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/raid1/www/Hosts/bankrupt/TCR_Public/120228.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, February 28, 2012, Vol. 16, No. 58 Headlines 155 EAST: Hearing on Canpartners Sale-Based Plan on March 2 2715 NORTH: Case Summary & 20 Largest Unsecured Creditors ABBOTT HOMES: Case Summary & 20 Largest Unsecured Creditors AES PUERTO RICO: Moody's Lowers Rating on $194MM Notes to 'Ba1' AMERICAN SCIENTIFIC: Enters Into APA with American Scientific AMERICANWEST BANCORP: Holdco Plan Proposes to Reorganize Debtor ARCTIC GLACIER: CCAA Order Recognized on Interim Basis in U.S. ATLANTIC & PACIFIC: NJ Objects to Plan Over $18MM in Back Taxes BERNARD L. MADOFF: Sues to Stop Mendelow Clients' Lawsuit BERNARD L. MADOFF: Son's Widow Fights Picard Clawback Claims BERNARD L. MADOFF: Mets Owners Push to Kill $386MM Clawback Suit BRISTOW GROUP: S&P Revises Outlook to Negative on High Leverage BTA BANK: Asks UK Court to Debar Former Chairman BUFFETS RESTAURANTS: Proposes $5-Mil. Employee Incentive Plan BUNKER LAKES: Case Summary & 5 Largest Unsecured Creditors CDW LLC: S&P Affirms 'B' Corp. Credit Ratings; Outlook Positive CENTAUR HOLDINGS: S&P Assigns Prelim. 'B' Corp. Credit Rating CENTRAL BANK OF GEORGIA: Closed; Ameris Bank Assumes Deposits CENTURY PLAZA: In Talks With Lender, Wants June 18 Plan Deadline CENTURY PLAZA: Taps Faegre Baker to Assist in Estate Tax Appeal CENTURY PLAZA: Anderson & Anderson Okayed as Local Counsel CENTURY PLAZA: Burke Warren Approved as Special Counsel CHRIST HOSPITAL: U.S. Trustee Names 7-Member Creditors Committee CHRIST HOSPITAL: Sale Protocol Okayed; Bids Due March 15 CHRIST HOSPITAL: Koenig Appointed as Patient Care Ombudsman CHRIST HOSPITAL: Files List of 20 Largest Unsecured Creditors CLEAR PEAK: Voluntary Chapter 11 Case Summary CLEARWIRE CORP: Google Intends to Sell 29.4-Mil. Class A Shares COMPETITIVE TECHNOLOGIES: To Issue 180,000 Common Shares CONNAUGHT GROUP: Hires Fulbright & Jaworski as Chapter 11 Counsel CONNAUGHT GROUP: Taps Richter Consulting as Financial Advisors CONNAUGHT GROUP: Consensus Tapped as Investment Banker CONNAUGHT GROUP: Rejects 52nd St. Showroom, Canadian Store Leases CONNAUGHT GROUP: To Sell Assets With No Stalking Horse Bidder Yet CONQUEST PETROLEUM: Farms Out Kentucky Properties CROSS BORDER: Red Mountain, Disgruntled, Wants 6 Add'l Directors CROWN MEDIA: Posts $29.8 Million Net Income in Fourth Quarter CRYOPORT INC: $5-Mil. Raised in Private Placement of 9.1MM Shares CSX CORP: Moody's Assigns Rating to New $300-Mil. Senior Notes CYBERDEFENDER CORP: Meeting to Form Creditors' Panel on March 6 DCS BUSINESS: Moody's Assigns '(P)B2' Corporate Family Rating DEX MEDIA WEST: Bank Debt Trades at 43% Off in Secondary Market DIPPIN' DOTS: Stockwell & Smedley OK'd for Patent Application DIWAN, LLC: Case Summary & 15 Largest Unsecured Creditors DUNE ENERGY: TPG Funds, et al., to Sell 24.5-Mil. Common Shares EASTMAN KODAK: Wins Nod for Groom as Employee Benefits Counsel EASTMAN KODAK: Wins Nod for KCC as Claims & Noticing Agent EASTMAN KODAK: Discloses $20-Mil. Charge on Camera Biz. Exit ENERGY CONVERSION: Seeks Court Approval to Sell Solar Business ENERGY FUTURE: Prices Offering of $350 Million Senior Notes ENERGY TRANSFER: Moody's Rates Proposed Term Loan at 'Ba2' ENERGY TRANSFER: S&P Puts BB- Corp. Credit Rating on Watch Pos. ENERGY TRANSFER: S&P May Affirm 'BB' Rating After SU Merger EVERGREEN INT'L: Moody's Cuts Corporate Family Rating to 'Caa2' FANNIE MAE: BofA Halts Selling New Mortgages FKF MADISON: One Madison Park Condo Set for April 10 Confirmation FOXCO ACQUISITION: S&P Raises Corporate Credit Rating to 'B+' GALP WATERS: Highcross Plan Outline Hearing Moved to March 5 GATEHOUSE MEDIA: Bank Debt Trades at 73% Off in Secondary Market GLEN ROSE: Widens Dec. 31 Quarter Profit to $909,000 GOODYEAR TIRE: Moody's Assigns 'B1' Rating to New Senior Notes GOODYEAR TIRE: S&P Rates $700-Mil. Senior Unsec. Notes at 'B+' GORDIAN MEDICAL: In Chapter 11 After Medicare Stopped Refunds GORDIAN MEDICAL: Case Summary & 20 Largest Unsecured Creditors GRAPHIC PACKAGING: Moody's Rates Credit Facilities at 'Ba2' GRAPHIC PACKAGING: S&P Raises Corporate Credit Rating to 'BB+' GRAY TELEVISION: Reports $7.5 Million Net Income in 4th Quarter GREENEDEN US: S&P Assigns 'B' Corporate Credit Rating GREGORY & PARKER: Case Summary & 4 Largest Unsecured Creditors GRUBB & ELLIS: Daymark Realty Unaffected By Filing Ex-Owner GSC GROUP: Court Okays $2-Mil. Black Diamond Exit Facility HAWKER BEECHCRAFT: Bank Debt Trades at 26% Off in Secondary Market HCA HOLDINGS: Reports $2.8 Billion Net Income in 2011 HEARTHSTONE HOMES: Files for Chapter 11 in Omaha HEARTHSTONE HOMES: Voluntary Chapter 11 Case Summary HELIX ENERGY: Moody's Assigns Ba2 Rating to New Sec. Term Loan HOME SAVINGS OF AMERICA: Closed; FDIC Unable to Find Continuity HORIZON LINES: Board OKs $100,000 Bonus to Executive Officers HOSTESS BRANDS: Union Demands Shared Sacrifice for Survival HOVENSA LLC: Moody's Withdraws 'Ba2' Corporate Family Rating IMPLANT SCIENCES: DMRJ Group Extends Debt Maturity to Sept. 30 INDIANAPOLIS DOWNS: Wants Plan Filing Exclusivity Until March 19 INDYMAC BANK: Former CEO Gets Chance to Appeal $600MM FDIC Case INNER CITY: Yucaipa, Fortress Taking Over Stations WLIB and WBLS JAMES RIVER: Blue Diamond Imminent Danger Order Lifted JEFFERSON COUNTY, AL: JPMorgan Stalling Fraud Suit, Says Insurer JEFFERSON COUNTY: S&P Keeps 'C' Rating on Various Warrants Series LA JOLLA: Patent for GCS-100 to Issue on March 6 LOS ANGELES DODGERS: 3rd Round of Bidding Begins This Week LSP ENERGY: Bondholders File Collateral Support Statement MADAWASKA HARDSCAPE: Case Summary & 20 Largest Unsecured Creditors MADISON 92ND: Hearing on Plan Disclosures Resumes Today MADISON 92ND: U.S. Trustee Wants Chapter 11 Trustee to Take Over MAQ MANAGEMENT: Withdraws Auction-Based Chapter 11 Plan MARCO POLO: Looks for Exclusivity Until March 31 MERIDIAN SHOPPING: Hires Dennis Yan as Attorney MF GLOBAL: JPM Cash Account Not Tied to Customer Cash MF GLOBAL: SIPA Trustee Says Customer Shortfall at $1.6 Billion MF GLOBAL: $17.8-Mil. Cash Available for Use as of Feb. 17 MF GLOBAL: Sapere Says Creditors Should Be Out of SIPA Proceeding MF GLOBAL: NFA Says Payouts Should Follow Commodity Broker Rules MF GLOBAL: SIPC Has Letter on SIPA Trustee Counsel Fee Oversight MONEY TREE: Small Loans Wins OK for Warren Averett as Advisors MONTANA ELECTRIC: Can Access Cash Collateral Until March 16 MOUNT CLEMENS: Moody's Lowers General Obligation Tax Debt Rating MSR RESORT: Wins More Time to Exclusively File Restructuring Plan MUSICLAND HOLDINGS: Seeks Doc to Prove Best Buy Owes $232 Mil. NASSAU BROADCASTING: Judge Clears to Auction Assets in May OTERO COUNTY: Has Deal With BofA on Cash Access for 9 Months PACESETTER FABRICS: Working on Exit; Exclusivity Tackled March 7 PALISADES 6300: Plan Outline Hearing Scheduled for March 7 PAN AM LAND: Chapter 11 Case Dismissed at Landlord's Behest PINNACLE AIRLINES: May File for Ch. 11 Absent Deal With UAL PJ FINANCE: Exclusive Solicitation Period Extended to March 31 PLS INC: Case Summary & 20 Largest Unsecured Creditors PMI GROUP: Executive Salaries Down, Bonuses Up as Approved PMI GROUP: Committee Taps Peter Solomon as Financial Advisor PMI GROUP: Committee Wants to Retain Roshka as Special Counsel PONCE TRUST: Files Chapter 11 Petition in Miami PORTS AMERICA: Bank Debt Trades at 26% Off in Secondary Market RCS CAPITAL: Wins Nod to Hire Bifferato as Special Counsel RCS CAPITAL: Court OKs Collins as Committee's Counsel RITE AID: J. Donald Won't Seek for Re-Election at Annual Meeting ROTHSTEIN ROSENFELDT: Victims Object to Gibraltar Bank Settlement RQB RESORT: Hearing on Further Access to Cash Collateral Today SAAB AUTOMOBILE: Judge Refuses to Transfer Unit's Ch. 11 SABRE HOLDINGS: S&P Affirms 'B' Revolving Credit Facility Rating SACRAMENTO APARTMENTS: 9th Cir. BAP Affirms Sanctions v. Counsel SAVANNAH OUTLET: To Present Plan for Confirmation on April 17 SAXBY'S COFFEE: Portion of IRS Claim Declared Unsecured SEARS HOLDINGS: Moody's Says B3 CFR Unaffected by Asset Sales SEQUENOM INC: Faces Infringement Lawsuit in California SNOKIST GROWERS: March 16 Hearing on Sale of Assets SOLYNDRA LLC: Jones Lang to Market Silicon Valley Facility SOPHIA LP: S&P Assigns 'B' Corporate Credit Rating SP NEWSPRINT: BDO Approved as Committee's Financial Advisor SP NEWSPRINT: Raymond James OK'd as Investment Banking Advisor SPRINGLEAF: Bank Debt Trades at 10% Off in Secondary Market STANFORD FIN'L: SEC Says There's Probable Cause for SIPC Coverage STOCKTON, CA: May Suspend Payments as It Mulls Bankruptcy STREETCAR PARTNERS: Case Summary & 7 Largest Unsecured Creditors SUNCOR DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors SUPERMEDIA INC: Incurs $771 Million Net Loss in 2011 TALON THERAPEUTICS: Board Adopts Amended 2010 Incentive Plan TEN SAINTS: Taps Bancroft & John to Appeal 2012-2013 Tax Value THORNBURG MORTGAGE: Credit Suisse Wins Most of Servicing Proceeds TRIBUNE CO: Funding for $32-Mil. ERISA Settlement Completed TRIBUNE CO: Bank Debt Trades at 37% Off in Secondary Market TRIDENT MICROSYSTEMS: Trustee Appoints 3 Equity Committee Members TRIDENT MICROSYSTEMS: Creditors Committee Has Imperial as Advisor TRIDENT SYSTEMS: Committee Taps Pachulski Stang as Counsel TXU Corp: Bank Debt Trades at 39% Off in Secondary Market TXU Corp: Bank Debt Trades at 44% Off in Secondary Market UNISYS CORP: Reports $141.2 Million Net Income in 2011 UNITED RENTALS: Moody's Assigns 'Ba3' Rating to $750-Mil. Notes UNITED RETAIL: Set for Auction With Stalking Horse Bid UNITED RETAIL: Hearing Today on Lease Decision Extension US CAPITAL: Plantation Fashion Mall Owners File for Chapter 11 US CAPITAL: Case Summary & 10 Largest Unsecured Creditors USI HOLDINGS: S&P Affirms 'B-' Counterparty Credit Rating VADIUM TECHNOLOGY: Section 341(a) Meeting Slated for March 6 VALHALLA CLO: Moody's Assigns 'B1' Rating to Class Q-1 Notes VITRO SAB: Judge Clear Bondholders to Go After Interest Payments W.R. GRACE: Lenders Appeal Plan Order Before 3rd Circuit W.R. GRACE: Wins Nod to Contribute $109.3-Mil. to Pension Plan W.R. GRACE: Submits Post-Confirmation Report for 4th Quarter WADE CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors WILCOX EMBARCADERO: Taps Gabrielson & Company as Accountant WILCOX EMBARCADERO: Access to WF Cash Collateral Ends Aug. 31 WILSON INTERNATIONAL: Meeting to Form Creditors' Panel on March 8 WINDOW FACTORY: American Integrity Wants Ch. 11 Trustee Appointed WOODBURY DEVELOPMENT: Taps Backenroth Frankel as Counsel WOODBURY DEVELOPMENT: Sec. 341 Creditors' Meeting on March 12 WOODBURY DEVELOPMENT: Status Conference Scheduled for April 17 Z TRIM HOLDINGS: Sells 311,545 Common Shares to Brightline * Oaktree Capital Reports Wider Net Loss for 2011 Ahead of IPO * Investors Bet on Retirement Home Bonds Despite High Default Rate * Large Companies With Insolvent Balance Sheets ********* 155 EAST: Hearing on Canpartners Sale-Based Plan on March 2 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada will convene a hearing on March 2 to consider confirmation of 155 East Tropicana LLC's Chapter 11 reorganization plan. The bankruptcy judge signed an order approving the sale of 155 East's Hooters Casino Hotel in Las Vegas to secured creditor Canpartners Realty Holding Co. IV LLC. Bill Rochelle, the bankruptcy columnist for Bloomberg News, notes that completion of the sale requires approval of the reorganization plan at the confirmation hearing. Canpartners owns 98.4% of the $130 million in 8.75% second-lien senior secured notes. According to Mr. Rochelle, it will acquire the property in exchange for $45 million of the notes and the assumption of $15 million in financing for the bankruptcy. Closing is expected at March 30. About 155 East Tropicana 155 East Tropicana LLC owns the world's first Hooters Casino Hotel, a 696-room and 4-suite hotel located one block from the Las Vegas Strip and across Tropicana Blvd. from MGM Grand. 155 East Tropicana, along with an affiliate, sought Chapter 11 protection (Bankr. D. Nev. Case No. 11-22216) on Aug. 1, 2011. 155 East sought bankruptcy protection to stop a scheduled Aug. 8 foreclosure of the second-lien debt. The two secured credit facilities were accelerated early this year. Canpartners Realty Holding Co. IV LLC acquired 98.4% of the $130 million in 8.75% second-lien senior secured notes. An additional $32.2 million of interest is owing on the second-lien debt, with US Bank NA as the indenture trustee. Holders of the $14.5 million in first-lien debt have Wells Fargo Capital Finance Inc. as their agent. The first-lien obligation is fully secured. Interest has been paid at the default rate. Gerald M. Gordon, Esq., and Brigid M. Higgins, Esq., at Gordon Silver, in Las Vegas, Nevada, serve as counsel to the Debtors. Garden City Group, Inc., is the claims agent. William G. Kimmel & Associates has been hired to provide an appraisal of the Debtors' casino hotel/property. Alvarez & Marsal serves as financial and restructuring advisor. Innovation Capital LLC serves as financial advisor for capital raising transactions and M&A transactions. 2715 NORTH: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: 2715 North Milwaukee, LLC 2731 N. Milwaukee Ave. Chicago, IL 60647 Bankruptcy Case No.: 12-06611 Chapter 11 Petition Date: February 22, 2012 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtor's Counsel: Robert R. Benjamin, Esq. GOLAN & CHRISTIE, LLP 70 West Madison Street Suite 1500 Chicago, IL 60602 Tel: (312) 263-2300 Fax: (312) 263-0939 E-mail: rrbenjamin@golanchristie.com Scheduled Assets: $1,321,000 Scheduled Liabilities: $23,542,967 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ilnb12-06611.pdf The petition was signed by Gladys McPherson, sole member. ABBOTT HOMES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Abbott Homes - Plymouth, LLC dba Seton Highlands at the Pinehills 75 Central Street, Suite 3A Boston, MA 02109 Bankruptcy Case No.: 12-11368 Chapter 11 Petition Date: February 22, 2012 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: James A. Wingfield, Esq. LAW OFFICES OF JAMES WINGFIELD 316 Main Street, Suite 600 Worcester, MA 01608 Tel: (508) 797-0200 Fax: (508) 797-0201 E-mail: wingfield@wingfieldlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mab12-11368.pdf The petition was signed by James McAuliffe, manager of Abbott Real Estate Dev., Debtor's manager. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Abbott Homes-Bay Club Phase One, LLC 11-20701 11/15/11 Abbott Magnolia, LLC 11-20710 11/15/11 AES PUERTO RICO: Moody's Lowers Rating on $194MM Notes to 'Ba1' --------------------------------------------------------------- Moody's Investors Service downgraded approximately $194 million of secured bonds issued by the Puerto Rico Industrial, Tourist, Educational, Medical, and Environmental Control Facilities Financing Authority on behalf of AES Puerto Rico L.P. (AES PR) to Ba1 from Baa3. The outlook is stable. RATINGS RATIONALE The downgrade for AES PR considers the project's operational and financial performance, which has been dampened by the challenges of meeting aggressive availability and heat rate guarantees incorporated in the PPA in addition to generally increased costs for operations and maintenance. As a result, over the next several years, Moody's anticipates debt service coverage ratios will generally remain in a range of 1.30 -- 1.40 times. Although AES PR has undertaken various maintenance activities and capital projects intended to improve the reliability and efficiency of the plant, to date, these efforts have met with mixed success. Recent availability factors have generally been in the range of the 90% required for the plant to receive its full capacity payment; however efforts to improve the plant's efficiency have been only partially successful, and though reduced, the project's heat rate remains over 300 BTU/kWh higher than the rate incorporated in its power purchase agreement. As a result, Moody's anticipates the project's under-recovery of fuel costs will continue, and could be exacerbated by the generally elevated cost of coal in the current market. AES PR's Ba1 senior secured rating also reflects the stability of revenues that are generated by its long-term power sales agreement for capacity and energy, the solid credit quality of its power purchaser, the competitive cost structure of its power purchase agreement, the limited competition in a resource-constrained service area, and AES's significant experience operating coal- fired power plants. The rating also considers the back-ended amortization profile of the bonds, which increases their exposure to longer term uncertainties, and the declining schedule of capacity payments, which reduces the amount of financial cushion available to protect against uncertainty. The outlook for AES Puerto Rico is stable reflecting Moody's view that over the next several years debt service coverage ratios are likely to be maintained in a range of 1.30 -- 1.40 times, with some potential modest upside as a result of the AES PR's new five- year agreement for the sale of 14 MWs of as available energy; however, Moody's does not anticipate debt service coverage ratios will remain in the range 1.50 times -- which would likely be required for upward pressure to develop on the rating. The outlook also reflects Moody's view that the project will be able address the upcoming 2012 maturities of its letter of credit and reserve commitment through extension or replacement, and recognizes that any draws on these commitments would be repaid over the life of the existing Tranche A loans (currently 5 years remaining). We do not anticipate the rating will be revised over the near-to- medium term. Longer term, the rating could rise if the project is able to demonstrate debt service coverage above 1.50 times on a sustainable basis. The rating could face downward pressure if the project sees continued operating difficulties which result in reductions to its capacity payments or increases in unrecovered operating and/or capital costs cause debt service coverage ratios to remain below the 1.30 -- 1.40 times range for an extended period. In the event PREPA were to be downgraded by three or more notches, there could be negative pressure on the rating. The principal methodology used in this rating was Power Generation Projects published in December 2008. AES PR, an indirect wholly owned subsidiary of AES Corp.(AES: Ba3 Corporate Family Rating, stable), owns and operates a 454 megawatt (MW) coal-fired cogeneration facility located on the southeastern coast of Puerto Rico. The project sells all of its firm energy and capacity pursuant to a 25-year power purchase agreement to the Puerto Rico Electric Power Authority (PREPA: A3 revenue bonds, negative), a public corporation and governmental agency of the Commonwealth of Puerto Rico. The project began operating in 2002. AMERICAN SCIENTIFIC: Enters Into APA with American Scientific ------------------------------------------------------------- American Scientific Resources, Incorporated, on Feb. 23, 2012, entered into an asset purchase agreement with American Scientific Resources, Inc. Pursuant to the Asset Purchase Agreement, the Company sold certain receivables and certain intellectual property to the Purchaser for a purchase price consisting of (i) $50,000 cash advanced at closing and (ii) a royalty for up to five years from the date of closing equal to 5% of the Purchaser's net revenues less returns less direct costs and joint marketing money up to a maximum of $4,000,000. Royalty payments will be remitted on the 15th day of each month 75 days in arrears for each calendar month. The transferred receivables and intellectual property were used to manufacture and market certain of the Company's healthcare and medical device products, including the Disintegrator home needle destruction device and the VeraTemp Non-Contact thermometers. The Company retained, among other things, its Kidz-Med product line, certain trademarks, the right to market and sell the remaining Disintegrator inventory in its possession, its Food and Drug Administration and ISO13485 compliant facility, FDA approvals necessary to operate as a medical device, repackaging or contract manufacturing business and its goodwill and corporate franchise. The Purchaser also assumed an aggregate of $1,785,745 of principal and interest owed by the Company under certain of its outstanding convertible notes. The Asset Purchase Agreement provides that if within five years from the date of closing either (i) all of the issued and outstanding shares of common stock of the Purchaser are sold to a third party or (ii) all or substantially all of the assets of the Purchaser are sold to a third party, then the Purchaser will pay the Company $4,000,000 less any amounts already paid by the Purchaser to the Company as a part of the purchase price. Also on Feb. 23, 2012, the Company, the Purchaser and the holders of assumed debt entered into a consent agreement pursuant to which the holders consented to the Purchaser's assumption of the debt and agreed to release the Company of all legal and financial responsibility, indebtedness and liability with respect to the notes. Robert Faber, the Company's President and Chief Executive Officer and Chairman of the board of directors, and Jason Roth, the Company's Senior Vice President and Director of Business Development and a director, are officers and directors of the Purchaser. The transaction was approved by a majority of the disinterested members of the Company's board of directors pursuant to Section 78.140 of the Nevada Revised Statutes. A full-text copy of the Asset Purchase Agreement is available at: http://is.gd/0A8iWj About American Scientific Weston, Fla.-bases American Scientific Resources, Inc., provides healthcare and medical products. The Company develops, manufactures and distributes healthcare and medical products primarily to retail drug chains, retail stores specializing in sales of products for babies and medical supply dealers. The Company does sub-component assembly and packaging for the Disintegrator product line. All of the Company's other products are manufactured by third parties. The Company was comprised of three subsidiaries: (i) Kidz-Med, Inc., (ii) HeartSmart, Inc., and (iii) Ulster Scientific, Inc., of which only Kidz-Med was active until Dec. 31, 2010. All subsidiaries are currently inactive. The Company reported a net loss applicable to common shareholders of $6.92 million on $763,020 of net product sales for the nine months ended Sept. 30, 2011, compared with a net loss applicable to common shareholders of $4.78 million on $578,961 of net product sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.26 million in total assets, $9.21 million in total liabilities, and a $7.95 million total shareholders' deficit. Rosenberg Rich Baker Berman & Company, in Somerset, New Jersey, expressed substantial doubt about American Scientific Resources' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has suffered recurring losses, its current liabilities exceed its current assets and it is in default with certain of its obligations. AMERICANWEST BANCORP: Holdco Plan Proposes to Reorganize Debtor --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Washington will convene hearing on April 26, 2012, at 10:00 a.m., to consider the adequacy of a Disclosure Statement explaining Holdco Advisors L.P.'s proposed Plan of Reorganization for AmericanWest Bancorporation. According to the Disclosure dated Dec. 19, 2011, Holdco's Plan provides for the reorganization of the Debtor and for holders of certain Allowed Claims to receive equity in the Reorganized Debtor, with the option for each holder of TOPrS Unsecured Claims and General Unsecured Claims to receive instead a "cash out" right of payment or a security that results in cash from certain of the Debtor's assets, including Cash held by the Reorganized Debtor as of the Effective Date. The Plan Proponent believes the Plan will maximize the value of the estate. In order to effectuate the Distributions, the Plan provides that all of the assets of the Debtor's Estate (including Causes of Action not expressly released under the Plan) will vest in the Reorganized Debtor, and that the former officer and director causes of action will vest in the Plan Trust. The Reorganized Debtor will continue to operate the Debtor's business as a going concern in the real estate and financial services sectors, and will pursue litigation (with the exception of Former Officer and Director Causes of Action, which will be pursued by the Plan Trustee) and make Distributions under the Plan. The new board will be appointed as of the Effective Date and will be responsible for implementing the Plan and operating the business of the Reorganized Debtor. Under the Plan, the creditors are projected to recover: Class 1 Secured Claims 100% Class 2 TOPrS Unsecured Claims Unknown Class 3 General Unsecured Claims Unknown Class 4 Convenience Claims 100% Class 5 Equity Interests N/A On March 15, 2011, the Debtor filed its Plan of Distribution, pursuant to which the Debtor proposed to make distributions to creditors and wind up the Debtor's affairs. The Liquidating Plan contemplated that, following the plan's effective date, the Reorganized Debtor's board of directors would be reduced to one individual, with one remaining shareholder. The single remaining director was to act as distribution agent, and commence distributions to all holders of allowed claims under the Liquidating Plan, which distributions would be made from the sale proceeds and remaining cash held in the Debtor's bank accounts. The distribution agent would then be responsible for winding up the Debtor's business affairs. During a Nov. 3, 2011 status conference, the Court authorized Holdco to submit a competing plan which would be considered for confirmation alongside the Debtor?s Liquidating Plan. A full-text copy of the Holdco Disclosure Statement is available for free at http://bankrupt.com/misc/AMERICANWEST_ds.pdf Holdco Advisors are represented by: Jeffrey D. Sternklar, Esq. DUANE MORRIS LLP 100 High Street, Suite 2400 Boston, MA 02110 Tel: (857) 488-4200 Fax: (857) 401-3034 Bruce K. Medeiros, Esq. DAVIDSON BACKMAN MEDEIROS PLLC 1550 Bank Of America Financial Center 601 West Riverside Avenue Spokane, WA 99201 Tel: (509) 624-4600 About AmericanWest Bancorporation Headquartered in Spokane, Washington, AmericanWest Bancorporation (OTC BB: AWBC) -- http://www.awbank.net/-- was a bank holding company whose principal subsidiary was AmericanWest Bank, which included Far West Bank in Utah operating as an integrated division of AmericanWest Bank. AmericanWest Bank was a community bank with 58 financial centers located in Washington, Northern Idaho and Utah. AmericanWest Bancorporation filed for Chapter 11 protection (Bankr. E.D. Wash. Case No. 10-06097) on Oct. 28, 2010. The banking subsidiary was not included in the Chapter 11 filing. Christopher M. Alston, Esq., and Dillon E. Jackson, Esq., at Foster Pepper Shefelman PLLC, in Seattle, Washington, serve as bankruptcy counsel. G. Larry Engel, Esq., at Morrison & Foerster LLP, also serves as counsel. The Debtor estimated assets of $1 million to $10 million and debts of $10 million to $50 million in its Chapter 11 petition. AmericanWest Bancorporation's estimates exclude its banking unit's assets and debts. In its Form 10-Q filed with the Securities and Exchange Commission before the Petition Date, AmericanWest Bancorporation reported consolidated assets -- including its bank unit's -- of $1.536 billion and consolidated debts of $1.538 billion as of Sept. 30, 2010. In December 2010, AmericanWest completed the sale of all outstanding shares of AmericanWest Bank to a wholly owned subsidiary of SKBHC Holdings LLC, in a transaction approved by the U.S. Bankruptcy Court. ARCTIC GLACIER: CCAA Order Recognized on Interim Basis in U.S. -------------------------------------------------------------- Arctic Glacier Income Fund disclosed the U.S. Bankruptcy Court for the District of Delaware entered an order recognizing on an interim basis the Canadian initial order issued on Feb. 22 under the Companies' Creditors Arrangement Act, including approval of debtor-in-possession financing. The U.S. court is scheduled to make a final order on March 16, 2012. In the interim the Company is permitted to continue with its court supervised sale and investment solicitation process in both the United States and Canada. The Canadian court's order, as previously announced, authorizes the Fund and its operating subsidiaries to commence a court supervised recapitalization of its business through the initiation of a sale and investment solicitation process. It also provides for a stay of certain creditor claims and authorizes debtor-in- possession financing to enable Arctic Glacier to maintain normal business operations during the CCAA process. During the CCAA and Chapter 15 processes, Arctic Glacier expects to maintain all operations at their normal capacity in both Canada and the United States. No layoffs or lease terminations are planned and all suppliers of goods and services are intended to be paid as usual, including amounts owed prior to the CCAA and Chapter 15 filings. About Arctic Glacier Arctic Glacier Income Fund, through its operating company, Arctic Glacier Inc., is a leading producer, marketer and distributor of high-quality packaged ice in North America, primarily under the brand name of Arctic Glacier(R) Premium Ice. Arctic Glacier operates 39 production plants and 48 distribution facilities across Canada and the northeast, central and western United States servicing more than 75,000 retail locations. Arctic Glacier Income Fund trust units are listed on the Toronto Stock Exchange under the trading symbol AG.UN. There are currently 39.0 million trust units outstanding. Following the issuance of units to the Debenture holders on August 2, 2011, there will be 350.3 million trust units outstanding. Arctic Glacier Inc. filed a Chapter 15 petition (Bankr. D. Del. Case No. 12-10603) on Feb. 22, 2012, to gain U.S. recognition of a foreign sale process that would melt away its rising debts. Philip J. Reynolds of Alvarez & Marsal Canada Inc., as foreign representative, signed the Chapter 15 petition. Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP, serves as counsel to the foreign representative. Arctic Glacier had assets of $65 million and liabilities of $240 million as of Sept. 30, 2011. ATLANTIC & PACIFIC: NJ Objects to Plan Over $18MM in Back Taxes --------------------------------------------------------------- Steven Melendez at Bankruptcy Law360 reports that New Jersey's Division of Taxation on Thursday objected to The Great Atlantic & Pacific Tea Co. Inc.'s Chapter 11 reorganization plan, saying it doesn't do enough to resolve $18 million the grocer owes its home state in back taxes. Law360 relates that the agency said A&P is required under U.S. bankruptcy law to pay all of its back taxes plus 6.25 percent interest, but the plan says the taxes will be paid only "with the reasonable consent of investors" and doesn't provide for any interest payments. As reported in the TCR on Feb. 20, 2012, the Debtor amended its plan after it was unable to nail down $750 million in bank financing required for its bankruptcy reorganization plan. To avoid having the business liquidate, the supermarket operator is reducing the financing to $650 million and eliminating a $40 million cash payment to several classes of unsecured creditors. According to Bloomberg News, instead of the $40 million cash payment, several classes of unsecured creditors will receive contingent payments that could be as much as $40 million. If the business is sold within five years, so net cash to the new owners is at least $800 million, unsecured creditors will receive $10 million for their contingent payment rights. The contingent payment increases until it reaches $40 million if the owners receive net cash of $1.5 billion from a sale. Before the amendment, the disclosure statement told unsecured creditors they should recover from 2.1 percent to 2.7 percent. About Great Atlantic & Pacific Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific is a supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid-Atlantic and Northeastern United States. Before filing for bankruptcy in 2010, A&P operated 429 stores in 8 states and the District of Columbia under the following trade names: A&P, Waldbaum's, Pathmark, Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees prior to the bankruptcy filing. A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Case No. 10-24549) on Dec. 12, 2010, in White Plains, New York. In its petition, A&P reported total assets of $2.5 billion and liabilities of $3.2 billion as of Sept. 11, 2010. