in Dallas, Tex.; Simon Klevansky, Esq., at Klevansky Piper, LLP, in Honolulu, Hawaii, are the attorneys to the Debtor. Bickel & Brewer serves as special litigation counsel. The Debtor tapped XRoads Solutions Group, LLC, and Xroads Case Management Services, LLC, as its financial and restructuring advisor. The Debtor disclosed $216,116,142 in assets and $135,085,843 in liabilities as of the Chapter 11 filing. Modern Management is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC. Marriott Hotel Services, which used to provide management services, is represented by Susan Tius, Esq., at Rush Moore LLP LLP, and Carren B. Shulman, Esq., at Sheppard Mullin Richter & Hampton LLP. James A. Wagner, Esq., and Chuck C. Choi, Esq., at Wagner Choi & Verbrugge, in Honolulu, serve as bankruptcy counsel for the Creditors' Committee. M WAIKIKI: HallStrom Group Approved as Non-Testifying Expert ------------------------------------------------------------ The Hon. Robert J. Faris of the U.S. Bankruptcy Court for the District of Hawaii, in a supplemental order, authorized M Waikiki LLC to employ The Hallstrom Group, Inc. Hallstrom es expected to consult with the Debtor's counsel as a non-testifying expert regarding the supplemental services, and as a testifying expert with respect to any issue within the scope of the supplemental services in the event Hallstrom's testimony on any issue is offered at a later date. If Halstrom is subsequently designated by the Debtor or its counsel as an expert upon the matters which he is serving as an expert witness. As reported in the Troubled Company Reporter on Nov. 4, 2011, Hallstrom served as an appraiser to consult with the Debtor's counsel, as a non-testifying expert regarding the value of the Debtor's property, and as a testifying expert in the event Hallstrom's testimony is offered at a later date. About M Waikiki M Waikiki owns the Modern Honolulu, a world-class, luxury hotel property located close to Waikiki Beach in Hawaii. The hotel is being managed by Modern Management Services LLC, an affiliate of Aqua Hotels and Resorts. M Waikiki is a Hawaii limited liability company with its principal place of business located in San Diego, California. It is a special purpose entity, having roughly 75 indirect investors, which was formed to acquire the Hotel. The Company filed for Chapter 11 protection (Bankr. D. Hawaii Case No. 11-02371) on Aug. 31, 2011. Judge Robert J. Faris presides over the case. Patrick J. Neligan, Esq., at Neligan Foley LLP, and Simon Klevansky, Esq., at Klevansky Piper, LLP, represent the Debtor. The Debtor tapped XRoads Solutions Group, LLC and XRoads Case Management Services, LLC, as its financial and restructuring advisor. Klevansky Piper LLP serves as its general counsel. The Debtor disclosed $216,116,142 in assets and $135,085,843 in liabilities as of the Chapter 11 filing. Modern Management is represented by Christopher J. Muzzi, Esq., atMoseley Biehl Tsugawa Lau & Muzzi LLC. Marriott Hotel Services, which used to provide management services, is represented by Susan Tius, Esq., at Rush Moore LLP LLP, and Carren B. Shulman, Esq., at Sheppard Mullin Richter & Hampton LLP. M WAIKIKI: Asserts that No Party May File a Plan Until Feb. 27 -------------------------------------------------------------- M Waikiki LLC, filed with the U.S. Bankruptcy Court for the District of Hawaii a response to Marriott International's motion to clarify Jan. 3, 2012, or in the alternative, terminate the Debtor's exclusive periods to file and solicit acceptances for the proposed Chapter 11 plan. The Debtor explains that there is no basis for construing the Court's deletion of the provision of the proposed order calling for an extension of the solicitation exclusivity period as having the effect of terminating that exclusivity period. Consequently, as a result of the Debtor's timely filing of a Plan during its extended exclusive period for doing so, no party may file a Plan until Feb. 27, 2012. The Debtor also asserts that the Jan. 3, order did not shorten the 180-day period. Under such circumstances, the Court would have no basis for ruling at the Dec. 15 hearing that it was shortening the 180-day period. The Debtor further relates that contrary to Marriott's assertion, the Debtor's Plan is an "absolute priority" plan, not a "new value" plan. The Debtor's plan provides that existing equity will be extinguished unless all allowed claims are paid in full, and provides for payment in full on the effective date or over time of all allowed claims. Notably, the Debtor's plan preserves the possibility that the various equity classes may be entitled to partial recovery on account of their interests if Marriott's unsecured claims are disallowed. The Court must not terminate the Debtor's exclusivity to permit Marriott to file a competing plan, where, in light of the Debtor's own full-pay plan, the kind of plan that Marriott has indicated that it intends to file is plainly unconfirmable. About M Waikiki M Waikiki owns the Modern Honolulu, a world-class, luxury hotel property located close to Waikiki Beach in Hawaii. The hotel is being managed by Modern Management Services LLC, an affiliate of Aqua Hotels and Resorts. M Waikiki is a Hawaii limited liability company with its principal place of business located in San Diego, California. It is a special purpose entity, having roughly 75 indirect investors, which was formed to acquire the Hotel. The Company filed for Chapter 11 protection (Bankr. D. Hawaii Case No. 11-02371) on Aug. 31, 2011. Judge Robert J. Faris presides over the case. Patrick J. Neligan, Esq., and James P. Muenker, Esq., at Neligan Foley LLP, in Dallas, Tex.; Simon Klevansky, Esq., at Klevansky Piper, LLP, in Honolulu, Hawaii, are the attorneys to the Debtor. Bickel & Brewer serves as special litigation counsel. The Debtor tapped XRoads Solutions Group, LLC, and Xroads Case Management Services, LLC, as its financial and restructuring advisor. The Debtor disclosed $216,116,142 in assets and $135,085,843 in liabilities as of the Chapter 11 filing. Modern Management is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC. Marriott Hotel Services, which used to provide management services, is represented by Susan Tius, Esq., at Rush Moore LLP LLP, and Carren B. Shulman, Esq., at Sheppard Mullin Richter & Hampton LLP. James A. Wagner, Esq., and Chuck C. Choi, Esq., at Wagner Choi & Verbrugge, in Honolulu, serve as bankruptcy counsel for the Creditors' Committee. MAIN ST. PERSONAL: S&P Affirms 'B-' Counterparty Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' long-term counterparty credit rating on Main St. Personal Finance Inc. "We subsequently withdrew the rating at the company's request. At the time of withdrawal, the outlook was stable," S&P said. "We believe that legislative and regulatory risk, as well as geographic and revenue concentration, continues to limit the ratings on U.S.-based consumer lender Main St. Personal Finance. Offsetting these negative factors are the favorable demand for payday, auto title lending, and check cashing products as well as the limited credit risk exposure stemming from the short-term nature and granularity of its loan portfolio," S&P said. MAUI LAND: Board of Directors Reduced to Six Members ---------------------------------------------------- The Bylaws of Maui Land & Pineapple Company, Inc., were amended to reduce the number of members on the Company's Board of Directors from seven to six. About Maui Land & Pineapple Company Maui Land & Pineapple Company, Inc. (NYSE: MLP) -- http://mauiland.com/-- develops, sells, and manages residential, resort, commercial, and industrial real estate. The Company owns approximately 23,000 acres of land on Maui and operates retail, utility operations, and a nature preserve at the Kapalua Resort. The Company's principal subsidiary is Kapalua Land Company, Ltd., the operator and developer of Kapalua Resort, a master-planned community in West Maui. As reported in the TCR on March 17, 2011, Deloitte & Touche LLP, in Honolulu, Hawaii, expressed substantial doubt about Maui Land & Pineapple's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that of the Company's recurring negative cash flows from operations and deficiency in stockholders' equity. The Company's balance sheet at Sept. 30, 2011, showed $66.41 million in total assets, $82.56 million in total liabilities and a $16.15 million stockholders' deficiency. MERCHANTS MORTGAGE: Judge Confirms Chapter 11 Plan -------------------------------------------------- Lana Birbrair at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Michael R. Romero on Wednesday confirmed Merchants Mortgage & Trust Corp. LLC's Chapter 11 plan to restructure its business and continue working with a private equity partner, after no creditors objected to the plan. After a confirmation hearing on Feb. 22, Judge Romero confirmed the plan and affirmed the company's disclosure statement, which it had submitted after struggling with its debt following the deterioration of the real estate sector, Law360 says. About Merchants Mortgage Merchants Mortgage & Trust Corporation LLC -- http://www.merchantsmtg.com/-- is a real estate finance company based in Denver, Colorado, with a branch office in Phoenix, Arizona (d/b/a/ Merchants Funding, LLC). The Company's specialty is making fix-and-flip loans to real estate investors. It also offers a 2, 3, or 5 year "mini-permanent" loan on non-owner occupied residential (1 to 4 unit) investment properties that have already been rehabilitated and rented. As the market dictates, it does some construction and small commercial real estate lending as well. Merchants has closed over 5,300 fix-and-flip loans totaling over $1.2 billion to investors since 1997. Merchants Mortgage filed for Chapter 11 bankruptcy (Bank. D. Colo. Case No. 11-39455) on Dec. 22, 2011. The Debtor estimated assets of $50 million to $100 million and estimated debts of $50 million to $100 million. Gary D. Levine signed the petition as president. The Debtor filed with the Bankruptcy Court its Prepackaged Chapter 11 Plan of Reorganization and an accompanying Disclosure Statement on Dec. 23, 2011. MF GLOBAL: Sangani Family Sought Claims Bar Date Extension ---------------------------------------------------------- Sangani Family LP asks the Court to extend the January 31, 2012 bar date for all commodities futures customers and securities customers to file their claims until the date on which the claims register and underlying documentation is made public as required by Section 107(a) of the Bankruptcy Code. The creditor made the request before the January 31 Claims Bar Date. Mark Schlachet, Esq., in Cleveland, Ohio -- mschalet@gmail.com -- argues that regardless of the SIPA Trustee's proffered justification to expedite treatment of the claims process, the fact is that various distributions to MFGI customers have since been made, foreshadowing a lengthy process -- of perhaps years -- before final distributions may reasonably be expected. However, the SIPA Trustee did not advise the Court that certain protections of the Bankruptcy Code, namely Section 107 allowing access to papers filed in the MFGI SIPA Case, would be denied Commodity Futures Customers, leaving them without the information that the statute anticipates they will enjoy, he points out. The SIPA Trustee disclosed on January 12, 2012 that 13,128 claims had been filed as of January 11, 2012. It is thus important to many of the customers in the MFGI case that they have access to the claims filed by similarly situated creditors of the Debtor, Mr. Schlachet stresses. "The number of Commodities Futures Customers who are misinformed, uninformed, and otherwise unprepared to file their claims by January 31, 2012 cannot be estimated. To enforce a 90-day Bar Date when claimants have been deprived of the statutory protections of Section 107(a) is unfair," he insists. 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: A. Furgatch Wants Sec. 523 Administration of Cases ------------------------------------------------------------- Adam Furgatch asks the Court to direct the Debtors and the Chapter 11 Trustee to administer the Debtors' estates pursuant to Sections 523(a)(5) and 507 of the Bankruptcy Code. According to Mr. Furgatch's accompanying declaration, on December 15, 2011, the SIPA Trustee transferred a cash deposit from the MF Global Inc. bankruptcy trust account to his RJ O'Brien accounts. The Transfer represented approximately 70% of Mr. Furgatch's segregated account funds. Mr. Furgatch has received no further fund transfers. On behalf of Mr. Furgatch, Maurice Henry Blum, Esq., at Law Office of Maurice Henry Blum, in Staten Island, New York -- MauriceHBlum@MHBlumLaw.com -- argues notes that MF Global Holdings Ltd. and MF Global Inc. are persons for the purpose of the Bankruptcy Code. As persons they have a parent-child relationship and are subject to Sections 523(a)(5) and 507, he asserts. Specifically, Section 523(a)(5) provides that a parent may not be discharged from any debt for a "domestic support obligation," he notes. The $1.2 billion shortfall that MFGI reported is clearly a debt that accrued to it as a "child" subsidiary of "parent" MFGH before its bankruptcy filing, Mr. Blum contends. If MFGI is simply considered together with MFGH's pool of unsecured creditors, then Section 507 clearly establishes a first priority rank for MFGI under MFGH's domestic support obligations as the parent of MFGI, he points out. "MFGI, as the child of MFGH, has first priority to recover the $1.2 billion in customer segregated accounts that MFGH borrowed or otherwise made use of for its own financial benefit," he alleges. He adds that a timely decision is appropriate here given that the issue of claimant priority will impact various futures decisions about the administration of the Debtors' estates, he insists. Mr. Furgatch is also represented by: James H. Fosbinder, Esq. IVEY FOSBINDER FOSBINDER LLLC 1883 Mill Street Wailuku, Hawaii 96793 Tel: (808) 242-4956 Fax: (808) 249-0668 E-mail: jfosbinder@iff-law.com 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: US Specialty Wants Lift Stay to Pay Defense Costs ------------------------------------------------------------ U.S. Specialty Insurance Company asks the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay to allow it to advance or pay under the insurance policies it issued to the Debtors to cover the defense costs incurred by the named insured under the policies. U.S. Specialty issued two insurance policies to the Debtors before the Petition Date: (1) A Directors, Officers and Corporate Liability Insurance Policy for the period from May 31, 2011 to May 31, 2012, which affords coverage up to a maximum aggregate limit of liability of $25 million, inclusive of defense costs; and (2) A Fiduciary Liability Insurance Policy for the period May 31, 2011 to May 31, 2012, which provides a $10 million maximum aggregate limit of liability, inclusive of defense costs, and subject to various sublimits of liability. The Fiduciary Policy generally provides coverage in connection with claims against the insureds relating to employee benefit plans. U.S. Specialty relates that since November 2011, it has received notices seeking coverage under the Policies on behalf of the directors, officers and certain employees of MF Global in connection with 18 lawsuits, including a consolidated action pending before the U.S. District Court for the Southern District of New York, a securities class action, and other cases filed in Illinois, Michigan and Montana. U.S. Specialty adds that it has also been notified of pending investigations conducted by various agencies. Brett D. Goodman, Esq., at Troutman Sanders LLP, in New York -- brett.goodman@troutmansanders.com -- tells the Court that U.S. Specialty is agreeable to advance reasonable defense costs incurred by the "insured persons." U.S. Specialty, however, reserves its rights to deny or limit coverage for these matters under the Policies. 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: NHIC Indemnity Insurance Not Estate Asset ---------------------------------------------------- Judge Martin Glenn held that a professional indemnity insurance policy issued by New Hampshire Insurance Company to MF Global Holdings Ltd. is not an "asset of the estate." The automatic stay is thus terminated so as to permit New Hampshire to (a) reimburse from the Policy any defense costs incurred by MF Global or Joseph Saab in connection with a fraud lawsuit before the Petition Date; and (b) reimburse from the Policy any defense costs incurred by Saab in connection with the Lawsuit on or subsequent to the Petition Date. Any and all payments by New Hampshire from the Policy of past, present or future defense costs will reduce the Policy's aggregate Limit of Liability in a like amount. The Court clarified that nothing in this order will constitute (1) a waiver, modification or limitation of New Hampshire's reservation of all of its rights, remedies and defenses under the Policy, or (2) a finding that sums are due and owing, or in what amount, under the Policy. Lift Stay Motion MF Global Bankruptcy News, Issue No. 9, reported that New Hampshire sought an order providing that that the automatic stay is not applicable so that the Insurer may advance costs related to the Lawsuit and incurred by MF Global and Saab as the insurer deems appropriate. In the alternative, New Hampshire asked the Court to vacate the automatic stay so as to permit the insurer to: (a) reimburse any defense costs incurred by MF Global and Saab in connection with the Lawsuit before the Petition Date which New Hampshire deems reasonable; and (b) reimburse any defense costs incurred by Saab in connection with the Lawsuit subsequent to the Petition Date which New Hampshire deems reasonable. New Hampshire further seeks an order that any payment of the defense costs by New Hampshire will reduce the Policy's aggregate Limit of Liability in a like amount and subject to a complete reservation of rights under the Policy. New Hampshire issued a professional indemnity insurance policy to MF Global Holdings Ltd. Before the Petition Date, Bank of Montreal filed a lawsuit against MFGH and its former employee, Joseph Saab, among others, relating to an alleged fraud carried out by BMO's former employees. MFGH and Mr. Saab have exhausted, by way of their defense costs, the $5 million retention that applies to each single claim under the Policy. At MFGH and Mr. Saab's request and subject to their coverage under the Policy, New Hampshire has agreed to reimburse those defense costs to MFGH and Mr. Saab as related to the Lawsuit and to advance those defense costs to Mr. Saab to the extent that the Lawsuit is not stayed as to him. New Hampshire is represented by: Mark G. Ledwin, Esq. WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER LLP 3 Gannett Drive White Plains, NY 10604 Tel: (914) 872-7148 Fax: (914) 323-7001 E-mail: mark.ledwin@wilsonelser.com -- and -- James K. Thurston, Esq. WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER LLP 55 W. Monroe Street, Suite 3800 Chicago, IL 60603 Tel: (312) 821-6125 Fax: (312) 704-1522 E-mail: james.thurston@wilsonelser.com 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: Has Stipulation on Reimbursing MFG for Defense Costs --------------------------------------------------------------- The Chapter 11 Trustee and MFG Assurance Company Limited entered into a stipulation regarding payment of loss and reimbursement of covered costs and expenses. Before the Petition Date, non-debtor MFG Assurance, a 100% owned subsidiary of MF Global Holdings, Ltd., issued the professional liability policies that are intended to provide coverage up to $70,000,000 in the policy period of May 31, 2010 to May 31, 2011 and $120,000,000 in the policy period of May 31, 2011 to May 31, 2012, in each period after the exhaustion of a $25,000 retention per single claim. Before the Petition Date, MFG Assurance advanced defense costs to MFGH on behalf of certain individual insureds with respect to certain unresolved claims against individual insureds, and after the Petition Date, certain individual insureds have sought continued payment of defense costs by MFG Assurance under the Policies. The Parties believe that individual insureds under the Policies may continue to seek payment of defense costs or other types of loss from MFG Assurance under the Policies in accordance with the Policies after the Petition Date. By this stipulation, the Parties agree that the Policies are not property of MFGH's estate and thus, the automatic stay is not applicable to the Policies. MFG Assurance is entitled to make payments, in accordance with the terms of the Policies, on behalf of any insured for loss as it deems appropriate. To the extent applicable, the automatic stay should be lifted so as to permit MFG Assurance to make payments, in accordance with the Policies, on behalf of any insured for loss as it deems appropriate. Any payment of loss by MFG Assurance will reduce the aggregate limit of liability under the applicable Policy in a like amount. The Parties further reserved all of their rights and defenses at law, in equity and under the Policies. Commodity Customers Object Sapere Wealth Management, LLC and scores of customers of MF Global Inc. object to the stipulation. Sapere, together with Granite Asset Management and Sapere CTA Fund, L.P., objects that the proposed order if entered will allow an asset -- liability insurance policies and the captive insurer 100% owned by the debtor that issued them -- that based on the recent report by the SIPA Trustee, may have been procured using commodities customers' segregated-account funds, to be depleted by paying the defense costs of Jon Corzine and others in defending