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. Lazard Freres & Co. LLC is the financial advisor. Huron Consulting Group is the management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent the Official Committee of Unsecured Creditors. A&P obtained court approval for a new contract with C&S Wholesale Grocers Inc., its principal supplier. The contract is designed to save A&P $50 million a year when the supermarket operator emerges from Chapter 11 reorganization. A&P sold 12 Super-Fresh stores in the Baltimore-Washington area for $37.83 million, plus the value of inventory. Thirteen other locations didn't attract buyers at auction and were closed mid- July 2011. BERNARD L. MADOFF: Sues to Stop Mendelow Clients' Lawsuit --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee for Bernard L. Madoff Investment Securities Inc. filed papers late last week to stop two customers from suing another. The report recounts that Irving Picard, the trustee, sued Stephen B. Mendelow in November 2010 for $20 million, including $11.4 million in fictitious profits taken out of the Madoff firm before the fraud became public. Last week, Mr. Picard, according to the report, sued two customers named Warshaw and Weinberg who filed their own suits in New York state court against Mendelow. Mr. Picard said that the two customers are trying to "circumvent the claims process and jump ahead of other customers" by directly suing Mendelow. Even if the two customers have their own claims, Mr. Picard said the suit interferes with the liquidation because they aim to recover the very same money the trustee is pursuing. 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. In February 2012, U.S. District Judge Deborah A. Batts ruled that the bankruptcy judge was correct in ignoring a request by a customer named Marsha Peshkin to remove Mr. Picard and his attorneys. Batts, in her Feb. 16 opinion, said the request was improperly made because it first appeared in a reply brief submitted on a motion seeking the bankruptcy judge to revoke approval of a $220 million settlement with the estate of Norman F. Levy. BERNARD L. MADOFF: Son's Widow Fights Picard Clawback Claims ------------------------------------------------------------ Max Stendahl at Bankruptcy Law360 reports that the widow of Bernard L. Madoff's son Mark asked a New York bankruptcy court Wednesday to shield her from a clawback suit by the trustee liquidating the Ponzi schemer's collapsed firm. Law360 relates that the filing by Stephanie Mack assailed a bid by trustee Irving Picard to file an amended suit targeting her and several other members of Madoff's extended family. 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. BERNARD L. MADOFF: Mets Owners Push to Kill $386MM Clawback Suit ---------------------------------------------------------------- Richard Vanderford at Bankruptcy Law360 reports that the owners of the New York Mets baseball team argued Thursday that the $386 million case brought against them by Bernard L. Madoff's bankruptcy trustee can be tossed without trial, saying there is no evidence the men knew about Madoff's fraud. Law360 relates that to claw back withdrawals Mets owners Fred Wilpon and Saul Katz took from accounts they kept with Madoff, trustee Irving Picard must show that the two were willfully blind to evidence that Madoff was running a Ponzi scheme. Dow Jones' Daily Bankruptcy Review reports that the owners of the Mets ill learn by March 5 whether they will have to go to trial on allegations they were "willfully blind" to a decades-long fraud by convicted Ponzi scheme operator Bernard Madoff. 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. BRISTOW GROUP: S&P Revises Outlook to Negative on High Leverage --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Houston- based Bristow Group Inc. to negative from stable and affirmed all of its ratings, including the 'BB' corporate credit rating, on the company. "The outlook revision reflects the potential that Bristow's leverage could exceed our downgrade threshold of 4x in fiscal 2013," said Standard & Poor's credit analyst Marc Bromberg. "Bristow's operating performance has been below expectations in fiscal 2012 (which ends March 31) due to softer operating margins brought on by higher operating costs. At the same time, adjusted debt, which captures in the impact of leases, has increased to about $1 billion from under $900 million in the year ago fiscal third quarter. The company has also authorized a $100 million share buyback program and a $20 million dividend program. Because of these factors, Bristow's last-12-months (LTM) leverage, as of Sept. 30, 2011, was 3.9x--a level we consider to be aggressive for the current rating category," S&P said. "Through the first three quarters of fiscal 2012, Bristow's margins have been below our expectations, with Standard & Poor's adjusted EBITDA margin averaging about 20% and gross margin at about 29% (versus fiscal 2011 adjusted EBITDA margin at near 22% and gross margin above 30%). Bristow has cited higher personnel compensation and pension costs, as well as higher operating costs (such as maintenance) for the decline and has said that it's focusing on passing through more of these costs to customers. However, we see the risk that margins could continue to be weak if customers do not embrace more of these costs and believe that if Bristow is unable to return gross margin to the 30% level, leverage is likely to exceed 4x in fiscal 2013," S&P said. BTA BANK: Asks UK Court to Debar Former Chairman ------------------------------------------------ Dow Jones' Daily Bankruptcy Review reports that Kazakhstan's BTA Bank Friday asked England's High Court to pass an order preventing its former chairman, Mukhtar Ablyazov, from defending one of the biggest cases of alleged embezzlement ever heard in the United Kingdom. About BTA Bank BTA Bank AO (BTA Bank JSC), formerly Bank TuranAlem AO -- http://bta.kz/-- is a Kazakhstan-based financial institution, which is involved in the provision of banking and financial products for private and corporate clients. The BTA Group is one of the leading banking groups in the Commonwealth of Independent States and has affiliated banks in Russia, Ukraine, Belarus, Georgia, Armenia, Kyrgyzstan and Turkey. In addition, the Bank maintains representative offices in Russia, Ukraine, China, the United Arab Emirates and the United Kingdom. The Bank has no branch or agency in the United States, and its primary assets in the United States consist of balances in accounts with correspondent banks in New York City. As of November 30, 2009, the Bank employed 5,043 people inside and 4 people outside Kazakhstan. It has no employees in the United States. Most of the Bank's assets, and nearly all its tangible assets, are located in Kazakhstan. JSC BTA Bank, also known as BTA Bank of Kazakhstan, commenced insolvency proceedings in the Specialized Financial Court of Almaty City, Republic of Kazakhstan. Anvar Galimullaevich Saidenov, the Chairman of the Management Board of BTA Bank, then filed a Chapter 15 petition (Bankr. S.D.N.Y. Case No. 10-10638) on Feb. 4, 2010, estimating more than US$1 billion in assets and debts. On March 9, 2010, the Troubled Company Reporter-Europe reported that JSC BTA Bank was granted relief in the U.S. under Chapter 15 when the bankruptcy judge in New York recognized the Kazakh proceeding as the "foreign main proceeding." Consequently, creditor actions in the U.S. were permanently halted, forcing creditors to prosecute their claims and receive distributions in Kazakhstan. In the U.S., the Foreign Representative is represented by Evan C. Hollander, Esq., Douglas P. Baumstein, Esq., and Richard A. Graham, Esq. -- rgraham@whitecase.com -- at White & Case LLP in New York City. The Specialized Financial Court of Almaty approved BTA Bank's debt restructuring on Aug. 31, 2010, trimming its obligations from $16.7 billion to $4.2 billion, and extending its longest maturity dates to 20 year from eight. Creditors who hold 92 percent of BTA's debt approved the restructuring plan in May. BTA reportedly distributed $945 million in cash to creditors and new debt securities including $5.2 billion of recovery units (representing an 18.5% equity stake) and $2.3 billion of senior notes on Sept. 1, 2010. BTA forecasts profit of slightly more than $100 million in 2011, Chief Executive Officer Anvar Saidenov told reporters in Almaty. BUFFETS RESTAURANTS: Proposes $5-Mil. Employee Incentive Plan ------------------------------------------------------------- Buffets Restaurants Holdings Inc. filed a motion seeking to dole out up to nearly $5 million in bonuses to a group of its managers as it works to reorganize, and possibly sell, its homestyle restaurant chain. The proposed key employee incentive plan (KEIP) for certain management employees is a two-tier bonus plan, for which the Debtors estimate a $2.3 million aggregate payout for tier one and $2.6 million for tier two. The Court scheduled a March 15, 2012 hearing on the matter. About Buffets Inc. Buffets Inc., the nation's largest steak-buffet restaurant company, operates 494 restaurants in 38 states, comprised of 483 steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R) restaurants, and franchises 3 steak-buffet restaurants in two states. The restaurants are principally operated under the Old Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire Mountain(R) brands. Buffets employs 28,000 team members and serves 140 million customers annually. Buffets Inc. and all of its subsidiaries filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18, 2012, after it reached a restructuring support agreement with 83% of its lenders to eliminate virtually all of the Company's roughly $245 million of outstanding debt. The Debtors are seeking to reject leases for 83 underperforming restaurants. Buffets had 626 restaurants when it began its prior bankruptcy case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged from bankruptcy in April 2009. Higher gasoline and energy costs, along with a decline in guest count, have hampered the Debtors' ability to service their long- term debt and caused a liquidity strain, forcing the Company to return to Chapter 11 bankruptcy. In the new Chapter 11 case, Buffets Inc.'s legal advisors are Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway, Stargatt & Taylor, LLP. The Company's financial advisor is Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims, noticing and balloting agent. An ad hoc committee of secured lenders is represented by Willkie Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP Agent and Prepetition First Lien Agent, is represented by Skadden Arps Slate Meagher & Flom as counsel. The U.S. Trustee has appointed a 5-member Official Committee of Unsecured Creditors in the Debtors' cases. BUNKER LAKES: Case Summary & 5 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Bunker Lakes, Inc. dba Bunker Lakes Dealership 5437 County Road 27 Auburn, IN 46706 Bankruptcy Case No.: 12-10439 Chapter 11 Petition Date: February 22, 2012 Court: United States Bankruptcy Court Northern District of Indiana (Fort Wayne Division) Judge: Robert E. Grant Debtor's Counsel: Daniel J. Skekloff, Esq. Sarah Mustard Heil, Esq. Scot T. Skekloff, Esq. SKEKLOFF, ADELSPERGER & KLEVEN, LLP 927 South Harrison Street Fort Wayne, IN 46802 Tel: (260) 407-7000 Fax: (260) 407-7137 E-mail: djs@sak-law.com sheil@sak-law.com sts@sak-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/innb12-10439.pdf The petition was signed by Kristin McGrade, president. CDW LLC: S&P Affirms 'B' Corp. Credit Ratings; Outlook Positive --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Vernon Hills, Ill.-based CDW Corp. to positive from stable. "In addition, we affirmed all our ratings on the company, including our 'B' corporate credit ratings. The outlook revision reflects CDW's strong revenue growth, consistent profitability and improving financial risk profile," S&P said. "The ratings on CDW LLC reflect our expectation that growth in North American IT spending, consistent profitability and debt reductions will support improvements in its highly leveraged financial profile in the near term, despite highly competitive industry conditions," said Standard & poor's credit analyst Martha Toll-Reed. "CDW is the leading value-added reseller (VAR) of IT products, solutions and services to business, government, and education and health care customers in the U.S. and Canada. It reaches its existing and prospective customers through catalogs, direct mail, outbound telemarketing, Web sites and Web advertising, and a direct sales force. CDW's 'fair' business risk profile reflects the company's good position in the highly fragmented reseller market for technology products and services, offset by a narrow geographic presence, relatively low-margin characteristics and exposure to potential IT spending weakness," S&P said. CENTAUR HOLDINGS: S&P Assigns Prelim. 'B' Corp. Credit Rating ------------------------------------------------------------- Standard & Poor's Rating Services assigned its preliminary 'B' corporate credit rating to Indiana-based Centaur Holdings LLC. The rating outlook is positive. "At the same time, we assigned our preliminary 'B+' issue-level rating (one notch higher than the preliminary corporate credit rating) and our preliminary '2' recovery rating to the company's proposed $240 million credit facility. The facility will consist of a $10 million revolver due 2017 and a $230 million term loan due 2018. The preliminary '2' recovery rating indicates our expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default," S&P said. "Centaur plans to use the proceeds from the proposed credit facility to refinance its existing first- and second-lien term loans, which remain in place following the company's exit from chapter 11 bankruptcy protection on Oct. 1, 2011," S&P said. "Our preliminary 'B' corporate credit rating reflects our assessment of Centaur's financial risk profile as 'highly leveraged' and our assessment of Centaur's business risk profile as 'weak,' according to our criteria," said Standard & Poor's credit analyst Ariel Silverberg. "Our assessment of Centaur's financial risk profile as 'highly leveraged' reflects our expectation that adjusted debt leverage will remain in the low-6.0x area through 2012, and around 6.0x in 2013 (our leverage measure includes about $52 million in PIK notes); interest coverage will remain in the low-2.0x area; and that Centaur will generate only modest discretionary cash flow, which will be used for debt reduction. These expectations do not incorporate the potential benefit from a proposed amendment to current tax legislation, which would reduce gaming taxes and result in a meaningful increase in EBITDA," S&P said. "Our positive rating outlook reflects the potential for meaningful incremental EBITDA in the event of the passage of favorable tax legislation, which, in conjunction with our performance expectations, would potentially result in credit measures supportive of a higher rating. However, in the event that Bill 140 passes, we would assess the current status of the potential acquisition of the other Indiana racino prior to determining whether a higher rating is warranted, as this would represent a potential leveraging transaction for Centaur. In the event that Bill 140 is voted down, we would likely revise our rating outlook to stable as, under our current performance expectations, leverage remains around 6x, which is in line with a 'B' rating based on our assessment of Centaur's business risk profile. Lower ratings would be considered if EBITDA generation is meaningfully below our expectation, resulting in our belief that leverage would be sustained above 7x or interest coverage would fall below 1.5x," S&P said. CENTRAL BANK OF GEORGIA: Closed; Ameris Bank Assumes Deposits ------------------------------------------------------------- Central Bank of Georgia of Ellaville, Ga., was closed on Friday, Feb. 24, 2012, by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Ameris Bank of Moultrie, Ga., to assume all of the deposits of Central Bank of Georgia. The five branches of Central Bank of Georgia will reopen during their normal business hours as branches of Ameris Bank. Depositors of Central Bank of Georgia will automatically become depositors of Ameris Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Central Bank of Georgia should continue to use their existing branch until they receive notice from Ameris Bank that it has completed systems changes to allow other Ameris Bank branches to process their accounts as well. As of Dec. 31, 2011, Central Bank of Georgia had around $278.9 million in total assets and $266.6 million in total deposits. In addition to assuming all of the deposits of the failed bank, Ameris Bank agreed to purchase essentially all of the assets. The FDIC and Ameris Bank entered into a loss-share transaction on $192.8 million of Central Bank of Georgia's assets. Ameris Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers with questions about today's transaction should call the FDIC toll-free at 1-800-523-0640. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/cbg.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $67.5 million. Compared to other alternatives, Ameris Bank's acquisition was the least costly resolution for the FDIC's DIF. Central Bank of Georgia is the tenth FDIC-insured institution to fail in the nation this year, and the second in Georgia. The last FDIC-insured institution closed in the state was The First State Bank, Stockbridge, on Jan. 20, 2012. CENTURY PLAZA: In Talks With Lender, Wants June 18 Plan Deadline ---------------------------------------------------------------- Century Plaza LLC asks the U.S. Bankruptcy Court for the Northern District of Indiana to extend its exclusive periods to file and solicit acceptances for a proposed plan of reorganization until June 18, 2012, and Aug. 31, respectively. The Debtor relates that it needs more time to complete the negotiations with the lender relating to a transaction that would fund a plan. The lender has just signed a confidentiality agreement that will permit the Debtor to disclose the transaction to the lender and discuss its terms. About Century Plaza Based in Merrillville, Indiana, Century Plaza LLC owns and operates a commercial shopping center known as "Century Plaza". It filed for Chapter 11 bankruptcy (Bankr. N.D. Ind. Case No. 11-24075) on Oct. 18, 2011. Judge J. Philip Klingeberger presides over the case. Crane, Heyman, Simon, Welch & Clar serves as the Debtor's counsel. Anderson & Anderson PC serves as local bankruptcy counsel. Burke Warren Mackey & Serritella P.C. PC serves as special counsel. The Debtor estimated assets and debts of $10 million to $50 million. The petition was signed by Richard Dube, president of Tri-Land Properties, Inc., manager. CENTURY PLAZA: Taps Faegre Baker to Assist in Estate Tax Appeal --------------------------------------------------------------- Century Plaza LLC asks the U.S. Bankruptcy Court for the Northern District of Indiana for permission to employ Jay Jaffe and Faegre Baker Daniels LLP as special counsel for real estate tax appeal purposes nunc pro tunc Jan. 1, 2012. Faegre has represented the Debtor with respect to matters before the lake County Indiana Treasurer in order to secure fair and equitable valuations for real estate tax purposes for the property -- a commercial shopping center located in Merrillville, Indiana. Faegre estimates that the total amount of billing for the tax appeal will be between $3,000 to $5,000 for the appeal at the township level and an additional $5,000 to $7,000 to appeal to the county level, if necessary. To the best of the Debtor's knowledge, the firm does not represent an interest adverse to the Debtor's estate or its creditors. About Century Plaza Based in Merrillville, Indiana, Century Plaza LLC owns and operates a commercial shopping center known as "Century Plaza". It filed for Chapter 11 bankruptcy (Bankr. N.D. Ind. Case No. 11-24075) on Oct. 18, 2011. Judge J. Philip Klingeberger presides over the case. Crane, Heyman, Simon, Welch & Clar serves as the Debtor's counsel. Anderson & Anderson PC serves as local bankruptcy counsel. Burke Warren Mackey & Serritella P.C. PC serves as special counsel. The Debtor estimated assets and debts of $10 million to $50 million. The petition was signed by Richard Dube, president of Tri-Land Properties, Inc., manager. No trustee, examiner or committee of unsecured creditors has been appointed to serve in the reorganization case. CENTURY PLAZA: Anderson & Anderson Okayed as Local Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Indiana authorized Century Plaza LLC to employ Anderson & Anderson PC as local bankruptcy counsel. As reported in the Troubled Company Reporter on Jan. 27, 2012, prior to the Chapter 11 filing, Anderson & Anderson was paid $5,000 by the Debtor as retainer. All compensation and reimbursement of expenses to Anderson & Anderson are subject to further Court order. The Debtor attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Century Plaza Based in Merrillville, Indiana, Century Plaza LLC owns and operates a commercial shopping center known as "Century Plaza". It filed for Chapter 11 bankruptcy (Bankr. N.D. Ind. Case No. 11-24075) on Oct. 18, 2011. Crane, Heyman, Simon, Welch & Clar serves as the Debtor's counsel. Burke Warren Mackey & Serritella P.C. PC serves as special counsel. The Debtor estimated assets and debts of $10 million to $50 million. The petition was signed by Richard Dube, president of Tri-Land Properties, Inc., manager. CENTURY PLAZA: Burke Warren Approved as Special Counsel ------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Indiana authorized Century Plaza LLC to employ Burke Warren Mackey & Serritella P.C. as special counsel. As reported in the Troubled Company Reporter on Jan. 27, 2012, the Debtor paid the firm a $60,000 retainer. BWM&S holds a $1,002 prepetition claim against the Debtor. Jeffrey D. Warren, Esq., a managing partner at Burke Warren, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Century Plaza Based in Merrillville, Indiana, Century Plaza LLC owns and operates a commercial shopping center known as "Century Plaza". It filed for Chapter 11 bankruptcy (Bankr. N.D. Ind. Case No. 11-24075) on Oct. 18, 2011. Judge J. Philip Klingeberger presides over the case. Crane, Heyman, Simon, Welch & Clar serves as the Debtor's counsel. Anderson & Anderson PC serves as local bankruptcy counsel. The Debtor estimated assets and debts at $10 million to $50 million. The petition was signed by Richard Dube, president of Tri-Land Properties, Inc., manager. CHRIST HOSPITAL: U.S. Trustee Names 7-Member Creditors Committee ---------------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, has appointed these entities to sit on the official committee of unsecured creditors in the Chapter 11 case of Christ Hospital pursuant to Section 1102(a)(1) of the Bankruptcy Code: 1. Peter Young McKesson Technologies, Inc. 5995 Windward Parkway Alpharetta, GA 30005 Tel: 404-338-3221 Fax: 866-455-5123 2. Ann Twomey Health Professionals & Allied Employees AFT-AFL/CIO 110 Kinderkamack Road Emerson, NJ 07630 Tel: 201-262-5005 ext. 113 Fax: 201-262-4335 3. Suzanne M. Klar, Esq. PSE&G 80 Park Plaza, T5D Newark, NJ 07102 Tel: 973-430-6483 Fax: 973-645-1103 4. Janice Klostermeier, Chairperson Emergency Medical Associates 651 West Mount Pleasant Ave. Livingston, NJ 07039 Tel: 973-251-1083 Fax: 973-740-9895 5. Brad Hamman Wood Dining Services Sodexo Operations, LLC 283 Cranes Roost Blvd., Suite 260 Altamonte Springs, FL 32701 Tel: 407-339-3230 ext. 35204 Fax: 407-260-2305 6. Arnab Sen Apollo Health Street, Inc. 2 Brighton Road, Suite 300 Clifton, NJ 07012 Tel: 973-405-5908 Fax: 973-860-0992 7. Jeff Sutton CBIZ-KA Consulting Consulting Services, LLC 50 Millstone Road Bldg. 200, Suite 230 East Windsor, NJ 08520 Tel: 609-918-0990 Fax: 609-918-0930 Andrew H. Sherman, Esq. -- asherman@sillscummis.com -- at Sills, Cummis & Gross, serves as the Committee's counsel. 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. The Health Professional and Allied Employees AFT/AFI-CIO is represented in the case by Mitchell Malzberg, Esq. -- mmalzberg@mmpclaw.com -- at Mitnick & Malzberg P.C. DIP lender HFG is represented in the Debtor's case by Benjamin Mintz, Esq., at Kaye Scholer LLP and Paul R. De Filippo, Esq., at Wollmuth Maher & Deutsch LLP. CHRIST HOSPITAL: Sale Protocol Okayed; Bids Due March 15 -------------------------------------------------------- The Bankruptcy Court has approved bidding procedures for the sale of Christ Hospital. Bids are due March 15. The Debtor will hold an auction March 19 at 10:00 a.m. if multiple bids are received. Regardless, the Court will conduct a sale hearing on March 20 at 10:00 a.m. Sale objections are due March 16. The Debtor will consult with the Official Committee of Unsecured Creditors and Healthcare Finance Group, the Debtor's DIP lender, in determining qualified bids. Among other things, the Debtor will require that bidders: -- reach an agreement with the Debtor's union, Health Professional and Allied Employees AFT/AFI-CIO, as to the Debtor's collective bargaining agreement; -- plan to continue the hospital's mission and service offerings; and -- enter into a binding commitment for capital expenditures to be undertaken post-Closing. The sale will include so-called Designation Rights, which will allow the successful bidder to instruct the Debtor to assume or reject any or all of the Designated Contracts within 90 days from the Closing, and then assign the assumed Designated Contracts to the Successful Bidder. Once the Successful Bidder selects what Designated Contracts it wants the Debtor to assume, the Debtor will provide additional notice of same to all of the Counterparties to the Designated Contracts. In early 2011, Christ Hospital retained Porzio, Bromberg & Newman, P.C., to conduct an out-of-court restructuring of the Hospital's debt. An "out of court" restructuring was deemed most desirable since the spate of urban hospital bankruptcies in recent years has resulted in tremendous costs and losses for employees, vendors, patients, communities and the State of New Jersey. Many hospitals have closed in bankruptcy proceedings and the professional fees that could otherwise have been used for stakeholders and for medical care have been enormous. In March 2011, the Hospital entered into discussions with the St. Barnabas Healthcare System for the acquisition of the Hospital. Similar discussions took place with a number of other suitors, including Hudson Hospital Holdco, LLC, in July, 2011, until in furtherance of the Hospital's restructuring efforts, the Hospital entered into a Letter of Intent on Aug. 12, 2011, with Prime Healthcare Services, Inc., followed by a Dec. 6, 2011 Asset Purchase Agreement. As of the date the Hospital executed the LOI, it owed $130,000,000 to the Pension Benefit Guaranty Corporation and the Internal Revenue Service on account of the Hospital's severely underfunded defined benefit pension plan, $12,000,000 to Bon Secours Health System, and $20,000,000 to its unsecured trade vendors, for a total of $162,700,000, not counting employee accruals and benefit claims. With Prime's support, the Debtor resolved the Bon Secours claim of $12,700,000 for $1,100,000 which was funded and paid on Sept. 1, 2011. The Debtor then settled the PBGC's claim for $10,500,000, with the amount to be paid and releases exchanged at the closing of the anticipated transaction with Prime. Finally, Prime agreed further to assume responsibility for all employee accrued vacation pay and other accruals, valued at some $8,000,000, and for the senior liens of certain tax sale certificate holders against the Debtor's assets. Following the Hospital's successes with Prime, Bon Secours, the PBGC, and with respect to employee accruals, the Debtor proceeded to address the final leg of the Hospital's creditor group, i.e., the Unsecured Creditors. The Hospital invited the Unsecured Creditors to form an unofficial committee, which they did. Following a meeting of the Unofficial Committee in mid-January 2012, the Debtor received word that the Unofficial Committee, which comprises some 70% to 80% in amount of the unsecured creditor debt, was in support of the proposed transaction with Prime and the $4.9 million creditor payment at closing, provided that the Hospital did not permit the $20 million in unsecured claims on the Hospital's balance sheet as of Sept. 30, 2011, to grow. However, as the Hospital, the Unofficial Committee, the State of New Jersey, and Prime have all been keenly aware, the Hospital's projections have included a $6.2 million shortfall through March 31, 2012, increasing to $7.4 million through June 30, 2012. The first quarter 2012 gap, the Hospital had projected, would be met by $3.6 million in second quarter Charity Care advances being distributed by the State in the first quarter, and hopefully, although the Hospital had not yet received the commitment, another $2.6 million from Prime. The Hospital had been anticipating a closing prior to March 31, 2012. However, in late January, 2012, the Hospital received discouraging news, including that the second quarter Charity Care advance would not be forthcoming in the first quarter and that the State approval process, which had been commenced by the Debtor and Prime in September 2011, would not likely be completed until June. As to the Charity Care advance, this meant the $1.2 million the Debtor had expected to fund its January 27 payroll would not be received. According to the Debtor, Prime interpreted this news (rightly or wrongly) to mean that the State was simply not supporting the Debtor's proposed transaction with Prime. Notwithstanding this interpretation, Prime advanced the Hospital an additional $1 million on Jan. 26, 2012, which enabled the Hospital to meet its Jan. 27 payroll. However, following this advance, Prime withdrew its bid and its concomitant continuing financial support for the Debtor. Prior to these developments with Prime, on Dec. 23, 2011, the Debtor received an unsolicited offer to purchase its assets from Hudson Holdco, 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 another unsolicited offer to purchase its assets this time 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. During the days preceding the Petition Date, Peter Kelly, President and Chief Executive Officer of the Hospital, met with representatives of both CHA (along with Jersey City Medical Center representatives) and Hudson Holdco, and bankruptcy counsel had numerous separate discussions as well about one of these two bidders potentially financing the Hospital's ongoing operations during this period of time. It became clear through these discussions that the Hospital had two prospective buyers with a high level of interest in acquiring the Hospital; and their proposals, as expressed in letters of intent, exceeded the value of Prime's offer. At a meeting with the Board of Trustees on Feb. 1, 2012, following discussions with CHA on whether there was a method to execute a purchase contract and stay out of bankruptcy, the Board voted unanimously to file for Chapter 11 protection. In the Board's view, filing for bankruptcy would likely result in the selection of the best possible successor for the assets of the Hospital because all prospective bidders and their bona fides would have to be evaluated subject to the scrutiny of the Court, parties-in- interest, and the State. Moreover, the Board did not have to align itself with one bidder in a future financing arrangement. On Feb. 3, 2012, the Debtor retained Alvarez & Marsal as its financial advisors. Melanie Evans at ModernHealthcare.com reported that Prime offered $35 million for the not-for-profit Christ Hospital. Beth Fitzgerald at NJSpotlight reported that CHA has made a tentative proposal to buy Christ Hospital for $104 million. The Debtor ultimately chose to seek Chapter 11 relief without a strategic partnership at this time. Given the complexity of the Debtor's case, its status as a not- for-profit hospital in a highly regulated industry, the importance of the healthcare it provides to the community, and the 1,400 jobs at stake, the Debtor said it is important that the sales process move as quickly as possible -- more quickly than is the case in traditional chapter 11 asset sales. In particular, with respect to the Community Healthcare Asset's Protection Act, Attorney General approval is required. With respect to the Certificate of Need Process, New Jersey Department of Health and Senior Services approval is required. The Debtor said selection of a highest and best bid as expeditiously as possible will enable the State to begin these processes, which could themselves be time consuming. The Debtor's DIP Facility with HFG includes milestones that require completion of the sale in March. Meanwhile, there is a hearing on March 1 to consider final approval of the Debtor's request to obtain postpetition financing and use prepetition collateral. The Final DIP hearing was originally set for Feb. 27. 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. 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. The Health Professional and Allied Employees AFT/AFI-CIO is represented in the case by Mitchell Malzberg, Esq. -- mmalzberg@mmpclaw.com -- at Mitnick & Malzberg P.C. DIP lender HFG is represented in the Debtor's case by Benjamin Mintz, Esq., at Kaye Scholer LLP and Paul R. De Filippo, Esq. -- PDeFillipo@wmd-law.com -- at Wollmuth Maher & Deutsch LLP. Andrew H. Sherman, Esq., at Sills, Cummis & Gross, serves as counsel to the Official Committee of Unsecured Creditors. CHRIST HOSPITAL: Koenig Appointed as Patient Care Ombudsman ----------------------------------------------------------- At the direction of the Bankruptcy Court, Roberta A. DeAngelis, the United States Trustee for Region 3, appointed a patient care ombudsman in the Chapter 11 case of Christ Hospital: Suzanne Koenig SAK MANAGEMENT SERVICES, LLC One Northfield Plaza, Suite 480 Northfield, IL 60093 Tel: (847) 446-8400 Fax: (847) 446-8432 Christ Hospital's case has been designated a heath care business case within the meaning of 11 U.S.C. Sec. 101 (27A). The U.S. Trustee sought the appointment of the patient care ombudsman to monitor the quality of patient care and represent the interests of patients. 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. The Health Professional and Allied Employees AFT/AFI-CIO is represented in the case by Mitchell Malzberg, Esq. -- mmalzberg@mmpclaw.com -- at Mitnick & Malzberg P.C. DIP lender HFG is represented in the Debtor's case by Benjamin Mintz, Esq., at Kaye Scholer LLP and Paul R. De Filippo, Esq. -- PDeFillipo@wmd-law.com -- at Wollmuth Maher & Deutsch LLP. Andrew H. Sherman, Esq., at Sills, Cummis & Gross, serves as counsel to the Official Committee of Unsecured Creditors. CHRIST HOSPITAL: Files List of 20 Largest Unsecured Creditors ------------------------------------------------------------- Christ Hospital filed with the Bankruptcy Court a list of creditors holding the 20 largest unsecured claims against its estate: Name of creditor Nature of claim Amount of Claim ---------------- --------------- --------------- MCKESSON INFORMATION Trade Creditor $2,217,089 SOLUTIONS JEFFREY C. CAMPBELL 1 POST STREET SAN FRANCISCO, CA 94104 Facsimile: (415) 983-7160 PUBLIC SERVICE ELEC Trade Creditor $1,428,693 & GAS CO 1018 SUZANNE KLAR, ESQ. 80 PARK PLAZA, T-5D NEWARK, NJ 07102 Facsimile: (973) 645-1103 UMDNJ Trade Creditor $1,178,309 LESTER ARON, ESQ. 65 BERGEN ST., SUITE 1218 NEWARK, NJ 07107-3001 Facsimile: (973) 972-1523 SODEXO INC Trade Creditor $1,177,381 BRAD HAMMAN 283 CRANES ROOSE BLVD SUITE 260 ALTAMONTE SPRINGS, FL 32701 Facsimile: (407) 260-2305 PRINCETON INSURANCE Trade Creditor $870,000 ANDREA C. KANEFSKY 746 ALEXANDER ROAD PRINCETON, NJ 08540 Facsimile: (609) 734-8461 EMERGENCY MEDICAL Trade Creditor $849,166 ASSOCIATES JANICE KLOSTERMETER 651 W. MT. PLEASANT AVENUE LIVINGSTON, NJ 07039 Facsimile: (973) 740-9895 UMR Trade Creditor $466,449 PRESIDENT 11 SCOTT ST. WAUSAU, WI 54403-4808 Facsimile: (513) 619-3021 CBIZ-KA CONSULTING Trade Creditor $436,096 SERVICES INC. SAM DONIO 50 MILLSTONE RD CRANBURY, NJ 08512 Facsimile: (609) 918-0930 PHILIPS MEDICAL SYSTEMS Trade Creditor $432,460 RON WIRAHADIRAKSA 3000 MINUTEMAN RD. ANDOVER, MA 01810-1099 Facsimile: (978) 689-8295 APOLLO HEALTH STREET Trade Creditor $409,020 ARNAB SEN 2 BRIGHTON RD., SUITE 300 CLIFTON, NJ 07012 Facsimile: (973) 860-0992 MEDASSETS NET REVENUE Trade Creditor $387,853 SYSTEMS, LLC DANIEL MULLIGAN 1 ROUTE 17 SOUTH SADDLE RIVER, NJ 07458 Facsimile: (201) 786-6406 MATRIX MEDICAL GROUP PC Trade Creditor $379,050 JOSEPH MATURO C/O MANUEL BORJA MD 201 PALISADE AVENUE JERSEY CITY, NJ 07306 JERSEY ELITE ANESTHESIA Trade Creditor $264,420 GROUP LLC PRESIDENT 75 KEAN ROAD SHORT HILLS, NJ 07078 Facsimile: (201) 943-8105 MICROSOFT Trade Creditor $235,734 MEDCO Trade Creditor $194,571 QUEST DIAGNOSTIC Trade Creditor $172,326 NJM INSURANCE CO. Trade Creditor $165,345 SIEMENS MEDICAL SOLUTIONS Trade Creditor $155,097 AETNA Trade Creditor $138,403 AMERICAN PHYSICIANS SERVICES Trade Creditor $128,284 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. The Health Professional and Allied Employees AFT/AFI-CIO is represented in the case by Mitchell Malzberg, Esq. -- mmalzberg@mmpclaw.com -- at Mitnick & Malzberg P.C. DIP lender HFG is represented in the Debtor's case by Benjamin Mintz, Esq., at Kaye Scholer LLP and Paul R. De Filippo, Esq. -- PDeFillipo@wmd-law.com -- at Wollmuth Maher & Deutsch LLP. Andrew H. Sherman, Esq., at Sills, Cummis & Gross, serves as counsel to the Official Committee of Unsecured Creditors. CLEAR PEAK: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Clear Peak Energy, Inc. aka Wavenetworx, Inc. aka On Line Productions Services, Inc. 10645 N. Tatum Blvd. Ste. 200-681 Phoenix, AZ 85028 Bankruptcy Case No.: 12-03225 Chapter 11 Petition Date: February 22, 2012 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Richard William Hundley, Esq. BERENS, KOZUB & KLOBERDANZ, PLC 7047 E Greenway Pkwy, #140 Scottsdale, AZ 85254 Tel: (480) 624-2777 Fax: (480) 607-2215 E-mail: rhundley@bkl-az.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Philip Polich, president. CLEARWIRE CORP: Google Intends to Sell 29.4-Mil. Class A Shares --------------------------------------------------------------- In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Google Inc. disclosed that it plans to sell 29,411,765 shares of Class A common stock of Clearwire Corporation. Google Inc. periodically rebalances its investments based on its goals and its evaluation of market conditions. Google plans to sell all of the Class A Common Stock to Intel Entities, Intel Capital, Intel Cayman, and Middlefield pursuant to the Equityholders' Agreement. If the Intel Entities, el al., do not elect to purchase all of those shares within the specified time period, Google will sell the Shares in one or more public open market transactions on the NASDAQ Stock Market, which sales will begin on or about Feb. 27, 2012. As of Feb. 7, 2012, Sprint Nextel Corporation beneficially owns 627,945,914 shares of Class A common stock of Clearwire, which represents 58.1% of the shares outstanding. A full-text copy of the Schedule 13D/A is available at: http://is.gd/vWSl2a About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a provider of 4G mobile broadband network services in 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company reported a net loss of $2.30 billion in 2010 and a net loss of $1.25 billion in 2009. The Company also reported a net loss attributable to Clearwire Corporation of $480.48 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $8.76 billion in total assets, $5.15 billion in total liabilities and $3.61 billion in total stockholders' equity. * * * As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured first- lien issue-level ratings on Bellevue, Wash.-based wireless provider Clearwire Corp. to 'CCC' from 'CCC+'. "The downgrade reflects our concerns that the company may choose to skip its $237 million of interest payments due on Dec. 1, 2011," explained Standard & Poor's credit analyst Allyn Arden. "With about $698 million of cash on the balance sheet, Clearwire has sufficient funds to pay the remaining interest expense due in 2011, although Standard & Poor's believes that it would still have to raise significant capital to maintain operations in 2012 despite the cost-reduction measures it has already achieved. If Clearwire elected to make the interest payment, we believe that it would exit 2011 with around $350 million to $400 million in cash, which assumes less than $100 million of capital expenditures and EBITDA losses. We do not believe that this cash balance will be sufficient to cover free operating cash flow (FOCF) losses and a Long-Term Evolution (LTE) wireless network overlay in 2012 and that the company will require additional funding during the year." COMPETITIVE TECHNOLOGIES: To Issue 180,000 Common Shares -------------------------------------------------------- Competitive Technologies, Inc., filed with the U.S. Securities and Exchange Commission a Form S-8 relating to the registration of 180,000 shares of common stock issuable in lieu of directors' fees, executive compensation and for legal services. A full-text copy of the filing is available at http://is.gd/C4W6Pg About Competitive Technologies Fairfield, Conn.-based Competitive Technologies, Inc. (OTC QX: CTTC) -- http://www.competitivetech.net/-- was established in 1968. The Company provides distribution, patent and technology transfer, sales and licensing services focused on the needs of its customers and matching those requirements with commercially viable product or technology solutions. Sales of the Company's Calmare(R) pain therapy medical device continue to be the major source of revenue for the Company. As reported in the Troubled Company Reporter on Nov. 2, 2010, Mayer Hoffman McCann CPAs, in New York, expressed substantial doubt about Competitive Technologies' ability to continue as a going concern, following the Company's results for the fiscal year ended July 31, 2010. The independent auditors noted that at July 31, 2010, the Company has incurred operating losses since fiscal year 2006. The Company reported a net loss of $1.84 million for the nine months ended Sept. 30, 2011, compared with a net loss of $2.30 million for the nine months ended Oct. 31, 2010. The Company's balance sheet at Sept. 30, 2011, showed $5.95 million in total assets, $6.36 million in total liabilities, all current, and a $409,428 total shareholders' deficit. CONNAUGHT GROUP: Hires Fulbright & Jaworski as Chapter 11 Counsel ----------------------------------------------------------------- The Connaught Group, Ltd., and its debtor-affiliates seek permission from the Court to employ Fulbright & Jaworski L.L.P. to act as their attorneys to file and prosecute their Chapter 11 case and all related matters. Fulbright has advised the Debtors regarding various restructuring alternatives, including relating to its bankruptcy proceedings and other possible strategic alternatives. In September 2011, Fulbright was retained by the Debtors to represent them with respect to an anticipated capital raise. Fulbright was paid $21,179.63 for such services. Thereafter, when it became evident that the Debtors would need financial restructuring and bankruptcy counsel and advice, Fulbright's engagement was expanded. Fulbright received a retainer for restructuring services of $150,000 on Dec. 16, 2011. David L. Barrack, Esq., a partner at Fulbright, and Paul Jacobs, Esq., and Warren J. Nimetz, Esq., corporate practitioners and Fulbright partners, will be working on the Debtors' cases. Mr. Barrack attests that Fulbright does not hold or represent any interest adverse to the Debtors or their estates, and is a "disinterested person" as that phrase is defined in Sec. 101(14) of the Bankruptcy Code, as modified by Sec. 1107(b) of the Bankruptcy Code. Fulbright's hourly rates are: Partners $505 - $955 Counsel $375 - $775 Associates $300 - $675 Paralegals $210 - $395 Fulbright is not a creditor of the Debtors. Fulbright has been paid a total of $879,515.39 through Feb. 8, 2012. Fulbright has applied its retainer to its fees and expenses incurred and unpaid prior to the Petition Date. 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 Richter Consulting as Financial Advisors -------------------------------------------------------------- The Connaught Group, Ltd., and its debtor-affiliates seek Bankruptcy Court authority to employ Richter Consulting, Inc., as financial advisors and consultant under the terms of an Engagement Letter, dated March 24, 2010, as amended on Dec. 5 and 22. On March 24, 2010, Richter was engaged to provide certain financial advisory and consulting services to the Debtors. Since that time, Richter has developed a great deal of institutional knowledge regarding the Debtors' operations, finance and systems. Richter is part of the Richter Group, a full-service business advisory firm, founded in 1926, with over 45 partners and 400 employees. Based in Montreal and Chicago, Richter provides a full range of consulting services delivered by a multidisciplinary group of professionals. Richter's services include business assessment, financial reorganization, crisis management, turnaround management, transaction advisory, business valuation, insolvency consulting, forensic investigations and litigation support. The firm's tasks include providing assistance and advice to the Debtors with respect to the identification of core business assets and the disposition of assets or liquidation of unprofitable operations as well as in the preparation of long term financial projections and a business plan; and assistance regarding the valuation of the present level of operations and identification of areas of potential cost savings, including overhead and operating expense reductions and efficiency improvements. Andrew Adessky attests that Richter (i) has no connection with the Debtors, its creditors or other parties in interest in this case, (ii) does not hold any interest adverse to the Debtors' estates, and (iii) is a "disinterested person" as defined within section 101(14) of the Bankruptcy Code. Prior to the Petition Date, Richter received from the Debtors payments for fees, expenses and fee and expense deposits of $2,036,399 in the aggregate for pre-petition consulting services (a significant portion of which was for services rendered in 2010) as well as in connection with the chapter 11 cases and other matters. Richter has further received from the Debtors and holds as of the Petition Date, "on account" cash in the amount of $115,319. Prior to the Petition Date, the Debtors paid Richter $1,148,827 (including $100,000 on account) for pre-petition consulting services including expenses for the period between Feb. 1, 2011 and the Petition Date. Additionally, the Debtors paid Richter $822,424 for pre-petition consulting services for the period between Nov. 1, 2011 and the petition date. The Debtors have paid Richter a $130,000 retainer fee of which $115,319 remains and will be held and applied to the final post-filing billing. The customary hourly rates charged by Richter professionals anticipated to be assigned to the Debtors' cases are: Partner $575 - $675 Principal/Vice President $425 - $525 Senior Associate $375 - $425 Associate $275 - $375 The Debtors have also agreed to reimburse necessary expenses. The Debtors also have agreed to indemnify the firm. 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: Consensus Tapped as Investment Banker ------------------------------------------------------ The Connaught Group, Ltd., and its debtor-affiliates filed an application with the Court to employ Consensus Advisory Services LLC and Consensus Securities LLC as financial advisor, consultant and investment banking firm. Consensus will: -- advise and assist the Debtors in identifying or evaluating various strategic alternatives that may be available to the Debtors, including, without limitation, an investment in, or a sale of, its business or such other form of transaction; -- assist with the development, negotiation and implementation of financial transactions, including negotiating with creditors, stockholders and other parties in interest; and -- render other financial advisory and investment banking services as may be mutually agreed upon by the parties. On Nov. 9, 2011, Consensus was engaged to provide financial advisory, consulting and investment banking to the Debtors. Consensus is a boutique investment banking and financial advisory firm focusing exclusively on the retail and consumer products industries. Consensus focuses on complex transactions for companies undergoing significant transformation of their business models. Consensus professionals have decades of relevant industry experience representing and advising companies, entrepreneurs, investors, creditors and lenders in financial and brand equity transactions. Michael A. O'Hara attests that Consensus has no connection with the Debtors, its creditors or other parties in interest in the case, (ii) does not hold any interest adverse to the Debtors' estates, and (iii) is a "disinterested person" as defined within section 101(14) of the Bankruptcy Code. Consensus will be compensated in this manner: A. The Debtors will pay Consensus a monthly retainer of $50,000 upon the monthly anniversary of the execution of the Engagement Agreement until termination of the Engagement Agreement. B. In the event the Debtors elect to enter into and consummate a Capital Transaction in its sole discretion during the term of Consensus's engagement, or if the Engagement Agreement is terminated without cause by the Debtors within 12 months of the termination of the Engagement Agreement and the Transaction involves the Debtors and another party on a list with whom the Debtors have had substantive discussions, (i) the Debtors will pay to Consensus a fee equal to 5% of the gross consideration received by the Debtors or (ii) in the event that the capital transaction consists of a refinancing of the Debtors' existing bank indebtedness, a fee of 5% of the amount financed in excess of the existing commitment of the lenders under the Debtors' existing bank agreements. C. In the event the Debtors elect to enter into and consummate a Material Contractual Relationship Transaction in its sole discretion during the term of Consensus's engagement hereunder, or if the Engagement Agreement is terminated without cause by the Debtors and within 12 months of the termination of the Engagement Agreement and the Material Contractual Relationship Transaction involves the Debtors and another party on the List with whom the Debtors have had substantive discussions, the Debtors will pay Consensus a fee equal to $200,000. D. If a sale or Sale Alternative occurs during the term of Consensus's engagement hereunder, or if the Engagement Agreement is terminated without cause by the Debtors, and within 12 months of the termination of the Engagement Agreement the sale or Sale Alternative occurs and it involves the Debtors and another party on the List with whom the Debtors have had substantive discussions, then the Debtors will pay Consensus a fee equal to $300,000 plus 1.5% of the Purchase Price. The Debtors will also indemnify the firm. 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: Rejects 52nd St. Showroom, Canadian Store Leases ----------------------------------------------------------------- The Connaught Group, Ltd., has filed its first omnibus motion to reject unexpired leases of non-residential real property. The Debtors seek to reject as of Feb. 15, 2012, the lease at 16 E 52nd Street, New York, where they rent seven floors for offices and a showroom. The monthly rent for 52nd Street is roughly $212,000 and represents a yearly cost for the Debtors of roughly $2.54 million. The Lease associated with 52nd Street does not expire until 2015. The Debtor began vacating the leased premises at 52nd Street prior to the Petition Date. The Debtors believe that the 52nd Street Lease is above market and more significantly, the Debtors have sufficient room at their other Manhattan office to accommodate the workforce from 52nd Street. The Debtors operate their businesses from 16 locations across the United States. The Debtors also seek to reject leases for three stores in Canada run by a non-debtor Canadian subsidiary, The Connaught Group ULC. Following the Chapter 11 filing, a bankruptcy proceeding was commenced for The Connaught Group ULC in Canada and thereafter the unit ceased operations. The Debtors said Connaught Group ULC has accrued a large intercompany debt to the Debtors and has not been profitable for several years. The Connaught Group ULC began vacating the Canadian Stores as of the Petition Date. 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: To Sell Assets With No Stalking Horse Bidder Yet ----------------------------------------------------------------- The Bankruptcy Court will hold a hearing March 1 at 10:00 a.m. to consider approval of bidding procedures that will govern the sale of The Connaught Group, Ltd. and its affiliates' assets. The Debtors are seeking to sell their assets at an auction in whole to a single bidder or in part to multiple bidders. In connection with the Sale, depending on the winning bidder or bidders and the Assets sold, it may be necessary to assume and assign certain related executory contracts and leases to the winning bidder or bidders. Prior to the Petition Date, the Debtors, with the assistance of their advisors, analyzed a range of potential solutions to the Debtors' liquidity issues. As part of this analysis, the Debtors investigated potential DIP Loan opportunities and selling their assets through a liquidation agent. The Debtors ultimately determined that a sale of their businesses as a going concern by selling substantially all of their assets is in the best interest of all parties and will maximize value for the estates. In light of the Debtors' unusual selling channel, which relies upon an independent third-party sales force -- the Wardrobe Consultants -- to sell its wares, the Debtors determined that the value of its primary assets would best be optimized by identifying a going concern buyer whose balance sheet could support the Debtors' cost structure and who would embrace the Wardrobe Consultants as a critical part of a going concern business. The Debtors and their advisors reasoned that such a buyer would provide future opportunities for the Debtors' employees, vendors and consultants, and would also enable the Debtors and their estates to recover the value of their receivables and inventory in the ordinary course instead of selling these assets at liquidation value, which the Debtors and their advisors determined would be a fraction thereof. The Debtors and their advisors also realized that the value of their primary asset, their inventory, would diminish materially if it were not sold in the ordinary course through the Wardrobe Consultants nearly immediately. Thus, the Debtors prioritized going concern buyers who were willing and demonstrably able to assist the Debtors in the maximization of the value of their assets through a sale or other structured arrangement in very short order. The Debtors' marketing efforts, therefore, focused primarily on parties believed to be both likely to be interested in the assets and capable of moving very rapidly. The Debtors' high-end women's clothing is very much a perishable good. Debtors' clothing is most valuable during the four selling seasons and being sold through the Debtors' Wardrobe Consultants. Clothing that is unsold at the end of a selling season is liquidated through one of the Debtors' outlet stores for only a fraction of the potential sale price through Wardrobe Consultants. Maintaining the Debtors' businesses as a going concern preserves the relationships with the Wardrobe Consultants and the ordinary and most profitable channels for sale and distribution of Debtors' goods. Sale of Debtors' assets through a liquidation agent or in any way other than the ordinary distribution through Wardrobe Consultants provides only cents on the dollar for Debtors' clothing. Consensus Securities LLC actively marketed the Debtors' assets to such a targeted audience of likely buyers for sale in an effort to find a transaction that would maximize the value of the Debtors' estates for all stakeholders. This marketing process included communicating with various parties to gauge their potential interest in purchasing some or all of the Debtors' assets. The Debtors' advisors have contacted 75 potential purchasers, sent form non-disclosure agreements to 29 parties, and entered into 21 NDAs. Despite their efforts, the Debtors have yet been able to reach an agreement with a potential purchaser to act as a stalking horse purchaser for the sale of substantially all of their assets. The Debtors maintain that an expeditious sale process can only increase the value to the Debtors' creditors in addition to avoid further deterioration of the Debtors' businesses, preserve trading partners, and allow for the assumption and/or assignment of certain executory contracts. The Debtors said failure to sell the business in an expedited timeframe dramatically reduces the value of their businesses as a going concern by significantly and potentially irrevocably damaging the Debtors' relationship with its Wardrobe Consultants and substantially reducing the profits from the 2012 summer and fall seasons. The Debtors have proposed these timelines: March 22, 2012 Deadline for submitting bids March 26, 2012 Auction date March 28, 2012 Sale Hearing The Debtors will reimburse a potential purchaser that agrees to be the stalking horse purchaser for expense reimbursement not to exceed $200,000. 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. CONQUEST PETROLEUM: Farms Out Kentucky Properties ------------------------------------------------- Conquest Petroleum Incorporated has consummated an agreement with a third party to farm-out wells and acreage contained on the Company's 9,000-acre leasehold interests in Muhlenberg County, Kentucky. The Agreement calls for the assignment of the 27 existing well bores on the 3000 acre Shearn Coal lease. The Farmee will have the right to workover any or all of these wells at its own cost and expense. Any wells not worked over will be plugged and abandoned at the expense of the Farmee. Conquest will maintain a 10% interest in any wells returned to production and will bear absolutely no costs in restoration or operations. Further, the Agreement calls for the Farmee to drill wells on the Shearn Coal lease and the other leases comprising an additional 6000 acres. The first well must be spudded by July 1, 2012, and the Farmee will be obligated to drill an additional well per quarter or the term of the option will lapse. The Farmee will earn the well bore only for wells on the Shearn Coal lease; and, will earn the lease on any of the other leases in the additional acreage. Conquest will maintain a 25% interest in any and all wells drilled and completed and will bear absolutely no costs for drilling, completing, equipping, and operating for any of the wells. Excluded from the Agreement is the New Albany Shale formation which is the only formation of interest to the Company. Should the Company raise the funds to develop the New Albany Shale, it will operate any well drilled and completed in that formation to include a pipeline and surface equipment. Robert D. Johnson, CEO, states that, "This Agreement allows the Company to monetize acreage with existing wells that are currently shut-in, obviate eventual plug and abandonment liability, and grow assets through the drilling and completion of new wells at no cost or expense to the Company. The Company retains the New Albany Shale which is the only asset in this area given a value by the Company. The Agreement represents a positive occurrence for both parties." About Conquest Petroleum Spring, Tex.