against investigations of, and claims against, them concerning the misuse of segregated-account assets. Moreover, Henning-Carey Proprietary Trading, LLC, Charles Carey, Joseph Niciforo, Robert Tierney, Brian Fisher, Shane McMahon, Michael Mette, and Timothy Zaug allege that, "There appears to be $170,000,000 in insurance coverage potentially available under the MFG Assurance policies to satisfy the claims which the Objectors and tens of thousands of other MFGI commodities customers have against MFGI, MF Holdings and their employees. Under no circumstances should MFG Assurance be granted unchecked discretion to pay the significant benefits available under its Policies to whomever it wishes whenever it wishes, the customers insist. Thus, the "Representative Customer Group" composed of Paradigm Global Fund I Ltd.; Paradigm Equities Ltd.; Paradigm Asia Ltd.; Augustus International Master Fund, L.P.; William Schur; Futures Capital Management, LLC and Ali A. Rangchi Bozorki seeks that any insurance policies be maintained in their entirety to, among other things, satisfy customer claims or lawsuits arising from the shortfall at MFGI. Sangani Family LP joins in Sapere's Objection. Paradigm, et al., is represented by: Andrew J. Entwistle, Esq. Joshua K. Porter, Esq. Jordan A. Cortez, Esq. ENTWISTLE & CAPPUCCI LLP 280 Park Avenue, 26th Floor West New York, NY 10017 E-mail: aentwistle@entwistle-law.com jcortez@entwistle-law.com Henning-Carey, et al., is represented by: Edward T. Joyce, Esq. Rowena T. Parma, Esq. LAW OFFICES OF EDWARD T. JOYCE AND ASSOCIATES, P.C. 135 South LaSalle Street Suite 2200 Chicago, Illinois 60603 Tel: (312) 641-2600 -- and -- Peter B. Carey, Esq. Katherine T. Hartmann, Esq. CAREY & HARTMANN, LLC 135 South LaSalle Street Suite 2200 Chicago, Illinois 60602 Tel: (312) 541-0360 -- and -- Michael H. Moraino, Esq. Claire E. Gorman, Esq. Brittany E. Kirk, Esq. NISEN & ELLIOTT, LLC 200 West Adams Street Suite 2500 Chicago, Illinois 60606 Tel: (312) 346-7800 E-mail: mmoirano@nisen.com cgorman@nisen.com bkirk@nisen.com 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) MGM RESORTS: Incurs $19.3 Million Net Loss in Fourth Quarter ------------------------------------------------------------ MGM Resorts International reported a net loss of $19.30 million on $2.48 billion of revenue for the three months ended Dec. 31, 2011, compared with a net loss of $139.18 million on $1.62 billion of revenue for the same period a year ago. The Company reported net income of $3.23 billion on $8.53 billion of revenue for the twelve months ended Dec. 31, 2011, compared with a net loss of $1.43 billion on $6.68 billion of revenue during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $27.76 billion in total assets, $17.88 billion in total liabilities and $9.88 billion in total stockholders' equity. "2011 was a year in which we achieved many goals: operationally, strategically, and financially. Operationally, we enhanced our customer experience through targeted reinvestment in our properties and improved relationships through our M life customer loyalty program. Strategically, we acquired a majority interest in MGM China and began expanding our brand presence in key markets throughout the world, particularly Asia. Financially, our revenues and margins have improved year over year increasing our cash flow and strengthening our financial profile," said Jim Murren, MGM Resorts International Chairman and CEO. "Going forward we expect to build off of these strategies to grow our company and maximize shareholder value." A full-text copy of the press release is available at: http://is.gd/voSphZ About MGM Resorts MGM Resorts International (NYSE: MGM) -- http://www.mgmresorts.com/-- has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, Illinois and Macau. Bankruptcy Warning Any default under the senior credit facility or the indentures governing the Company's other debt could adversely affect its growth, its financial condition, its results of operations and its ability to make payments on its debt, and could force the Company to seek protection under the bankruptcy laws. * * * As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on MGM Resorts International to 'B-' from 'CCC+'. "The rating upgrade reflects MGM's solid performance thus far in 2011, and our expectation that MGM will continue benefitting from improving performance trends on the Las Vegas Strip, particularly on the lodging side of the business," said Standard & Poor's credit analyst Ben Bubeck. "MGM maintains weak credit measures, including operating lease-adjusted debt to wholly owned EBITDA of over 11x and EBITDA coverage of interest of just 1.0x. Still, we believe recent strong performance trends are reducing refinancing risk in the company's intermediate- term debt maturities, and expect credit measures to continue to gradually improve modestly in 2012." In the Nov. 21, 2011, edition of the TCR, Moody's Investors Service upgraded MGM Resorts International's Corporate Family and Probability of Default ratings to B2, its senior secured rating to Ba2, and its senior unsecured notes to B3. MGM has an SGL-3 Speculative Grade. The B2 rating reflects Moody's view that continued earnings improvement at MGM's 51% owned Macau joint venture increases the likelihood of a dividend distribution that would help improve the company's liquidity profile. The B2 Corporate Family Rating also reflects Moody's view that positive lodging trends in Las Vegas will continue through 2012 and will help improve MGM's leverage and coverage metrics modestly. MGT CAPITAL: NYSE Gets Extension Related to Plan of Compliance -------------------------------------------------------------- MGT Capital Investments, Inc. received notice from the staff of the NYSE Amex LLC that the Company was granted an extension until March 31, 2012 for the Company to comply with Section 1003 (f) (v) of the Exchange's Company Guide. The Exchange noted that the Company could regain compliance by effectuating a reverse-split of its common stock. The Company plans to effectuate a reverse split of its common stock prior to March 31, 2012. As previously disclosed, on June 8, 2011 the Exchange notified the Company that it is not in compliance with Section 1003(a)(i) of the Company Guide since it reported stockholders' equity of less than $2,000,000 at March 31, 2011 and losses from continuing operations and net losses in two of its three most recent fiscal years ended Dec. 31, 2010, Section 1003(a)(ii) of the Company Guide since it reported stockholders' equity of less than $4,000,000 at March 31, 2011 and losses from continuing operations and/or net losses in three of its four most recent fiscal years ended Dec. 31, 2010 and Section 1003(a)(iii) of the Company Guide since it reported stockholders' equity of less than $6,000,000 at March 31, 2011 and losses from continuing operations and net losses in its five most recent fiscal years ended Dec. 31, 2010. The Company was afforded the opportunity to submit a plan of compliance to the Exchange and that plan was accepted by the Exchange on Aug. 23, 2011, with a targeted date of Dec. 8, 2012 to regain compliance with Sections 1003(a)(i), (ii) and (iii) of the Exchange's Company Guide. On Jan. 3, 2012, the Company was cited for noncompliance with Section 704 of the Company Guide in that it failed to hold an annual meeting of its stockholders during 2011 for the fiscal year ended Dec. 31, 2010. The Company's plan of compliance detailing actions which it had taken, or intended to take, to regain compliance with the continued listing standards was accepted by the Exchange via letter dated Jan. 26, 2012, granting the Company until July 3, 2012 to regain compliance with Section 704 of the Exchange's Company Guide. The Company will be subject to periodic review by Exchange staff during the extension period and prior to compliance with Sections 704, 1003(a)(i), (ii), (iii) and (f)(v) of the Exchange's Company Guide. Failure to make progress consistent with the Plans or to regain compliance with the continued listing standards by the end of the extension period could result in the Company being delisted from the NYSE AMEX LLC. About MGT Capital MGT Capital Investments, Inc. is a holding company comprised of MGT, the parent company, and its wholly-owned subsidiary MGT Capital Investments (U.K.) Limited. In addition we also have a controlling interest in our subsidiary, Medicsight Ltd, including its wholly owned subsidiaries. MICROBILT CORP: Plan Outline Hearing Scheduled for March 8 ---------------------------------------------------------- The Hon. Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey will convene a hearing on March 8, 2012, to consider adequacy of the Disclosure Statement explaining MicroBilt Corporation's Chapter 11 Plan. As reported in the Troubled Company Reporter on Jan. 23, 2012, all cash necessary for the Reorganized Debtors to make payments pursuant to the Plan will be funded by the use of the Debtors' existing cash on hand as of the Effective Date. As of Dec. 15, 2011, the Debtors' cash on hand is $6,430,721. The Debtors anticipate that the available cash as of the distribution date will be sufficient to pay allowed general unsecured claims in full. The classification and treatment of claims under the plan are: A. Class 1 (Non-Tax Priority Claims) will receive cash equal to the amount of allowed claim. The estimated amount of Class 1 claims is $10,000 and the estimated recovery is 100%. B. Class 2 (General Unsecured Claims) will receive a pro rata share of available cash in the class 2 cash pool. The estimated amount of allowed class 2 claims is $2,658,391 while the estimated percentage recovery of the claims is 75-100%. C. Class 3 (Equity Interests) will be retained and will remain unaffected and unchanged by the Plan. The estimated percentage recovery of Class 3 claims is 100%. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/MICROBILT_ds.pdf About MicroBilt Corporation MicroBilt Corporation in Princeton, New Jersey, and CL Verify LLC in Tampa, Florida, offer small business owner solutions for fraud prevention, consumer financing, debt collection, skip tracing and background screening. MicroBilt provides access to over 3 billion debit account records, nearly 30 billion pieces of demographic and public record data and over 100 million unique consumer records to prevent identity fraud, evaluate credit risk and retain customer relationships. MicroBilt and CL Verify filed for Chapter 11 five days apart: MicroBilt (Bankr. D. N.J. Case No. 11-18143) on March 18, 2011, and CL Verify (Bankr. D. N.J. Case No. 11-18715) on March 23, 2011. The Debtors tapped Lowenstein Sandler PC as their counsel, and Maselli Warren, PC, as their special litigation counsel. MicroBilt estimated $10 million to $50 million in both assets and debts. CL Verify estimated $100 million to $500 million in assets, but under $1 million in debts. Court papers say the Debtors have roughly $8.4 million in unsecured debt and no secured debt. The Debtors believe they have an enterprise value of $150 million to $180 million. No trustee, examiner or committee has been requested or appointed in these Chapter 11 cases. MICROBILT CORP: Oscar Marquis OK'd as Special Regulatory Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey authorized MicroBilt Corporation and CL Verify, LLC, to employ Oscar Marquis & Associates as special regulatory compliance counsel. As reported in the Troubled Company Reporter on Nov. 17, 2011, OM&A has represented the Debtors on a prepetition basis in connection with various matters and provided compliance advice and assistance to the Debtors with a focus on the Fair Credit Reporting Act and consumer information data use. OM&A is expected to, among other things: a) assist the Debtors with respect to a Civil Investigative Demand filed by the Federal Trade Commission (proceeding as an exception to the automatic stay); b) provide legal, contractual and compliance advice and representation regarding the disputes with Chex Systems, Inc., including, but not limited to, areas pertaining to the FCRA; and c) provide ongoing regular corporate assistance to help assure compliance with legal and regulatory requirements, including, but not limited to, the FCRA. The Debtors will compensate OM&A at a monthly rate of $7,500 plus reimbursement of actual and necessary expenses incurred by OM&A. OM&A disclosed that it holds a prepetition claim against the Debtors on account of legal services rendered prior to the Petition Date in the approximate amount of $62,363. Additionally, as of the Petition Date, Mr. Marquis personally held an outstanding claim against the Debtors in the amount of $218,065. The Debtors submit that neither OM&A's claim nor Mr. Marquis' claim serve to disqualify OM&A from representing the Debtors on a postpetition basis given that OM&A does not represent or hold any interest adverse to either the Debtors or their estates with respect to the matters upon which OM&A is to be employed, namely regulatory compliance, consumer reporting and privacy issues. About MicroBilt Corporation MicroBilt Corporation in Princeton, New Jersey, and CL Verify LLC in Tampa, Florida, offer small business owner solutions for fraud prevention, consumer financing, debt collection, skip tracing and background screening. MicroBilt provides access to over 3 billion debit account records, nearly 30 billion pieces of demographic and public record data and over 100 million unique consumer records to prevent identity fraud, evaluate credit risk and retain customer relationships. MicroBilt and CL Verify filed for Chapter 11 five days apart: MicroBilt (Bankr. D. N.J. Case No. 11-18143) on March 18, 2011, and CL Verify (Bankr. D. N.J. Case No. 11-18715) on March 23, 2011. The Debtors tapped Lowenstein Sandler PC as their counsel, and Maselli Warren, PC, as their special litigation counsel. MicroBilt estimated $10 million to $50 million in both assets and debts. CL Verify estimated $100 million to $500 million in assets, but under $1 million in debts. Court papers say the Debtors have roughly $8.4 million in unsecured debt and no secured debt. The Debtors believe they have an enterprise value of $150 million to $180 million. No trustee, examiner or committee has been requested or appointed in these Chapter 11 cases. MOHEGAN TRIBAL: Exchange Offers Expiration Extended Until Today --------------------------------------------------------------- The Mohegan Tribal Gaming Authority has extended its private exchange offers and consent solicitations to 5:00 p.m., New York City time, today, and has extended the early tender date with respect to its outstanding 6 1/8% senior notes due 2013 and 8% senior subordinated notes due 2012 until 5:00 p.m., New York City time, today, in each case unless extended by the Authority. As previously announced, the Authority is offering to exchange any and all of its outstanding notes held by eligible holders for new notes in a private exchange offer which includes a solicitation of consents to certain amendments to the old notes and the indentures governing the old notes. The early tender date and expiration date were previously scheduled for 5:00 p.m., New York City time, on Feb. 22, 2012. As of the previous early tender and expiration date, old notes had been tendered into the exchange offers in amounts sufficient to satisfy the minimum tender condition with respect to the old second lien notes and the old 2014 notes and old 2015 notes, in the aggregate, but not with respect to the old 2012 notes and old 2013 notes, in the aggregate. As of the previous early tender and expiration date, approximately 99.9% of the old second lien notes, approximately 83.6% of the old 2012 and old 2013 notes, in the aggregate, and approximately 91.8% of the old 2014 and old 2015 notes, in the aggregate, had been tendered into the exchange offers. The exchange offers are conditioned upon, among other things, the valid tender of old notes representing at least (i) 50.1% of the outstanding principal amount of the old second lien notes, (ii) 90%, in the aggregate, of the outstanding principal amount of the old 2012 notes and the old 2013 notes, and (iii) 75%, in the aggregate, of the outstanding principal amount of the old 2014 notes and the old 2015 notes. The conditions to the exchange offers are set forth in the offering memorandum and consent solicitation statement, dated Jan. 24, 2012, and the related supplement dated Feb. 3, 2012, for the exchange offers and consent solicitations. The conditions to the exchange offers are for the Authority's benefit and may be asserted or waived by the Authority at any time and from time to time, in the Authority's sole discretion. The exchange offers were launched on Jan. 24, 2012, and all other terms of the exchange offers remain unchanged from the terms announced at launch. Withdrawal rights for old notes and the related consents tendered into the exchange offers expired at 5:00 p.m., New York City time, on Feb. 6, 2012, as scheduled, and there will be no withdrawal rights for the remainder of the exchange offers. Holders of old notes accepted in the exchange offers will also receive a cash payment equal to the accrued and unpaid interest in respect of those old notes from the most recent interest payment date to, but not including, the settlement date of the exchange offers. Wachtell, Lipton, Rosen & Katz served as legal advisor to the Authority. About Mohegan Tribal Gaming Authority Mohegan Tribal Gaming Authority -- http://www.mtga.com/-- is an instrumentality of the Mohegan Tribe of Indians of Connecticut, or the Tribe, a federally-recognized Indian tribe with an approximately 507-acre reservation situated in Southeastern Connecticut, adjacent to Uncasville, Connecticut. The Authority has been granted the exclusive authority to conduct and regulate gaming activities on the existing reservation of the Tribe, including the operation of Mohegan Sun, a gaming and entertainment complex located on a 185-acre site on the Tribe's reservation. Through its subsidiary, Downs Racing, L.P., the Authority also owns and operates Mohegan Sun at Pocono Downs, a gaming and entertainment facility located on a 400-acre site in Plains Township, Pennsylvania, and several off-track wagering facilities located elsewhere in Pennsylvania. The Authority's balance sheet at Sept. 30, 2011, showed $2.2 billion in total assets, $2.0 billion in total liabilities and $198.7 million total capital. PricewaterhouseCoopers LLP, in Hartford, Connecticut, expressed substantial doubt about the Authority's ability to continue as a going concern. The independent auditors noted that of the Authority's total debt of $1.6 billion as of Sept. 30, 2011, $811.1 million matures within the next twelve months, including $535.0 million outstanding under the Authority's Bank Credit Facility which matures on March 9, 2012, and the Authority's $250.0 million 2002 8% Senior Subordinated Notes which mature on April 1, 2012. In addition, a substantial amount of the Authority's other outstanding indebtedness matures over the following three fiscal years. MORGAN'S FOODS: James Pappas Elected to Board of Directors ---------------------------------------------------------- Morgan's Foods, Inc., entered into an indemnification agreement with James Pappas in connection with his election as a director. Mr. Pappas, age 30, was elected as director to fill the vacancy created by the resignation of Bahman Guyuron. Mr. Pappas will serve until the 2012 Annual Meeting of Shareholders and at that time it is expected that he will be a nominee for election to the Board of Directors by the Company's shareholders at the 2012 Annual Meeting of Shareholders. Mr. Pappas is the managing member of JCP Investment Management, LLC, and has a strong background in investment banking, having held positions with Goldman Sachs and Bank of America Securities. His education includes both a Masters in Finance and a Bachelor of Business Administration degree from Texas A&M University. Mr. Pappas is also expected to be named as a member of the Compensation Committee of the Board of Directors. Mr. Pappas is a large shareholder of the Company, owning, directly or indirectly, through companies he controls approximately 12.6% of the Company's outstanding common shares. The Company, acting mainly through Kenneth Hignett, a director and Chief Financial Officer of the Company, and Mr. Pappas have previously discussed his interest in serving as a director of the Company, should an opening become available. The Company believes that Mr. Pappas' experience in mergers and acquisitions and various aspects of financing will be a significant asset in the Board of Director's oversight of the Company. On Feb. 16, 2012, Dr. Bahman Guyuron resigned as a director of the Company. Dr. Guyuron had served as a director of the Company since 2003 and his distinguished service in that capacity is greatly appreciated by the Company. The increased time commitment required by his positions with University Hospitals, Case Western Reserve University and a private business which is run by him necessitated his reassessment of the time required to serve as a director of the Company. About Morgan's Foods Cleveland, Ohio-based Morgan's Foods, Inc., which was formed in 1925, operates through wholly-owned subsidiaries KFC restaurants under franchises from KFC Corporation, Taco Bell restaurants under franchises from Taco Bell Corporation, Pizza Hut Express restaurants under licenses from Pizza Hut Corporation and an A&W restaurant under a license from A&W Restaurants, Inc. As of May 20, 2011, the Company operates 56 KFC restaurants, 5 Taco Bell restaurants, 10 KFC/Taco Bell "2n1's" under franchises from KFC Corporation and franchises from Taco Bell Corporation, 3 Taco