-based Conquest Petroleum Incorporated (OTC BB: CQPT) -- http://www.conquestpetroleum.com/-- is an independent oil and natural gas company engaged in the production, acquisition and exploitation of oil and natural gas properties geographically focused on the onshore United States. The Company's areas of operation include Louisiana and Kentucky. The Company reported a net loss of $14.49 million in 2010 and a net loss of $23.26 million in 2009. The Company reported a net loss of $4.77 million for the nine months ending Sept. 30, 2011. The Company's balance sheet as of Sept. 30, 2011, showed $1.99 million in total assets, $32.56 million in total liabilities, and a $30.57 million total stockholders' deficit. As reported by the TCR on April 21, 2011, M&K CPAS, PLLC, in Houston, Texas, noted that Conquest Petroleum has insufficient working capital and reoccurring losses from operations, all of which raises substantial doubt about its ability to continue as a going concern. CROSS BORDER: Red Mountain, Disgruntled, Wants 6 Add'l Directors ---------------------------------------------------------------- Red Mountain Resources, Inc., Black Rock Capital, Inc., Alan W. Barksdale, Paul N. Vassilakos, Richard Y. Roberts, Lynden B. Rose, Randell K. Ford and William F. Miller, III, on Feb. 21, 2012, filed with the Securities and Exchange Commission a preliminary consent solicitation statement in connection with their anticipated solicitation of written consents from the stockholders of Cross Border Resources, Inc., to consent to the following actions without a stockholders' meeting, as authorized by Section 78.320 of the Nevada Revised Statutes: * Amend Article IV, Section 15 of Issuer's Bylaws to provide that stockholders have the ability to fix the size of the Issuer's Board of Directors and to increase the size of the Board to eleven directors; * Amend Article IV, Section 18 of the Bylaws to allow newly created directorships resulting from an increase in the size of the Board to be filled by a vote of the stockholders; * Subject to approval of the above actions, elect each of Alan W. Barksdale, Paul N. Vassilakos, Richard Y. Roberts, Lynden B. Rose, Randell K. Ford and William F. Miller, III, to serve as a director of the Issuer; * Repeal the amendments to the Bylaws adopted by the Board on Nov. 14, 2011 which added Article XIII - Acquisition of a Controlling Interest; and * Remove the power of the Board to amend the Bylaws prior to the next annual meeting of stockholders and repeal any provision of the Bylaws adopted by the Board in effect at the time this proposal becomes effective that was not included in the Bylaws as of Feb. 21, 2012. The Group is seeking to add six independent directors to the Issuer's Board because it does not believe the current Board is acting in the best interests of the Company's stockholders and that new independent directors are necessary in order to enhance stockholder value. The Group believes the approval of the actions will provide the Issuer with qualified and committed directors who, in accordance with their respective fiduciary duties as directors, will provide proper oversight and direct management to take decisive steps to maximizing stockholder value. Red Mountain and its affiliates disclosed that, as of Feb. 21, 2012, they beneficially own 6,973,589 shares of common stock of Cross Border Resources, Inc., which represents 38.1% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/VY5dXv About Cross Border Resources Cross Border Resources, Inc. f/k/a Doral Energy Corp. (OTC BB: DRLY) -- http://www.DoralEnergy.com/-- is a licensed oil and gas operator in the state of New Mexico. The Company is headquartered in Midland, Texas. The Company's balance sheet at Sept. 30, 2011, showed $25.92 million in total assets, $7.88 million in total liabilities and $18.04 million in total stockholders' equity. As reported in the Troubled Company Reporter on Nov. 23, 2010, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about Doral Energy's ability to continue as a going concern following the Company's results for the fiscal year ended July 31, 2010. The independent auditors noted that the Company has negative working capital and recurring losses from operations. CROWN MEDIA: Posts $29.8 Million Net Income in Fourth Quarter ------------------------------------------------------------- Crown Media Holdings, Inc., reported net income of $29.87 million on $99.56 million of total revenue for the three months ended Dec. 31, 2011, compared with net income of $29.46 million on $90.66 million of total revenue for the same period during the prior year. The Company reported net income of $318.98 million on $323.36 million of total revenue for the year ended Dec. 31, 2011, compared with net income of $24.08 million on $287.27 million of total revenue a year ago. The Company's balance sheet at Dec. 31, 2011, showed $958.46 million in total assets, $714.97 million in total liabilities and $243.49 million total stockholders' equity. "Our fourth quarter and holiday season continues to be a source of strength and interest to advertisers for Hallmark Channel and Hallmark Movie Channel," said Bill Abbott, President and CEO of Crown Media Family Networks. "Advertising sales revenue from our highly sought after seasonal programming directly contributed to our EBITDA growth. Hallmark Movie Channel has experienced significant gains in distribution, recently surpassing the 45 million subscriber milestone, in addition to increased carriage interest from non-affiliates. We are pleased with our results from the quarter and the year, and are pursuing strategic initiatives that will continue to resonate with our viewers, advertisers and distributors." A full-text copy of the press release is available for free at: http://is.gd/LXPUGY About Crown Media Studio City, Calif.-based Crown Media Holdings, Inc. (NASDAQ: CRWN) -- http://www.hallmarkchannel.com/-- owns and operates cable television channels dedicated to high quality, broad appeal, entertainment programming. The Company currently operates and distributes Hallmark Channel in both high definition (HD) and standard definition (SD) to 90 million subscribers in the U.S. Crown Media also operates a second 24-hour linear channel, Hallmark Movie Channel, available in both HD and SD, which focuses on family-friendly movies with a mix of classic theatrical films, presentations from the acclaimed Hallmark Hall of Fame library, original Hallmark Channel movies and special events. Going Concern KPMG LLP, in Denver, the Company's independent registered public accounting firm, rendered a going concern opinion in connection with the financial statements included in the Company's annual report on form 10-k for the year ended Dec. 31, 2009. The independent auditors noted of the Company's significant short-term debt obligations. KPMG LLP, however, did not issue a going concern opinion in its report on the Company's 2010 financial statements. * * * As reported by the TCR on July 25, 2011, Standard & Poor's Ratings Services assigned Studio City, Calif.-based cable network company Crown Media Holdings Inc. its 'B' corporate credit rating. The outlook is stable. "The stable rating outlook reflects our expectation that the company could reduce its lease-adjusted leverage over the intermediate term through EBITDA growth and modest debt repayment, barring any unforeseen events," S&P said. CRYOPORT INC: $5-Mil. Raised in Private Placement of 9.1MM Shares ----------------------------------------------------------------- CryoPort, Inc., has closed a private placement with various accredited investors for gross proceeds of $5.0 million. The Company obtained agreements to purchase 9,119,100 shares of common stock at $0.55 per share. For each share of common stock purchased, investors will receive a warrant to purchase one share of common stock at an exercise price of $0.69 per share, pursuant to a Securities Purchase Agreement. The Company intends to use the proceeds of the private placement for working capital purposes. Craig-Hallum Capital Group LLC served as the Company's placement agent for the transaction and Emergent Financial Group, Inc. as co-placement agent. A full-text copy of the Form 8-K disclosure is available at: http://is.gd/Z88mnW About CryoPort Inc. Headquartered in Lake Forest, Calif., CryoPort, Inc. (OTC BB: CYRXD) -- http://www.cryoport.com/-- provides innovative cold chain frozen shipping system dedicated to providing superior, affordable cryogenic shipping solutions that ensure the safety, status and temperature of high value, temperature sensitive materials. The Company has developed a line of cost-effective reusable cryogenic transport containers capable of transporting biological, environmental and other temperature sensitive materials at temperatures below 0-degree Celsius. KMJ Corbin & Company LLP expressed substantial doubt about CryoPort's ability to continue as a going concern, following the Company's fiscal 2009 results. The firm noted that the Company has incurred recurring losses and negative cash flows from operations since inception. The Company reported a net loss of $6.16 million on $378,718 of net revenues for the nine months ended Dec. 31, 2011, compared with a net loss of $4.29 million on $375,438 of net revenues for the same period during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $4.22 million in total assets, $3.60 million in total liabilities and $620,873 in total stockholders' equity. CSX CORP: Moody's Assigns Rating to New $300-Mil. Senior Notes -------------------------------------------------------------- Moody's Investors Service assigned a Baa3 rating to CSX Corporation's ('CSX') new $300 senior notes due 2043. The company's other ratings are unaffected by the assignment. The ratings outlook is positive Moody's has just updated the credit opinion for CSX Please see the issuer page on Moody.com for the most current publication. Moody's current ratings for CSX are: Moody's current ratings on CSX and its affiliates are: Long Term Issuer Rating of Baa3 Senior Unsecured domestic currency ratings of Baa3 Senior Unsecured MTN Program domestic currency ratings of (P)Baa3 Senior Unsecured Shelf domestic currency ratings of (P)Baa3 Subordinate Shelf domestic currency ratings of (P)Ba1 Preferred Shelf domestic currency ratings of (P)Ba1/(P)Ba2 Preferred Shelf -- PS2 domestic currency ratings of (P)Ba2 CSX Transportation, Inc.: Equipment Trust domestic currency ratings of A2 Senior Secured domestic currency ratings of A2 Senior Unsecured domestic currency ratings of Baa3 BACKED Senior Secured domestic currency ratings of A2 CSX Capital Trust I: BACKED Preferred Shelf domestic currency ratings of (P)Ba1 RATINGS RATIONALE CSX's Baa3 Senior Unsecured rating reflects the company's status as a large Class I railroad operator with a strong position in the eastern U.S. railroad market, its impressive record of improving margins through the industry cycle, and expectations for service levels that should support yields, margins, and returns in the future. The ratings also take into account CSX's solid liquidity profile, which will be important to support the sizeable capital spending levels that are required to sustain a strong service offering. However, the ratings also consider the company's substantial debt levels, and resulting credit metrics that lag many higher-rated Class I railroads. CSX is expected to utilize free cash flow for share repurchases, although the program has moderated in comparison to prior practices. The positive rating outlook considers the potential for a higher rating within the next twelve months if operating performance continues to improve and share repurchases are maintained largely within CSX's free cash flow generation. The ratings also consider the diverse range of freight groups that CSX services. This should allow for slow but stable revenue growth over the near term despite expectations for continued weakness in housing-related freight and slow volume growth in the company's large and profitable coal franchise. The principal methodology used in rating CSX was the Global Freight Railroad Industry Methodology published in March 2009. CSX Corporation (CSX) operates the largest freight railroad in the eastern US, with 21,000 route miles and service to 23 states, the District of Columbia, Quebec and Ontario. CYBERDEFENDER CORP: Meeting to Form Creditors' Panel on March 6 --------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on March 6, 12, 2012, at 10:00 a.m. in the bankruptcy case of CyberDefender Corporation. The meeting will be held at: J. Caleb Boggs Federal Building 844 King Street, Room 5209 Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtor's case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. 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. 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. GR Match has committed to provide up to $4.6 million in debtor-in- possession financing. 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. DCS BUSINESS: Moody's Assigns '(P)B2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service assigned a (P)B2 Corporate Family Rating (CFR), a B3 Probability of Default Rating and a (P)B2 rating to a proposed $120 million senior secured credit facility of DCS Business Services, Inc. (DCS), a wholly owned subsidiary of Performant Financial Corporation (Performant). This is a first time rating for either company and is based on a proposed new financing for DCS. The ratings outlook is stable. RATINGS RATIONALE The (P)B2 CFR reflects DCS's modest revenue size of about $163 million, despite revenue growth of 32% in 2011. The ratings are constrained by risks related to such rapid growth, significant customer concentration, and an evolving landscape in the student loan guaranty industry that could result in changes to contract volumes or pricing mechanisms over time. Nonetheless, DCS does have long-standing relationships with most of its clients and reportedly maintains leading market positions within the student loan recovery and Medicare audit niche markets. Initial financial leverage (debt/EBITDA) will be about 3 times using Moody's standard adjustments, relatively low for the B2 rating category. However, financial flexibility will be limited due to near-term working capital needs and high amortization on the proposed term loan A. Liquidity is expected to be supplemented by at least $10 million of cash on hand post-transaction and an undrawn $10 million revolver. The stable outlook reflects Moody's expectation that DCS will continue to grow revenue through higher volumes, while maintaining stable margins. The ratings could be upgraded over time if DCS sustains steady revenue and EBITDA growth and maintains a good liquidity profile. Free cash flow (after term loan amortization) to debt would need to be maintained above 10% for an upgrade. Conversely, the ratings could be downgraded if liquidity deteriorates or if Moody's anticipates that DCS will experience a decline in revenue or operating results following an inability to renew key contracts or any significant adjustments in contract volumes or pricing. Specifically, financial leverage (debt/EBITDA) and free cash flow to debt sustained above 4.5 times and below 5%, respectively, could pressure the ratings down. Moody's assigned these prospective ratings (assessments): Corporate Family Rating, (P)B2 Probability of Default Rating, B3 $10 million first lien revolving credit facility due 2017, (P)B2 (LGD 3, 34%) $40 million first lien term loan A due 2017, (P)B2 (LGD 3, 34%) $70 million first lien term loan B due 2018, (P)B2 (LGD 3, 34%) Proceeds from the new $110 million in term loans along with $10 million in cash on the balance sheet are expected to be used to refinance existing indebtedness, redeem about $8 million in preferred stock, and pay fees and expenses. The proposed credit facility contains an option to increase the term loan B by an incremental $75 million to redeem remaining preferred stock and pay a dividend of up to $20 million to common shareholders. In applying Moody's standard adjustments to the financial statements, the preferred shares have been allocated 75% debt/25% equity treatment. Moody's ratings are prospective and will be converted upon closing of the transaction and Moody's review of final documentation. Moody's does not rate Performant's existing debt instruments. The principal methodology used in rating DCS Business Services was the Global Business & Consumer Service Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Performant is majority-owned by Parthenon Capital Partners and members of management. The company is a leading provider of audit and recovery services for organizations in the public and private sectors. Performant derived about 80% of its 2011 revenues from the recovery and restructuring of student loans. DEX MEDIA WEST: Bank Debt Trades at 43% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media West LLC is a borrower traded in the secondary market at 57.20 cents-on- the-dollar during the week ended Friday, Feb. 24, 2012, an increase of 0.24 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2014, and carries Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 149 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About R.H. Donnelley & Dex Media East Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc., and Local Launch, Inc., are the company's only direct wholly owned subsidiaries. Dex Media East LLC is a publisher of the official yellow pages and white pages directories for Qwest Communications International Inc. in the states, where Qwest is the primary incumbent local exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media, Inc., filed for Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09- 11852) on May 28, 2009, after missing a $55 million interest payment on its senior unsecured notes. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, represented the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, served as the Debtors' local counsel. The Debtors' financial advisor was Deloitte Financial Advisory Services LLP while its investment banker was Lazard Freres & Co. LLC. The Garden City Group, Inc., served as claims and noticing agent. The Official Committee of Unsecured Creditors tapped Ropes & Gray LLP as its counsel, Cozen O'Connor as Delaware bankruptcy co-counsel, J.H. Cohn LLP as its financial advisor and forensic accountant, and The Blackstone Group, LP, as its financial and restructuring advisor. The Debtors emerged from Chapter 11 bankruptcy proceedings at the end of January 2010. DIPPIN' DOTS: Stockwell & Smedley OK'd for Patent Application ------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Kentucky authorized Dippin' Dots Inc. to employ Todd E. Stockwell, Esq. of Stockwell & Smedley, Attorney at Law, as special counsel to assist in the patent application process. Mr. Stockwell, founding partner of Stockwell & Smedley, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Dippin' Dots Inc. Founded in 1988 by microbiologist Curt Jones, Dippin' Dots Inc. manufactures quirky and colorful ice cream beads, which are flash frozen using liquid nitrogen. It owns a 120,000-square-foot plant in Kentucky that can produce more than 25,000 gallons of frozen dots a day. It has about 140 Dippin' Dots retail locations, which are mostly controlled by franchisees, and agreements with 9,952 small vendors who sell the ice cream at fairs, festivals and sports games. Dippin' Dots isn't sold in grocery stores because of its extreme cooling requirements. Dippin' Dots filed a Chapter 11 petition (Bankr. W. D. Ky Case No. 11-51077) on Nov. 3, 2011 in Paducah, Kentucky. Judge Thomas H. Fulton presides over the case. Farmer & Wright, PLLC, represents the Debtor as Chapter 11 counsel. The Debtor disclosed $20,233,130 in assets and up to $20,233,130 in debts. The petition was signed by Curt Jones, president. Regions Bank, the Debtor's secured lender, is represented by Brian H. Meldrum, Esq., at Stites & Harbison PLLC. DIWAN, LLC: Case Summary & 15 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Diwan, L.L.C. dba Gas America dba Citgo Mart Stop #2 fka Clark Station dba Citgo Gas & Car Wash 3527 Spring Street Davenport, IA 52807 Bankruptcy Case No.: 12-00424 Chapter 11 Petition Date: February 22, 2012 Court: United States Bankruptcy Court Southern District of Iowa (Davenport) Judge: Anita L. Shodeen Debtor's Counsel: Dale G. Haake, Esq. KATZ, HUNTOON & FIEWEGER, P.C. 1000 36th Ave. P.O. Box 950 Moline, IL 61266-0950 Tel: (309) 797-3000 Fax: (309) 797-3330 E-mail: dhaake@katzlawfirm.com Scheduled Assets: $941,092 Scheduled Liabilities: $1,532,409 A list of the Company's 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/iasb12-00424.pdf The petition was signed by Ranbir Thakur, member. DUNE ENERGY: TPG Funds, et al., to Sell 24.5-Mil. Common Shares --------------------------------------------------------------- Dune Energy, Inc., filed with the U.S. Securities and Exchange Commission a Form S-1 registration statement relating to the resale of up to 24,579,997 shares of common stock, par value $0.001 per share, of the Company. The common stock may be offered for sale from time to time by West Face Long Term Opportunities Global Opportunities Global Master L.P., TPG Funds, High Ridge Ltd, et al. The proposed maximum aggregate offering price is $83.81 million. The Company's common stock is traded on the OTC Bulletin Board under the symbol "DUNR." On Feb. 23, 2012, the closing price of the Company's common stock on the bulletin board was $3.50. A full-text copy of the prospectus is available for free at: http://is.gd/a38GTq About Dune Energy Dune Energy, Inc. (NYSE AMEX: DNE) -- http://www.duneenergy.com/ -- is an independent energy company based in Houston, Texas. Since May 2004, the Company has been engaged in the exploration, development, acquisition and exploitation of natural gas and crude oil properties, with interests along the Louisiana/Texas Gulf Coast. The Company's properties cover over 90,000 gross acres across 27 producing oil and natural gas fields. The Company reported a net loss of $75.53 million in 2010 and a net loss of $59.13 million in 2009. The Company's balance sheet at Sept. 30, 2011, showed $271.17 million in total assets, $376.85 million in total liabilities, $156.56 million in redeemable convertible preferred stock, and a $262.24 million total stockholders' deficit. * * * As reported by the TCR on Dec. 27, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on Dune Energy Inc. to 'SD' (selective default) from 'CC'. "The rating actions follow the company's announcement that it has completed the exchange offer for its 10.5% senior notes due 2012, which we consider a distressed exchange and tantamount to a default," said Standard & Poor's credit analyst Stephen Scovotti. "Holders of $297 million of principle amount of the senior secured notes exchanged their 10.5% senior secured notes for common stock, which in the aggregate constitute 97.0% of Dune's common stock post-restructuring, and approximately $49.5 million of newly issued floating rate senior secured notes due 2016. We consider the completion of such an exchange to be a distressed exchange and, as such, tantamount to a default under our criteria." In the Jan. 2, 2012, edition of the TCR, Moody's Investors Service revised Dune Energy, Inc.'s Probability of Default Rating (PDR) to Caa3/LD from Ca following the closing of the debt exchange offer of the company's 10.5% secured notes. Simultaneously, Moody's upgraded the Corporate Family Rating (CFR) to Caa3 reflecting Dune's less onerous post-exchange capital structure and affirmed the Ca rating on the secured notes. The revision of the PDR reflects Moody's view that the exchange transaction constitutes a distressed exchange. Moody's will remove the LD (limited default) designation in two days, change the PDR to Caa3, and withdraw all ratings. EASTMAN KODAK: Wins Nod for Groom as Employee Benefits Counsel -------------------------------------------------------------- Eastman Kodak Co. obtained a court order approving the hiring of Groom Law Group, Chartered, as the company's "special employee benefits" counsel. Groom will also advise the Debtors on contingency planning options with respect to employee benefits issue that may arise throughout the Debtors' Chapter 11 cases. Lonie A. Hassel, Esq., a principal at Groom Law, will be the primary attorney responsible for the services rendered to the Debtors. Ms. Hassel's billing rate is $775 per hour. Other Groom Law attorneys may assist Ms. Hassel in her representation of the Debtors. The rates charged by other Groom Law attorneys range from $305 to $875 per hour. Groom Law will also be paid for all necessary out-of-pocket expenses. Ms. Hassel tells the Court that Groom Law is not being employed to administer the Debtors' bankruptcy cases and will not represent the Debtors before the Court. The firm, she says, will not be responsible for obtaining confirmation of any plan of reorganization or appearances before the Court and will review pleadings in the Court only where specifically related to non- bankruptcy matters on which the firm is engaged. Ms. Hassel assures the Court that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. 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 Nod for KCC as Claims & Noticing Agent ---------------------------------------------------------- Eastman Kodak Co. and its affiliates sought and obtained permission from the Bankruptcy Court to hire Kurtzman Carson Consultants LLC as claims and noticing agent in their Chapter 11 cases nunc pro tunc to the Petition Date pursuant to Section 156(c) of Judiciary and Judicial Procedures Code. KCC is authorized and directed to perform noticing services. Required notices and documents in the Debtors' cases include (i) notice of the commencement of the chapter 11 cases and the initial meeting of creditors under Section 341(a) of the Bankruptcy Code, (ii) notice of any claims bar date, (iii) notices of transfers of claims, (iv) notices of objections to claims and objections to transfers of claims, (v) notices of any hearings on a disclosure statement and confirmation of the Debtors' plan or plans of reorganization, including under 3017(d) of the Federal Rules of Bankruptcy Procedure, (vi) notice of the effective date of any plan and (vii) all other notices, orders, pleadings, publications and other documents as the Debtors or Court may deem necessary. KCC is tasked to maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs. The Claims and Noticing Agent is also authorized to receive, maintain, record and otherwise administer the proofs of claim filed in the Debtors' cases and all related tasks. KCC will serve as the custodian of court records and will be designated as the authorized repository of all proofs of claim filed in the Debtors' cases; and is authorized to maintain official claim registers for each of the Debtors and to provide the Clerk with a certified duplicate of it upon the Clerk's request. KCC is also authorized and directed to obtain a post office box or address for the receipt of proofs of claim. The Claims and Noticing Agent is authorized to take other action to comply with all its duties. The Debtors will pay for KCC's services, expenses and supplies at the rates or prices set by KCC. The fees and expenses of KCC will be treated as administrative expenses of the Debtors' estates and will be paid in the ordinary course of business. The Debtors provided KCC with a $25,000 retainer before the Petition Date. KCC may apply retainer to all prepetition invoices and thereafter may hold the remaining retainer during the bankruptcy cases as security for the payment of fees and expenses it incurred, the Court ruled. KCC Vice President for Corporate Restructuring Services Albert Kass assures the Court that his firm neither holds nor represents any interest materially adverse to the Debtors' estates in connection with any matter on which it would be employed. KCC is a "disinterested person" as defined under Section 101(14) of the Bankruptcy Code, he maintains. 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: Discloses $20-Mil. Charge on Camera Biz. Exit ------------------------------------------------------------ Eastman Kodak Co. disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that approximately $20 million of the charges connected with its plan to exit its capture devices business will require cash expenditures. On February 9, 2012, Eastman Kodak announced a plan to exit its dedicated capture devices business consisting of digital cameras, pocket video cameras and digital picture frames. This decision is the result of the company's ongoing strategic review process and commitment to drive sustainable profitability through its most valuable business lines. The company expects to complete the exit of its capture devices business in the first half of 2012. As a result of the exit from this business, Eastman Kodak expects to incur charges related to separation benefits of approximately $30 million. The company estimates that approximately $20 million of these charges will require cash expenditures and that the remainder will be provided in the form of special termination benefits from the company's defined benefit pension plans. As of the date of this filing, the company is not able to determine all other estimated costs and expenditures relating to the exit of the business. 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 CONVERSION: Seeks Court Approval to Sell Solar Business -------------------------------------------------------------- BankruptcyData.com reports that Energy Conversion Devices filed with the U.S. Bankruptcy Court a motion for an order (a) establishing bidding procedures related to the sale of the stock or assets of the Debtors' solar business unit; (b) authorizing the Debtors to enter into a stalking horse agreement; (c) approving break-up fee and expense reimbursement related to the sale and (d) scheduling a hearing to consider the proposed sale. The Debtors propose an April 17, 2012 bid deadline. About Energy Conversion Devices Energy Conversion Devices -- http://energyconversiondevices.com/- - has a renowned 51 year history since its formation in Detroit, Michigan and has been a pioneer in materials science and renewable energy technology development. The company has been awarded over 500 U.S. patents and international counterparts for its achievements. ECD's United Solar wholly owned subsidiary has been a global leader in building-integrated and rooftop photovoltaics for over 25 years. The company manufactures, sells and installs thin-film solar laminates that convert sunlight to clean, renewable energy using proprietary technology. Energy Conversion Devices filed for Chapter 11 relief (Bankr. E.D. Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker presides over the case. Aaron M. Silver, Esq., Judy B. Calton, Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz & Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel. The Debtor Listed assets and debts of between $100 million and $500 million as of the petition date. The petition was signed by William Christopher Andrews, chief financial officer and executive vice president. Affiliate United Solar Ovonic LLC filed a separate Chapter 11 petition on the same day (Bankr. E.D. Mich. Case No. 12-43167). Affiliate Solar Integrated Technologies, Inc., filed a petition for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 12-43169. ENERGY FUTURE: Prices Offering of $350 Million Senior Notes ----------------------------------------------------------- Energy Future Intermediate Holding Company LLC and EFIH Finance Inc., both wholly-owned subsidiaries of Energy Future Holdings Corp., announced that they have priced a private offering of $350 million principal amount of additional 11.750% Senior Secured Second Lien Notes due 2022. The Additional Notes are being offered as additional notes under the Indenture, dated as of April 25, 2011, as supplemented by the first supplemental indenture, dated as of Feb. 6, 2012, and the second supplemental indenture, to be dated as of the closing date, among the Issuers and The Bank of New York Mellon Trust Company, N.A., as trustee, pursuant to which the Issuers previously issued $800 million aggregate principal amount of 11.750% Senior Secured Second Lien Notes due 2022. The Additional Notes will have identical terms, other than the issue date and issue price, and will constitute part of the same series as the Initial Notes. The offering is expected to close on or about Feb. 28, 2012, subject to customary closing conditions. The Issuers intend to use the net proceeds from the offering to pay a dividend of $300 million 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. The Issuers will use the remaining net proceeds for general corporate purposes, which may include dividends 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. Energy Future reported a net loss of $1.91 billion in 2011 and 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: Moody's Rates Proposed Term Loan at 'Ba2' ---------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Energy Transfer Equity, L.P.'s (ETE) proposed senior secured term loan of up to $2.3 billion; the ratings are on review for downgrade. ETE plans to use the term loan proceeds to fund in part the cash portion of its pending acquisition of Southern Union Company (SUG, Baa3 negative). Moody's notes that upon the closing of the term loan, in accordance with the terms of its Indenture, ETE's $1.8 billion senior unsecured notes due 2020 will become ratably secured with the new senior secured term loan. The Ba1 Corporate Family Rating (CFR) and the Ba2 senior note rating remain on review for downgrade. RATINGS RATIONALE "ETE's proposed term loan in conjunction with the issuance of up to $2.9 billion of new ETE common units will comprise the net financing required for the funding of ETE's acquisition of SUG," commented Andrew Brooks, Moody's Vice President. "This transaction will increase ETE's consolidated and stand-alone leverage and impose execution and integration risk across an increasingly complex organizational structure, which is the basis for Moody's review for downgrade of ETE's ratings." On June 16, 2011 Moody's placed ETE's ratings on review for downgrade in response to ETE's announcement that it had reached an agreement to merge with SUG in a transaction valued at $9.4 billion (including SUG debt). SUG shareholders voted to approve the merger on December 9, 2011, with the transaction expected to close in 2012's first quarter. The merger agreement provides for ETE to fund up to 60% of the purchase price in cash (approximately $3.4 billion) with the balance (not less than 50%) to be funded with newly issued ETE common units. ETE had obtained a $3.7 billion 364-day acquisition facility from its banks to fund the cash portion of the acquisition. The proposed term loan together with the net proceeds of the planned drop-down of SUG's 50% interest in Citrus Corp, which owns the Florida Gas Transmission pipeline system (Baa2 stable), will provide for permanent financing, replacing the 364-day acquisition facility. Moody's expects to resolve ETE's review for downgrade following the closing of the SUG acquisition. Moody's has previously noted if ETE's CFR is lowered, the downgrade would likely be limited to one notch, to Ba2. Moody's review will focus on ETE's consolidated and stand-alone debt leverage, announced and potential future asset drop-downs, the adequacy of the combined distributions from its subsidiaries to support ETE's debt service and distributions, and the execution and integration risks inherent in absorbing operations of SUG's scale, whose assets at year-end 2011 totaled $8.2 billion. While the extent of the ETE family's increased structural complexity will also be a focus of the review, the increased scale and scope of the combined entities asset base and operating footprint, together with opportunities to achieve operating efficiencies through the merger, are likely to be viewed as positive aspects of the transaction. A sustained increase in ETE's consolidated debt leverage, which Moody's sees approximating 6x, would likely prompt a ratings downgrade. An increase in the combined business risk profile of ETE, or high asset drop-down multiples and related financings which compromise distributions to ETE, could also prompt a ratings downgrade. Given the review for downgrade, it is unlikely that Moody's will upgrade the rating in the near future. The principal methodology used in rating ETE was the Global Midstream Energy Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ENERGY TRANSFER: S&P Puts BB- Corp. Credit Rating on Watch Pos. --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Energy Transfer Equity L.P. (ETE), including the 'BB-' corporate credit rating, on CreditWatch with positive implications. "At the same time, we revised the recovery rating on the 'BB-' senior notes to '3' from '4', which indicates our expectation of meaningful (50%- 70%) recovery in the event of a payment default. We also assigned a preliminary 'BB-' rating and a preliminary '3' recovery rating to the pending term loan as it will be pari passu with the existing senior notes; we placed these ratings on CreditWatch with positive implications," S&P said. "The CreditWatch with positive implications reflects the potential that we will either affirm our 'BB-' corporate credit rating on ETE or raise it to 'BB'," said Standard & Poor's credit analyst William Ferara. "In our view, ETE's proposed funding plan to purchase Southern Union Co. (SUG) could result in better financial metrics than we previously expected. Key to our ratings decision will be the ultimate funding mix of the SUG acquisition and its impact on credit ratios. We would raise the rating if we expect the company's stand-alone debt to EBITDA to be below 3.5x and systemwide debt to EBITDA to be about 5.5x in the near term. We have taken into consideration the expected completion of the Citrus sale (which ETE will sell to ETP because it is owned by SUG) to ETP in our analysis, which we believe eliminates execution risk of this transaction and limits ETE's incremental indebtedness related to the SUG acquisition. ETP, however, is experiencing some credit pressure and is the primary generator of ETE's cash flows. We are not assuming any additional sales of SUG's assets in our analysis. We expect to resolve the CreditWatch listing in mid- to late-March, roughly the anticipated time that the SUG acquisition is expected to be completed." "We expect to resolve the CreditWatch listing on ETE in mid-to- late March, roughly the time that the SUG acquisition is expected to be completed. We could either affirm our 'BB-' corporate credit rating on ETE or raise it by one notch to 'BB'. We would raise the rating if stand-alone debt to EBITDA stays below 3.5x and we expect systemwide debt to EBITDA of about 5.5x in the near term," S&P said. ENERGY TRANSFER: S&P May Affirm 'BB' Rating After SU Merger ----------------------------------------------------------- Standard & Poor's Ratings Services stated that its ratings on Southern Union Co. and operating subsidiary Panhandle Eastern Pipe Line Company L.P., including the 'BBB-' corporate credit ratings, remain on CreditWatch with negative implications. The ratings were originally placed on CreditWatch with developing implications on July 20, 2011; the CreditWatch implications were revised to negative on Nov. 15, 2011. "The CreditWatch update follows U.S. midstream master limited partnership Energy Transfer Equity L.P.'s (ETE) (BB-/Watch Pos/--) proposed funding plan to acquire Southern Union Co. and its operating subsidiary, Panhandle Eastern Pipe Line L.P., which could result in better financial metrics for ETE than we previously expected. The CreditWatch implications for Southern Union are based on Southern Union's pending merger with lower- rated acquirer ETE," said Standard & Poor's credit analyst Michael Grande. "When the merger with Southern Union is complete, we will either affirm our 'BB-' corporate credit rating on ETE or raise it to 'BB'. We have allowed for a certain level of ratings separation between Southern Union and ETE based on the new corporate structure and some structural features that we anticipate ETE may put in place. However, because Southern Union will be a wholly owned subsidiary of ETE and because ETE's management will exert significant control over Southern Union, such separation could be limited at most to two notches," S&P said. "We expect to resolve the CreditWatch listing on Southern Union when ETE completes its acquisition of the company, which will likely occur before the end of March 2012. We have allowed for a certain level of ratings separation between Southern Union and ETE based on the new corporate structure and some structural features that we anticipate ETE may put in place. However, we will limit such separation to at most two notches because Southern Union will be a wholly owned subsidiary of ETE and ETE's management will exert significant control over Southern Union's financial policies. If we affirm our 'BB-' corporate credit rating on ETE, we will likely lower our ratings on Southern Union," S&P said. EVERGREEN INT'L: Moody's Cuts Corporate Family Rating to 'Caa2' --------------------------------------------------------------- Moody's Investors Service lowered its ratings of Evergreen International Aviation, Inc.: Corporate Family and Probability of Default ratings to Caa2 from B3, senior secured first lien to B3 from B2 and senior secured second lien to Caa3 from Caa1. The outlook is stable. Issuer: Evergreen International Aviation, Inc. Downgrades: -- Probability of Default Rating, Downgraded to Caa2 from B3 -- Corporate Family Rating, Downgraded to Caa2 from B3 -- Senior Secured Bank Credit Facility, Downgraded to a range of Caa3 to B3 from a range of Caa1 to B2: LGD Assessments -- Senior Secured Bank Credit Facility, to LGD 2, 28% from LGD3, 33% and to LGD5, 72% from LGD5, 78% RATINGS RATIONALE The ratings downgrades reflect the increasing pressure on Evergreen's liquidity brought on by the greater than expected decline in demand for international commercial air freight as well as for cargoes from the U.S. Department of Defense's Air Mobility Command ("AMC"). Weaker than anticipated demand from the customer base of the company's airline operation has reduced earnings and cash flows and consumed the majority of the modest cash cushion the company had garnered upon completing its refinancing in June 2011. The stable outlook considers that the growth in demand for air freight, from both commercial channels and the AMC, is likely to remain tepid, limiting a sizeable positive inflection in free cash flow that would sufficiently strengthen Evergreen's liquidity. The Caa2 Corporate Family rating reflects the increased risk stemming from a weaker business outlook and the company's weakened liquidity position. While Evergreen successfully refinanced its bank facilities in 2011, operating performance has lagged expectations and the company could face challenges in maintaining compliance with financial covenants in its credit agreements. Demand for the company's air freight services is expected to be weaker in 2012 than in prior years. The drawdown of forces from foreign theaters of operations by the U.S. military has reduced demand for the supply cargoes that had sustained demand from the AMC for much of the past decade. Additionally, Moody's does not see a catalyst that would significantly increase demand from commercial shippers to offset the lower revenues and earnings that the AMC program will provide in upcoming periods. The company also has fewer under-utilized aircraft or non-core segments to monetize, which has been its practice in periods when operations do not generate sufficient positive free cash flow. The ratings could be further downgraded if demand further weakens, leading to a significant decline in operating cash flow that would increase the company's reliance on asset sales to service its debt. FFO + interest to interest that approaches 1.0 time could also lead to a downgrade of the ratings. The outlook could be stabilized or the ratings directly upgraded if cash flow generation improves, leading to sustained positive free cash flow and certainty of compliance with financial covenants of its credit agreements. Credit metrics are not primary rating drivers over the near term since many remain indicative of the single-B rating category. FFO + Interest to Interest that approaches 3.5 times could exert positive ratings pressure. The principal methodology used in rating Evergreen was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Evergreen International Aviation, Inc. is a privately held company headquartered in McMinnville, Oregon. The company provides diversified air cargo transportation and aviation support services including global air cargo shipping, ground handling and logistics, helicopter transportation services, small aircraft charters and small aircraft and helicopter maintenance and repair to government and commercial customers through its various operating segments. FANNIE MAE: BofA Halts Selling New Mortgages -------------------------------------------- American Bankruptcy Institute reports that Bank of America Corp., the second-largest U.S. lender by assets, will stop selling new home loans to Fannie Mae after a dispute over faulty mortgages. About Fannie Mae Federal National Mortgage Association, aka Fannie Mae, is a government-sponsored enterprise that was chartered by U.S. Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. The Company's balance sheet at Dec. 31, 2010 showed $3.222 trillion in total assets, $3.224 trillion in total liabilities, and a $2.52 billion total deficit. Fannie Mae has been under conservatorship, with the Federal Housing Finance Agency acting as conservator, since September 6, 2008. As conservator, FHFA succeeded to all rights, titles, powers and privileges of the company, and of any shareholder, officer or director of the company with respect to the company and its assets. The conservator has since delegated specified authorities to Fannie Mae's Board of Directors and has delegated to management the authority to conduct day-to-day operations. The U.S. Department of the Treasury owns Fannie Mae's senior preferred stock and a warrant to purchase 79.9% of its common stock, and Treasury has made a commitment under a senior preferred stock purchase agreement to provide Fannie with funds under specified conditions to maintain a positive net worth. FKF MADISON: One Madison Park Condo Set for April 10 Confirmation ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that FKF Madison Group Owner LLC is set for an April 10 confirmation hearing to approve the Chapter 11 reorganization plan. The bankruptcy judge in Manhattan approved the explanatory disclosure statement on Feb. 24. According to the report, the plan in part is based on a settlement where unsecured creditors will share $6.75 million for a recovery of 1.9% to 4.27% on claims aggregating as much as $180 million. The unsecured creditors' committee supports the plan. Secured lenders, owed $234.2 million, are co-proponents of the plan. The secured lenders will receive the new stock while retaining the full amount of the secured debt, for a recovery estimated at 84%. Mechanics lienholders, with claims of as much as $12.5 million, are to be paid in full. The disclosure statement shows the Debtor's property is worth less than the secured debt and mechanics' liens. About FKF Madison FKF Madison owns the One Madison Park condominium tower in New York City. The One Madison Park project came to halt in February 2010 when iStar Financial Inc., the chief financier for the project, moved to foreclose on it. The high-profile condominium project, a 50-story tower was developed by Ira Shapiro and Marc Jacobs. An involuntary Chapter 7 case (Bankr. D. Del. Case No. 10-11867) was filed against FKF Madison on June 8, 2010. The case was converted to a Chapter 11 in November 2010. Before bankruptcy, the $235 million first lien was held by IStar Financial Inc. The debt was sold to the trustee for the junior lender, Longview Ultra Construction Loan Fund. FOXCO ACQUISITION: S&P Raises Corporate Credit Rating to 'B+' ------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit ratings on Fort Wright, Ky.-based TV broadcaster FoxCo Acquisition LLC and operating subsidiary FoxCo Acquisition Sub LLC (which S&P analyze on a consolidated basis) to 'B+' from 'B'. The rating outlook is stable. "At the same time, we revised our recovery rating on FoxCo Acquisition Sub LLC's senior secured credit facilities to '1', indicating our expectation of very high (90% to 100%) recovery for lenders in the event of a payment default, from '2' (70% to 90% recovery expectation). The issue-level rating on the debt was raised to 'BB' (two notches higher than the 'B+' corporate credit rating) from 'B+', in accordance with our notching criteria for a '1' recovery rating. The revision of the recovery rating reflects less senior secured debt at default than we used in our previous simulated default scenario, which results in a higher estimated recovery," S&P said. "We also raised the issue-level rating on FoxCo Acquisition Sub's senior unsecured notes to 'B-' from 'CCC+' in conjunction with the raising of the corporate credit rating. The recovery rating on this debt remains unchanged at '6', indicating our expectation of negligible (0% to 10%) recovery for noteholders in the event of a payment default," S&P said. "The rating upgrade reflects FoxCo's stable operating performance in 2011 despite much lower political advertising revenue," said Standard & Poor's credit analyst Jeanne Shoesmith. "The upgrade also reflects our expectation that the company will be able to reduce debt to average trailing-eight-quarter EBITDA to less than 5x in 2012." "The corporate credit rating reflects our expectation that mid- single-digit percentage core revenue growth and healthy political advertising revenue will lead to an improvement in discretionary cash flow and credit metrics in 2012. We consider the company's business risk profile 'fair,' based on its portfolio of TV stations in mostly top-50 markets and an EBITDA margin comparable to its peers'. This represents a reassessment of our previous view of the business risk profile as 'weak,' based on our analysis of FoxCo's position relative to peers. Although FoxCo's lease- adjusted debt to average trailing-eight-quarter EBITDA is very high, at 5.9x as of Sept. 30, 2011, we expect it to moderate below 5x in 2012, which underpins our view that the company's financial risk is 'aggressive,'" S&P said. "All but one of FoxCo's stations are affiliated with the Fox network; this leaves the company vulnerable to any declines in the network's audience ratings. Additional risks include TV broadcasting's mature growth prospects, and intensifying competition for audiences and advertisers from traditional and nontraditional media. FoxCo's advertising revenue is highly vulnerable to economic downturns and election cycles. The company's Fox-affiliated and CBS-affiliated stations have either a No. 1 or No. 2 morning and late news ranking, which is important to the stations' profitability and to its ability to attract political advertising. Although the company's EBITDA margin lags that of its more efficient peers, at 34% it is still very healthy and in line with that of its overall peer group," S&P said. GALP WATERS: Highcross Plan Outline Hearing Moved to March 5 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Texas has continued until March 5, 2012, at 4:00 p.m., the hearing to consider adequacy of the Disclosure Statement explaining GALP Highcross Limited Partnership's proposed Plan of Reorganization. The Debtor will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. As reported in the Troubled Company Reporter on Jan. 3, 2012, according to the Disclosure Statement, under the Plan, the Debtor is in the process of arranging to fund the Plan out of: (i) new equity (in the form of mandatory and non-mandatory cash calls on various limited partners); and (ii) collection of related party receivables. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/GALP_HIGHCROSS_ds.pdf About GALP Waters Limited Partnership Houston, Texas-based GALP Waters Limited Partnership, aka Gallery at Champions Apartments, filed for Chapter 11 bankruptcy (Bankr. S.D. Tex. Case No. 11-36743) on Aug. 2, 2011. Affiliate GALP Highcross Limited Partnership filed a separate petition (Case No. 11-36741) on the same day. Matthew Hoffman, Esq., at the Law Offices Of Matthew Hoffman, P.C., in Houston, represents the Debtor in its restructuring effort. In its schedules, GALP Waters Limited Partnership disclosed $15,933,583 in assets and $15,193,950 in liabilities. The petitions were signed by Gary M. Gray, president of Waters-1 GP, Inc., general partner of Waters GP, L.P., general partner. GATEHOUSE MEDIA: Bank Debt Trades at 73% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which GateHouse Media, Inc., is a borrower traded in the secondary market at 27.05 cents- on-the-dollar during the week ended Friday, Feb. 24, 2012, an increase of 0.23 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on Feb. 27, 2014, and carries Moody's Ca rating and Standard & Poor's CCC- rating. The loan is one of the biggest gainers and losers among 149 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About GateHouse Media GateHouse Media, Inc. -- http://www.gatehousemedia.com/-- headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites. The Company reported a net loss of $28.42 million on $381.35 million of total revenues for the nine months ended Sept. 25, 2011, compared with a net loss of $27.74 million on $415.22 million of total revenues for the nine months ended Sept. 30, 2010. The Company reported a net loss of $26.64 million on $558.58 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of $530.61 million on $584.79 million of total revenue for the year ended Dec. 31, 2009. The Company's balance sheet at Sept. 25, 2011, showed $511.80 million in total assets, $1.32 billion in total liabilities, and a $811.28 million total stockholders' deficit. GLEN ROSE: Widens Dec. 31 Quarter Profit to $909,000 ---------------------------------------------------- Glen Rose Petroleum Corporation filed with the U.S. Securities and Exchange Commission a Form 10-Q reporting net income of $909,108 on $459,299 of oil and gas sales for the three months ended Dec. 31, 2011, compared with a net loss of $666,233 on $477,403 of oil and gas sales for the same period a year ago. The Company reported net income of $10.81 million on $942,005 of oil and gas sales for the nine months ended Dec. 31, 2011, compared with a net loss of $1.70 million on $747,640 of oil and gas sales for the same period during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $8.26 million in total assets, $16.56 million in total liabilities and a $8.30 million total shareholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/6Aid2K About Glen Rose Glen Rose Petroleum Corporation presently is focused on the development of on-shore U.S. oil and gas assets. Glen Rose has five leases covering 10,500 gross acres in the Wardlaw Field and 5,400 gross acres in the Adamson Field, both located in Edwards County, TX. The Company's net loss for the 2011 fiscal year was $14,662,555, as compared to a restated net loss of $12,176,826 for the 2010 fiscal year. The Company said it has incurred substantial losses from operations and it has negative operating cash flows which raises substantial doubt about its ability to continue as a going concern. GOODYEAR TIRE: Moody's Assigns 'B1' Rating to New Senior Notes -------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to The Goodyear Tire & Rubber Company's new $700 million senior unsecured notes. The net proceeds from the new unsecured notes will be used to redeem the existing $650 million 10.5% senior notes due May 2016 and pay the associated premium and accrued interest. In a related action, Moody's affirmed Goodyear's Corporate Family Rating at Ba3 and other ratings as detailed below. The rating outlook remains stable. Rating assigned: Goodyear Tire & Rubber Company B1 (LGD4, 65%), $700 million unsecured notes due 2022 Moody's current ratings on Goodyear Tire & Rubber Company and its affiliate are: Corporate Family Rating, Ba3; Probability of Default Rating, Ba3; SGL-2, Speculative Grade Liquidity rating $1.5 billion first lien revolving credit facility due 2013, Baa3 (LGD-1, 5%); $1.2 billion second lien term loan due 2014, Ba1 (LGD-2, 16%); 8.75% senior unsecured guaranteed notes due 2020, B1 (LGD-4, 65%); 8.25% senior unsecured guaranteed notes due 2020, B1 (LGD-4, 65%); 7% senior notes due 2028, B2 (LGD-6, 96%) 10.50% unsecured notes due 2016, B1 (LGD-4, 66%) -- these ratings will be withdrawn up repayment; (P)B1, guaranteed senior unsecured shelf Goodyear Dunlop Tires Europe B.V.: Baa3 (LGD-1, 5%), ?400 million of first lien revolving credit facilities due April 2016; Ba2 (LGD-2, 27%), ?250 million of senior unsecured notes due April 2019 RATINGS RATIONALE The affirmation of Goodyear's Ba3 Corporate Family Rating reflects the company's continuing efforts to improve its business profile by selling a greater share of higher value added tires in its product mix, pursuing market pricing initiatives consistent with its higher value added product line, and delivering on cost saving initiatives. Goodyear faces a challenging business environment where Asian producers are aggressively competing in many of the company's geographic markets with low priced tires. With competitive pressures constraining the top line and ongoing volatility in raw material costs, Goodyear has been able to support overall revenues and profits by avoiding the commodity tire business and by growing its sales of value added products. The company has maintained a sound balance sheet, with cash and cash equivalents of $2.8 billion at 12/31/11, and earnings growth along with refinancing initiatives that have lowered interest costs and have helped boost consolidated EBIT/Interest coverage (inclusive of Moody's standard adjustments) to 2.0x for 2011 from 1.1.x in the prior year. Goodyear's position as a leading manufacturer of automotive tires is expected to be maintained despite near-term volume pressure in several markets and continuing pressure from low priced competitors. Goodyear's stable outlook reflects Moody's belief the company will continue to successfully execute its strategy to position itself for long-term growth. Moody's expects Goodyear will face headwinds into 2012 including lower volumes, raw material cost pressures in the first-half, additional start-up costs in Asia, and product mix issues in Latin America. However, Goodyear has demonstrated the ability to offset rising raw material pricing with improving price-mix and restructuring actions in 2011. In addition, while the company's capital spending needs are likely to consume funds during the near term, its good liquidity profile provides continued financial flexibility. Goodyear's SGL-2 Speculative Grade Liquidity is supported by strong cash balances and revolver availability. Global cash on hand at December 31, 2011 was $2.8 billion which includes about $291 million in Venezuela. As of December 31, 2011, Goodyear had $407 million in letters of credit issued and $1.1 billion of remaining availability under the US$1.5 billion ABL revolving credit facility. Goodyear's Euro 400 million revolving credit facility was undrawn as of December 31, 2011 with Euro 6 million of letters of credit outstanding and the Pan European accounts receivable securitization facility was fully utilized. Goodyear is expected to experience ongoing cash flow pressure from a number of fronts including ongoing high raw material costs, plant reinvestments to support growth in high value added tires, and increased competition in Latin American and Asian markets. While the above liquidity measures are sufficient over the near-term, the U.S. revolving credit facility matures in April 2013. Yet, Moody's believes Goodyear's potential cash burn over the near term will result in a modest decline in reported year-end 2011 cash balances. There is a coverage ratio covenant test under the $1.5 billion revolver which comes into effect only when availability under the revolver, plus cash balances, goes below $150 million, which is unlikely to be activated in the near-term. Goodyear has the capacity under the indentures for its unsecured obligations to pledge additional assets (subject to the terms, limitations and exclusions provided in the respective indentures). Should the permissible basket of liens exceed the prescribed amount, Goodyear would be required to ratably secure the unsecured notes and bonds issued under the indentures. Goodyear continues to face significant business challenges stemming from highly competitive tire markets and significant volatility in raw material costs. It has been pursuing strategies that have strengthened its competitive profile, yet overall financial metrics remain weak for the Ba3 Corporate Family Rating. A lower rating could result if Goodyear is unable to offset expected lower volume trends, competitive pressures, and increasing raw material costs through the combination of improved product mix, pricing, or restructuring actions. Developments that suggest that the EBIT margin will revert below 5% for a protracted period, that the company will not be able to restore free cash flow generation, or that the company will not be able to make progress toward lowering debt to EBITDA below the 4.5x could put downward pressure on the rating. Ratings pressure could also arise from a meaningful decrease in the liquidity profile. Upward rating migration is unlikely over the intermediate term. Any improvement in Goodyear's credit metrics would first help to positioning the company more solidly in the Ba3 rating. However, a positive rating outlook or rating change could result from a de- leveraging of Goodyear's balance sheet, or if industry conditions evolve to permit the company to sustain better margins through a lower risk associated competitive pricing pressures and/or lesser exposure to volatile commodity costs resulting in EBIT/interest being sustained above 3.0 times, and debt/EBITDA approaching 3.0x while maintaining a good liquidity profile. The principal methodology used in rating Goodyear Tire & Rubber Company was the Global Automotive Supplier Industry Methodology published in January 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. The Goodyear Tire & Rubber Company, based in Akron, OH, is one of the world's largest tire companies with 53 manufacturing facilities in 22 countries around the world. Revenues in 2011 were approximately $22.8 billion. GOODYEAR TIRE: S&P Rates $700-Mil. Senior Unsec. Notes at 'B+' -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue-level rating on Akron, Ohio-based The Goodyear Tire & Rubber Co.'s proposed $700 million in senior unsecured notes due May 15, 2022. "At the same time, we assigned our recovery rating of '5' to the notes, indicating our expectation that lenders would receive modest recovery (10%-30%) in the event of a payment default," S&P said. "Net proceeds of this offering, together with cash and cash equivalents, will be used to redeem all of the company's $650 million 10.5% senior notes due 2016, at a redemption price of 100% of the principal amount plus a premium as well as accrued and unpaid interest as of the redemption date. We expect the company to exercise its option to redeem these 10.5% senior notes on or before May 15, 2012 and pay the associated premium and accrued interest," S&P said. "The notes are senior unsecured obligations of Goodyear Tire and the guarantors, ranking equal in right of payment with existing and future unsubordinated debt. The notes will also be effectively subordinated to all existing and future secured debt of the company and subsidiary guarantors to the extent of the collateral securing the debt," S&P said. "Our BB-/Stable/-- rating on Goodyear Tire reflects the company's high leverage and the substantial competition in both the replacement and original equipment tire markets," S&P said. Ratings List The Goodyear Tire & Rubber Co. Corporate credit rating BB-/Stable/-- Rating Assigned $700 mil. sr unsec notes due 3/15/22 B+ Recovery rating 5 GORDIAN MEDICAL: In Chapter 11 After Medicare Stopped Refunds ------------------------------------------------------------- Gordian Medical, Inc., doing business as Gordian Medical, Inc., filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-12339) in Santa Ana, California on Feb. 24, 2012. The Debtor estimated assets and debts of up to $50 million. It says it has $4.3 million in cash and $31.1 million in receivables due from Medicare. Unsecured debt owed to 460 creditors total $9.4 million. Taxing authorities are also owed $2 million and lessors are owed $1.12 million. The Debtor also has a $2.225 million note payable to the president. Irvine, California-based Gordian Medical provides supplies and services to treat serious wounds. The company has active relationships with and serves