Bell/Pizza Hut Express "2n1's" under franchises from Taco Bell Corporation and licenses from Pizza Hut Corporation, 1 KFC/Pizza Hut Express "2n1" under a franchise from KFC Corporation and a license from Pizza Hut Corporation and 1 KFC/A&W "2n1" operated under a franchise from KFC Corporation and a license from A&W Restaurants, Inc. The Company reported a net loss of $988,000 for the fiscal year ended Feb. 27, 2011, compared with net income of $396,000 for the fiscal year ended Feb. 28, 2010. The Company reported a net loss of $567,000 for the 36 weeks ended Nov. 6, 2011. The Company's balance sheet at Nov. 6, 2011, showed $41.41 million in total assets, $41.34 million in total liabilities and $68,000 in total shareholders' equity. Grant Thornton LLP, in Cleveland, Ohio, expressed substantial doubt about Morgan's Foods' ability to continue as a going concern. The independent auditors noted that as of Feb. 27, 2011, the Company was in default and cross default of certain provisions of its most significant credit agreements and in default of the image enhancement requirements under franchise agreements for certain of its restaurants. MORGAN'S FOODS: James Pappas Discloses 12.6% Equity Stake --------------------------------------------------------- James C. Pappas and his affiliates filed with the U.S. Securities and Exchange Commission an amended Schedule 13D disclosing that, as of Feb. 20, 2012, they beneficially own 368,825 shares of common stock of Morgan's Foods, Inc., which represents 12.6% of the shares outstanding. As previously reported by the TCR on Jan. 13, 2012, Mr. Pappas disclosed beneficial ownership of 275,000 common shares. A full-text copy of the amended filing is available for free at http://is.gd/06JOAK On Feb. 20, 2012, the Board of Directors of the Company appointed James C. Pappas to serve as a director, effective immediately. About Morgan's Foods Cleveland, Ohio-based Morgan's Foods, Inc., which was formed in 1925, operates through wholly-owned subsidiaries KFC restaurants under franchises from KFC Corporation, Taco Bell restaurants under franchises from Taco Bell Corporation, Pizza Hut Express restaurants under licenses from Pizza Hut Corporation and an A&W restaurant under a license from A&W Restaurants, Inc. As of May 20, 2011, the Company operates 56 KFC restaurants, 5 Taco Bell restaurants, 10 KFC/Taco Bell "2n1's" under franchises from KFC Corporation and franchises from Taco Bell Corporation, 3 Taco Bell/Pizza Hut Express "2n1's" under franchises from Taco Bell Corporation and licenses from Pizza Hut Corporation, 1 KFC/Pizza Hut Express "2n1" under a franchise from KFC Corporation and a license from Pizza Hut Corporation and 1 KFC/A&W "2n1" operated under a franchise from KFC Corporation and a license from A&W Restaurants, Inc. The Company reported a net loss of $988,000 for the fiscal year ended Feb. 27, 2011, compared with net income of $396,000 for the fiscal year ended Feb. 28, 2010. The Company reported a net loss of $567,000 for the 36 weeks ended Nov. 6, 2011. The Company's balance sheet at Nov. 6, 2011, showed $41.41 million in total assets, $41.34 million in total liabilities and $68,000 in total shareholders' equity. Grant Thornton LLP, in Cleveland, Ohio, expressed substantial doubt about Morgan's Foods' ability to continue as a going concern. The independent auditors noted that as of Feb. 27, 2011, the Company was in default and cross default of certain provisions of its most significant credit agreements and in default of the image enhancement requirements under franchise agreements for certain of its restaurants. NAVISTAR INTERNATIONAL: Jeffrey Altman Holds 5.8% Equity Stake -------------------------------------------------------------- Jeffrey A. Altman and his affiliates filed with the U.S. Securities and Exchange Commission an amended Schedule 13D disclosing that, as of Feb. 21, 2012, they beneficially own 3,990,443 shares of common stock of Navistar International Corporation, which represents 5.8% of the shares outstanding. As previously reported by the TCR on Feb. 14, 2012, Mr. Altman disclosed beneficial ownership of 4,864,434 common shares. A full-text copy of the amended filing is available for free at: http://is.gd/y3JXqo About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. The Company's balance sheet as of Oct. 31, 2011, showed $12.29 billion in total assets, $12.26 billion in total liabilities, $5 million in redeemable equity securities, and $23 million in total stockholders' equity. * * * Navistar has a 'BB-/Stable/--' corporate credit rating from Standard & Poor's and a 'B1' Corporate Family Rating and Probability of Default Rating from Moody's Investors Service. Moody's said in October 2010 that Navistar's B1 rating could improve if the North American truck market remains on track for a sustained recovery into 2011, and Navistar's operational initiatives to moderate its vulnerability to the truck cycle show evidence of taking hold. NET ELEMENT: Mike Zoi Discloses 90.7% Equity Stake -------------------------------------------------- In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Mike Zoi and his affiliates disclosed that, as of May 16, 2011, they beneficially own 902,417,232 shares of common stock of Net Element, Inc., representing 90.7% of the shares outstanding. The percentage was calculated based on 747,674,446 shares of common stock outstanding as of Feb. 21, 2012, plus 247,272,729 shares of common stock issuable upon exercise of warrants and upon conversion of convertible promissory notes beneficially owned by Mr. Zoi. As previously reported by the TCR on March 16, 2011, Mr. Zoi disclosed beneficial ownership of 875,269,503 common shares. A full-text copy of the amended filing is available at: http://is.gd/wZ5mND About Net Element Miami, Fla.-based Net Element, Inc. (formerly TOT Energy, Inc.) currently operates several online media websites in the film, auto racing and emerging music talent markets. The Company reported a net loss of $3.1 million for the nine-month period ended Dec. 31, 2010. The Company had a net loss of $6.6 million for the twelve months ended March 31, 2010. The Company also reported a net loss of $23.53 million on $143,988 of net revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $2.62 million on $0 of net revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.95 million in total assets, $5.69 million in total liabilities, and a $3.73 million total stockholders' deficit. Daszkal Bolton LLP, in Fort Lauderdale, Fla., expressed substantial doubt about Net Element's ability to continue as a going concern. The independent auditors noted that the Company has experienced recurring losses and has an accumulated deficit and stockholders' deficiency at Dec. 31, 2010. NEW LEAF: Enters Into Consulting Agreement with Fuselier -------------------------------------------------------- New Leaf Brands, Inc., on Feb. 14, 2012, entered into a Consulting Agreement with Fuselier and Co., Inc., to advise the Company on a corporate turnaround strategy. The compensation arrangement gives Fuselier the right to earn up to 34,000,000 shares of New Leaf Brands, Inc., common stock in 2012 and 12,000,000 shares thereafter annually. On Feb. 14, 2012, the Company entered into a five year Employment Agreement with David Fuselier. Mr. Fuselier will assume the role of Chairman, Chief Executive Officer and President immediately. The Company entered into a Mutual Termination and Release agreement between New Leaf Brands, Inc. and Eric Skae. On Feb. 14, 2012, Eric Skae, the Company's current Chairman, Chief Executive Officer and President, resigned as the Company's Chairman, CEO, CFO and COO. Mr. Skae also resigned as a member of the Company's Board of Directors. Mr. Skae will remain with the Company in a non-executive consulting capacity to assist will all matters necessary. The Company entered into a two year Consulting Agreement with Eric Skae. Effective Feb. 16, 2012, Mr. Skae will receive a monthly consulting fee of $14,000 plus reimbursement of $4,000 in authorized expenses. On Feb. 14, 2012, O. Lee Tawes resigned as a member of the Company's Board of Directors. Mr. Tawes was not a member of any committee of the Board at the time of his resignation. On Feb. 14, 2012, the Company's Board appointed David Fuselier, as Chairman, CEO and President. Effective Feb. 16, 2012, Mr. Fuselier will receive an annual salary of $150,000. The Company's Board will research and establish the Company's executive option pool, pursuant to its desire to establish a Stock Option Plan. The Employee will be provided options to purchase shares of Common Stock, par value $0.001 per share, of the Company at an exercise price equal to the Current Market Price on the date of grant. The Options will vest as to 20% on the date of grant and as to an additional 20% on each anniversary date of the date of grant. The Options will expire as to each vested portion if not exercised within five years after the date of vesting. For the last ten years, Mr. Fuselier (52) has been the principal of Fuselier and Co., a private merchant banking firm in engaged corporate turnarounds. He is a graduate of Louisiana State University (MSJ) and Louisiana College (BA). 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. NO FEAR RETAIL: Hearing on Plan Disclosures Set for March 22 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of California will convene a hearing on March 22, 2012, at 2:00 p.m. to consider adequacy of the Disclosure Statement explaining No Fear Retail Stores, Inc., et al.,'s Chapter 11 Plan. Objections, if any, are due March 9. If notice was served electronically or by mail, the objector has three additional days or March 12 to take actions. According to the Disclosure Statement, the Plan is a liquidating Plan. Pursuant to prior orders of the Court, the Debtors have sold substantially all of their assets and have paid substantial claims of secured creditors and administrative expenses from the proceeds of the sales. The Plan provides for the allocation and distribution of the remaining proceeds from the Debtor's sales transactions and the creation of a liquidating trustee that will administer and liquidate all remaining property of the Debtors, including causes of action, not sold, transferred or otherwise waived or released before the Effective Date of the Plan. The Plan further provides for the substantive consolidation of the Debtors subject to, and in accordance with, a settlement arrangement between the estates. The Plan also provides that for every 3% recovery that is received by the holder of an allowed general unsecured claim against Simo Holdings Inc., the holder of an allowed general unsecured claim against each of No Fear Retail Stores, Inc. and No Fear MX, Inc. will receive a 1% recovery. Under the Plan, all equity interest in the Debtors are terminated and extinguished, the Debtors are to be dissolved and their wound- up, and all assets are transferred to the liquidating trust. The Plan also provides for distributions to holders of allowed claims. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/NO_FEAR_ds.pdf About No Fear Retail Carlsbad, California-based No Fear Retail Stores, Inc., is a retailer of action, sports, and casual youth lifestyle apparel and accessories, targeting young adults and teens. It operates 41 retail locations in California, Oregon, Arizona, Florida, Nevada, North Carolina, and Texas. No Fear filed for Chapter 11 bankruptcy protection (Bankr. S.D. Calif. Case No. 11-02896) on Feb. 24, 2011. David S. Kupetz, Esq., at Sulmeyer, Kupetz, A Professional Corp, serves as the Debtor's bankruptcy counsel. The Debtor tapped Jones Day as special intellectual property counsel; Avant Advisory Group's George Blanco as chief restructuring officer, and Venturi & Company LLC, as financial advisors. The Debtor estimated disclosed $31,648,063 in assets and $12,552,985 in liabilities as of the Chapter 11 filing. Affiliates No Fear MX, Inc. (Bankr. S.D. Calif. Case No. 11-02897) and Simo Holdings, Inc. (Bankr. S.D. Calif. Case No. 11-02898) filed separate Chapter 11 petitions on Feb. 24, 2011. Tiffany L. Carroll, the Acting U.S. Trustee for Region 15, appointed three creditors to serve on an Official Committee of Unsecured Creditors of No Fear MX, Inc. Pachulski Stang Ziehl & Jones LLP represents the Committee. BDO USA LLP serves as financial advisor to provide financial advisory services to the Committee. Gibson Dunn & Crutcher LLP is the counsel for the Debtors' creditors panel. Lapidus & Lapidus acts as special litigation Counsel for the Debtors. NORTHCORE TECHNOLOGIES: Renews Contract of Key Enterprise Client ---------------------------------------------------------------- Northcore Technologies Inc. announced the contract renewal of a key strategic client. The client is one of the ten largest companies in North America and has been a long term customer and key strategic partner. Northcore develops solutions to support the evolving needs of industry and provides a comprehensive platform for the management of capital equipment assets throughout the entire lifecycle. This includes tools that optimize asset sourcing, tracking and ultimately disposition. These products are proven, effective and in use by some of the world's most successful corporations. "This most recent customer renewal continues an important trend," said Amit Monga, CEO of Northcore Technologies. "Our existing clients are finding compelling evidence as to the ongoing benefits of our Asset Management platform and continue to extend their partnerships with Northcore." Companies or public entities interested in effective software solutions should contact Northcore at 416-640-0400 or 1-888-287- 7467, extension 395 or via email at Sales@northcore.com. About Northcore Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC BB: NTLNF) -- http://www.northcore.com/-- provides a Working Capital Engine(TM) that helps organizations source, manage, appraise and sell their capital equipment. Northcore offers its software solutions and support services to a growing number of customers in a variety of sectors including financial services, manufacturing, oil and gas and government. Northcore owns 50% of GE Asset Manager, LLC, a joint business venture with GE. Together, the companies work with leading organizations around the world to help them liberate more capital value from their assets. The Company reported a net loss and comprehensive loss of C$3.27 million for the nine months ended Sept. 30, 2011, compared with a net loss and comprehensive loss of C$2.35 million for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed C$1.91 million in total assets, C$1.16 million in total liabilities, and C$747,000 in total shareholders' equity. Certain adverse conditions and events cast substantial doubt upon the ability of the Company to continue as a going concern, the Company said in the filing. "The Company has not yet realized profitable operations and has relied on non-operational sources of financing to fund operations." OMNICOMM SYSTEMS: Cornelis Wit Discloses 45.7% Equity Stake ----------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Cornelis Wit disclosed that, as of Dec. 31, 2011, he beneficially owns 69,306,342 shares of common stock of Omnicomm Systems, Inc., which represents 45.72% of the shares outstanding. That amount of shares includes (i) 4,188,825 shares of common stock, (ii) 1,925,000 shares issuable upon exercise of currently exercisable common stock purchase options, (iii) 40,792,517 shares issuable upon exercise of currently exercisable common stock purchase warrants, and (iv) 22,400,000 shares issuable upon conversion of Convertible Debentures. A full-text copy of the amended filing is available at: http://is.gd/H6TMZq About OmniComm Systems Ft. Lauderdale, Fla.-based OmniComm Systems, Inc. (OTC: OMCM.OB) -- http://www.OmniComm.com/-- provides customer-driven Internet solutions to pharmaceutical, biotechnology, research and medical device organizations that conduct life changing clinical trial research. OmniComm Systems, Inc has U.S. headquarters in Fort Lauderdale, Fla. and European headquarters in Bonn, Germany, with satellite offices in New Jersey and the United Kingdom, as well as sales offices throughout the U.S. and Europe. Webb & Company, P.A., in Boynton Beach, Fla., expressed substantial doubt about OmniComm Systems' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has a net loss attributable to common shareholders of $3,335,869, a negative cash flow from operations of $1,953,919, a working capital deficiency of $9,400,947 and a stockholders' deficiency of $17,814,029. The Company reported a net loss of $4.38 million for the nine months ended Sept. 30, 2011, compared with a net loss of $2.39 million revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $2.24 million in total assets, $24.31 million in total liabilities, and a $22.06 million total shareholders' deficit. OMNICOMM SYSTEMS: Guus Kesteren Retains 5.7% Equity Stake --------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Guus van Kesteren disclosed that, as of Dec. 31, 2011, he beneficially owns 5,098,103 shares of common stock of Omnicomm Systems, Inc., representing 5.7% of the shares outstanding. As previously reported by the TCR on Feb. 14, 2012, Mr. Kesteren disclosed beneficial ownership of 4,738,103 common shares. A full-text copy of the amended filing is available for free at http://is.gd/jT4Tk5 About OmniComm Systems Ft. Lauderdale, Fla.-based OmniComm Systems, Inc. (OTC: OMCM.OB) -- http://www.OmniComm.com/-- provides customer-driven Internet solutions to pharmaceutical, biotechnology, research and medical device organizations that conduct life changing clinical trial research. OmniComm Systems, Inc has U.S. headquarters in Fort Lauderdale, Fla. and European headquarters in Bonn, Germany, with satellite offices in New Jersey and the United Kingdom, as well as sales offices throughout the U.S. and Europe. Webb & Company, P.A., in Boynton Beach, Fla., expressed substantial doubt about OmniComm Systems' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has a net loss attributable to common shareholders of $3,335,869, a negative cash flow from operations of $1,953,919, a working capital deficiency of $9,400,947 and a stockholders' deficiency of $17,814,029. The Company reported a net loss of $4.38 million for the nine months ended Sept. 30, 2011, compared with a net loss of $2.39 million revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $2.24 million in total assets, $24.31 million in total liabilities and a $22.06 million total shareholders' deficit. OMNICOMM SYSTEMS: Fernando Montero Discloses 8.2% Equity Stake -------------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Fernando Montero disclosed that, as of Dec. 31, 2011, he beneficially owns 7,223,411 shares of common stock of OmniComm Systems, Inc., representing 8.21% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/2gYBcP About OmniComm Systems Ft. Lauderdale, Fla.-based OmniComm Systems, Inc. (OTC: OMCM.OB) -- http://www.OmniComm.com/-- provides customer-driven Internet solutions to pharmaceutical, biotechnology, research and medical device organizations that conduct life changing clinical trial research. OmniComm Systems, Inc has U.S. headquarters in Fort Lauderdale, Fla. and European headquarters in Bonn, Germany, with satellite offices in New Jersey and the United Kingdom, as well as sales offices throughout the U.S. and Europe. Webb & Company, P.A., in Boynton Beach, Fla., expressed substantial doubt about OmniComm Systems' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has a net loss attributable to common shareholders of $3,335,869, a negative cash flow from operations of $1,953,919, a working capital deficiency of $9,400,947 and a stockholders' deficiency of $17,814,029. The Company reported a net loss of $4.38 million for the nine months ended Sept. 30, 2011, compared with a net loss of $2.39 million revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $2.24 million in total assets, $24.31 million in total liabilities and a $22.06 million total shareholders' deficit. PATIENT SAFETY: Lynne Silverstein Appointed as Class A Director --------------------------------------------------------------- One of the members of Patient Safety Technologies, Inc.'s board of directors, Herbert Langsam, passed away on Feb. 7, 2012. Mr. Langsam was one of the two directors appointed by the holders of the Company's Series A Preferred Stock. On Feb. 16, 2012, Dr. Louis Glazer, one of the other directors appointed by the holders of the Company's Series A Preferred Stock, filled the vacancy created by the death of Mr. Herbert Langsam by appointing Dr. Glazer's daughter, Ms. Lynne Silverstein, as the second Series A director. No Board vote was taken on this appointment because under Article IV, Section D(6)(b)(iii) of the Company's Amended and Restated Certificate of Incorporation, any vacancy occurring in the office of a director elected by the holders of the Series A Preferred Stock may be filled by the remaining director elected by those holders unless and until that vacancy will be filled by those holders. 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 for the nine months ended Sept. 30, 2011, compared with net income of $1.32 million 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. PHI GROUP: Incurs $61,000 Net Loss in Dec. 31 Quarter ----------------------------------------------------- PHI Group, Inc., filed with the U.S. Securities and Exchange Commission a Form 10-Q disclosing a net loss of $61,486 on $215,000 of consulting and advisory fee income for the three months ended Dec. 31, 2011, compared with a net loss of $303,019 on $6,000 of consulting and advisory fee income for the same period a year ago. The Company reported a net loss of $1.2 million for the fiscal year ended June 30, 2011, compared with a net loss of $3.6 million for the fiscal year ended June 30, 2010. The Company reported a net loss of $190,064 on $390,000 of consulting and advisory fee income for the six months ended Dec. 31, 2011, compared with a net loss of $373,766 on $353,317 of consulting and advisory fee income for the same period during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $2.46 million in total assets, $10.11 million in total liabilities, all current, and a $7.65 million total stockholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/GQrwyt 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. 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. PHOENIX COMPANIES: Fitch Affirms Issuer Default Rating at 'B' ------------------------------------------------------------- Fitch Ratings has affirmed Phoenix Companies, Inc.'s (PNX) 'B' holding company Issuer Default Rating (IDR) and revised the Rating Outlook to Positive from Stable. At the same time, Fitch has affirmed the 'BB+' Insurer Financial Strength (IFS) ratings of the group's primary insurance subsidiaries with a Stable Outlook. These rating actions reflect continued improvements in PNX's profitability and interest coverage as well as improved investment results, statutory capitalization and stable financial leverage. PNX's debt servicing capabilities improved substantially in 2011 GAAP interest coverage was 2.5 times (x) for the full year 2011 based on $48 million of pre-tax operating earnings and $32 million of interest expense, which includes the surplus notes. Coverage was about 0.6x in 2010 on the same basis. Statutory interest coverage is 3.8x in 2012 based on maximum dividend capacity of $72 million in 2012 and holding company interest expense projected at $19 million. PNX's operating return on equity (ROE) was 3.7% in 2011, the first positive ROE since 2007. Consolidated pre-tax GAAP operating earnings were $48 million compared with a $14 million loss in 2010. mortality experience added about $30 million to the 2011 results, although that same level of improvement is not expected in 2012. Interest margins are under pressure as with the industry as a whole. The company is managing this risk through reduced crediting rates and product design and pricing. This is particularly important as the company experienced significant growth of its core indexed annuity product in 2011. PNX's financial leverage ratio (FLR) remains well within expectations for the rating level at 25% as of Dec. 31, 2011. The group's total financing and commitments ratio remains low at about 0.3x. PNX's surplus notes in relation to total adjusted capital (TAC) was 18% at year-end, above Fitch's maximum guideline of 15%. For this reason, the surplus notes are rated one notch below standard notching. Statutory capitalization improved significantly in 2011 due not only to a reinsurance transaction but also to improved statutory operating earnings and net income. The reinsurance of one-third of the closed block was completed in December 2011 and resulted in a 53-point increase in the risk-based capital (RBC) ratio, which is expected to be over 360% for the full year. Excluding the transaction, the RBC ratio is expected to remain above 300% at year-end 2011 compared to 282% at the previous year-end. The 2011 RBC ratio is net of a $65 million dividend to the parent and $35 million of charges designed to address legacy issues and reduce capital requirements going forward. Investment results continue to improve. Credit-related impairments declined by almost half in 2011 compared to 2010, and the portfolio was in a net unrealized gain position. Fitch believes that PNX remains vulnerable to earnings pressure, particularly given alternative investment income volatility and interest margin pressure in its spread-based business. The ratings also consider competitive challenges facing PNX as a mid- size life insurer competing against companies with much larger scale and capital resources. The holding company IDR could be upgraded one notch based on the following triggers: -- GAAP interest coverage of 3x or greater; -- Financial leverage maintained at or below 25%; -- Statutory coverage of holding company interest expense maintained at or above 3x; The surplus note rating could be upgraded one notch to standard notching if the ratio of surplus notes to TAC declines to 15% or lower; Other upgrade triggers include: -- GAAP ROE at or above 5%; -- Sustained statutory capital generation resulting in an RBC position at or above current levels. The key rating drivers that could result in a downgrade include: -- An RBC position below 200%; -- Investment losses higher than anticipated, particularly within the structured portfolio; -- Financial leverage above 30%. PNX is a life and annuity insurance holding company and ultimate parent of Phoenix Life Insurance Company and PHL Variable Insurance Company. It is headquartered in Hartford, Connecticut. PNX had $21.3 billion in GAAP assets and $1.1 billion in equity as of Dec. 31, 2011, and reported $8 million in consolidated net income for 2011. Fitch affirms the following rating with a Positive Outlook: Phoenix Companies, Inc -- IDR at 'B'. Fitch affirms the following ratings with a Stable Outlook: Phoenix Life Insurance Company -- IFS at 'BB+'; -- IDR at 'BB'; -- $174 million Surplus note 7.15% due Dec. 2034 at 'B+'. PHL Variable Life Insurance Company -- IFS at 'BB+'. PONCE TRUST: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Ponce Trust, LLC c/o Luis Lamar 8950 SW 74 Court, #2213 Miami, FL 33156 Bankruptcy Case No.: 12-14247 Chapter 11 Petition Date: February 22, 2012 Court: U.S. Bankruptcy Court Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: Joel L Tabas, Esq. TABAS, FREEDMAN, SOLOFF, MILLER & BROWN, P.A. 14 NE 1 Avenue PH Miami, FL 33132 Tel: (305) 375-8171 E-mail: jtabas@tabasfreedman.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Luis Lamar, vice president and manager. Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1300 Ponce Holdings, LLC Lots $37,346,026 c/o MUNB Loan Holdings, LLC 1221 Brickell Avenue, Suite 1140 Miami, FL 33131 Dayco HC, LLC Mezz Lender $3,586,829 8950 SW 74 Court, #2213 Miami, FL 33156 Infracommerce International Mezz Lender $3,586,829 Ltd., BVI c/o Arazoza & Fernandez-Fraga 2100 Salzedo Street, #300 Miami, FL 33134 Dayco Properties, Ltd. -- $365,949 8950 SW 74 Court, #2213 Miami, FL 33156 Milton Construction Company -- $330,942 3711 SW 27 Street Miami, FL 33134 1300 Ponce Condominium Assn, Inc. -- $284,680 c/o The Continental Group, Inc. 2950 N 28 Terrace Hollywood, FL 33020 Merrick Trust, LLC -- $161,983 Southern Hill Real Estate -- $98,936 Mostrenco, LLC/Lenox 359 LLC Final Judgment $45,071 American National Realty Corp. -- $43,867 Nationwide Management Srvs -- $20,625 Gerson Preston Robinson, PA -- $7,500 Biscayne Engineering Company, Inc. -- $5,184 Chicago Title Ins. Co/Commonwealth Title Ins. $4,125 Company Florida Classic Closets -- $4,047 Withers Worldwide -- $3,853 InStyle Window D�cor Vendor $3,815 Forch & Associates -- $3,000 TWR Engineers, Inc. -- $2,017 CIT Technology -- $1,215 PROLOGIS INC: Fitch Affirms 'BB' Rating on $582-Mil. Pref. Stock ---------------------------------------------------------------- Fitch Ratings has revised the Rating Outlook for Prologis, Inc. (NYSE: PLD), its operating partnership, Prologis, L.P., and its subsidiary Prologis Japan Finance Y.K. (formerly known as AMB Japan Finance Y.K.) to Positive from Stable. In addition, Fitch has affirmed the following credit ratings: Prologis, Inc. -- Issuer Default Rating (IDR) at 'BBB-'; -- $582 million preferred stock at 'BB'. Prologis, L.P. -- IDR at 'BBB-'; -- $1.75 billion global senior credit facility at 'BBB-'; -- $4.7 billion senior unsecured notes at 'BBB-'; -- $1.4 billion senior unsecured convertible notes at 'BBB-'. Prologis Japan Finance Y.K. -- JPY36.5 billion senior unsecured revolving credit facility at 'BBB-'. Fitch has also assigned a 'BBB-' rating to Prologis, L.P.'s EUR487.5 million senior unsecured term loan with an initial maturity of Feb. 2, 2014. proceeds from this term loan were used for general corporate purposes including the repayment of ProLogis, L.P.'s EUR157.5 million senior unsecured term loan and Prologis Japan Finance Y.K.'s JPY12.5 billion senior unsecured term loan. Fitch has withdrawn the 'BBB-' ratings on the EUR157.5 million and JPY12.5 billion term loans. The revision of the Rating Outlook to Positive reflects that the company's credit profile is migrating toward a 'BBB' IDR. The Positive Outlook takes into account improving fundamentals across the company's broad industrial real estate platform, coupled with the ongoing implementation of a strategy to de-lever the company through property dispositions and fund contributions. Fitch anticipates that this strategy will result in improving asset quality via asset sales in non-core markets. PLD's credit strengths include a global franchise (including the private capital platform), a granular tenant roster, strong access to capital, and a large unencumbered asset base. Credit concerns include high leverage for the rating as a result of PLD's large land holdings (though leverage is trending toward a level consistent with a 'BBB' IDR) and sizeable debt maturities through 2015. In addition, PLD's liquidity position will depend materially on its ability to sell and contribute assets to funds. Operating performance continues to improve due to favorable tenant demand. Occupancy increased to 92.2% in the fourth quarter of 2011 (4Q'11) from 91% in 3Q'11, and rental rate declines moderated to negative 4.5% in 4Q'11 compared with negative 8.6% in 3Q'11. Overall, same-property NOI grew by 40 basis points in 4Q'11 compared with negative 70 basis points in 3Q'11. Fixed charge coverage (recurring operating EBITDA including Fitch's estimate of recurring cash distributions from unconsolidated entities less recurring capital expenditures and straight-line rent adjustments divided by cash interest incurred and preferred dividends) was 2.0 times (x) in 4Q'11, up from 1.8x in 3Q'11 due to stabilizing fundamentals, reduced fixed charges and G&A expense reductions via merger synergies. When combining the results of legacy ProLogis and AMB Property Corporation, fixed charge coverage was 1.6x in 2010 and 1.4x in 2009. Fitch anticipates that fixed charge coverage may decline somewhat in the near term due to earnings reductions from expected asset sales but that coverage will sustain in the low 2x range over the next 12 to 24 months due to flat-to-low single digit same store results, incremental earnings from development and private capital income, and merger synergies. The low 2x range is appropriate for a 'BBB' IDR for an industrial REIT of PLD's size. In a stress case not anticipated by Fitch resulting in negative same-store NOI, fixed-charge coverage could sustain below 2x, which would be appropriate for a 'BBB-' IDR. One of the company's strategic initiatives since the ProLogis and AMB Property Corporation merger in June 2011 is aligning the portfolio with an investment strategy focused on global markets Consistent with that strategy, during the second half of 2011, PLD completed approximately $1.65 billion in contributions and building and land dispositions in predominantly non-global markets, of which approximately $1.38 billion was PLD's share. As a result, the percentage of the portfolio in global markets increased to 84.2% of total operating portfolio as of Dec. 31, 2011 from 78.6% as of June 30, 2011. Additionally, the company continues to selectively develop in high growth potential markets, which Fitch views favorably. Bondholders benefit from Prologis' global franchise as it mitigates exposure to regional demand drivers. As of Dec. 31, 2011, PLD's operating portfolio consisted of 3,200 buildings in 22 countries in the Americas, Europe and Asia. As of Dec. 31, 2011, the company had approximately $43.3 billion in total assets under management including $24.7 billion in the private capital segment. Prologis continues to streamline this segment via fund dissolutions and consolidations. PLD's tenant roster is granular and includes more than 4,500 customers. As of Dec. 31, 2011, top tenants were DHL at 2.4% of annual base rents, CEVA Logistics at 1.4%, Kuehne & Nagel at 1.2%, Home Depot, Inc. (Fitch IDR of 'A-' with a Stable Rating Outlook) at 1.1% and SNCF Geodis at 1%, and no other tenant exceeds 1% of total rent Lease expirations are manageable with 14.1%, 16.3% and 15.4% of Prologis' share of annual base rents expiring in 2012, 2013 and 2014, respectively. Prologis has strong access to capital and financial flexibility. The company raised $7.2 billion in capital in 2011, including $2.2 billion in a new global line of credit and Yen revolver commitments. Fitch calculates that 4Q'11 annualized unencumbered NOI divided by a capitalization rate of 7% to unsecured debt was 2.2x at Dec. 31, 2011, which is appropriate for a 'BBB' IDR. When including 50% of PLD's book value of unencumbered land and development, asset coverage increases to 2.3x. In addition, the covenants in the company's senior note indentures and credit agreements do not restrict PLD's financial flexibility. Leverage remains high for an industrial REIT but is trending toward a level consistent with a 'BBB' IDR. Net debt to 4Q'11 annualized recurring operating EBITDA including Fitch's estimate of recurring cash distributions from unconsolidated entities was 7.8x compared with 8.6x in 3Q'11. Improvements stem from proceeds from dispositions and contributions used to repay debt along with modest EBITDA growth. As part of the company's goal to strengthen its financial position, Prologis is focused on reducing leverage. Fitch anticipates that leverage will approach 7.0x over the next 12 to 24 months prior to a recapitalization of PEPR principally due to debt repayment from asset sale and contribution proceeds. Leverage sustaining between 7x and 8x is appropriate for a 'BBB' IDR for an industrial REIT of PLD's size and good asset quality. In a stress case not anticipated by Fitch resulting in negative same-store NOI, leverage could sustain above 8x, which would be appropriate for a 'BBB-' IDR. PLD's liquidity position changes materially when layering in proceeds from expected asset sales and fund contributions. Sources of liquidity (unrestricted cash, availability under the company's credit facilities pro forma for the 487.5 million Euro senior term loan effective February 2012, and projected retained cash flows after dividends and distributions) divided by uses of liquidity (PLD's share of debt maturities and projected recurring capital expenditures) was 0.6x for Jan. 1, 2012 to Dec. 31, 2013. Adding $3.5 billion of proceeds from asset sales as a liquidity source and $1.075 billion of capital requirements from acquisitions and development starts as a liquidity use, liquidity coverage would be 1.2x. $3.5 billion represents Prologis' 70% share of proceeds, net of proceeds to PLD's co-investment partners, from the midpoint of 2012 disposition and contribution guidance. $1.075 billion represents Prologis' 40% share of capital requirements, net of capital requirements for PLD's co- investment partners, from the midpoint of 2012 acquisition guidance plus Prologis' 70% share of capital requirements, net of capital requirements for PLD's co-investment partners, from the midpoint of 2012 development start guidance. While Prologis has a solid capital raising track record, execution risks are present in the company's deleveraging and debt repayment strategy. An economic slowdown or the company's inability to sell and contribute assets to funds as contemplated could place pressure on the company's ability to address debt maturities and its liquidity position. Debt maturities are heavily weighted towards the next several years, with 9.7% of debt maturing in 2012, 14.4% maturing in 2013, 17.7% in 2014 and 16% in 2015. While Prologis operates a global portfolio, Europe represents approximately 24.7% of 4Q'11 NOI. Despite macroeconomic uncertainties in the Euro zone, European industrial property fundamentals are somewhat stable and PLD's European property occupancy increased to 91.6% in 4Q'11 from 90% in 3Q'11. European distribution facility fundamentals appear stable, although macroeconomic uncertainties in the Euro zone indicate risks vis-a-vis the future structure of Prologis European Properties (PEPR), which holds the majority of Prologis' consolidated assets in Europe. PEPR is currently a publicly listed vehicle that is expected to be delisted in the near future and recapitalized and unconsolidated from PLD's balance sheet after 2012. Presently, the future structure for PEPR remains unclear. Broadly, the Fitch report, 'European Senior Fixed Income Investor Survey Q112,' dated Feb. 13, 2012, notes that most European participants in a recent fixed income investor survey think the eurozone crisis will persist through 2012. While this may generally dampen near-term investor appetite, the PEPR portfolio includes prime assets that are desirable to institutional investors. A PEPR recapitalization would enable PLD to monetize a portion of its investment, with the proceeds likely used to repay debt or fund development. The two-notch differential between PLD's IDR and preferred stock rating is consistent with Fitch's criteria for corporate entities with an IDR of 'BBB-'. Based on Fitch research titled 'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis', these preferred securities are deeply subordinated and have loss absorption elements that would likely result in poor recoveries in the event of a corporate default. The following factors may result in an upgrade to 'BBB': -- Fixed charge coverage sustaining above 2.0x (fixed charge coverage ratio was 2.0x in 4Q'11); -- Net debt to recurring operating EBITDA sustaining below 8.0x (leverage was 7.8x in 4Q'11); -- Unencumbered asset coverage sustaining above 2.0x (as of Dec. 31, 2011, when including 50% of PLD's book value of unencumbered land and development, unencumbered asset coverage was 2.3x). The following factors may result in negative momentum on the Outlook: -- An inability to continue executing on the company's strategic priorities, which entail substantial dispositions and fund contributions to reduce leverage; -- Fixed charge coverage sustaining below 2.0x; -- Net debt to recurring operating EBITDA sustaining above 8.0x; -- Unencumbered asset coverage sustaining below 2.0x. The following factors may result in negative momentum on the rating: -- Fixed charge coverage ratio sustaining below 1.5x; -- Leverage sustaining above 9.0x; -- Liquidity coverage after dispositions, fund contributions, acquisitions and development starts sustaining below 1.0x. QUINTILES TRANSNATIONAL: S&P Rates $300MM Sr. Sec. Loan at 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' issue-level and '6' recovery rating to Durham, N.C.