patients in more than 4,000 nursing facilities in 49 states with the heaviest concentration of the nursing homes being in the south and southeast sections of the United States. The Debtor maintains a nationwide staff of 394 employees, including a physician as the Chief Medical Officer and 224 nurses and physical therapists who have completed the required training and testing to be designated "Certified Wound Specialists" or similar certifications. In addition to the medical team, the Debtor has 50 employees in management, sales and administration, eight employees in finance and operations, 116 employees in order processing and compliance; 16 employees working in the warehouse, and seventeen employees in the regulatory area. Explaining the bankruptcy filing, Gerald Del Signore, president and sole member of the board, says in court documents, "The Debtor has enjoyed uninterrupted sales growth since its formation in 2007, experiencing compound average growth of 14.3% per year from the fiscal years ended March 31, 2008 through March 31, 2011. Its net revenue for the fiscal year ending March 31, 2010 was $77,358,926 and for 2011 was $81,185,635 per the Debtor's audited financial statements. The Debtor's net income also increased annually through fiscal 2010. In fiscal 2011 the Debtor recognized a net loss, the result of recording a one-time significant reduction in accounts receivable (and an increase in related bad debt expense) due to unfavorable results related to claims on appeal within the Medicare appeal system. The Debtor resumed profitable operations in fiscal 2012 until November 2011 when the Debtor received notice that Medicare was withholding 100% of reimbursement payments to the Debtor arising from more than 14,000 claims per month. The withholding of these payments has resulted in the Debtor's inability to continue its operations outside of the protection of the Bankruptcy Code." According to the docket, the schedules of assets and liabilities and the statement of financial affairs are due March 9, 2012. But the Debtor has filed a motion to extend the deadline to April 8, 2012. The Debtor has also filed typical first day motions that include requests to pay employee wages and prohibit utilities from discontinuing service. The Debtor is represented by Samuel R. Maizel, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, California. Medicare Issue Many of the patients at long term care facilities have been fitted with gastrostomy tube, or "G tube," which enters a patient's stomach through an ostomy, or surgical hole. Roughly 40% of the Debtor's business consists in supplying dressings to treat G tube sites with bleeding, drainage, infection, and other complications. In its decision In the Matter of Key Largo Medical Systems, et al, (2002), the Medicare Appeals Council held that a provider should be reimbursed for irrigation and site care supplies provided to G tube patients, notwithstanding conflicting guidance in the Medicare Carriers' Manual which stated that supplies included with G tube kits could not be billed separately. In Key Largo, the MAC recognized that G tube kits did not routinely contain irrigation and site care supplies, and that accordingly, a provider should be allowed to bill separately for such supplies. In 2005, agents for the United States Medicare program responded to Key Largo by issuing a revision to a non-binding policy article providing that the reimbursement allowances payable to G tube kit providers include amounts to buy dressings. On Nov. 30, 2011, the Debtor received a letter from AdvanceMed, a Medicare Zone Program Integrity Contractor (ZPIC) engaged by Medicare to review claims, notifying it of AdvanceMed's determination to withhold Medicare payments due AMT effective Nov. 28, 2011 "for all jurisdictions in which you bill the Medicare program." The Nov. 30 letter says that "the suspension of your Medicare payments is based on reliable evidence of an overpayment, or that the payments to be made may not be correct." The Debtor disputes Medicare's right to handle the payment issues in this manner and is taking appropriate action to defend its rights. However, because the Debtor relies on Medicare payments for more than 90% of its revenue and is currently operating at a cash deficit of roughly $1.25 million per week, the viability of its business is threatened. Therefore, the Debtor had no choice but to seek protection under chapter 11 of the Bankruptcy Code, which it believes will stabilize its situation so that it can continue to work with Medicare to resolve these payment issues. A bankruptcy court hearing is scheduled for Feb. 29, 2012, at 9:00 a.m., Pacific. GORDIAN MEDICAL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Gordian Medical, Inc. dba American Medical Technologies 17575 Cartwright Road Irvine, CA 92614 Tel: (714) 556-0200 Bankruptcy Case No.: 12-12339 Chapter 11 Petition Date: February 24, 2012 Court: U.S. Bankruptcy Court Central District of California (Santa Ana) Judge: Mark S. Wallace Debtor's Counsel: Samuel R. Maizel, Esq. PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Boulevard, Suite 1100 Los Angeles, CA 90067 Tel: (310) 277-6910 E-mail: smaizel@pszjlaw.com Debtor?s Financial Advisor: GLASSRATNER ADVISORY & CAPITAL GROUP, LLC Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Gerald Del Signore, chief executive officer. Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Center of Medicare and Medicaid Services $9,000,000 7500 Security Boulevard Baltimore, MD 21244 CA State Board Off Equalization Taxes $1,756,309 MIC 85 Sacramento, CA 94279-0085 Medline Industries Inc. Goods and Services $555,897 One Medline Place Mundelein, IL 60060 MPM Medical Inc. Goods and Services $433,114 2301 Crown CT Irving, TX 75038 Fulbright & Jaworski Legal Services $223,315 Hartmann USA Inc. Goods and Services $222,137 DeRoyal Industries, Inc. Goods and Services $174,740 Smith & Nephew Goods and Services $130,199 McKesson General Medical Goods and Services $106,963 KForce Inc. Goods and Services $93,500 Pridestaff Goods and Services $86,500 Dermarite Industries Goods and Services $81,091 Covalon Technologies Ltd. Goods and Services $40,000 Verizon Wireless Goods and Services $39,617 Sage Goods and Services $25,002 Van Scoyoc Associates Services $21,701 Broad and Cassel Legal Services $10,993 Invacare Supply Group Goods and Services $6,204 AT&T Mobility Goods and Services $4,961 Derma Services Goods and Services $4,254 GRAPHIC PACKAGING: Moody's Rates Credit Facilities at 'Ba2' ----------------------------------------------------------- Moody's Investors Service assigned Ba2 rating to Graphic Packaging's proposed senior secured credit facilities, including $800 million revolving credit facility maturing in 2017, $800 million term loan maturing in 2017, and $400 million term loan maturing in 2018. At the same time, Moody's affirmed the company's existing ratings, including its Ba3 CFR and B2 rating on its senior unsecured notes. The outlook was changed to positive from stable. Moody's also affirmed the company's SGL-2 speculative grade liquidity rating. Moody's took the following rating actions: Assignments: Issuer: Graphic Packaging International Inc. -- Senior Secured Bank Credit Facility, Assigned Ba2 Outlook Actions: Issuer: Graphic Packaging International Inc. -- Outlook, Changed To Positive From Stable RATINGS RATIONALE The new credit facilities will be secured by substantially all of company's assets and will rank in priority to all unsecured indebtedness. The proceeds from the financing will be used to retire the company's existing secured term loans, at which point the ratings on this debt will be withdrawn. The change in outlook to positive reflects Moody's expectation that the company will generate free cash flows in the $200 million range over the next twelve months and will continue its deleveraging efforts, bringing adjusted Debt/ EBITDA ratio in 3.5- 4.0x range over the next twelve to eighteen months. Graphic Packaging's Ba3 corporate family rating primarily reflects the company's leading industry position in the folding cartons packaging industry, including its substantial position in coated unbleached kraft (CUK) paperboard, coated recycled boxboard (CRB), and multi-wall bag. The rating also reflects Graphic Packaging's good liquidity position and strong operating performance that benefits from stable end markets (largely food and beverage), good vertical integration and a disciplined consolidated industry. The rating is constrained by exposure to potentially high fiber, energy and chemical costs and the significant lags in contractual cost pass-throughs. Graphic Packaging's SGL-2 liquidity rating indicates good liquidity supported primarily by almost full availability under the current $400 million revolver and cash balance of approximately $270 million as of December 31, 2011. The liquidity position will be about the same under the new facility, with approximately half of the $800 million revolver available after refinancing. While the existing term loans mature in 2014, under the proposed the refinancing, the company will have no meaningful near-term maturities until 2017. Moody's estimates Graphic Packaging will remain in compliance with its debt covenants over the next 12 month period. Moody's could upgrade the ratings if Graphic Packaging is able to maintain a good liquidity position and sustain normalized (RCF- Capex)/Debt of around 10% and Debt/EBITDA of around 3.5x (including Moody's standard adjustments). The outlook would be stabilized should the company face significant price and volume deterioration, material deterioration in liquidity arrangements, (RCF-Capex)/Debt of around 5%, or if Debt/ EBITDA remains above 4.0x on an adjusted basis. The principal methodology used in rating Graphic Packaging was the Global Paper and Forest Products Industry Methodology published in September 2009 and Speculative Grade Liquidity Rating Industry Methodology published in September 2002. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June. GRAPHIC PACKAGING: S&P Raises Corporate Credit Rating to 'BB+' -------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings, including its corporate credit rating (CCR), on Marietta, Ga.-based Graphic Packaging International Inc. to 'BB+' from 'BB'. "At the same time, we revised the outlook to stable from positive," S&P said. "We also assigned our 'BBB' issue-level rating (two notches above the CCR) to the company's proposed $2 billion credit facilities, which include a revolving credit facility and term loans, with a recovery rating of '1', indicating our expectation that lenders can expect to achieve a very high (90% to 100%) recovery in the event of a payment default," S&P said. "At the same time, we raised our issue-level rating on Graphic Packaging's senior notes to 'BB+' (the same as the CCR) from 'BB- '. We revised the recovery rating on this debt to '3' from '5', reflecting our expectation that lenders can expect a meaningful (50% to 70%) recovery in the event of a payment default. We also raised our issue-level rating on Graphic Packaging's existing credit facilities, including its term loans B and C, to 'BBB' from 'BBB-'. The recovery rating on this debt is '1', reflecting our expectation that lenders can expect a very high (90% to 100%) recovery in the event of a payment default. We then withdrew our 'B+' issue-level ratings on the company's subordinated debt that is no longer outstanding," S&P said. "The ratings upgrade reflects our expectations that Graphic Packaging's credit measures will continue to improve as a result of its relatively steady earnings, good free cash flow generation, and management's demonstrated commitment to debt reduction," said Standard & Poor's credit analyst Tobias Crabtree. "We expect further deleveraging from free cash flow to result in adjusted leverage approaching 3.5x and funds from operations to debt increasing to 20% by the end of 2012. We view these credit metrics as consistent with the higher rating and our assessment of the company's 'significant' financial risk profile. The upgrade also incorporates our expectations for no large debt-financed acquisitions or dividends to its concentrated shareholder base.: "The ratings also reflect the combination of what we consider to be the company's 'satisfactory' business risk profile and its 'significant' financial risk profile. Specifically, we view the company as having relatively steady earnings capacity due to its long-term customer relationships and its value-added product mix. The ratings also take into account our expectations for considerable free cash flow, the company's stated commitment to reduce debt, and its 'strong' liquidity profile," S&P said. "Graphic Packaging manufactures paperboard, most of which it uses internally to produce beverage carriers or folding cartons for food, household goods, and other consumer products that tend to be recession resistant. As a result, the paperboard segment (83% of sales) fared relatively well during the most recent U.S. recession, with revenue declining by less than 5%. Its relatively lower margin multi-wall bag and specialty plastics packaging business (17% of sales) was recently combined with the assets of two other entities in an effort to vertically integrate the business, realize meaningful synergies, and improve overall profitability," S&P said. "Under our baseline scenario, we believe Graphic Packaging's 2012 adjusted EBITDA could increase by 4% or more from an estimated $610 million in 2011," S&P said. Key assumptions to S&P's 2012 EBITDA forecast include: * Limited demand improvement for paperboard packaging products based upon a very gradual economic recovery with real GDP growth of 2.1% in 2012; * Modest benefits from contractually higher selling prices from previous raw material inflation recovery; * Cost inflation being less of a headwind in 2012 than 2011; and * Estimated benefits from ongoing productivity improvements and cost reductions of $60 million to $80 million per year. "A key risk to our forecast is a 'double-dip' recession scenario which could negatively affect demand, albeit to a lesser extent than for other forest products companies given Graphic Packaging's relatively stable food and beverage end markets. Other risks include lower profitability that may temporarily arise from greater-than-expected raw material input (for wood, petroleum- based materials, and energy) cost inflation that is not offset by price increases. We view this risk to be largely mitigated by the company's customer supply agreements that contain inflation recovery provisions," S&P said. "The rating outlook is stable. We expect Graphic Packaging will continue to generate relatively steady earnings and sizeable free cash flow and remain committed to further modest debt reduction, so that credit measures remain in-line with the ratings. Based on our EBITDA projections, we expect 2012 free cash flow generation to be $200 million or more, adjusted leverage to approach 3.5x, and FFO to debt to be 20% by the end of 2012," S&P said. "We view a higher rating as unlikely over the next 12 to 18 months given the company's currently concentrated ownership and the inordinate influence several of the larger shareholders could hold over the company's financial policies," Mr. Crabtree continued. "To that point, our rating specifically assumes that any future share repurchases or dividends will be modest and fully funded from free cash flow." "We could lower the rating if free cash flow were to significantly decline or be used for other activities such as excessive shareholder rewards, large acquisitions, or initiatives, causing adjusted leverage to be sustained above 4x, with FFO to debt in the mid-teen percentage area," S&P said. GRAY TELEVISION: Reports $7.5 Million Net Income in 4th Quarter --------------------------------------------------------------- Gray Television, Inc., reported net income of $7.57 million on $84.67 million of revenue for the three months ended Dec. 31, 2011, compared with net income of $21.86 million on $114.59 million of revenue for the same period during the prior year. The Company reported net income of $9.03 million on $307.13 million of revenue for the year ended Dec. 31, 2011, compared with net income of $23.16 million on $346.05 million of revenue during the prior year. "We are pleased with our operating results for the fourth quarter of 2011. For the fourth quarter of 2011, our operating results were consistent with or exceeded our estimates, which were publicly disclosed on November 4, 2011. Our actual total revenue exceeded our estimates, our actual broadcast expense was within our estimated range and our actual corporate expense was below our estimated range." A full-text copy of the press release is available for free at: http://is.gd/9RLcxc About Gray Television Formerly known as Gray Communications System, Atlanta, Georgia- based Gray Television, Inc., is a television broadcast company. Gray currently operates 36 television stations serving 30 markets. Each of the stations are affiliated with either CBS (17 stations), NBC (10 stations), ABC (8 stations) or FOX (1 station). In addition, Gray currently operates 38 digital second channels including 1 ABC, 4 Fox, 7 CW, 16 MyNetworkTV and 1 Universal Sports Network affiliates plus 8 local news/weather channels and 1 "independent" channel in certain of its existing markets. The Company's balance sheet at Sept. 30, 2011, showed $1.23 billion in total assets, $1.08 billion in total liabilities, $31.33 million in preferred stock and $125.45 million in total stockholders' equity. * * * Gray Television carries 'B-' issuer credit ratings, with stable outlook, from Standard & Poor's and 'Caa1' corporate family rating and probability of default rating, with stable outlook, from Moody's. "Moody's views the company's current level of financial leverage, as exacerbated by a concentrated maturity profile, to be unsustainable for a TV broadcaster and indicative of elevated restructuring risk over the longer-term," said Moody's Russell Solomon, Senior Vice President, in April 2010. Pro forma for the pending transaction, all of Gray's debt (including its debt-like Series D Preferred Stock) comes due in 2014-2015. Moody's believes Gray will need to significantly reduce its debt with free cash flow and will probably need to issue additional equity in order to further moderate its leverage profile over the next few years prior to accessing the capital markets again to refinance current obligations. The Caa1 CFR incorporates Moody's view that leverage will remain excessive over at least the next two years. GREENEDEN US: S&P Assigns 'B' Corporate Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Genesys (aka Greeneden U.S. Holdings II LLC). The outlook is stable. "At the same time, we assigned a 'BB-' rating to the company's proposed $50 million senior secured revolving credit facility due 2017 and the $575 million first-lien term loan due 2019. The recovery rating is '1', indicating our expectation for very high (90% to 100%) recovery in the event of a payment default. Greeneden Lux 3 S.a.r.l and Genesys Telecom Holdings U.S. Inc. are coborrowers under the senior credit facilities," S&P said. "After the assignment of preliminary ratings on Jan. 6, 2012, Genesys upsized its senior term loan to $575 million, using an incremental $25 million to reduce mezzanine debt. In addition, the senior term loan's maintenance covenants have been eliminated. These changes had no impact on corporate credit rating, outlook, or recovery ratings," S&P said. "Our rating on Genesys reflects its competitive industry and 'highly leveraged' financial profile," said Standard & Poor's credit analyst Katarzyna Nolan. She added, "The company's high recurring revenues and stable cash flow generation partly offset these factors." "The stable outlook reflects Genesys' stable free cash flow generation, resulting from the company's recurring and predictable revenue base. It also reflects our expectation that it will maintain its competitive position in key markets. We may lower the rating if profitability deteriorates or if the company pursues a material shareholder distribution, such that leverage rises to the high-7x area," S&P said. "Although unlikely in the next 12 months, we could raise the rating if the company continues its revenue growth, such that adjusted leverage declines to the 5x area," S&P said. GREGORY & PARKER: Case Summary & 4 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Gregory & Parker, Inc. 807 Halifax Street Raleigh, NC 27604 Bankruptcy Case No.: 12-01382 Chapter 11 Petition Date: February 22, 2012 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Debtor's Counsel: Richard D. Sparkman, Esq. RICHARD D. SPARKMAN & ASSOC., P.A. P.O. Drawer 1687 Angier, NC 27501 Tel: (919) 639-6181 E-mail: rds@sparkmanlaw.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $10,000,001 to $50,000,000 The petitions were signed by William D. Parker, Jr., manager. Affiliate that simultaneously filed for Chapter 11 protection: Debtor Case No. ------ -------- Gregory & Parker - Seaboard, LLC 12-01383 Assets: $0 to $50,000 Debts: $10,000,001 to $50,000,000 A list of Gregory & Parker, Inc.'s four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb12-01382.pdf A list of Gregory & Parker - Seaboard's 13 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb12-01383.pdf GRUBB & ELLIS: Daymark Realty Unaffected By Filing Ex-Owner ----------------------------------------------------------- Daymark Realty Advisors, a leading provider of strategic asset, property management and structured finance solutions for owners of commercial real estate, disclosed that it remains unaffected by and entirely unaffiliated with former owner Grubb & Ellis Company's Chapter 11 Bankruptcy filing on Monday, Feb. 20, 2012. In August 2011, San Diego-based Sovereign Capital Management Group and Infinity Urban Century, a New York City-based investment affiliate of the Infinity Group, completed the purchase of Daymark Realty Advisors, Inc. from Grubb & Ellis Company. With the completion of the acquisition, Grubb & Ellis fully exited the tenant-in-common business and Daymark became entirely independent from Grubb & Ellis. The strategic joint venture between Sovereign Capital and Infinity Urban Century has emerged as one of the leading players in the securitized tenant-in-common investment market. In the process, Daymark has been operating under the direction of a new board of directors and executive management team. Since the August acquisition, Daymark Realty Advisors has seen its portfolio of approximately 130 assets reinvigorated with new capital and a new leadership team of industry experts. According to Todd Mikles, Daymark's CEO, the new leadership team has been implementing an aggressive business plan focused on stabilizing and recapitalizing Daymark's portfolio of properties, allowing them to survive in this challenging economic market. "Despite the obstacles we're facing under the current market conditions, we've been able to make significant progress over the past six months," says Mikles. "We have strengthened and capitalized on deep lending relationships by successfully restructuring and refinancing several property loans within the portfolio that were previously facing maturity or potential default. Daymark has bolstered communications with its investors by providing more information, transparency and timeliness than ever experienced under previous ownership." Looking ahead, Daymark has been thoroughly evaluating and analyzing each of the properties within the portfolio with respect to cash flows, debt, and valuation, and plans to announce a number of strategic options to its investor groups in the coming weeks. Mikles concludes that as part of Daymark's updated business objective to create solutions for both long-term and short-term ownership, as well as exit strategies through a fresh thought process and new capital, the company is seeking the best possible investment outcome for its investors in this very difficult real estate environment. About Daymark Realty Daymark Realty Advisors, Inc. is one of the country's leading providers of strategic asset management and structured finance services to private and institutional owners of commercial real estate. Daymark provides a fully integrated platform of services that focus on maximizing property value and performance, and offers proven expertise in the repositioning of distressed assets, debt restructuring and property recapitalizations. From six offices throughout the country, Daymark manages a nationwide portfolio of commercial real estate properties totaling approximately 33.3 million square feet, including more than 8,700 multifamily units, valued at $4.9 billion based on purchase price. About Grubb & Ellis Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is a commercial real estate services and property management company with more than 3,000 employees conducting throughout the United States and the world. It is one of the oldest and most recognized brands in the industry. Grubb & Ellis and 16 affiliates filed for Chapter 11 bankrutpcy (Bankr. S.D.N.Y. Lead Case No. 12-10685) on Feb. 21, 2012, to sell almost all its assets to BGC Partners Inc. The Santa Ana, California-based company disclosed $150.16 million in assets and $167.2 million in liabilities as of Dec. 31, 2011. Judge Martin Glenn presides over the case. 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 Debtors have proposed a March 9 deadline for preliminary bids, a March 19 deadline for binding bids, an auction on March 31, 2012, and a sale hearing on March 23, 2012. Pursuant to the term sheet signed by the parties, BGC will buy the assets for $30.02 million, consisting of a credit bid the full principal amount outstanding under the (i) $30 million credit agreement dated April 15, 2011, with BGC Note, (ii) the amounts drawn under the $4.8 million facility, and (iii) the cure amounts due to counterparties. BGC can terminate the contract if the sale order has not been entered by the bankruptcy court in 25 days after the execution of the Asset Purchase Agreement. BGC Partners, Inc., and its affiliate, BGC Note Acquisition Co., L.P., the DIP lender and Prepetition Secured Lender, are represented in the case by Emanuel C. Grillo, Esq. GSC GROUP: Court Okays $2-Mil. Black Diamond Exit Facility ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized GSC Group, Inc., et al., to enter into a $2 million term loan facility with Black Diamond Capital Corporation. The proceeds of loans under the Credit Facility will be utilized to satisfy the obligations of the Debtors under the Fourth Amended Joint Chapter 11 Plan to make distributions to holders of allowed priority tax claims, allowed secured claims, allowed other priority claims and allowed general unsecured claims and the disputed general unsecured claims cash reserve. The final maturity of the Credit Facility will be 6 years from the closing date. The Court approved BDCM's Fourth Amended Joint Chapter 11 Plan Plan for the Debtors on Feb. 17, 2012. The Court held that, BDCM, as proponent of the Plan, has met its burden of proving the elements of Sections 1129(a) and (b) of the Bankruptcy Code by a preponderance of the evidence. The Plan was supported by majority of unsecured creditors and preferred shareholders, the only groups entitled to vote under the Plan. Prior to the entry of the Confirmation Order, BDCM made certain non-material or technical modifications to the Plan. The modifications do not materially or adversely affect the treatment of any Claims against or Equity Interests in the Debtors under the Plan. A full-text copy of the further amended Fourth Amended Plan is available at http://bankrupt.com/misc/GSC_GROUP_Feb10Plan.pdf As reported by The Troubled Company Reporter on Jan. 24, 2012, the Fourth Amended BDCM Plan provides for the continued operation of the Debtors' existing investment management business. BDCM maintained that its plan is a more preferable and value-preserving alternative to the GSC Chapter 11 Trustee's Modified Joint Plan of Liquidation. The BDCM Plan offers all unsecured creditors three recovery options: (1) a fast cash payout; (2) a partial cash payment close to the Effective Date plus a delayed cash payout from the proceeds of the Liquidating Trust; or (3) shares of Reorganized GSC Group Series B Preferred Stock and shares of Reorganized GSC Group Convertible Class B Common Stock, which will comprise between 33% and 49%, at BDCM's discretion, of the Reorganized GSC Group Common Stock with 24.9% of the voting rights. The BDCM Plan also provides that Preferred Equity Interest holders will receive shares of Reorganized GSC Group's Class A Common Stock equal to between 51% and 67%, at BDCM's discretion, of the total GSC Common Stock, while the Trustee Plan does not provide any recovery for the interest holders. A full-text copy of the Confirmation Order is available at: http://bankrupt.com/misc/GSCGROUP_PlanOrd.pdf About GSC Group Florham Park, New Jersey-based GSC Group, Inc. -- http://www.gsc.com/-- was a private equity firm that specialized in mezzanine and fund of fund investments. Originally named Greenwich Street Capital Partners Inc. when it was a subsidiary of Travelers Group Inc., GSC became independent in 1998 and at one time had $28 billion of assets under management. Market reverses, termination of some funds, and withdrawal of customers' investments reduced funds under management at the time of bankruptcy to $8.4 billion. GSC Group, Inc., filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B. Solow, Esq., at Kaye Scholer LLP, served as the Debtor's bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's notice and claims agent. Capstone Advisory Group LLC served as the Debtor's financial advisor. The Debtor estimated its assets at $1 million to $10 million and debts at $100 million to $500 million as of the Chapter 11 filing. Since Jan. 7, 2011, the Debtors have been operated by James L. Garrity Jr., as Chapter 11 trustee for the Debtors. The Chapter 11 trustee tapped Shearman & Sterling LLP as his counsel, and Togut, Segal & Segal LLP as his conflicts counsel. No committee of unsecured creditors has been appointed in the case. Adam Goldberg, Esq., and Douglas Bacon, Esq., at Latham & Watkins, represent Black Diamond Capital Management, LLC, as counsel. Patrick J. Nash, Jr., Esq. and Paul Wierbicki, Esq. of Kirkland & Ellis LLP serve as counsel to Black Diamond Capital Management, LLC. HAWKER BEECHCRAFT: Bank Debt Trades at 26% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Hawker Beechcraft is a borrower traded in the secondary market at 73.54 cents-on- the-dollar during the week ended Friday, Feb. 24, 2012, a drop of 2.63 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on March 26, 2014, and carries Moody's Caa2 rating and Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 149 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. The Company's balance sheet at Sept. 30, 2011, showed $3.10 billion in total assets, $3.49 billion in total liabilities and a $383.20 million total deficit. * * * As reported by the Troubled Company Reporter on Sept. 16, 2011, Moody's Investors Service has lowered all the credit ratings, including the corporate family rating to Caa3 from Caa2, of Hawker Beechcraft Acquisition Company LLC. The rating outlook is negative. The downgrades reflect Hawker Beechcraft's mounting retained deficit and Moody's view that the soft economy dims chances for profitability anytime soon. Although limited near-term debt maturities exist, with the prospect of further losses Moody's views the capital structure to be