-based biopharmaceutical services company Quintiles Transnational Holdings Inc.'s proposed $300 million term loan due 2017. "The 'B' issue-level rating is two notches below our 'BB-' corporate credit rating, in accordance with our notching criteria for a recovery rating of '6'. Proceeds from the loan, along with $50 million of cash, will be used to pay a $335 million shareholder dividend and fees associated with the term loan. At the same time, we are affirming operating subsidiary Quintiles Transnational Corp.'s 'BB-' corporate credit rating and our 'BB-' issue-level and '4' recovery rating on that entity's senior secured debt," S&P said. "The '6' recovery rating reflects the fact that, despite having the pledge of Quintiles Transnational Corp. stock as security, the loan is the most junior piece of debt in the company's capital structure," said Standard & Poor's credit analyst. "The loan is being issued at the holding company level and is subordinated to Quintiles Transnational Corp.'s (the operating entity) senior secured debt. Moreover, the loan does not amortize and, if there is no restricted payment capacity available, is subject to the deferral of interest payments through its paid-in-kind (PIK) toggle feature. However, the more than $200 million restricted payment basket supports our view that the deferred interest feature will not likely be invoked." "The ratings on global biopharmaceutical provider Quintiles Transnational Corp. reflect an 'aggressive' financial risk profile characterized by a shareholder-friendly financial policy. This financial policy will result in lease adjusted leverage increasing to 5.1x, from 4.5x at Sept. 30, 2011, pro forma for the proposed term loan that will fund a second debt-funded dividend in less than one year. We believe that adjusted leverage will decline to 4.5x over the near-term. The ratings also reflect Quintiles' 'satisfactory' business risk profile (according to our cirteria), supported by the company's industry-leading market position in the growing contract research industry," S&P said. RESPONSE GENETICS: Regains NASDAQ Compliance -------------------------------------------- Response Genetics, Inc. notified that it has regained compliance with The NASDAQ Capital Market and its minimum market value of listed securities requirement. The Company regained compliance with NASDAQ Marketplace Rule 5550(b)(2) and was notified by NASDAQ that the delisting matter is now closed. Response Genetics, Inc. is focused on the development and sale of molecular diagnostic tests for cancer. RGI's technologies enable extraction and analysis of genetic information from genes derived from tumor samples stored as formalin-fixed and paraffin-embedded specimens. In addition to diagnostic testing services, RGI also generates revenue from the sales of its proprietary analytical pharmacogenomic testing services of clinical trial specimens to the pharmaceutical industry. The Company's headquarters is located in Los Angeles, California. ROUNDY'S SUPERMARKETS: S&P Raises Corp. Credit Rating to 'B+' ------------------------------------------------------------- Standard & Poor's Rating Services raised the corporate credit rating on the Milwaukee-based Roundy's Supermarkets Inc. to 'B+' from 'B' and removed the ratings from CreditWatch with positive implications. This action comes after the company successfully completed its IPO and closed on an $800 million first-lien senior secured credit facility, consisting of a $675 million term loan and a $125 million revolving credit facility. The outlook is stable. "At the same time, we are assigning a 'BB-' issue-level rating, which is one notch above the corporate credit rating, and a '2' recovery rating to the company's senior secured credit facility. The '2' recovery rating indicates our expectation of substantial (70% to 90%) recovery of principal in the event of default," S&P said. "The rating on Milwaukee based-Roundy's reflects our view of the company's business risk profile as 'fair' and its financial risk profile as 'highly leveraged' under our criteria," said Standard & Poor's credit analyst Charles Pinson-Rose. He added, "We believe that Roundy's will have modest but steady profit growth that will lead to credit metric enhancement." "The outlook is stable and incorporates our expectation that the company will have modest credit ratio enhancement as a result of profit growth and debt reduction with free cash flow. Given the company's stable operating trends, we do not expect a rating action in the near term. However, we may consider a higher rating if the company can improve leverage to about 4.6x, though we would want to be confident that the company's financial policies would allow leverage to remain below that threshold. Such a scenario could occur in about two to three years with about 13% EBITDA growth and a debt reduction of $110 million. Conversely, we could lower our rating if leverage weakened to 5.7x or lower. Such a scenario could occur in 2012 with an approximate 10% decline in EBITDA, which could occur if sales grew only 3% and operating margins contracted 50 basis points," S&P said. RSC EQUIPMENT: S&P Keeps 'B-' Corp. Credit Rating on Watch Neg. --------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B-' issue rating on RSC Equipment Rental Inc.'s senior unsecured debt on CreditWatch with positive implications. The corporate credit rating on RSC remains on CreditWatch with negative implications pending the completion of its acquisition by United Rentals Inc. (URI) in the second quarter of 2012. "The positive CreditWatch listing of RSC's senior unsecured debt reflects our expectation that recovery prospects for these issues will improve once the acquisition closes," said Standard & Poor's credit analyst John Sico. "URI has indicated that it will assume RSC's existing unsecured debt--consisting of three outstanding issues--when the transaction closes in the second quarter. Our action is based on URI's recently proposed capital structure and because ultimately this debt would rank pari passu with all of URI's present and proposed unsecured debt (which we rate 'B')," S&P said. "We expect to resolve the CreditWatch and address the unsecured debt ratings when the transaction closes. We will also resolve the CreditWatch on the corporate credit rating at that time," Mr. Sico said. SAVANNAH OUTLET: Can Access Lender Cash Collateral Until April 30 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Georgia authorized Savannah Outlet Shoppes, LLC, to continue using cash collateral until April 30, 2012. Comm 2006-C8 Gateway Boulevard Limited Partnership is amenable to the continued use of cash collateral provided that such use is in accordance with the budget, a full-text copy of which is available for free at: http://bankrupt.com/misc/SAVANNAH_Aprilbudget.pdf About Savannah Outlet Shoppes Claremont, California-based Savannah Outlet Shoppes, LLC, owns and operates a business related to the management and leasing of a commercial shopping center located in Savannah, Georgia. Savannah Outlet filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ga. Case No. 10-42135) on Oct. 4, 2010. Karen F. White, Esq., at Cohen Pollock Merlin & Small PC, represents the Debtor. The Debtors' professionals include Bulovic Law Firm, LLC, as local co-counsel, and Steven H. Spears as accountant. The Debtor estimated assets and debts at $10 million to $50 million. SAVANNAH OUTLET: Case Dismissal Hearing Moved to April 17 --------------------------------------------------------- The Bankruptcy Court has continued to April 17, 2012, at 11:00 a.m., the hearing on the motion by Comm 2006-C8 Gateway Boulevard Limited Partnership to dismiss the Chapter 11 case of Savannah Outlet Shoppes, LLC. The hearing was originally scheduled on Feb. 14, 2012. In its Motion to Dismiss, Comm 2006-C8 asserted that the Debtor's case is essentially a two party case and that the Debtor has taken too long to file a chapter 11 plan and disclosure statement. As reported by the TCR on Aug. 15, 2011, Comm 2006-C8 claims to hold a first priority debt deed on the Debtor's real estate securing a claim of approximately $9.5 million. About Savannah Outlet Shoppes Claremont, California-based Savannah Outlet Shoppes, LLC, owns and operates a business related to the management and leasing of a commercial shopping center located in Savannah, Georgia. Savannah Outlet filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ga. Case No. 10-42135) on Oct. 4, 2010. Karen F. White, Esq., at Cohen Pollock Merlin & Small PC, represents the Debtor. The Debtors' professionals include Bulovic Law Firm, LLC, as local co-counsel, and Steven H. Spears as accountant. The Debtor estimated assets and debts at $10 million to $50 million. SEARS HOLDINGS: Incurs $2.4 Billion Net Loss in Jan. 28 Quarter --------------------------------------------------------------- Sears Holdings Corporation reported a net loss of $2.40 billion on $12.48 billion of merchandise sales and services for the 13 weeks ended Jan. 28, 2012, compared with net income of $382 million on $13 billion of merchandise sales and services for the 13 weeks ended Jan. 29, 2011. The Company reported a net loss of $3.14 billion on $41.56 billion of merchandise sales and services for the 52 weeks ended Jan. 28, 2012, compared with net income of $150 million on $42.66 billion of merchandise sales and services for the 52 weeks ended Jan. 29, 2011. The Company's balance sheet at Jan. 28, 2012, showed $21.38 billion in total assets, $17.04 billion in total liabilities and $4.34 billion in total equity. Lou D'Ambrosio, Sears Holdings' Chief Executive Officer and President, said, "We are taking immediate actions to address our fourth quarter performance including cost and inventory reductions, honed and targeted marketing, margin actions, and bringing in new talent to strengthen our merchandising and leadership team, like Ron Boire, who was recently named Chief Merchant and President, Sears and Kmart Formats." A full-text copy of the press release is available for free at: http://is.gd/qrl2wU About Sears Holdings Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- is the nation's fourth largest broadline retailer with more than 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a 94% stake in Sears Canada and an 80.1% stake in Orchard Supply Hardware. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. Kmart completed its merger with Sears on March 24, 2005. Negative Outlook Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Ill.-based Sears Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with negative implications on Dec. 28, 2011. We are also lowering the short-term and commercial paper rating to 'C' from 'B-2'. The rating outlook is negative," S&P said. "The corporate credit rating reflects our projection that Sears' EBITDA will be negative in 2012, given our expectations for continued sales and margin pressure," said Standard & Poor's credit analyst Ana Lai. She added, "We further expect that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses." Moody's Investors Service in January 2012 lowered Sears Holdings Family and Probability of Default Ratings to B3 from B1. The outlook remains negative. At the same time Moody's affirmed Sears' Speculative Grade Liquidity Rating at SGL-2. The rating action reflects Moody's expectations that Sears will report a significant operating loss in fiscal 2011. Moody's added that the rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers. SEARS HOLDINGS: Poor 2011 Results Trigger Company Transformation ---------------------------------------------------------------- Sears Holdings Corporation intends to separate its Sears Hometown and Outlet Businesses and certain hardware stores through a proposed rights offering that is expected to raise approximately $400 million to $500 million. The Company's poor financial results in 2011 underscore the need to accelerate the transformation of the Company. In a letter addressed to shareholders, Edward S. Lampert, the Company's Chairman, said that the goal of the transaction is to allow each business to pursue its own strategic opportunities and to achieve a focus that is often difficult as part of a large company undergoing significant change. Mr. Lampert added that the transaction: (1) strengthens Sears Holdings' balance sheet and liquidity; (2) provides the separated Hometown and Outlet stores businesses flexibility to pursue their strategic and financial objectives; and (3) provides Sears Holdings' shareholders the choice to hold shares in both companies or in either company separately. "We do not intend to sit idly by and have it be business as usual. We will make the difficult decisions required to position Sears Holdings for the future and we will not accept such poor performance without making substantial adjustments. We have a portfolio of businesses and assets that deserve to generate substantial value for our shareholders. The adjustments and actions we intend to take will reduce the risk of downside scenarios playing out and will be informed by understanding and appreciating what type of profit performance we need to deliver on our investment in these assets." Proceeds from the share subscription will provide additional liquidity to Sears Holdings and are expected to be used for general corporate purposes. Mr. Lampert has advised the Company that ESL, which is Sears Holdings' largest shareholder, intends to exercise its subscription rights in full at the anticipated valuation, subject to the successful completion of the transaction process. About Sears Holdings Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- is the nation's fourth largest broadline retailer with more than 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a 94% stake in Sears Canada and an 80.1% stake in Orchard Supply Hardware. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. Kmart completed its merger with Sears on March 24, 2005. The Company reported a net loss of $3.14 billion on $41.56 billion of merchandise sales and services for the 52 weeks ended Jan. 28, 2012, compared with net income of $150 million on $42.66 billion of merchandise sales and services for the 52 weeks ended Jan. 29, 2011. The Company's balance sheet at Jan. 28, 2012, showed $21.38 billion in total assets, $17.04 billion in total liabilities and $4.34 billion in total equity. Negative Outlook Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Ill.-based Sears Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with negative implications on Dec. 28, 2011. We are also lowering the short-term and commercial paper rating to 'C' from 'B-2'. The rating outlook is negative," S&P said. "The corporate credit rating reflects our projection that Sears' EBITDA will be negative in 2012, given our expectations for continued sales and margin pressure," said Standard & Poor's credit analyst Ana Lai. She added, "We further expect that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses." Moody's Investors Service in January 2012 lowered Sears Holdings Family and Probability of Default Ratings to B3 from B1. The outlook remains negative. At the same time Moody's affirmed Sears' Speculative Grade Liquidity Rating at SGL-2. The rating action reflects Moody's expectations that Sears will report a significant operating loss in fiscal 2011. Moody's added that the rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers. SEMTECH CORP: S&P Assigns Prelim. 'BB' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Rating Services assigned a preliminary 'BB' corporate credit rating to Semtech Corp. "Concurrently, we assigned a preliminary 'BBB-' issue-level rating to Semtech Corp.'s proposed $100 million term loan A and $250 million term loan B, both due 2017. The recovery rating is '1', reflecting our expectation for very high (90% to 100%) recovery of principal in the event of default. The outlook is stable," S&P said. "The ratings on Semtech reflect our expectation that the company's expanded product and market position and good communications industry growth prospects will support continued revenue growth and consistent profitability, despite near-term integration risks," said Standard & Poor's credit analyst John Moore. He added, "In addition, we expect Semtech to maintain leverage appropriate for the rating, even with a moderately acquisitive growth strategy." "The stable outlook reflects our expectation that Semtech will successfully integrate Gennum's business and maintain profitability while maintaining no less than $150 million cash balances and leverage below 3x. Upgrade potential is currently constrained by the company's near-term integration risks and lack of a track record operating at its current scale. A downgrade would likely be the result of a more aggressive financial policy, including increased acquisition activity and shareholder returns, or deterioration in operating performance due to competition or macroeconomic trends, resulting in cash balances declining below $150 million or sustained leverage in the mid-3x area," S&P said. SHANTA CORPORATION: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Shanta Corporation dba St. Anne's Convalescent Center 721 Elmwood Troy, MI 48083 Bankruptcy Case No.: 12-43956 Chapter 11 Petition Date: February 22, 2012 Court: U.S. Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Thomas J. Tucker Debtor's Counsel: Brendan G. Best, Esq. SCHAFER AND WEINER, PLLC 40950 Woodward Avenue, Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 E-mail: bbest@schaferandweiner.com - and ? Michael E. Baum, Esq. SCHAFER AND WEINER, PLLC 40950 Woodward Avenue, Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 E-mail: mbaum@schaferandweiner.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/mieb12-43956.pdf The petition was signed by Bradley Mali, president. Affiliates that filed separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Cadillac Nursing Home, Inc. 12-43957 02/22/12 St. Jude Nursing Center, Inc. 12-43959 02/22/12 St. Michael Nursing Center, Inc. 10-52146 04/13/10 SHASTA LAKE: Files Amended Plan of Reorganization ------------------------------------------------- Shasta Lake Resorts, LP submitted to the U.S. Bankruptcy Court for the Eastern District of California a First Amended Plan of Reorganization dated Jan. 30, 2012. According to the Plan, the Debtor proposes to pay creditors from future revenue and to the extent necessary, from the sale of certain assets of the Debtor. The Plan provides for two classes of secured claims, 5 classes of unsecured claim; and 1 class of equity security holders. Unsecured creditors holding allowed claims will receive distributions, valued at 100 percent of allowed claims. The Plan also provides for the payment of administrative and priority claims. A full-text copy of the Amended Plan is available for free at http://bankrupt.com/misc/SHASTA_LAKE_plan_1stamended.pdf About Shasta Lake Lodi, California-based Shasta Lake Resorts LP, also known as houseboats.com, is a leading supplier of luxury houseboat rentals in Northern California, operating a fleet of approximately 65 houseboats primarily out of its Jones Valley Resort on Shasta Lake and its New Melones Lake Marina. SLR offers a full service dock at both Jones Valley Resort and New Melones Lake Marina, with overnight and year round moorage and small boat and accessory rentals. SLR also operates floating stores, which sell everything its customers may want to complete their houseboating experience, including grocery items, bait and tackle, water sports and marine items, unique gifts and apparel. SLR offers slip rentals at Sugarloaf Resort on Shasta Lake. Shasta Lake disclosed $11,711,440 in assets and $6,796,283 in liabilities as of the Chapter 11 filing. SLR filed voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Calif. Case No. 11-37221) on July 13, 2011. Judge Christopher M. Klein is assigned to the case. Jamie P. Dreher, Esq., at Downey Brand LLP, in Sacramento, California, represents SLR. SHENGDATECH INC: Wants Plan Filing Exclusivity Until June 18 ------------------------------------------------------------ ShengdaTech, Inc., seeks entry of an order from the Bankruptcy Court further extending its exclusive periods within which to file and solicit acceptances of a Chapter 11 plan by an additional 90 days, to June 18, 2012, for filing a Chapter 11 plan and September 12, 2012 for soliciting acceptances to the plan. Under the order approving the first extension motion, the Debtor's exclusive period to file a plan currently expires on March 19, 2012, and its exclusive solicitation period expires on June 14, 2012. Though the Debtor has made progress, given the unique complexities of the Chapter 11 case, including issues related to the recovery of assets in the People's Republic of China, the Debtor needs additional time to develop and negotiate a plan of reorganization with its key creditor constituencies, including the Committee, other key constituencies and the Securities and Exchange Commission. About ShengdaTech Headquartered in Shanghai, China, ShengdaTech, Inc., makes nano precipitated calcium carbonate for the tire industry. ShengdaTech converts limestone into nano-precipitated calcium carbonate (NPCC) using its proprietary and patent-protected technology. NPCC products are increasingly used in tires, paper, paints, building materials, and other chemical products. In addition to its broad customer base in China, the Company currently exports to Singapore, Thailand, South Korea, Malaysia, India, Latvia and Italy. ShengdaTech sought Chapter 11 bankruptcy protection from creditors (Bankr. D. Nev. Case No. 11-52649) on Aug. 19, 2011, in Reno, Nevada, in the United States. The Shanghai-China based company said in its bankruptcy filing it would fire all of its officers and restructure to try to recover from an accounting scandal. The Company disclosed US$295.4 million in assets and US$180.9 million in debt as of Sept. 30, 2011. The Company's legal representative in its Chapter 11 case is Greenberg Traurig, LLP. On Aug. 23, 2011, the Court entered an interim order confirming the Board of Directors Special Committee's appointment of Michael Kang as the Debtor's chief restructuring officer. Alvarez & Marsal North America, LLC, is the Company's chief restructuring officer. As reported in the TCR on Sept. 7, 2011, the United States Trustee appointed AG Ofcon, LLC, The Bank of New York, Mellon (in its role as indenture trustee for bondholders), and Zazove Associates, LLC, to serve on the Official Committee of Unsecured Creditors of ShengdaTech, Inc. Hogan Lovells US serves as counsel for ShengdaTech's official committee of unsecured creditors. SOLYNDRA LLC: Headquarters Could Land Foreign Buyer, Brokers Say ---------------------------------------------------------------- Natalie Rodriguez at Bankruptcy Law360 reports that the Fremont, Calif., headquarters of Solyndra LLC went up for sale Wednesday under the care of real estate broker Jones Lang LaSalle Brokerage Inc., which is casting a wide net to find a buyer. Site tours for the LEED Gold-certified property, which includes 37,210 square feet of office space and a 22-megawatt plant, started February 22, according to Bart Lammersen, who is part of the JLL team spearheading the project, Law360 relates. About Solyndra LLC Founded in 2005, Solyndra LLC is a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. In the Chapter 11 cases, the Debtors are pursuing a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors are unable to identify any such potential buyers, an orderly liquidation of the Debtors' assets for the benefit of their creditors. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Solyndra LLC. The Committee has tapped Blank Rome LLP as counsel. Solyndra is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are Evergreen Solar and start-up Spectrawatt Inc., both of which filed in August, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. Solyndra did not receive acceptable offers to buy the business as a going concern. It is going ahead with plans for piecemeal auctions of the assets to begin Feb. 22. Solyndra auctioned non-core assets and obtained $6.2 million. Solyndra also took in $1.86 million from the sale of miscellaneous equipment. Solyndra LLC retained the exclusive right for filing a Chapter 11 plan until April 3. SOVRAN LLC: Court Approves Schwabe Williamson as Counsel -------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Washington authorized Sovran LLC to employ Schwabe, Williamson & Wyatt, P.C. as counsel nunc pro tunc Oct. 21, 2011. As reported in the Troubled Company Reporter on Feb. 16, 2012, the Debtor related that the Court approved the employment of Bullivant Houser Bailey PC as counsel for the Debtor. However, Richard G. Birinyi, Esq. and Lawrence Ream, Esq., the two primary attorneys at Bullivant who were handling the Chapter 11 case have switched firms and now practiced at Schwabe Williamson. The Debtor desired to continue to employ Messrs. Birinyi and Ream and their new firm. The firm agreed to represent the Debtor in its bankruptcy proceedings and perform related legal services. The firm is not a prepetition creditor of the Debtor. To the best of the Debtor's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the bankruptcy Code. About Sovran LLC Sovran LLC, is a development company that was formed to acquire and develop a large commercial piece of real property located between Military Road and Interstate 5, in Winlock, Washington. Sovran filed a Chapter 11 petition (Bankr. W.D. Wash. Case No. 11-45107) on June 23, 2011. Richard G. Birinyi, Esq., and Lawrence R. Ream, Esq., at Bullivant Houser Bailey PC, in Seattle, Washington, serve as counsel. In its schedules, the Debtor disclosed $18,968,289 in assets and $11,619,450 in liabilities. The Debtor's Plan provides for the marketing of the property and obtaining sales of all or any part of the property. The liens securing claims will be modified in accordance with the Bankruptcy Code's provisions to permit sales of partial parcels, with deed release provisions specifying the amount to be paid to the holders of secured claims based on a certain price per square foot. SP NEWSPRINT: Can Pay ACE's Surety Bonds from Cash Collateral ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized SP Newsprint Holdings LLC, et al., to enter into an agreement with, and to provide certain cash collateral to, Westchester Fire Insurance Company, one of the ACE USA Group of companies, or its affiliates in connection with new surety bonds and related undertakings by ACE Insurance. The Debtors related that in the ordinary course of their business have provided surety bonds or other methods of indemnification to the counties, but these arrangements have begun to expire according to their terms. For example, a $250,000 letter of credit that the Debtors provided in favor of Prince William County prior to the Petition Date has expired. The Debtors are required to replace these surety arrangements as and when they become due, to ensure that there are no disruptions in their operations at the applicable county and to otherwise protect the value of their assets there. To that end, Prince William County has informed the Debtors that it will no longer permit the Debtors to continue operating at their facility located there unless the Debtors provide it with a new surety bond in the amount of $250,000. Similarly, Clay County has required that the Debtors increase the amount of the surety bond in its favor from $10,000 to $30,000. The Debtors have arranged with ACE Insurance to provide the counties with the new required surety bonds or other similar indemnity undertakings, pursuant to an agreement. As a condition to its furnishing the surety bonds, ACE Insurance is requiring that the Debtors provide it with cash collateral in the amount of the bonds. Specifically, in connection with Prince William County, ACE Insurance will provide a new surety bond in the amount of $250,000 in exchange for an equal amount of new cash collateral from the Debtors. Also, ACE Insurance will increase the amount of the bond from $10,000 to $30,000 in connection with Clay County in exchange for a corresponding $20,000 increase in cash collateral from the Debtors. The Debtors noted that the amounts of cash collateral to be provided to ACE Insurance are included in the Debtors' approved budget under their DIP credit agreement. 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. SP NEWSPRINT: Has Until June 12 to Propose Chapter 11 Plan ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended SP Newsprint Holdings LLC, et al.'s exclusive periods to file and solicit acceptances for the proposed Chapter 11 Plan until June 12, 2012, and Aug. 11, respectively. 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. SP NEWSPRINT: Court Establishes March 23 as Claims Bar Date ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has established March 23, 2012, at 4:00 p.m., (EDT) as the deadline for any individual or entity to file proofs of claim against SP Newsprint Holdings LLC, et al. The Court also set May 18, at 4:00 p.m., as the governmental bar date. All entities filing proofs of claim must deliver their completed proof of claim forms to these addresses: if by mail: GCG, Inc. Attn: SP Newsprint Holdings LLC., Claims Processing P.O. Box 9840 Dublin, OH 43017-5740 if by hand delivery or overnight courier: GCG, Inc. Attn: SP Newsprint Holdings LLC., Claims Processing 5151 Blazer Parkway, Suite A Dublin, OH 43017 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. SP NEWSPRINT: Lease Decision Period Extended Until June 12 ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended until June 12, 2012, SP Newsprint Holdings LLC, et al.'s time to assume or to reject non-residential real property leases. As reported in the Troubled Company Reporter on Feb. 8, 2012, the Debtors' initial period to assume or to reject the leases is scheduled to expire on March 14. The Debtors explained that they are starting to market their assets to potential purchasers. Although no one lease is the Debtors' primary asset, the SP Leases as a whole are important to the Debtors' value as a going concern, and the Debtors expect that potential buyers will have varying opinions regarding the SP Leases, and while some potential buyers may wish to acquire some or all of the SP Leases, others may have different intentions. The Debtors submitted that their ability to assume or to reject the SP Leases will have a material impact on any potential bidder's valuation of the Debtors' assets, and accordingly, the Debtors believe that assumption or rejection at this time is premature and would be detrimental to their sale process. About SP Newsprint Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers, Southeastern Paper Recycling and SP Newsprint Merger LLC -- and three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011. SP Newsprint Holdings LLC is a newsprint company controlled by polo-playing mogul Peter Brant. It is one of the largest producers of newsprint in North America. SP Recycling Corporation, a Georgia corporation and the Debtors' other operating company, was established in 1980 as a means for SP to secure a ready supply of recycled fiber, a key raw material for its newsprint. SP Newsprint is the second Brant-owned newsprint company to tumble into bankruptcy proceedings in recent years. Current and former affiliated entities are Bear Island Paper Company, L.L.C., Brant Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint, Inc., White Birch Paper Company. Judge Christopher S. Sontchi presides over the case. Joel H. Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr., Esq. -- jlevitin@cahill.com , mpeleg@cahill.com and rstieglitz@cahill.com -- at Cahill Gordon & Reindel LLP serve as the Debtors' lead counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq. -- kaufman@rlf.com and collins@RLF.com -- at Richards, Layton & Finger, P.A., serve as the Debtors' Delaware counsel. AlixPartners LLP serves as the Debtors' financial advisors and The Garden City Group Inc. serves as the Debtors' claims and noticing agent. 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. ST. JUDE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: St. Jude Nursing Center, Inc. 721 Elmwood Troy, MI 48083 Bankruptcy Case No.: 12-43959 Chapter 11 Petition Date: February 22, 2012 Court: U.S. Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Thomas J. Tucker Debtor's Counsel: Brendan G. Best, Esq. SCHAFER AND WEINER, PLLC 40950 Woodward Avenue, Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 E-mail: bbest@schaferandweiner.com - and ? Michael E. Baum, Esq. SCHAFER AND WEINER, PLLC 40950 Woodward Avenue, Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 E-mail: mbaum@schaferandweiner.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/mieb12-43959.pdf The petition was signed by Bradley Mali, president. Affiliates that filed separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Cadillac Nursing Home, Inc. 12-43957 02/22/12 Shanta Corporation 12-43956 02/22/12 St. Michael Nursing Center, Inc. 10-52146 04/13/10 SUNGARD DATA: Fitch Lifts Issuer Default Rating to 'B+' ------------------------------------------------------- SunGard Data Systems (SunGard) announced that it will call its $500 million in 10.625% senior unsecured notes due 2015. This follows the company's recently launched amend and extend transaction to extend the maturity date of up to $1 billion of the $1.3 billion of Term Loans due in 2014 to Feb. 28, 2017 and renew its $880 million revolving credit facility to a new maturity of November 2016. SunGard is also asking to amend its senior secured Credit Agreement to allow for the potential spin-off of the Availability Services (AS) business segment and to modify certain other provisions of the credit agreement. Fitch has upgraded SunGard's Issuer Default Rating (IDR) to 'B+' from 'B' with a Stable Outlook. This reflects the reduced leverage resulting from the company's decision to call its 2015 notes which is also solid evidence of management's intent to reduce leverage through free cash flow generation This follows SunGard's recently completed divestiture of the majority of its Higher Education business segment for $1.8 billion in January 2012. SunGard utilized $1.2 billion of net proceeds from the transaction to reduce its term loans. As a result of this transaction and pro forma for the 2015 note redemption, Fitch estimates that leverage will have decreased from 6.3 times (x) at December 2011 to 4.9x once the redemption is complete on April 2, 2012. Free cash flow to total adjusted debt (adjusted for operating leases) will be near 5% following the transaction. Fitch has also upgraded the Recovery Ratings (RRs) for SunGard's senior secured credit facility and term loan to 'BB+/RR1' from 'BB-/RR2'. This reflects the reduction in senior secured indebtedness following the term loan paydown in January, resulting in a higher recovery assumption, plus the higher IDR. SunGard continues to move forward with the planned spin-off of its AS business. believes it is management's intention to keep leverage at or below current levels for the remaining entity (RemainCo) although the ultimate capital structure of both AS and RemainCo is uncertain. It is possible that the AS transaction might not occur or, if it does, that leverage at RemainCo actually increases post-transaction. If either scenario were to occur, the ratings would be reevaluated for potential negative action. Fitch believes that a resolution to the planned spin of AS may not occur until mid-2013. In that regard, SunGard's business continues to face headwinds. In the latest quarter (end December 2011), organic revenue growth was -3% for both business segments (AS and Financial Services). AS revenue has been flat to modestly negative for three years running. order for the proposed AS spin and public equity offering of RemainCo to occur, Fitch believes that these trends would need to stabilize. That said, SunGard continues to generate positive cash flow and Fitch believes it is management's intention to continue to use cash generation to reduce debt going forward. Total debt at Dec. 31, 2011 and pro forma for the use of proceeds from the HE sale to reduce term loan indebtedness was $6.6 billion and consisted primarily of: 1) $3.05 billion of senior secured term loans, of which approximately $1.3 billion expires 2014 and $1.7 billion expires 2016; 2) $200 million outstanding under the company's on-balance-sheet accounts receivable (AR) securitization facility, which matures in September 2014; 3) approximately $242 million of 4.875% senior notes due 2014 ($250 million at maturity), which were originally unsecured when issued in 2004 but which became secured by real property in the leveraged buyout (LBO); 4) approximately $496 million of 10.625% senior unsecured notes due 2015 ($500 million at maturity which, as referenced above are being redeemed in full on April 2, 2012); 5) $900 million of 7.375% senior unsecured notes due 2018; 6) $700 million 7.625% senior unsecured notes due 2020; and 7) $1 billion of 10.25% senior subordinated notes due 2015. As of Dec. 31, 2011, Fitch believes SunGard's liquidity position was sufficient given the company's minimal near-term debt service needs. Liquidity consisted of $868 million of cash (approximately 30% of which is located outside the U.S. and subject to repatriation tax) and approximately $850 million available under its $880 million revolving credit facility (RCF) which expires May 2013. SunGard also has approximately $90 million of availability under its aforementioned AR securitization facility. is further supported by annual free cash flow, which Fitch expects will be at least $300 million in 2012, given expectations for flat operating profit. SunGard's RRs reflect Fitch's belief that the company would be reorganized rather than liquidated in a bankruptcy scenario, given Fitch's estimates that the company's ongoing concern value is significantly higher than its projected liquidation value, due mostly to the significant value associated with SunGard's intangible assets. estimating ongoing concern value, Fitch applies a valuation multiple of 5x to the company's discounted EBITDA. discounts SunGard's pro forma LTM operating EBITDA of $1.2 billion by 22%, approximately corresponding to the EBITDA level that would breach the company's leverage covenant in the secured credit agreement. After reductions for administrative and cooperative claims, Fitch arrives at an adjusted reorganization value of approximately $4.8 billion. Based upon these assumptions, the senior secured debt, including $880 million revolving credit and $3.1 billion of term loan facilities recover approximately 91%-100%, resulting in 'RR1' ratings for both tranches of debt. The senior notes' 'RR4' Recovery Rating reflects the partial security these notes received during the LBO process and Fitch's belief that the secured bank debt is in a superior position due to its right to the company's intellectual property. The 'RR5' Recovery Rating for the $2.1 billion senior unsecured debt reflects Fitch's estimate that 11%- 30% recovery is reasonable, while the 'RR6' Recovery Rating for the $1 billion of subordinated debt reflects Fitch's belief that negligible recovery would be achievable due to its deep subordination to other securities in the capital structure. The following ratings for SunGard have been upgraded: -- IDR to 'B+' from 'B'; -- $3.05 billion senior secured term loan due 2014 and 2016 to 'BB+/RR1' from 'BB-/RR2'; -- $880 million senior secured RCF due 2013 to 'BB+/RR1' from 'BB-/RR2'; -- $250 million 4.875% senior notes due 2014 to 'B+/RR4' from 'B/RR4'; -- $500 million 10.625% senior unsecured notes due 2015 to 'B/RR5' from 'B-/RR5'; -- $1 billion 10.25% senior subordinated notes due 2015 to 'B-/RR6' from 'CCC/RR6'; -- $900 million 7.375% senior unsecured notes due 2018 to 'B/RR5' from 'B-/RR5'; and -- $700 million 7.625% senior unsecured notes due 2020 to 'B/RR5' from 'B-/RR5'. SUPERMEDIA INC: Board Establishes 2012 STIP Plan, Cash LTI Plan --------------------------------------------------------------- The Compensation Committee of the Board of Directors of SuperMedia Inc., established the performance objectives and other terms of the Company's 2012 Short Term Incentive Plan pursuant to the Company's 2009 Long Term Incentive Plan. The 2012 STI Plan provides for a payment of incentive compensation to each of the Company's executive officers and to other eligible employees. These incentive compensation payments are determined by the Company's achievement of specified performance metrics for 2012, based on: (i) EBITDA, which comprises 70% of the total performance opportunity; and (ii) multi-product ad sales, which comprises 30% of the total performance opportunity. The Committee established the performance objectives and other terms of the Company's 2012 Cash Long-Term Incentive Plan pursuant to the LTIP. The 2012 Cash LTI Plan provides for a payment of incentive compensation to each of the Company's executive officers and to other eligible employees. These incentive compensation payments are determined by the Company's achievement of specified performance metrics for 2012 and 2013, respectively, based on: (i) EBITDA, which comprises 50% of the total performance opportunity; and (ii) multi-product ad sales, which comprises 50% of the total performance opportunity. The Committee also approved grants of restricted stock awards under the LTIP, effective as of Feb. 24, 2012, to certain of the Company's executive officers and to other eligible employees. The restricted stock vests over three years in equal installments of one-third on the first, second, and third anniversaries of the grant date. All unvested shares of restricted stock will immediately terminate upon the employee's termination of employment with the Company for any reason on or before the third anniversary date of the award, except that the Committee, at its sole option and election, may permit the unvested shares not to terminate if the employee is terminated without cause. If a change in control occurs on or before the third anniversary date of the award, all unvested shares of restricted stock will immediately vest. On Feb. 16, 2012, Georgia Scaife, the Company's Executive Vice President -- Human Resources and Employee Administration announced her plans to retire from the Company effective March 31, 2011. A full-text copy of the Form 8-K is available for free at: http://is.gd/QYlcrZ 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 Dec. 31, 2011, showed $1.63 billion in total assets, $2.42 billion in total liabilities and a $788 million total stockholders' deficit. * * * 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: Files Form 10-K, Incurs $771MM Net Loss in 2011 --------------------------------------------------------------- SuperMedia Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $771 million on $1.64 billion of operating revenue for the year ended Dec. 31, 2011, compared with a net loss of $196 million on $1.17 billion of operating revenue during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $1.63 billion in total assets, $2.42 billion in total liabilities and a $788 million total stockholders' deficit. A full-text copy of the Form 10-K is available for free at: http://is.gd/zqgzaY 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. * * * 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: To Utilize up to $31 Million to Buy Back Debt ------------------------------------------------------------- On Nov. 8, 2011, SuperMedia Inc., entered into the Second Amendment to the Loan Agreement, dated as of Dec. 31, 2009, by and among the Company, lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as collateral agent and administrative agent for the lenders. The Amendment, among other things, allows the Company to repurchase and retire debt below par, subject to the procedures and conditions set forth in the Loan Agreement. Under the terms and conditions of the Loan Agreement, the Company has commenced an offer to utilize up to approximately $31,000,000 to repurchase debt at a price of 48% to 53% of par. The offer will expire at 5:00 p.m., New York City time, on Wednesday, Feb. 29, 2012, unless extended by the Company. 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. The Company reported a net loss of $771 million in 2011 and a net loss of $196 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $1.63 billion in total assets, $2.42 billion in total liabilities and a $788 million total stockholders' deficit. * * * 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. TAO-SAHI LP: Plan Confirmation Hearing Continued Until April 5 -------------------------------------------------------------- The Hon. Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas granted Tao-Sahi, LP's motion to extend deadlines and continue settings related to confirmation of the Debtor's Second Amended Plan of Reorganization. The deadlines and dates are set or modified as: a. the estimation hearings for S2 and the FDIC, scheduled for Feb. 16, 2012, be continued until March 7, at 10 a.m. * any response to the motions to estimate will be due on or before Feb. 28. b. the confirmation hearing for the Debtor's proposed plan, scheduled for March 7, be continued until April 5, at 9:30 a.m. c. any objections to the Debtor's proposed plan or confirmation will be due ten days before the confirmation hearing. * additionally, all ballots relating to the Proposed Plan will be due ten days before the confirmation hearing. d. the Debtor will provide notice of the re-scheduled dates and deadlines to parties in interest who received a solicitation package for the Proposed Plan. As reported in the Troubled Company Reporter on Jan. 4, 2012, funding for the Plan payments will be from the Reorganized Debtor's operations, recoveries from the August 12, 2011 adversary complaint the Debtor commenced against Specialty Finance Group LLC, and a $700,000 contribution from the Debtor's current or new Interest Holders. The business of the Reorganized Debtor will continue to be managed by its general partner, TAO Development, through Clayton Isom and Rashid Al-Hmoud, CEO and CFO of TAO Development. TAO Development will continue to receive its asset management fee of 1.5% of gross revenue of the Reorganized Debtor to defray its overhead and expenses after all Plan payments and other other obligations for any given month are paid in full. The Debtor will assume the existing management agreement with HMC Hospitality Operating Company for operation of the Hotel. Staffing for the Hotel will continue to be provided by Corporate Solutions and the Republic Entities. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/tao-sahi.doc156.pdf About Tao-Sahi LP Tao-Sahi LP owns the Holiday Inn NW - Seaworld in San Antonio, Texas. Tao-Sahi has no employees. The Hotel is managed under contract with an independent management company. Tao-Sahi filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-52027) on June 7, 2011, to stay foreclosure of the hotel and restructure its debts. Judge Ronald B. King presides over the case. Marvin E. Sprouse, III, Esq., and Jack Skaggs, Esq., at Jackson Walker LLP, in Austin, Tex., serve as bankruptcy counsel. Bolton Real Estate Consultants, Ltd., serves as the Debtor's appraiser. In its Schedules, the Debtor disclosed $24,735,728 in assets and $20,584,065 in debts. The petition was signed by Clayton Isom, CEO of Tao Development Group, LLC, general partner. S2 Acquisition LLC, an opportunity fund associated with Square Mile Capital Management in New York, acquired the hotel debt from the failed Silverton Bank. S2 Acquisition is represented by Tom Rogers, Esq., and Shari L. Heyan, Esq., at Greenberg Traurig. No trustee, examiner or committee of creditors has been appointed in this case. TECHNEST HOLDINGS: To Borrow $100,000 from Khaldoon Aljerian ------------------------------------------------------------ Technest Holdings, Inc., on Feb. 21, 2012, entered into a loan agreement with Mr. Khaldoon Aljerian pursuant to which the Company entered into a convertible promissory note to borrow $100,000 from Mr. Aljerian and agreed to issue Mr. Aljerian a five-year warrant to purchase 1,000,000 shares of Technest Common Stock, par value $.001 per share at an exercise price of $0.01 per share. The Note bears an interest rate of 5% per annum and shall be paid on or before Aug. 16, 2013. The entire principal amount of the Note may be converted into shares of Technest Common Stock at the election of Mr. Aljerian at any time. The number of shares into which the entire principal amount of the Note may be converted into is determined by dividing the entire principal amount of the Note outstanding by the closing bid price on the trading day immediately prior to the Company's receipt of the conversion notice; provided that in no event will the per share price be less than $0.01 per share. The Company has the option of paying the accrued and unpaid interest on the Note with shares of Technest Common Stock at the closing bid price immediately prior to the due date. The Company granted piggyback registration rights for the shares of common stock underlying the warrant and the shares of common stock issuable pursuant to the Note. The issuance and sale of the securities to Mr. Aljerian was not registered under the Securities Act of 1933, and was made in reliance upon the exemptions from the registration requirements of the Securities Act set forth in Section 4(2) thereof. On Feb. 17, 2012, the Company received a written consent in lieu of a meeting of the holders of the majority of the Common Stock of the Company, holding in the aggregate approximately 52.96% of the total voting power of all issued and outstanding voting capital of the Company. The Majority Stockholders authorized (i) the change in the name of the Company from Technest Holdings, Inc. to AccelPath, Inc.; (ii) the change in the domicile of the Company from Nevada to Delaware and (iii) the ratification of the Technest Holdings, Inc. 2011 Equity Incentive Plan. As such, the Company plans to file a Schedule 14C to inform all shareholders of the Name Change, Reincorporation Merger and ratification of the Plan. Additionally, the Company also intends to file the requisite Issuer Company Related Action Notification form with FINRA to properly affect the Name Change and Reincorporation Merger, as soon as practicable. About Technest Holdings Bethesda, Md.-based Technest Holdings, Inc., has two primary businesses: AccelPath, which is in the business of enabling pathology diagnostics and Technest, which is in the business of the design, research and development, integration, sales and support of three-dimensional imaging devices and systems. Wolf & Company, P.C., in Boston, Massachusetts, expressed substantial doubt about Technest Holdings' ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations, has negative cash flows from operations, a stockholders' deficit and a working capital deficit. The Company reported a net loss of $2.9 million on $449,937 of revenues for the fiscal year ended June 30, 2011, compared with a net loss of $325,235 on $0 revenue for the fiscal year ended June 30, 2010. The Company's balance sheet as of Sept. 30, 2011, showed $5.51 million in total assets, $6.21 million in total liabilities and a $700,374 total stockholders' deficit. TRIBUNE CO: Wins Final Approval of Wage Class Action Settlement --------------------------------------------------------------- Tribune Company and Tribune New York Newspaper Holdings, LLC, won final approval by the U.S. Bankruptcy Court for the District of Delaware of a settlement agreement resolving a state court wage litigation captioned James Allen, et al. v. Tribune New York Newspaper Holdings, LLC, et al. On August 24, 2011, the Bankruptcy Court granted preliminary approval of the Settlement Agreement and Release and related settlement class action relief. The Settlement Agreement fully and finally settles and releases all claims under the minimum wage lawsuit before the Supreme Court of New York, County of New York brought by the Plaintiffs on behalf of individuals that promoted or distributed the amNew York newspaper from 2004 to 2007 on a claims-made basis. Under the Settlement Agreement, the defendants will pay a total gross settlement amount of $325,000, of which $275,000 will be contributed by the Debtors and $50,000 will be contributed by the Debtors' co-defendants. The Settlement Agreement also resolves substantial potential liabilities if the Plaintiffs prevailed, as indicated by a $1.5 million class proof claim and 18 individual proofs of claim, each asserting $10,000. The Court-appointed claims administrator, Gilardi & Co., LLC previously implemented the approved claims-made and noticing procedures, whereby Gilardi received 479 timely and valid claims. Holders of those timely and valid claims stand to receive $52,050 in settlement payments. The Debtors are thus authorized to place $275,000 in an escrow account with the claims administrator to fund the total gross settlement amount under the Settlement Agreement no later than 10 business days after the settlement effective date. The Enhanced Service Payments in the aggregate amount of $18,000 as set forth in the Settlement Agreement are also fair and reasonable based on the facts and circumstances of the Lawsuit, the Bankruptcy Court held. The class counsel is thus authorized to allocate the Enhanced Service Awards and those awards may be deducted from the Total Gross Amount. Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, insisted that the Settlement Agreement is now ripe for final approval as a fair, reasonable and adequate settlement that is well within the range of reasonableness, under Rule 23(e) of the Federal Rules of Civil Procedure and Rules 7023 and 9019 of the Federal Rules of Bankruptcy Procedure. The Bankruptcy Court also reaffirmed the settlement class for settlement purposes only and that class certification fully and fairly meets the requirements under Rule 23 of the Federal Rules of Civil Procedure. The Class Claims and Individual Claims filed by Class Counsel on behalf of the Plaintiffs against the Debtors Tribune and Tribune NY will be deemed disallowed and expunged pursuant to the Settlement Agreement and upon entry of the final order. The Bankruptcy Court further held that the distributions and payments authorized under the Settlement Agreement will constitute full and complete satisfaction of any and all claims however arising in relation to the Lawsuit and related claims set forth in the Settlement Agreement. Moreover, the award of attorneys' fees in the amount of 33% of the Total Gross Amount after deduction of costs is also approved and may be deducted from the Total Gross Amount. Likewise, the award of costs is finally approved and may be deducted from the Total Gross Amount in the amount of $18,364, the Bankruptcy Court ruled. The parties will execute a stipulation of discontinuance with prejudice of the Lawsuit, with each party to bear its own costs and fees, which will be filed with the State Court on or before February 21, 2012. The Bankruptcy Court entered the final order after a certification of no objection was filed. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Tribune CRO Don Liebentritt said it is possible the media company could emerge late in the third quarter of 2012. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: File 2015.3 Report as of Dec. 31 -------------------------------------------- On January 25, 2012, Chandler Bigelow III, executive vice president and chief financial officer of Tribune Company, submitted with the Court a report as of December 31, 2011, on the value, operations and profitability of certain entities in which one or more Debtors hold: (i) a combined 100% interest of certain non-debtor entities, and (ii) between a 20% and 50% interest of certain non-debtor entities. Mr. Bigelow relates in the report that the estates of Tribune Company, Tribune Broadcasting Company, TMS Entertainment Guides, Inc., Tribune Media Services, Inc., Los Angeles Times Communications LLC, Chicago Tribune Company, Eagle New Media Investments, LLC, and Tribune Media Net, Inc., hold 100% equity interest in these entities: Net Book Entity Value ------ -------------- Multimedia Insurance Company ($348,000) Riverwalk Center I JV $10,808,000 Tribune (FN) Cable Ventures, Inc. $533,014,000 Tribune Interactive, Inc. $84,241,000 Tribune National Marketing Company $48,329,000 Tribune ND, Inc. $538,414,000 Tribune Receivables, LLC $293,029,000 TMS Entertainment Guides Canada Corp $4,882,000 Tribune Hong Kong Ltd. $83,000 Tribune Media Services B.V. ($6,539,000) Blue Lynx Media Services B.V. $1,047,000 CastTV, Inc. $8,374,000 Mr. Abelow notes that non-majority interest entities have a combined net book value of $2,805. The Debtors have no interest in those entities. The Periodic Report contains a combined and condensed financial report of the operations and profitability of the Non-Majority Interest Entities: Combined Balance Sheets For Non-Majority Entities As of December 31, 2011 Assets Current Assets Cash and cash equivalents $8,513,000 Accounts receivable, net 18,851,000 Inventories 88,000 Prepaid expenses and other 724,000 ----------------- Total current assets 28,176,000 Property, plant and equipment, net 1,698,000 Other Assets Intangible assets, net 157,000 Other investments 235,000 Receivables from related parties 2,954,000 Other 2,321,000 ----------------- Total Assets $35,541,000 ================= Liabilities and Shareholders' Equity Current Liabilities Accounts payable, accrued expenses, and other $18,048,000 ----------------- Total current liabilities 18,048,000 Other obligations 14,688,000 ----------------- Total liabilities 32,736,000 ----------------- Shareholder's Equity 2,805,000 ----------------- Total Liabilities and Shareholders' Equity $35,541,000 ================= Combined Statements of Operations For Non-Majority Entities For Six Months Ended December 31, 2011 Total Revenue $32,352,000 Operating Expenses Cost of sales 9,612,000 Selling, general and administrative 20,374,000 Depreciation and amortization 372,000 ----------------- Total operating expenses 30,358,000 ----------------- Operating Income 1,994,000 ----------------- Interest expense, net (4,000) Non-operating loss, net (2,258,000) ----------------- Income (loss) before income taxes (268,000) ----------------- Income taxes (138,000) ----------------- Net Loss (406,000) ================= Combined Statements of Operations For Non-Majority Entities For Twelve Months Ended December 31, 2011 Total Revenue $63,013,000 Operating Expenses Cost of sales 18,519,000 Selling, general and administrative 40,611,000 Depreciation and amortization 693,000 ----------------- Total operating expenses 59,823,000 ----------------- Operating Income 3,190,000 ----------------- Interest expense, net (10,000) Non-operating loss, net (2,814,000) ----------------- Income (loss) before income taxes 366,000 ----------------- Income taxes (457,000) ----------------- Net Loss ($91,000) ================= Combined Statements of Cash Flows For Non-Majority Entities For Six Months Ended December 31, 2011 Beginning Cash $12,475,000 ----------------- Net Income (406,000) Operating Activities Depreciation and amortization 372,000 Decrease/(increase) in accounts receivable (3,524,000) Increase/(decrease) in current liabilities 5,274,000 Increase/(decrease) in other obligations 40,000 Decrease/(increase) in inventories 59,000 Decrease/(increase) in other assets (19,000) ----------------- 2,202,000 ----------------- Net Cash Flow from operating activities 1,796,000 Investing Activities Capital expenditures (405,000) Investments - ----------------- (405,000) Financing Activities Borrowings from related party 592,000 Distributions to equity owners (5,945,000) ----------------- Net Cash Flow from Financing Activities (5,353,000) ----------------- Net Cash Flow (3,962,000) ----------------- Ending Cash $8,513,000 ================= Combined Statements of Cash Flows For Non-Majority Entities For Twelve Months Ended December 31, 2011 Beginning Cash $10,631,000 ----------------- Net Income (91,000) Operating Activities Depreciation and amortization 693,000 Decrease/(increase) in accounts receivable (4,309,000) Increase/(decrease) in current liabilities 4,188,000 Increase/(decrease) in other obligations 87,000 Decrease/(increase) in inventories 174,000 Decrease/(increase) in other assets (395,000) ----------------- 438,000 ----------------- Net Cash Flow from operating activities 347,000 Investing Activities Capital expenditures (599,000) Investments 1,900,000 ----------------- 1,301,000 Financing Activities Borrowings from related party 2,179,000 Distributions to equity owners (5,945,000) ----------------- Net Cash Flow from Financing Activities (3,766,000) ----------------- Net Cash Flow (2,118,000) ----------------- Ending Cash $8,513,000 ================= Combined Condensed Statement of Changes in Shareholders' Equity for Non-Majority Interest Entities Six-Month period and year ending Dec. 31, 2011 Shareholders' Equity at June 30, 2011 $9,156,000 Net Loss (406,000) Distributions to equity owners (5,945,000) ----------------- Shareholders' Equity at Dec. 31, 2011 $2,805,000 ================= Shareholders' Equity at Dec. 31, 2010 $6,941,000 Net Loss (91,000) Distributions to equity owners (5,945,000) Capital contributions by equity owners 1,900,000 ----------------- Shareholders' Equity at Dec. 31. 2011 $2,805,000 ================= About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Tribune CRO Don Liebentritt said it is possible the media company could emerge late in the third quarter of 2012. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIDENT MICROSYSTEMS: U.S. Trustee Objects to Incentive Plan ------------------------------------------------------------ BankruptcyData.com reports that the U.S. Trustee assigned to the Trident Microsystems case filed with the U.S. Bankruptcy Court an objection to the Debtors' motion for approval of a key employee incentive plan. The Trustee explains, "As set forth in the Motion, one portion of the KEIP would have been earned as long as the set-top box business of the Debtors sold for $45 million or more. Yet, as of the petition date, the Debtors already had a stalking horse bid to purchase the set-top box business for $55 million. Thus, that portion of the KEIP did not provide any incentive to the officers who were to receive such bonuses, and such bonuses were truly retention bonuses to insiders that did not comply with 11 U.S. C. Section 503(c)(1)." About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $309,992,980 in assets and $39,607,591 in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. UNITED RENTALS: S&P Assigns 'BB-' Rating to $650-Mil. Sec. Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned issue and recovery ratings to new note issues of UR Financing Escrow Corp., a subsidiary of U.S.-based construction equipment rental company United Rentals Inc. (URI, B/Positive/--). "We are assigning the $650 million offering of secured notes a 'BB-' rating (two notches higher than the corporate credit rating on URI) and a '1' recovery rating, indicating our expectation that noteholders would receive very high (90%-10%) recovery in the event of a payment default. We are assigning the $1.5 billion offering of senior unsecured notes a 'B' rating (the same as the corporate credit rating on URI) and a '4' recovery rating, indicating average (30%-50%) expected recovery," S&P said. "At the same time, we affirmed the 'B' rating on the existing senior unsecured notes issued by URI subsidiary United Rentals (North America) Inc. (URNA) and removed the issue from CreditWatch with negative implications," S&P said. "Any changes that URI announces to the terms of the proposed notes, including but not limited to debt amounts, could have an impact on our recovery and issue-level ratings for each debt instrument," S&P said. "The proceeds of the new notes will be placed into an escrow account pending URI's acquisition of RSC Holdings Inc. Upon close, URI will use the proceeds to pay the cash portion of the acquisition, refinance RSC's existing senior secured notes, and pay related fees and expenses," S&P said. "The ratings on Greenwich, Conn.-based URI reflect our expectation that URI will likely continue to benefit from improving fundamentals in the equipment rental industry in 2012. Although we expect the acquisition of RSC and $200 million in share repurchases that the company announced in December to increase leverage to more than 5x, synergies and strong demand could allow URI to reduce leverage to less than 5x by the end of 2012," S&P said. Ratings List United Rentals Inc. United Rentals (North America) Inc. Corporate credit rating B/Positive/-- Ratings Assigned UR Financing Escrow Corp. $650 mil. secured notes BB- Recovery rating 1 $1.5 bil. sr unsec notes B Recovery rating 4 Ratings Affirmed, Removed From Watch To From United Rentals (North America) Inc. Senior unsecured B B/Watch Neg Recovery rating 4 4 UNITED STATES OIL: To Pay $650,000 Trentelman P-Note on June 30 --------------------------------------------------------------- United States Oil and Gas Corp amended its Promissory Note with an outstanding principal amount of $650,000 dated April 9, 2009, issued to J.B. Trentelman. The Company agreed to pay Mr. Trentelman all principal and outstanding interest due under the Note at June 30, 2012, rather than on Dec. 31, 2011. Interest on the Note will remain 8% until it matures. About United States Oil United States Oil and Gas Corp. OTC QB: USOG) -- http://www.usaoilandgas.com/-- is an oil and gas products, services and technology company headquartered in Austin, Texas. Through its subsidiaries, the Company markets and distributes refined oil and gas (diesel, gasoline, propane, high octane racing fuels and lubricants) to wholesale and retail customers in the United States. The Company reported a net loss of $1.3 million in 2010 and a net loss of $1.5 million in 2009. The Company reported a net loss of $2.37 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $6.35 million in total assets, $7.43 million in total liabilities, and a $1.07 million total stockholders' deficit. As reported in the TCR on April 27, 2011, M&K CPAS, PLLC, in Houston, Texas, expressed substantial doubt about United States Oil and Gas Corp.'s ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has accumulated losses resulting in an accumulated deficit as of Dec. 31, 2010. VANTIV LLC: S&P Puts 'B+' Corporate Credit Rating on Watch Pos. --------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' corporate credit rating on Symmes Township, Ohio-based Vantiv LLC on CreditWatch with positive implications. "We also assigned the company's proposed first-lien senior secured credit facilities (consisting of a $250 million revolver, $1 billion term loan A, and $465 million term loan B) our preliminary 'BBB-' issue-level rating. The preliminary recovery rating on this debt is '1', indicating our expectation of very high (90%-100%) recovery for lenders in the event of a payment default," S&P said. "The issue-level rating on the existing first-lien senior secured credit facilities remains unchanged at 'BB-' and the recovery rating remains at '2', indicating our expectation of 70% to 90% recovery in the event of a payment default. We will withdraw these ratings if and when the company completes the proposed refinancing," S&P said. "The CreditWatch listing follows Vantiv's clarification over the timing and potential size of its planned IPO. The company is targeting a March 2012 launch of an IPO (we expect primary proceeds will not exceed $500 million), which it intends to use to partially repay existing first-lien lenders. Simultaneously, and contingent upon successful execution of an IPO, Vantiv will enter into new first-lien senior secured credit facilities to complete the refinancing of its existing debt. Based upon these events, we expect our calculation of pro forma adjusted leverage to decline to the low-3x area from the current low-4x area. Furthermore, the IPO would revise the current ownership structure and alter our view that sustained deleveraging is unlikely. Therefore, given the lower leverage range and our assessment of the company's business risk profile as 'fair' (based on our criteria), we would expect to raise our corporate credit rating on the company to 'BB' from 'B+' with the closing of the IPO/refinancing. (Our assessment of Vantiv's business risk will not change as a part of these transactions)," S&P said "Our expectation for a higher recovery value on the new first-lien credit facilities than on the existing ones reflects our assumption of less debt outstanding at the time of default in our simulated default scenario. Also, we have revised our recovery valuation slightly upwards to reflect better-than-expected performance, a completed transition from Fifth Third Bank, and a successful integration of National Processing Company," S&P said. "If the company receives less than $300 million in IPO proceeds, resulting in higher-than-expected post-IPO leverage, we may not raise the corporate credit rating to 'BB', but most likely we would still raise it to no lower than the 'BB-' level," S&P said. "Our assessment of Vantiv's current business risk profile as 'fair' reflects the company's consistent operating performance and solid market position in the U.S. payment processing industry, which we believe has strong secular growth prospects. These factors are partially offset by relatively limited geographic diversity, highly competitive industry conditions (with substantially larger competitors), and a limited track record as a stand-alone company. We currently view the company's financial risk profile as 'aggressive,' with our calculation of adjusted leverage in the low-4x area," S&P said. Vantiv provides transaction and payment processing solutions for merchants, businesses, and financial institutions. The company is a joint venture of its former parent, Fifth Third Bank (a subsidiary of Fifth Third Bancorp), and Advent International (51% owner). "Resolution of the CreditWatch listing will be predicated upon the completion of the IPO and refinancing. We will also assess the company's post-IPO financial policies and governance structure prior to resolving the CreditWatch," S&P said. VIASAT INC: S&P Assigns 'B+' Rating on $275-Mil. New Sr. Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue-level rating and '4' recovery rating to satellite services and equipment provider ViaSat Inc.'s proposed $275 million of new senior notes due 2020. "At the same time, we revised our recovery rating on the company's existing senior notes due 2016 to '4' from '3'. The revision reflects the increased amount of unsecured debt due to the proposed new issuance, which leads to recovery expectations for this debt falling to the 30%-50% range from the previous 50%- 70% range. ViaSat's 'B+' corporate credit rating remains unchanged," S&P said. "We expect proceeds to be used to repay borrowings under the company's revolving credit facility, which had about $170 million outstanding as of Dec. 30, 2011, and to increase cash balances. As a result, we expect total debt to increase by about $100 million, but debt to EBITDA will remain within our parameters for the 'aggressive' financial risk profile. The ratings on ViaSat also reflect what we consider a 'weak' business risk profile, which takes into account the company's relatively recent entry into the consumer broadband business, which we believe has somewhat uncertain demand prospects and potential for more intense competition than the company's government systems and commercial networks systems. The company has a sustainable position in the government services segment providing defense network components, although we believe U.S. federal budget pressures will constrain growth in this area," S&P said. Ratings List ViaSat Inc. Corporate credit rating B+/Stable/-- Rating Assigned $275 mil. senior notes due 2020 B+ Recovery rating 4 Recovery Rating Revised To From $275 mil. senior notes due 2016 B+ Recovery rating 4 3 VITRO SAB: Units Face US Bank $311MM Breach of Contract Suit ------------------------------------------------------------ Martin Bricketto at Bankruptcy Law360 reports that U.S. Bank NA on Wednesday hit subsidiaries of Vitro SAB de CV with a breach of contract suit in New York, seeking to recover more than $311 million in unpaid principal and interest on notes the company issued. U.S. Bank, the indenture trustee for the notes, also wants the court to block the defendants from shirking their alleged obligations over the debt through Vitro's insolvency proceedings in Mexico, Law360 relates. About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global glass producer, serving the construction and automotive glass markets and glass containers needs of the food, beverage, wine, liquor, cosmetics and pharmaceutical industries. Vitro is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009, and sought to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. Concurso Mercantil & Chapter 15 Proceedings Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, commencing its voluntary concurso mercantil proceedings -- the Mexican equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on Dec. 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. The judge said Vitro couldn't push through a plan to buy back or swap US$1.2 billion in debt from bondholders based on the vote of US$1.9 billion of intercompany debt when third-party creditors were opposed. Vitro as a result dismissed the first Chapter 15 petition following the ruling by the Mexican court. On April 12, 2011, an appellate court in Mexico reinstated the reorganization. Accordingly, Vitro SAB on April 14 re-filed a petition for recognition of its Mexican reorganization in U.S. Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11- 11754). The Vitro parent told the Mexico stock exchange that it received sufficient acceptances of its reorganization pending in a court in Monterrey. The approval vote was evidently obtained using claims of affiliates. The bondholders are opposing the Mexican reorganization plan because shareholders could retain ownership while bondholders aren't being paid in full. Bondholders previously cited an "independent analyst" who estimated the Mexican plan was worth 49% to 54% of creditors' claims. In the present Chapter 15 case, the Debtor seeks to block any creditor suits in the U.S. pending the reorganization in Mexico. Chapter 11 Proceedings A group of noteholders opposed the exchange -- namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P. Together, they held US$75 million, or approximately 6% of the outstanding bond debt. The Noteholder group commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders, known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. The U.S. affiliates subject to the involuntary petitions are Vitro Chemicals, Fibers & Mining, LLC (Bankr. N.D. Tex. Case No.10-47472); Vitro America, LLC (Bankr. N.D. Tex. Case No. 10- 47473); Troper Services, Inc. (Bankr. N.D. Tex. Case No. 10- 47474); Super Sky Products, Inc. (Bankr. N.D. Tex. Case No. 10- 47475); Super Sky International, Inc. (Bankr. N.D. Tex. Case No. 10-47476); VVP Holdings, LLC (Bankr. N.D. Tex. Case No. 0-47477); Amsilco Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47478); B.B.O. Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47479); Binswanger Glass Company (Bankr. N.D. Tex. Case No. 10-47480); Crisa Corporation (Bankr. N.D. Tex. Case No. 10-47481); VVP Finance Corporation (Bankr. N.D. Tex. Case No. 10-47482); VVP Auto Glass, Inc. (Bankr. N.D. Tex. Case No. 10-47483); V-MX Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47484); and Vitro Packaging, LLC (Bankr. N.D. Tex. Case No. 10-47485). A bankruptcy judge in Fort Worth, Texas, denied involuntary Chapter 11 petitions filed against four U.S. subsidiaries. On April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro America LLC and three other U.S. subsidiaries -- that were subject to the involuntary petitions into voluntary Chapter 11. The Texas Court on April 21 denied involuntary petitions against the eight U.S. subsidiaries that didn't consent to being in Chapter 11. Kurtzman Carson Consultants is the claims and notice agent to Vitro America, et al. Alvarez & Marsal North America LLC, is the Debtors' operations and financial advisor. The official committee of unsecured creditors appointed in the Chapter 11 cases of Vitro America, et al., has selected Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, as counsel. Blackstone Advisory Partners L.P. serves as financial advisor to the Committee. The U.S. Vitro companies sold their assets to American Glass Enterprises LLC, an affiliate of Sun Capital Partners Inc., for US$55 million. U.S. subsidiaries of Vitro SAB are having their cases converted to liquidations in Chapter 7, court records in January 2012 show. In December, the U.S. Trustee in Dallas filed a motion to convert the subsidiaries' cases to liquidations in Chapter 7. The Justice Department's bankruptcy watchdog said $5.1 million in bills were run up in bankruptcy and hadn't been paid. Mexico Court Approves Plan Mexican glassmaker Vitro SAB de CV won approval of its reorganization plan by a judge in Monterrey, Mexico, the company said in a statement Feb. 7, 2012. The reorganization was being fought by holders of some of the $1.2 billion in defaulted bonds. Bondholders were in opposition based on an argument that the company created $1.9 billion in debt owing by the parent to subsidiaries and used the affiliates' debt to vote down opposition from bondholders. Bondholders also opposed the plan would retain ownership. Vitro characterized the ad hoc bondholder group as "vulture investors" who have "an established pattern of highly litigious behavior." WHOLE FOODS: S&P Affirms 'BB+' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB+' corporate credit rating on Whole Foods and revised the outlook to positive from stable. "The outlook revision reflects that Whole Foods Market Inc.'s comparable-store sales and profit growth have accelerated in recent quarters, which we expect may continue in the near term," said Standard & Poor's credit analyst Charles Pinson-Rose. He added, "We now believe there is a greater chance that the company could outperform our base case forecast on its operating performance and credit ratios." "Moreover, Whole Foods has no funded debt, and we do not expect the company to incur any, since we forecast cash flows from operations to fund capital spending and dividend payments. Consequently, we expect the company's adjusted debt will be composed of the present value of its operating lease commitments. Since the company's 2012 new stores are relatively smaller and seemingly more productive than stores it opened in recent years, we believe profits relative to operating lease commitments could improve in the near term," S&P said. "Our positive rating outlook on Whole Foods incorporates our expectations that the overall sales and profit growth trends should be strong in the near term and intermediate term. If the company performs somewhat better than we anticipate, we would consider a higher rating. If, for example, in 2012, comparable- store sales increase approximately 8%, total revenue grows about 16%, and our other assumptions are unchanged, EBITDA could be in the range of $1.05 billion to $1.10 billion and leverage would be in the mid-2x area. In such a scenario, we may consider a higher rating. If the company's performance is strong but lease commitments increase more than we expect, we may still consider a higher rating because of the company's competitive position as the leading natural and organic food retailer and its profit growth potential. However, we would want to make sure that the company's financial policies would be such that future capital allocations would ensure that the company maintains credit ratios and liquidity appropriate with a higher rating," S&P said. "Conversely, if same -store sales increased at a mid-single-digit rate and EBITDA only neared 10%--somewhat commensurate with expected operating lease growth--and we do not expect future credit ratio enhancement, we would consider a stable outlook," S&P said. ZALE CORP: Reports $28.8 Million Net Earnings in Jan. 31 Quarter ---------------------------------------------------------------- Zale Corporation reported net earnings of $28.83 million on $663.76 million of revenue for the three months ended Jan. 31, 2012, compared with net earnings of $27.21 million on $626.41 million of revenue for the same period during the prior year. The Company reported a net loss of $112.30 million for the year ended July 31, 2011, compared with a net loss of $93.67 million during the prior year. The Company reported a net loss of $3.03 million on $1.01 billion of revenue for the six months ended Jan. 31, 2012, compared with a net loss of $70.67 million on $953.45 million of revenue for the same period a year ago. The Company's balance sheet at Jan. 31, 2012, showed $1.25 billion in total assets, $1.05 billion in total liabilities and $202.29 million in stockholders' investment. "Because of the importance of the holiday selling period to our business, the positive same store sales we've achieved over the past two years is significant," commented Theo Killion, chief executive officer. "Our consistent top line growth is a result of the work we're doing to return the Company to profitability." As reported by the Troubled Company Reporter on February 10, 2010, The Deal.com's Sara Behunek reported that analysts said bankruptcy looms for Zale if it fails to restructure its debt and put in place a solid merchandising strategy. A full-text copy of the press release is available for free at: http://is.gd/yGeDZu About Zale Corporation Based in Dallas, Texas, Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is a specialty retailer of diamonds and other jewelry products in North America, operating approximately 1,900 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at http://www.zales.com/, http://www.zalesoutlet.com/, http://www.gordonsjewelers.com/and http://www.pagoda.com/ * Harb, Levy & Weiland LLP to Merge with EisnerAmper LLP -------------------------------------------------------- Harb, Levy & Weiland LLP, a San Francisco-based accounting, tax and advisory firm, joins forces with EisnerAmper LLP effective March 1. Harb, Levy & Weiland staff will continue to be located at their existing offices in San Francisco, Chicago, and Mumbai, India. "A merger with a firm which has the financial services expertise and reputation for client service enjoyed by Harb, Levy & Weiland is an important step forward in our strategic plan for targeted growth," said Charly Weinstein, EisnerAmper Chief Executive Officer. "Our ability to provide audit, tax and advisory services to clients in the financial services and real estate industries, as well as to high net worth individuals and family offices, is significantly strengthened; and our clients will benefit from an even deeper pool of talent in the dynamic financial markets of California, Chicago and Mumbai," Mr. Weinstein said. EisnerAmper, a PCAOB-registered and inspected firm, is one of the largest accounting firms in the nation and is recognized internationally as one of the premier firms providing audit, tax and advisory services to a broad array of financial services entities, public companies, technology and life sciences firms, as well as closely-held businesses. Harb, Levy & Weiland focuses on serving financial services companies, hedge funds, broker-dealers, real estate entities, family offices and high net worth individuals. Commenting on the merger, Harb, Levy & Weiland Managing Partner John M. Williamson, who will become partner-in-charge of the San Francisco office of EisnerAmper and a member of its Executive Committee, said "Our partners recognized that joining forces with EisnerAmper, and expanding to the financial capital of the world, is the right opportunity at the right time; and the entrepreneurial spirit of our firm fits perfectly with the culture at EisnerAmper." Upon completion of the merger, EisnerAmper will be providing services to more than 1300 financial services clients including hedge funds, private equity and venture funds, broker-dealers, family offices, and insurance companies. On a combined basis, revenues will exceed $270 million, and the firm will have approximately 180 partners and 1300 employees. EisnerAmper is headquartered in New York and, combined with Harb, Levy & Weiland, will have offices throughout New Jersey and in the financial hubs of San Francisco, Chicago, Philadelphia, Mumbai and the Cayman Islands. About EisnerAmper LLP EisnerAmper LLP is a full-service accounting and advisory firm and among the largest in the United States. It provides audit, accounting, and tax services, as well as corporate finance, internal audit and risk management, litigation consulting, forensic accounting, and other professional advisory services to a broad range of clients across many industries. With offices in New York, California, New Jersey, Pennsylvania, Chicago, Mumbai and the Cayman Islands, and as an independent member of PKF International, EisnerAmper serves clients worldwide. * BOND PRICING -- For Week From Feb. 20 to 24, 2012 --------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- AMBAC INC 9.375 8/1/2011 12.000 AMBAC INC 9.500 2/15/2021 12.125 AMBAC INC 7.500 5/1/2023 13.000 AMBAC INC 5.950 12/5/2035 13.500 AMBAC INC 6.150 2/7/2087 0.500 AES EASTERN ENER 9.000 1/2/2017 29.000 AGY HOLDING COR 11.000 11/15/2014 29.956 AHERN RENTALS 9.250 8/15/2013 39.500 ALION SCIENCE 10.250 2/1/2015 60.200 AMER GENL FIN 4.625 3/15/2012 98.184 AMER GENL FIN 5.200 5/15/2012 92.883 AMR CORP 9.200 1/30/2012 26.250 AM AIRLN PT TRST 10.180 1/2/2013 67.000 AMR CORP 6.250 10/15/2014 30.250 AMR CORP 10.200 3/15/2020 25.951 AMR CORP 9.880 6/15/2020 27.000 AMR CORP 10.290 3/8/2021 19.100 AMR CORP 10.550 3/12/2021 27.136 AMR CORP 10.000 4/15/2021 26.000 AMR CORP 10.125 6/1/2021 15.500 AMR CORP 9.750 8/15/2021 26.200 AMERICAN ORIENT 5.000 7/15/2015 43.621 BROADVIEW NETWRK 11.375 9/1/2012 89.000 BANKUNITED FINL 3.125 3/1/2034 7.125 BON-TON DEPT STR 10.250 3/15/2014 64.000 CDWC-CALL03/12 11.000 10/12/2015 106.000 CTL-CALL03/12 7.500 2/15/2014 100.030 DIRECTBUY HLDG 12.000 2/1/2017 23.000 DELTA PETROLEUM 3.750 5/1/2037 65.000 DUNE ENERGY INC 10.500 6/1/2012 93.000 EASTMAN KODAK CO 7.250 11/15/2013 27.000 EASTMAN KODAK CO 7.000 4/1/2017 27.750 EASTMAN KODAK CO 9.950 7/1/2018 29.750 ENERGY CONVERS 3.000 6/15/2013 51.500 EVERGREEN SOLAR 13.000 4/15/2015 47.500 FFCB-CALL02/12 3.000 11/29/2021 100.040 FIBERTOWER CORP 9.000 11/15/2012 15.250 GREAT ATLA & PAC 5.125 6/15/2011 1.450 GREAT ATLANTIC 9.125 12/15/2011 1.000 GLB AVTN HLDG IN 14.000 8/15/2013 31.200 GMX RESOURCES 5.000 2/1/2013 58.845 GMX RESOURCES 5.000 2/1/2013 61.000 GLOBALSTAR INC 5.750 4/1/2028 55.375 HAWKER BEECHCRAF 8.500 4/1/2015 22.500 HAWKER BEECHCRAF 9.750 4/1/2017 6.500 HEWLETT-PACK CO 5.250 3/1/2012 100.010 ELEC DATA SYSTEM 3.875 7/15/2023 93.060 HORIZON LINES 6.000 4/15/2017 20.000 LEHMAN BROS HLDG 6.000 7/19/2012 26.630 LEHMAN BROS HLDG 5.000 1/22/2013 25.470 LEHMAN BROS HLDG 5.625 1/24/2013 27.500 LEHMAN BROS HLDG 5.100 1/28/2013 25.630 LEHMAN BROS HLDG 5.000 2/11/2013 26.100 LEHMAN BROS HLDG 4.800 2/27/2013 26.000 LEHMAN BROS HLDG 4.700 3/6/2013 25.300 LEHMAN BROS HLDG 5.000 3/27/2013 24.987 LEHMAN BROS HLDG 5.750 5/17/2013 27.000 LEHMAN BROS HLDG 4.800 3/13/2014 26.680 LEHMAN BROS HLDG 5.000 8/3/2014 24.000 LEHMAN BROS HLDG 6.200 9/26/2014 27.750 LEHMAN BROS HLDG 5.150 2/4/2015 25.500 LEHMAN BROS HLDG 5.250 2/11/2015 25.760 LEHMAN BROS HLDG 8.800 3/1/2015 25.625 LEHMAN BROS HLDG 7.000 6/26/2015 24.000 LEHMAN BROS HLDG 8.500 8/1/2015 26.100 LEHMAN BROS HLDG 5.000 8/5/2015 25.630 LEHMAN BROS HLDG 7.000 12/18/2015 26.375 LEHMAN BROS HLDG 5.500 4/4/2016 26.750 LEHMAN BROS HLDG 8.920 2/16/2017 26.000 LEHMAN BROS HLDG 11.000 6/22/2022 25.750 LEHMAN BROS HLDG 11.000 7/18/2022 26.500 LEHMAN BROS HLDG 11.500 9/26/2022 25.750 LEHMAN BROS INC 7.500 8/1/2026 3.000 LEHMAN BROS HLDG 11.000 3/17/2028 26.250 LOCAL INSIGHT 11.000 12/1/2017 0.501 LIFECARE HOLDING 9.250 8/15/2013 79.360 MASHANTUCKET PEQ 8.500 11/15/2015 5.025 MF GLOBAL HLDGS 6.250 8/8/2016 34.000 MF GLOBAL LTD 9.000 6/20/2038 33.125 MANNKIND CORP 3.750 12/15/2013 56.500 ARVINMERITOR 8.750 3/1/2012 100.125 PMI GROUP INC 6.000 9/15/2016 22.125 PENSON WORLDWIDE 8.000 6/1/2014 40.475 POWERWAVE TECH 3.875 10/1/2027 38.310 POWERWAVE TECH 3.875 10/1/2027 38.259 REDDY ICE CORP 13.250 11/1/2015 45.660 REAL MEX RESTAUR 14.000 1/1/2013 45.900 RESIDENTIAL CAP 6.500 6/1/2012 90.500 RESIDENTIAL CAP 6.500 4/17/2013 58.000 ISTAR FINANCIAL 5.150 3/1/2012 100.000 TARGET CORP 5.875 3/1/2012 100.032 THORNBURG MTG 8.000 5/15/2013 11.750 TOUSA INC 9.000 7/1/2010 12.967 TOUSA INC 9.000 7/1/2010 13.000 TRAVELPORT LLC 11.875 9/1/2016 32.000 TRAVELPORT LLC 11.875 9/1/2016 31.375 TIMES MIRROR CO 7.250 3/1/2013 36.260 MOHEGAN TRIBAL 8.000 4/1/2012 82.000 MOHEGAN TRIBAL 7.125 8/15/2014 63.750 TEXAS COMP/TCEH 7.000 3/15/2013 45.000 TEXAS COMP/TCEH 10.250 11/1/2015 27.875 TEXAS COMP/TCEH 10.250 11/1/2015 30.000 TEXAS COMP/TCEH 10.250 11/1/2015 29.000 VERENIUM CORP 5.500 4/1/2027 95.250 VERENIUM CORP 5.500 4/1/2027 94.737 VERSO PAPER 11.375 8/1/2016 45.250 WILLIAM LYONS 7.625 12/15/2012 30.000 WILLIAM LYON INC 10.750 4/1/2013 28.000 WILLIAM LYON INC 7.500 2/15/2014 29.000 WASH MUT BANK FA 5.650 8/15/2014 0.500 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***