unsustainable. Pronounced risk that some form of restructuring of the company's debt obligations may occur underscores the negative rating outlook. Softness in most developed economies should constrain demand for the smaller and mid-sized cabin aircraft that comprise the company's Business and General Aviation product portfolio. While management has aggressively lowered overhead and cut production costs, the revenue outlook seems weak. As of June 30, 2011, the debt to book capital ratio was 114% and the trailing 12-month EBITDA to interest ratio was 0.2x (Moody's adjusted basis) In the Dec. 5, 2011 edition of the TCR, Standard & Poor's Ratings Services lowered its ratings on Hawker Beechcraft, including the corporate credit rating to 'CCC' from 'CCC+'. "The downgrade reflects Hawker's continued poor credit protection measures and tighter liquidity resulting from declining revenues, significant (albeit improving) losses, and weak cash generation," said Standard & Poor's credit analyst Christopher DeNicolo. "We have concerns about the company's ability to maintain covenant compliance." HCA HOLDINGS: Reports $2.8 Billion Net Income in 2011 ----------------------------------------------------- HCA Holdings, Inc., filed with the U.S. Securities and Exchange Commission a Form 10-K reporting net income of $2.84 billion on $29.68 billion of revenue for the year ended Dec. 31, 2011, compared with net income of $1.57 billion on $28.03 billion of revenue during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $26.89 billion in total assets, $33.91 billion in total liabilities, and a $7.01 billion stockholders' deficit. A full-text copy of the Form 10-K is available for free at: http://is.gd/nvWjDR About HCA Inc. Headquartered in Nashville, Tennessee, HCA is the nation's largest acute care hospital company with 162 hospitals and 104 freestanding surgery centers (including eight hospitals and eight freestanding surgery centers that are accounted for using the equity method) as of Sept. 30, 2010. For the 12 months ended Sept. 30, 2010, the company recognized revenue in excess of $30 billion. * * * In May 2011, Moody's Investors Service upgraded the Corporate Family and Probability of Default Ratings of HCA Inc. (HCA) to B1 from B2. "The upgrade of HCA's rating reflects the considerable progress the company has made in improving financial metrics and managing the company's maturity profile since the November 2006 LBO," said Dean Diaz, a Moody's Senior Credit Officer. "While the funding of distributions to shareholders at the end of 2010 increased debt levels, the growth in EBITDA and debt repayment since the LBO have improved leverage metrics considerably from the high levels seen just after the company went private," continued Diaz. As reported by the Troubled Company Reporter on March 14, 2011, Moody's Investors Service commented that the completion of the IPO by HCA Holdings, Inc., has no immediate impact on the company's B2 Corporate Family Rating. The outlook for the ratings remains positive. While Moody's believes that the completion of the IPO is a credit positive since proceeds are expected to be used to repay outstanding debt, the estimated $2.6 billion of proceeds to the company won't meaningfully reduce HCA's $28.2 billion debt load. In the March 16, 2011, edition of the TCR, Fitch Ratings has upgraded its ratings for HCA Inc. and HCA Holdings Inc., including the companies' Issuer Default Ratings which were upgraded to 'B+' from 'B'. The Rating Outlook is revised to Stable from Positive. The ratings apply to approximately $28.2 billion in debt outstanding at Dec. 31, 2010. Fitch noted that HCA has made significant progress in reducing debt leverage since it was taken private in 2006 in a LBO which added $17 billion to the company's debt balance; at Dec. 31, 2006, immediately post the LBO, debt-to- EBITDA was 6.7x. Most of the reduction in debt leverage over the past four years was accomplished through growth in EBITDA, which Fitch calculates has expanded by $1.7 billion or 40% to $5.9 billion for 2010 versus $4.2 billion in 2006. Although the company did not undertake a significant organizational restructuring post the LBO, management has nevertheless been successful in growing EBITDA and significantly expanding discretionary free cash flow (FCF). Fitch believes this was accomplished through various operational initiatives, including expansion of profitable service lines and the divestiture of some under performing hospitals, as well as the generally resilient operating trend of the for-profit hospital industry during the recent economic recession despite the pressure of increased levels of uncompensated care and generally weak organic patient volume trends. HEARTHSTONE HOMES: Files for Chapter 11 in Omaha ------------------------------------------------ Hearthstone Homes, Inc., filed a bare-bones Chapter 11 petition in Omaha, Nebraska (Bankr. D. Neb. Case No. 12-80348) on Feb. 24, 2012. According to the docket, Chief Judge Thomas L. Saladino has ordered that the case will be dismissed without further notice or hearing if the Debtor fails to submit a creditor's matrix within seven days. ketv.com reports that real estate company HearthStone Homes -- http://omahanewhomes.com/-- filed for chapter 11 bankruptcy protection after a deal to sell the company fell through on Feb. 24. According to the report, the company's vice president Scott Kinkaid said, "I'm not able to say a whole lot about that, but I can say the two parties involved in the negotiations were not agreeable." The report relates Mr. Kinkaid said HearthStone's bankruptcy attorney was expected to present the case to a judge on Feb. 27, 2012. Mr. Kinkaid said the company leadership will meet with HearthStone's associates and vendor partners to discuss the next step. The report notes that HearthStone's 24 employees have "no guarantee" of getting paid. The report adds that the company still owes one of its lenders, Wells Fargo Bank, roughly $17.5 million on an overdue loan. It also has to account for dozens upon dozens of construction liens filed by contractors in recent weeks. Mr. Kinkaid said the company will close on one of its homes financed by Wells Fargo on Feb. 28, 2012. Hearthstone estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. The Debtor is represented by Robert F. Craig, Esq., at Robert F. Craig, P.C. HEARTHSTONE HOMES: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Hearthstone Homes, Inc. 810 N. 96th Street, 3rd Floor Omaha, NE 68114 Tel: (402) 339-0150 Bankruptcy Case No.: 12-80348 Chapter 11 Petition Date: February 24, 2012 Court: U.S. Bankruptcy Court District of Nebraska (Omaha Office) Judge: Thomas L. Saladino Debtor's Counsel: Robert F. Craig, Esq. ROBERT F. CRAIG, P.C. 1321 Jones Street Omaha, NE 68102 Tel: (402) 408-6004 Fax: (402) 408-6001 E-mail: robert@craiglaw.org Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by John J. Smith, president. HELIX ENERGY: Moody's Assigns Ba2 Rating to New Sec. Term Loan -------------------------------------------------------------- Moody's assigned a Ba2 rating to Helix Energy Solutions Group, Inc.'s (Helix) new $100 million senior secured term loan A. The B2 Corporate Family Rating, B3 senior unsecured note rating, and stable outlook were not affected. Helix plans to use the proceeds of the new term loan along with $100 million of cash to call $200 million of its 9.5% senior unsecured notes. Pro forma for the proposed refinancing, the amount of senior unsecured notes outstanding would be $275 million, down from $475 million currently. RATINGS RATIONALE Helix's B2 CFR reflects the company's durable cash flow from its offshore contracting services and production facilities businesses and its more volatile cash flow from its oil and gas operations. Moody's expects 2012 results to be soft compared to 2011 because of the scheduled regulatory-required dry dock of four vessels and further declines in oil and gas production. Despite the weaker results, Moody's expects Helix to generate positive free cash flow in 2012 after funding its capital budget. Based on Moody's assumptions and using Moody's standard adjustments, leverage should drop from 3.3x at September 30, 2011 to about 3.1x by the end of 2012 driven mostly by higher crude oil prices. Helix has indicated a desire to sell its oil and gas properties at some point in the future. When the sale occurs and depending on the price received, it could have a material impact on Helix's leverage, positively or negatively, although the change in business risk would be viewed positively. On February 15, 2012, Helix announced its intention to build a new semi-submersible well intervention vessel similar to the Q4000. The construction of this vessel is expected to cost approximately $500 million over the next three years. With over $500 million of cash at year end 2011 and about $500 million of availability under its revolving credit facility, Helix has the ability to finance the construction without any additional third party financing. Therefore, Moody's views the announcement as credit neutral in the short term. Once the backlog of business for the new vessel approaches the construction cost, there would be a positive credit impact. The stable outlook reflects the expectation that the company will not increase borrowings over the next 18 months and that leverage will remain relatively unchanged. An upgrade is unlikely as Moody's expects leverage to begin to increase in 2013 because EBITDA is projected to fall as oil and gas production declines. The sale of the oil and gas assets would reduce Helix's business risk and improve the visibility of Helix's future earnings. Therefore it could result in a rating upgrade depending on the amount of proceeds received. The ratings could be downgraded if commodity prices decline significantly or if there is a sharp downturn in the offshore contracting services business. Furthermore, the company's 2012 EBITDA is highly reliant on the success of two wells, the Nancy and the Danny 2, to slow the production declines. Disappointing results for these wells or a delay in the delivery of the Grand Canyon charter vessel could result in lower than projected EBITDA and a corresponding increase in leverage. Should leverage exceed 4.0x on a sustained basis, a downgrade may be appropriate. Under Moody's Loss-Given-Default (LGD) methodology, the secured credit facilities are rated Ba2 (three notches above the B2 CFR) and the senior unsecured notes are rated B3 (one notch below the CFR). Helix has a $600 million senior secured revolving credit facility and $380 million of senior secured term loans pro forma for the proposed financing. This secured indebtedness is structurally senior to the company's $275 million of senior unsecured notes and $300 million of convertible senior notes. Should the senior convertible notes get converted or redeemed (they are puttable/callable in December 2012), the CFR might improve but the senior secured rating, as well as the senior unsecured rating, could be notched one level lower, in which case there would be no change in the issue ratings. The principal methodology used in rating Helix was the Global Oilfield Services Rating Methodology, published December 2009. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Helix Energy Solutions Group, Inc. is an offshore, oilfield service company headquartered in Houston, Texas. HOME SAVINGS OF AMERICA: Closed; FDIC Unable to Find Continuity --------------------------------------------------------------- The Federal Deposit Insurance Corporation approved the payout of the insured deposits of Home Savings of America of Little Falls, Minn. The bank was closed on Friday, Feb. 24, 2012, by the Office of the Comptroller of the Currency, which appointed the FDIC as receiver. The FDIC was unable to find another financial institution to take over the banking operations of Home Savings of America. The FDIC will mail directly to depositors of Home Savings of America, checks for the amount of their insured money. Customers with questions about the transaction, including those with accounts in excess of $250,000, should call the FDIC toll- free at 1-800-523-8089. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/homesvgs.html Beginning Monday, Feb. 27, 2012, insurance coverage of Home Savings of America depositors with more than $250,000 at the bank can be found on the FDIC's Web page "Is My Account Fully Insured?" at http://www2.fdic.gov/dip/Index.asp As of Dec. 31, 2011, Home Savings of America had $434.1 million in total assets and $432.2 million in total deposits. The amount of uninsured deposits will be determined once the FDIC obtains additional information from those customers. The FDIC as receiver will retain all the assets from Home Savings of America for later disposition. Loan customers should continue to make their payments as usual. The FDIC estimates that the cost to the Deposit Insurance Fund will be $38.8 million. Home Savings of America is the eleventh FDIC-insured institution to fail in the nation this year, and the second in Minnesota. The last FDIC-insured institution closed in the state was Patriot Bank Minnesota, Forest Lake, on Jan. 27, 2012. HORIZON LINES: Board OKs $100,000 Bonus to Executive Officers ------------------------------------------------------------- The Board of Directors of Horizon Lines, Inc., approved a bonus plan and a management incentive plan. Three of the Company's named executive officers, as well as certain other employees, participate in the two plans. In connection with the bonus plan, the Company will pay $100,000 to each of Michael T. Avara, the Executive Vice President and Chief Financial Officer, Brian Taylor, the Executive Vice President and Chief Operating Officer and Michael F. Zendan II, the Senior Vice President, General Counsel and Secretary by Feb. 29, 2012. The management incentive plan provides an additional opportunity for Mr. Avara, Mr. Taylor and Mr. Zendan, if a Company financial performance target and certain business goals are met during 2012. The financial performance target is based on the Company's Adjusted EBITDA for 2012, which is a non-GAAP financial measure defined as net income plus net interest expense, income taxes, depreciation and amortization, and excludes certain expenses and costs related to the antitrust matters and related lawsuits, as well as severance, restructuring and impairment charges. Attainment of the business goals will be determined by the Compensation Committee of the Board of Directors. The management incentive plan target incentive award for each of Mr. Avara, Mr. Taylor and Mr. Zendan is $100,000. Sixty percent of this amount will be paid if the Adjusted EBITDA target is met, as measured at the end of 2012. Forty percent of this amount will be paid if and when the business goals are met during 2012. Consequently, plan participants will receive payment of their full target incentive award only if both the Adjusted EBITDA target and the business goals are met. No additional bonus over the amount of the target incentive award is payable for exceeding either the Adjusted EBITDA target or the business goals. Generally, a named executive officer must be employed by the Company on the date of payment to receive any portion of his target incentive award under the plan. On Feb. 21, 2012, the Board of Directors authorized the Company to enter into an indemnification agreement with Mr. Zendan. The Board of Directors also authorized the Company to enter into new indemnification agreements to replace the current indemnification agreements of Mr. Avara and Mr. Taylor. The indemnification agreements are considered to be important employee benefit arrangements for the officers of the Company. The prior indemnification agreements of Mr. Avara and Mr. Taylor have been updated to reflect the current organizational structure of the Company. About Horizon Lines Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the nation's leading domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. The Company provides express trans-Pacific service between the U.S. West Coast and the ports of Ningbo and Shanghai in China, manages a domestic and overseas service partner network and provides integrated, reliable and cost competitive logistics solutions. The Company's balance sheet at Sept. 25, 2011, showed $677.4 million in total assets, $801.7 million in total liabilities, and a stockholders' deficit of $124.3 million. Ernst & Young LLP, in Charlotte, North Carolina, expressed substantial doubt Horizon Lines' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 26, 2010. The independent auditors noted that there is uncertainty that Horizon Lines will remain in compliance with certain debt covenants throughout 2011 and will be able to cure the acceleration clause contained in the convertible notes. "The Company believes the Oct. 5, 2011 refinancing transactions more fully described in Note 18 to these financial statements have resolved the concern as to compliance with debt covenants throughout the remainder of 2011," the Company said in the filing. "In addition, the Company believes it will be in compliance with its debt covenants through 2012." Refinancing The Company was not in compliance with the maximum senior secured leverage ratio and the minimum interest coverage ratio under its Senior Credit Facility at the close of its third fiscal quarter ended Sept. 25, 2011. Non-compliance with these financial covenants constituted an event of default, which could have resulted in acceleration of the maturity. None of the indebtedness under the Senior Credit Facility or Notes was accelerated prior to the completion of a comprehensive refinancing on Oct. 5, 2011. The Senior Credit Facility and 99.3% of the 4.25% Convertible Senior Notes were repaid as part of the refinancing. In addition, as a result of the completion of the refinancing, the short-term obligations under the Senior Credit Facility, the Notes and the Bridge Loan have been classified as long-term debt. As a result of the efforts to refinance the Company's debt and the 2011 amendments to the Senior Credit Facility, the Company paid $17.3 million in financing costs and recorded a loss on modification of debt of $0.6 million during 2011. * * * As reported by the TCR on Aug. 26, 2011, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Horizon Lines Inc. to 'SD' from 'CCC'. The rating action on Horizon Lines follow the company's decision to defer the interest payment on its $330 million senior convertible notes due August 2012, exercising the 30-day grace period. "Under our criteria, we view failure to make an interest payment within five business days after the due date for payment a default, regardless of the length of the grace period contained in an indenture," said Standard & Poor's credit analyst Funmi Afonja. HOSTESS BRANDS: Union Demands Shared Sacrifice for Survival ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Teamsters union said in a Feb. 24 filing in Hostess Brands Inc.'s Chapter 11 case that "either everyone works together to find a workable solution or it is hard to see how the company survives." At a trial to begin March 5, the baker of Wonder bread will ask the bankruptcy court to terminate existing union contracts, pension plans and retiree health benefit for the Teamsters and bakery workers, Hostess's two largest unions. While Hostess blamed financial problems on uneconomic labor costs and retirement benefits, the Teamsters has been arguing that Hostess' bankruptcy was the result of an "unsustainable capital structure" on emerging from the previous Chapter 11 reorganization. According to the report, the Teamsters said that workers made $100 million of annual concessions in the first bankruptcy. Labor costs were one of few areas where the company's performance met projections on emerging from the first reorganization, the union said. The Teamsters have been saying since the new bankruptcy began that the union won't agree to concessions without knowing what the new capital structure will be. The union wants assurance there will be "shared sacrifice by all constituents." 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: Moody's Withdraws 'Ba2' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service withdrew HOVENSA L.L.C.'s Ba2 Corporate Family Rating and the Ba2 long-term debt ratings on its tax-exempt revenue bonds following the conclusion of the company's cash tender offer for the bonds. The joint-venture announced on January 18, 2012 that it would shut down its 350,000 barrel per day refinery in St. Croix in the first quarter of 2012, while continuing to operate the site as an oil products terminal. The cash tender offer expired on February 17, 2012, with virtually all of the $355.7 million of the bonds tendered. HOVENSA funded the tender from cash on hand and working capital liquidation at the refinery. Ratings withdrawn include five separate issuances by the Virgin Islands Public Finance Authority totalling $355.7 million. RATINGS RATIONALE The sponsors decided to shut down the refinery, one of the largest in the western hemisphere, based on continuing losses and limited prospects for any near-term recovery in Hovensa's Atlantic Basin markets. Moody's noted when the shutdown was announced that it would not affect Hess Corporation's Baa2 long-term debt rating and stable outlook, or PDVSA's B1 global local currency issuer rating. Hess took a $525 million after-tax charge related to severance and shuttering costs against its fourth quarter 2011 earnings to cover its pro-rata share of any residual cash costs incurred in the shuttering process. The shutdown should be largely completed with any related liabilities paid out in 2012. For Hess, the leverage and liquidity impacts will be fairly small given an outlook for strong crude prices, its crude-weighted upstream production profile, and its solid liquidity position, which included $351 million in cash as of December 30, 2011, and a $4 billion revolving credit facility, substantially all of which was unutilized. In addition, Hess should be able to replace HOVENSA product supplies for its retail marketing system using plentiful market supplies in the Atlantic Basin. PDVSA, like Hess, has continued to support HOVENSA's crude supply needs and working capital and liquidity. While HOVENSA provided a secure outlet for significant volumes of PDVSA's Mesa and Merey crudes, the loss of this outlet and residual cash costs of the shutdown will not materially affect the Venezuelan state oil company's financial and operating position. The principal methodology used in rating HOVENSA was the Global Refining and Marketing Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Moody's current ratings for HOVENSA LLC's owner/sponsors are: Hess Corporation Senior Unsecured (domestic currency) Rating of Baa2 Senior Unsec. Shelf (domestic currency) Rating of (P)Baa2 Subordinate Shelf (domestic currency) Rating of (P)Baa3 Pref. Shelf (domestic currency) Rating of (P)Ba1 Preferred shelf -- PS2 (domestic currency) Rating of (P)Ba1 Petroleos de Venezuela, S.A. LT Issuer Rating (domestic currency) of B1 IMPLANT SCIENCES: DMRJ Group Extends Debt Maturity to Sept. 30 -------------------------------------------------------------- Implant Sciences Corporation has renegotiated its credit agreements with its senior secured investor, DMRJ Group LLC. On Feb. 21, 2012, DMRJ agreed to extend the maturity of all Implant Sciences' indebtedness to Sept. 30, 2012. No other terms of the credit facility were changed. DMRJ Managing Director, David Levy commented, "Implant Sciences has made significant progress in achieving market success. They are shipping QS-B220 systems internationally, and have developed strong relationships with TSL and TSA, which are so critical to the domestic market." Implant Sciences President and CEO, Glenn D. Bolduc added, "The willingness of DMRJ to extend our credit line well before its current expiration date is a true vote of confidence in the Company's products and technology. This is a critical period for Implant Sciences, and their cooperation and support is very helpful in allowing us to focus on reaching our goals." About Implant Sciences Implant Sciences Corporation (OBB: IMSC.OB) -- http://www.implantsciences.com/-- develops, manufactures and sells sensors and systems for the security, safety and defense (SS&D) industries. The Company reported a net loss of $15.55 million for the year ended June 30, 2011, compared with a net loss of $15.52 million during the prior year. The Company reported a net loss of $6.36 million on $2.16 million of revenue for the six months ended Dec. 31, 2011, compared with a net loss of $10.03 million on $4.15 million of revenue for the same period during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $7 million in total assets, $33.03 million in total liabilities and a $26.03 million in total stockholders' deficit. Marcum LLP, in Boston, Massachusetts, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has had recurring net losses and continues to experience negative cash flows from operations. As of Sept. 30, 2011, the Company's principal obligation to its primary lender was approximately $23,115,000 with accrued interest of approximately $1,705,000. Bankruptcy Warning The Company's ability to comply with its debt covenants in the future depends on its ability to generate sufficient sales and to control expenses, and will require the Company to seek additional capital through private financing sources. In addition, the Company will require substantial funds for further research and development, regulatory approvals, and the marketing of its explosives detection products. The Company's capital requirements depend on numerous factors, including but not limited to the progress of the Company's research and development programs; the cost of filing, prosecuting, defending and enforcing any intellectual property rights; competing technological and market developments; changes in the Company's development of commercialization activities and arrangements; and the hiring of additional personnel, and acquiring capital equipment. There can be no assurances that the Company will achieve its forecasted financial results or that the Company will be able to raise additional capital to operate its business. Any failure to comply with the Company's debt covenants, to achieve its projections or obtain sufficient capital on acceptable terms would have a material adverse impact on the Company's liquidity, financial condition and operations and could force the Company to curtail or discontinue operations entirely or file for protection under bankruptcy laws. INDIANAPOLIS DOWNS: Wants Plan Filing Exclusivity Until March 19 ---------------------------------------------------------------- BankruptcyData.com reports that Indianapolis Downs filed with the U.S. Bankruptcy Court an amended motion for an order extending the exclusive period during which the Debtors can file a Chapter 11 plan and solicit acceptances thereof through and including March 19, 2012 and May 7, 2012, respectively. According to Indianapolis Downs, "During the current exclusivity period, the Debtors evaluated whether to proceed with a sale of their assets or a plan of reorganization (or to pursue the two paths in parallel). The Debtors also engaged in negotiations with their two major creditor constituents with regard to potential restructuring alternatives. In addition, within the last forty- five (45) days the Debtors received one written and two verbal indications of interest from strategic buyers. The Debtors have determined that proceeding on a parallel process is their preferred alternative if the terms of the process can be agreed to by their major creditor constituencies -- Fortress and the Ad Hoc Second Lien Committee." About Indianapolis Downs Indianapolis Downs LLC operates Indiana Live -- http://www.indianalivecasino.com/-- a combined race track and casino at a state-of-the-art 283 acre Shelbyville, Indiana site. It also operates two satellite wagering facilities in Evansville and Clarksville, Indiana. Total revenue for 2010 was $270 million, representing an 8.7% increase in 2009. The casino captured 53% of the Indianapolis market share. In July 2001, Indianapolis Downs was granted a permit to conduct a horse track operation in Shelvyville, Indiana, and started operating the track in 2002. It was granted permission to operate the casino at the racetrack operation in May 2007. The casino began operations in July 2010. Indianapolis Downs and subsidiary, Indianapolis Downs Capital Corp., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11046) in Wilmington, Delaware, on April 7, 2011. Indianapolis Downs estimated $500 million to $1 billion in assets and up to $500 million in debt as of the Chapter 11 filing. According to a court filing, the Debtor owes $98,125,000 on a first lien debt. It also owes $375,000,000 on secured notes and $72,649,048 on subordinated notes. Matthew L. Hinker, Esq., Scott D. Cousins, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP in Wilmington, Delaware, have been tapped as counsel to the Debtors. Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, is the conflicts counsel. Lazard Freres & Co. LLC is the investment banker. Bose Mckinney & Evans LLP and Bose Public Affairs Group LLC serve as special counsel. Kobi Partners, LLC, is the restructuring services provider. Epiq Bankruptcy Solutions is the claims and notice agent. INDYMAC BANK: Former CEO Gets Chance to Appeal $600MM FDIC Case --------------------------------------------------------------- Evan Weinberger at Bankruptcy Law360 reports that former IndyMac Bank FSB CEO Michael Perry will have the chance to eliminate federal regulators' $600 million negligence suit stemming from the bank's failure after a California federal judge certified his interlocutory appeal of the denial of his motion to dismiss the case. About IndyMac Bank Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) -- http://www.indymacbank.com/-- is the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that originated mortgages in all 50 states of the United States. Through its hybrid thrift- mortgage bank business model, IndyMac designed, manufactured, and distributing cost-efficient financing for the acquisition, development, and improvement of single-family homes. IndyMac also provided financing secured by single-family homes to facilitate consumers' personal financial goals and strategically invests in single-family mortgage-related assets. On July 11, 2008, the Office of Thrift Supervision closed IndyMac Bank and appointed FDIC as the bank's receiver. Thacher Proffitt & Wood LLP was engaged as counsel to the FDIC. Indymac Bancorp filed for Chapter 7 bankruptcy protection on July 31, 2008 (Bankr. C.D.Calif., Case No. 08-21752). Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C. Weitnauer, Esq. Bloomberg noted that Indymac had about $32.01 billion in assets as of July 11, 2008. In court documents, IndyMac disclosed estimated assets of $50 million to $100 million and estimated debts of $100 million to $500 million. INNER CITY: Yucaipa, Fortress Taking Over Stations WLIB and WBLS ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports Inner City Media Corp. attracted no competing bids at auction, prompting the bankruptcy judge to sign an order on Feb. 23 selling the Debtor's radio stations to secured lenders Yucaipa Cos. and Fortress Investment Group LLC. Mr. Rochelle notes that the original proposal was for the lenders, owed $228 million, to take ownership through confirmation of a Chapter 11 plan. It turned out that confirming a plan would result in a $31 million tax claim, making reorganization impossible. To accomplish the same result, Yucaipa and Fortress agreed to purchase the business through a sale by exchanging some of the debt for ownership, along with some cash. In addition, the buyers will pay Inner City's non-bankrupt owner $2.75 million for trademarks and other intellectual property. About Inner City Media Corp. On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit Facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. JAMES RIVER: Blue Diamond Imminent Danger Order Lifted ------------------------------------------------------ Blue Diamond Coal Company, a subsidiary of James River Coal Company, received an imminent danger order under section 107(a) of the Mine Act alleging that an individual miner in Mine #75, in Perry County, Kentucky, was observed traveling by foot between the low structure and the continuous haulage system while the equipment was in use. Upon issuance of the imminent danger order, the equipment was stopped, the individual miner was removed from the area, and the imminent danger order was immediately terminated. No injuries occurred and the order did not require withdrawal of miners from the mine. Blue Diamond maintains a safety policy prohibiting miners from placing themselves in pinch points while equipment is operating. The mine workforce has been retrained on this policy. About James River Headquartered in Richmond, Virginia, James River Coal Company (NasdaqGM: JRCC) -- http://www.jamesrivercoal.com/-- mines, processes and sells bituminous steam and industrial-grade coal primarily to electric utility companies and industrial customers. The company's mining operations are managed through six operating subsidiaries located throughout eastern Kentucky and in southern Indiana. The Company reported a net loss of $10.54 million on $820.47 million of total revenue for the nine months ended Sept. 30, 2011, compared with net income of $52.29 million on $539.06 million of total revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.38 billion in total assets, $929.56 million in total liabilities, and $451.26 million in total shareholders' equity. * * * James River carries a 'B' corporate credit rating from Standard & Poor's Ratings Services, and 'B3' corporate family rating from Moody's Investors Service. As reported by the TCR on March 25, 2011, Moody's Investors Service upgraded James River Coal Company's Corporate Family Rating to 'B3' from 'Caa2'. The rating upgrade reflects post- acquisition potential for significant increase in JRCC's metallurgical coal production, increase in operational diversity within Central Appalachia, and greater access to export markets. The S&P corporate rating was upgraded from 'B-' in March 2011. "The upgrade reflects S&P's view that the IRP acquisition provides James River Coal exposure to the attractive metallurgical coal market," said Standard & Poor's credit analyst Fred Ferraro. "The acquisition also adds management experience in overseas marketing, and expands the company's reserve life. Furthermore, S&P expects that it will be funded in a way that is consistent with the current capital structure so as to maintain the current credit metrics." JEFFERSON COUNTY, AL: JPMorgan Stalling Fraud Suit, Says Insurer ---------------------------------------------------------------- Martin Bricketto at Bankruptcy Law360 reports that Assured Guaranty Municipal Corp. on Thursday told the bankruptcy court overseeing Jefferson County, Ala.'s $4 billion Chapter 9 case that JPMorgan Chase Bank NA is improperly trying to use the proceeding to stall the municipal bond insurer's fraud suit against it in New York. Meanwhile, American Bankruptcy Institute reports that Bankruptcy Judge Thomas Bennett, presiding over the $4.23 billion chapter 9 proceeding of Jefferson County, Ala., said Thursday that he wants guidance from the state's highest court on a dispute that could scuttle the bankruptcy case. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. A report by Bloomberg News in January said, citing Jefferson's attorney, that the default on sewer bonds has already cost Jefferson County, Alabama, $22 million in attorneys' fees. JEFFERSON COUNTY: S&P Keeps 'C' Rating on Various Warrants Series ----------------------------------------------------------------- Standard & Poor's Ratings Services kept its 'C' underlying rating on Jefferson County, Ala.'s series 2000 limited-tax general obligation warrants and series 2003A and 2004A GO warrants on CreditWatch with negative implications, where it was placed on Nov. 11, 2011. 'The 'C' rating reflects our view of the county's fiscal stress of the county as evident in the November Chapter 9 bankruptcy filing," said Standard & Poor's credit analyst Brian Marshall. "The CreditWatch listing continues to reflect the likelihood that we could lower the ratings in the short term because of nonpayment on these rated obligations," Mr. Marshall added. LA JOLLA: Patent for GCS-100 to Issue on March 6 ------------------------------------------------ La Jolla Pharmaceutical Company received from the U.S. Patent and Trademark Office a notification of issuance for the Company's patent application covering certain claims relating to GCS-100, a galectin-3 inhibitor that is being studied for the treatment of cancer and chronic organ failure. The patent is expected to issue on or about March 6, 2012, and will expire on March 13, 2028, without giving effect to any potential patent term extensions that may be available in the future under the Hatch-Waxman Amendments to the Drug Price Competition and Patent Term Restoration Act of 1984. 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. LOS ANGELES DODGERS: 3rd Round of Bidding Begins This Week ---------------------------------------------------------- The Wall Street Journal's Matthew Futterman reports that people with knowledge of the sales process said Feb. 27 that the Los Angeles Dodgers received multiple bids worth $1.2 billion to $1.5 billion apiece during the second round of bidding. According to WSJ, the Dodgers said its representatives at the Blackstone Group LP "have evaluated the bids submitted on February 23rd and have notified the parties that have been selected to advance to the next round. The identities of these parties are being provided to Major League Baseball and they will be meeting with the MLB Ownership Committee." People familiar with the matter told the Journal that bidders advancing to the third round included: * hedge fund manager Steven Cohen, * a group that includes media investor Leo Hindery, financier Marc Utay and investor Tom Barrack; and * a group led by NBA Hall of Famer Magic Johnson and former baseball executive Stan Kasten. The sources said other bidders who remain are St. Louis Rams owner Stan Kroenke and Jared Kushner, owner of the New York Observer. The sources also said former Dodgers owner Peter O'Malley and Los Angeles developer Rick Caruso, who had submitted proposals in the first round of bidding, didn't advance through the second round. A spokesman for Mr. Caruso declined to comment. Mr. Caruso had partnered with former New York Yankees and Dodgers manager Joe Torre. Mr. O'Malley declined to comment. Pete Brush at Bankruptcy Law360 reports that former Los Angeles Dodgers manager Joe Torre and a real estate developer have backed out of bidding for the team, citing current owner Frank McCourt's refusal to include parking lot assets in a bankruptcy sale, according to a letter published Thursday. Executives with Major League Baseball will begin a new round of vetting for potential owners this week. About Los Angeles Dodgers Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a professional Major League Baseball club in the Los Angeles metropolitan area. Frank McCourt, a Boston real-estate developer who unsuccessfully bid for the Boston Red Sox, bought the Dodgers from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for $330 million. Mr. McCourt also bought the Dodgers Stadium from Fox for $100 million. Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB Commissioner Bud Selig rejected a television deal with News Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for June 30 and July 1. Fox Sports has exclusive cable television rights for Dodgers games until the end of 2013 baseball season. Chapter 11 filings were also made for LA Real Estate LLC, an affiliated entity which owns Dodger Stadium, and three other related holding companies. The petition estimates assets of up to $500 million and debts of up to $1 billion. In its schedules, the LA Dodgers baseball club disclosed $77,963,734 in assets and $4,695,702 in liabilities. LA Real Estate LLC disclosed $161,761,883 in assets and $0 in liabilities. According to Forbes, the team is worth about $800 million, making it the third most valuable baseball team after the New York Yankees and the Boston Red Sox. Judge Kevin Gross presides over the case. Lawyers at Young, Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Public relations specialist Kekst and Company has been hired for crisis support. Covington & Burling LLP serves as special counsel. An official committee of unsecured creditors has been appointed in the case. The panel has tapped Lazard Freres & Co. as financial adviser and investment banker, and Morrison & Foerster LLP and Pinckney, Harris & Weidinger, LLC as counsel. The LA Dodgers is the 12th sports team in North America to have sought bankruptcy protection. The reorganization is being financed with a $150 million unsecured loan from the Commissioner of Major League Baseball. The loan gives the Commissioner few of the controls lenders often demanded from bankrupt companies. On Feb. 22, 2012, the Bankruptcy Court approved the disclosure statement explaining the Dodgers' Chapter 11 bankruptcy plan. The Plan contemplates that all creditor claims will be satisfied in full either through their assumption by the reorganized debtors or by the payment of cash from proceeds from the sale of the team. Only one creditor -- the parent of the holding company for the team -- may vote on the plan by March 16. LSP ENERGY: Bondholders File Collateral Support Statement --------------------------------------------------------- BankruptcyData.com reports that an informal group of holders of LSP Energy Limited Partnership's 7.164% Series C Senior Secured Bonds due January 15, 2014 and 8.160% Series D Senior Secured Bonds due July 15, 2025 and D.I.P. lenders filed with the U.S. Bankruptcy Court a statement (I) in support of the Debtors' motion for use of cash collateral and incurrence of D.I.P. financing and (II) in opposition to the objection of two affiliated bondholders (Luminus) thereto. The statement explains, "There is an inference in the Luminus Objection that the DIP Facility is intended as a vehicle for the DIP Lenders to control the process. This is simply not true. First, as noted above, the DIP Facility was available to the entire Informal Group, not just the two Informal Group participants who ultimately agreed to become the DIP Lenders. Second, the DIP Lenders have informed the Debtors and Luminus that other holders of the Bonds, including Luminus, are welcome to participate in the DIP Facility if they agree to its terms as drafted and are otherwise in general agreement with the objectives of the Informal Group as set forth in the 'restructuring term sheet' described in the Cash Collateral/DIP Motion as the RTS.' Luminus has rejected the possibility of participating in the DIP Facility because, among other reasons, Luminus does not support the RTS. While this is Luminus' right, of course, it belies the suggestion that the DIP Lenders are seeking to control the DIP Facility for their own benefit rather than providing a DIP Facility for the benefit of all of the Prepetition Secured Parties." About LSP Energy LSP Energy Limited Partnership, the owner of a natural-gas-fired power plant in Mississippi, and its Debtor-affiliates filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10460) in Delaware on Feb. 10, 2012. Judge Mary F. Walrath presides over the case. Thomas Joseph Francella, Jr., Esq., at Whiteford Taylor Preston LLC serves as the Debtors' counsel. In its petition, the Debtors estimated $100 million to $500 million in assets and debts. The petition was signed by Thomas G. Favinger, president of LSP Energy, Inc., general partner. Affiliates that simultaneously sought Chapter 11 protection are LSP Batesville Holding, LLC (Bankr. D. Del. Case No. 12-10461), LSP Energy, Inc. (Bankr. D. Del. Case No. 12-10463), and LSP Batesville Funding Corporation (Bankr. D. Del. Case No. 12-10464). MADAWASKA HARDSCAPE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Madawaska Hardscape Products, Inc. 3146 Wade Hampton Boulevard Taylors, SC 29687 Bankruptcy Case No.: 12-01093 Chapter 11 Petition Date: February 22, 2012 Court: United States Bankruptcy Court District of South Carolina (Spartanburg) Judge: John E. Waites Debtor's Counsel: Robert A. Pohl, Esq. STODGHILL LAW FIRM CHARTERED 201 East McBee Avenue, Suite 300A Greenville, SC 29601 Tel: (864) 271-0966 Fax: (864) 770-6167 E-mail: rpohl@stodghill-law.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/scb12-01093.pdf The petition was signed by Daniel B. Albert, president. MADISON 92ND: Hearing on Plan Disclosures Resumes Today ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing today Feb. 28, 2012, at 10:00 a.m., to consider the adequacy of the Disclosure Statement explaining Madison 92nd Street Associates, LLC's Chapter 11 Plan. As reported in the Troubled Company Reporter on Dec. 28, 2011, according to the Disclosure Statement, the cornerstone of the Plan is the sale of the hotel and pursuit of causes of action. It is expected, but not guaranteed, that the net sale proceeds will be sufficient to pay all creditors in full. However, Courtyard Marriott Corporation, the manager of the hotel, may attempt to assert a large rejection claim. While the Proponent believes that no such claim would be allowed, it believes that any such claim will be below $500,000, and possibly zero. Moreover, the Proponent believes that Courtyard Marriott and affiliates will owe the Debtor for damages resulting from its malfeasance in the Courtyard Action, and in the Rejection Motion. However, in the event that the Court approves a larger rejection claim than the Debtor expects, the Plan will not be held up and can still confirm, as the Plan essentially represents a "pot plan", whereby the net proceeds of the sale of the hotel will be distributed to creditors in order of priority in accordance with the terms of the Plan. The Plan is intended to enable the Debtor to conduct the sale without the likelihood of a subsequent liquidation or the need for further financial reorganization. The Proponent believes that the Debtor will be able to perform its obligations under the Plan and meet its expenses after the Effective Date without further financial reorganization. Also, the Proponent believes that the Plan permits fair and equitable recoveries, while expediting the closing of the Chapter 11 Case. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/MADISON_92ND_ds.pdf Objections Filed Party-in-interest the New York Hotel & Motel Trades Council, AFL- CIO asked the Court to deny approval of the Disclosure Statement. According to the Union, both the Disclosure Statement motion and the Sales procedure motion are the latest installments in the Debtor's continuing "union-busting" efforts, which are not only improper, but detrimental to the Debtor's estate and its creditors. The Union continued that the implied premise of the Debtor's contemplated sale of the hotel and proposed Plan is that greater value can be obtained only from the sale of the hotel without its unionized workforce. The Disclosure Statement, however, ignores the detrimental effects that will accompany an absence of labor peace at the hotel, as disruptions in operations and profitability in the face of a picket line and public boycott campaign, well as unfair labor practice charges and court actions against any purchaser which violates the rights of the workforce following the acquisition of the hotel. At the Feb. 28 hearing, the Court will also consider the Debtor's motions to (i) use the cash collateral; and (ii) reject management agreement; extend its exclusive periods to file and solicit acceptances for the proposed Plan. As reported in the Troubled Company Reporter on Dec. 20, 2011, the Debtor is asking the Court to extend its exclusive periods to file and solicit acceptances for the proposed plan of reorganization until March 14, and May 14, respectively. The Union is represented by: Norman N. Kinel, Esq. Terence D. Watson, Esq. LOWENSTEIN SANDLER PC 1251 Avenue of the Americas, 18th Floor New York, NY 10020 Tel: (212) 262-6700 Fax: (212) 262-7402 E-mail: nkinel@lowenstein.com - and - Barry N. Saltzman, Esq. PITTA & GIBLIN, LLP 120 Broadway, 28th Floor New York, NY 10271 Tel: (212) 652-3890 Fax: (212) 652-3891 E-mail: bsaltzman@pittagiblin.com About Madison 92nd Madison 92nd Street Associates, LLC, owns real property improved by a hotel located at 410 East 92nd Street, New York, known as the Upper East Side Courtyard by Marriott. It filed for Chapter 11 bankruptcy protection as lender General Electric Capital Corp., owed $74 million, has scheduled a foreclosure sale for Aug. 24, 2011. The petition (Bankr. S.D.N.Y. Case No. 11-13917) was filed Aug. 16, 2011, before Judge Stuart M. Bernstein. J. Ted Donovan, Esq., at Goldberg Weprin Finkel Goldstein LLP, serves as the Debtor's counsel. It scheduled $84,471,069 in assets and $75,398,580 in debts. The petition was signed by Louis Taic, managing member of 92nd Hotel Associates, LLC and Jeffrey Kosow, managing member of JKNY, LLC, members of the Debtor. Courtyard Management Corporation, which manages and operates the hotel pursuant to a management agreement, is represented by Thomas R. Califano, Esq., and William M. Goldman, Esq., at DLA Piper LLP (US). The Bankruptcy Judge appointed an examiner to explore the best route to reorganization for the Debtor amid a rift between two investor groups. Thomas R. Slome, the examiner, tapped his firm, Meyer, Suozzi, English & Klein, P.C., as his counsel. MADISON 92ND: U.S. Trustee Wants Chapter 11 Trustee to Take Over ---------------------------------------------------------------- Tracy Hope Davis, the U.S. Trustee for Region 2, asks the U.S. Bankruptcy Court for the Southern District of New York to direct the appointment of a Chapter 11 trustee in the case of Madison 92nd Street Associates, LLC or, in the alternative, dismiss or convert the case to one under Chapter 7 of the Bankruptcy Code. The U.S. Trustee relates that Thomas R. Slome, Esq., examiner in the case, has concluded that the fundamental issue in the case is the inability by the two separate groups of equity holders of the Debtor to agree upon a single course of action. Specifically, the main asset owned by the Debtor is a hotel. The equity owners cannot agree whether to sell the hotel or to restructure the mortgage on the hotel. In his first report, the examiner recommended as a first preference that one group of equity holders purchase the equity interest of the other group of equity holders, and second, if this was not possible, that the equity holders all agree to an auction of the hotel. The examiner further recommended that if the equity holders could not agree on a course of action, that the Court appoint a Chapter 11 trustee. At this juncture, since the equity holders have not agreed to a compromise, it is in the interest of creditors that a Chapter 11 trustee be appointed. The U.S. Trustee set a March 6, 2012, hearing at 10:00 a.m., on its request for trustee appointment. Objections, if any, are due March 1. About Madison 92nd Madison 92nd Street Associates, LLC, owns real property improved by a hotel located at 410 East 92nd Street, New York, known as the Upper East Side Courtyard by Marriott. It filed for Chapter 11 bankruptcy protection as lender General Electric Capital Corp., owed $74 million, has scheduled a foreclosure sale for Aug. 24, 2011. The petition (Bankr. S.D.N.Y. Case No. 11-13917) was filed Aug. 16, 2011, before Judge Stuart M. Bernstein. J. Ted Donovan, Esq., at Goldberg Weprin Finkel Goldstein LLP, serves as the Debtor's counsel. It scheduled $84,471,069 in assets and $75,398,580 in debts. The petition was signed by Louis Taic, managing member of 92nd Hotel Associates, LLC and Jeffrey Kosow, managing member of JKNY, LLC, members of the Debtor. Courtyard Management Corporation, which manages and operates the hotel pursuant to a management agreement, is represented by Thomas R. Califano, Esq., and William M. Goldman, Esq., at DLA Piper LLP (US). The Bankruptcy Judge appointed an examiner to explore the best route to reorganization for the Debtor amid a rift between two investor groups. Thomas R. Slome, the examiner, tapped his firm, Meyer, Suozzi, English & Klein, P.C., as his counsel. MAQ MANAGEMENT: Withdraws Auction-Based Chapter 11 Plan ------------------------------------------------------- MAQ Management, Inc., has withdrawn its amended Chapter 11 plan of reorganization and the explanatory disclosure statement filed with the U.S. Bankruptcy Court for the Southern District of Florida. The Hon. Erik P. Kimball has also vacated the previous order conditionally approving the disclosure statement. As reported in the Troubled Company Reporter on Nov. 30, 2011, the chapter 11 plan filed by the Debtors is based upon an auction of several properties which will enable the claimants to receive the release prices for their respective collateral in full satisfaction of their claims. In the event a particular claimant's collateral is not sold above the release price, the Debtor will surrender the collateral in full satisfaction of the Claim. The auction liquidates vacant and/or non- or underperforming collateral and reduces the Debtors' overall obligations by nearly $14 million. A copy of the Disclosure Statement is available at http://bankrupt.com/misc/MAQ_ds.pdf About MAQ Management Based in Boca Raton, Florida, MAQ Management, Inc., and three other affiliates serve as commercial landlords to convenience stores and gas stations in primarily in South Florida. They filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Cases No. 11-26571 to 11-26574) on June 15, 2011. Affiliates that sought Chapter 11 protection are Super Stop Petroleum, Inc., Super Stop Petroleum I, Inc., and Super Stop Petroleum IV, Inc. Judge Erik P. Kimball presides over the case. MAQ Management estimated assets and debts of $1 million to $10 million. Super Stop estimated assets and debts of $10 million to $50 million. The petitions were signed by Mahammad A. Qureshi, CEO. Richard J. McIntyre, Esq., and Chirstopher C. Todd, Esq., at McIntyre, Panzarella, Thanasides, Hoffman, Bringgold & Todd, P.L., in Tampa, Florida, serve the Debtors as substitute counsel. The U.S. Trustee announced that until further notice, it will not appoint a committee of creditors for the Debtors' cases. stores and gas stations in primarily in South Florida. As reported in the TCR on Oct. 21, 2011, MAQ Management, Inc., et al., filed their Consolidated Chapter 11 Plan of Reorganization, with the U.S. Bankruptcy Court for the Southern District of Florida, in compliance with the Court's Order. MARCO POLO: Looks for Exclusivity Until March 31 ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, notes that Seaarland Shipping Management filed papers in bankruptcy court last week admitting it may not be possible to negotiate a reorganization plan that satisfies both of the primary secured lenders, Royal Bank of Scotland and Credit Agricole Corporate & Investment Bank. With the exclusive right to propose a Chapter 11 plan ending on Feb. 29, the company filed papers last week to extend so-called exclusivity until March 31. The hearing on the exclusivity motion will take place March 1. About Marco Polo Marco Polo Seatrade B.V. operates an international commercial vessel management company that specializes in providing commercial and technical vessel management services to third parties. Founded in 2005, the Company mainly operates under the name of Seaarland Shipping Management and maintains corporate headquarters in Amsterdam, the Netherlands. The primary assets consist of six tankers that are regularly employed in international trade, and call upon ports worldwide. Marco Polo and three affiliated entities filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29, 2011. The other affiliates are Seaarland Shipping Management B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V. Marco Polo is the sole owner of Seaarland, which in turn is the sole owner of Cargoship, and also holds a 5% stake in Magellano. The remaining 95% stake in Magellano is owned by Amsterdam-based Poule B.V., while another Amsterdam company, Falm International Holding B.V. is the sole owner of Marco Polo. Falm and Poule didn't file bankruptcy petitions. The filings were prompted after lender Credit Agricole Corporate & Investment Bank seized one ship on July 21, 2011, and was on the cusp of seizing two more on July 29. The arrest of the vessel was authorized by the U.K. Admiralty Court. Credit Agricole also attached a bank account with almost US$1.8 million on July 29. The Chapter 11 filing precluded the seizure of the two other vessels. The company started a lawsuit against the two creditors in January 2012. The cases are before Judge James M. Peck. Evan D. Flaschen, Esq., Robert G. Burns, Esq., and Andrew J. Schoulder, Esq., at Bracewell & Giuliani LLP, in New York, serve as the Debtors' bankruptcy counsel. Kurtzman Carson Consultants LLC serves as notice and claims agent. The petition noted that the Debtors' assets and debts are both more than US$100 million and less than US$500 million. Tracy Hope Davis, the United States Trustee for Region 2, appointed three members to serve on the Official Committee of Unsecured Creditors. The Committee has retained Blank Rome LLP as its attorney. Creditor Credit Agricole Corporate and Investment Bank is represented by Alfred E. Yudes, Jr., Esq., and Jane Freeberg Sarma, Esq., at Watson, Farley & Williams (New York) LLP. Gregory M. Petrick, Esq., Ingrid Bagby, Esq., and Sharon J. Richardson, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, represents secured creditor and post-petition lender The Royal bank of Scotland plc. MERIDIAN SHOPPING: Hires Dennis Yan as Attorney ----------------------------------------------- Meridian Shopping Center, LLC, sought and obtained permission from the U.S. Bankruptcy Court for the Northern District of California to employ Dennis Yan as its attorney. Mr. Yan has agreed to work on hourly basis at $250 per hour. No payment was made to Mr. Yan prior to the filing of the petition. To the best of the Debtor's knowledge, neither Mr. Yan nor any member of his office has any interest adverse in the Debtor's case or in any of the matters upon which he is to be engaged, and the Debtor believes Mr. Yan's employment would be in the best interests of the estate. Meridian Shopping Center LLC owns and operates the shopping center Meridian Park Plaza in Milpitas, California. Meridian Shopping Center filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 12-50380) on Jan. 18, 2012. Judge Stephen L. Johnson presides over the case. The Debtor scheduled $14,000,000 in assets and $10,912,623 in liabilities. The petition was signed by John Wynn, manager. MF GLOBAL: JPM Cash Account Not Tied to Customer Cash ----------------------------------------------------- Louis J. Freeh, the Chapter 11 trustee for MF Global Holdings Ltd. and its debtor affiliates' bankruptcy, submitted to Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York on February 16, 2012, a forensic analysis of the cash collateral held in the bank account of MF Global Finance USA, Inc. at JPMorgan Chase. According to the report, MF Global Finance or FINCO's cash account had an ending balance of $25.3 million as of October 28, 2011. Bloomberg News pointed out that although JPMorgan gave permission to use cash in the account, some customers of MF Global Inc. objected that some of the $25.3 million might have been taken improperly of from their segregated accounts. In handing down his final approval of the cash collateral use in December 2011, the Court expressed concerns regarding whether any of the cash held in the JPM Account contained the cash of customers at MFGI, the Chapter 11 Trustee said. On February 6, the trustee overseeing the liquidation of MFGI under the Securities and Investor Protection Act said in a preliminary report that MFGI's shortfall, which is estimated to be at $1.6 billion, began on October 26. The SIPA Trustee found that approximately $105 billion in cash transactions were made in and out of MFGI in the last week before the bankruptcy. The ultimate recipients of those transfers were banks, exchanges, clearinghouses, MFGI affiliates, among other parties, according to the SIPA Trustee. In his February 16 report, the Chapter 11 Trustee said he does not believe that the JPM Account contains any cash that should have been held in customer segregated accounts. At the Court's directive, the Chapter 11 Trustee and his advisors conducted an investigation focusing on the 100 inflows totaling $1,762,100,000 and 108 outflows totaling $1,769,600,000 during October 2011. Out of the $1.75 billion, only $33.5 million originated from a bank account maintained by MFGI that contained customer funds, the Chapter 11 Trustee explained. All transactions between this MFGI customer funding account and the JPM Account were on account of customer margin loans, the Chapter 11 Trustee explained. These transactions were part of the ordinary operating procedures of both MFGI and FINCO, the Chapter 11 Trustee added. Of the more than $1.75 billion in inflows into the JPM Account during October 2011, more than $950 million is attributable to receipts from MFGH, the Chapter 11 Trustee continued. This sum represents borrowings made under the RCF during the month of October 2011, said the Chapter 11 Trustee. "Clearly, those inflows cannot be tied to customer cash. In addition, a review of the cash inflows from other sources (mostly, unregulated FINCO affiliates) does not involve any segregated MFGI customer funds," the Chapter 11 Trustee continued. "Substantially all of the payments into the JPM Account from these MFGI accounts represent repayments of borrowings made under the Debtors' revolving credit facility with JPM and the other lenders party thereto or 'RCF', or repayments of short-term working capital loans made by FINCO to MFGI," the Chapter 11 Trustee stated. Indeed, when the bankruptcy began, $1.17 billion was owing on the revolving credit, Bloomberg disclosed. As of December 31, 2011, the available cash collateral funds provided by JPMorgan is $21.05 million, according to a January monthly operating report. During the period of October 26 to October 28, 2012 (the last day of trading), only $7.5 million was sent by MFGI into the JPM Account, the Chapter 11 Trustee noted. During the period of October 26th through October 28th, there was a total of $322 million in inflows into the JPM Account (including the $7.5 million), the Chapter 11 Trustee continued. During this same period, there were more than $773 million in outflows from the FINCO account, of which $697 million was sent to MFGI, the Chapter 11 Trustee added. The Chapter 11 Trustee prepared a Powerpoint presentation regarding the cash account review. "The presentation is the result of a time-consuming, labor-intensive and thorough analysis by him and his professionals required to address the concerns of not only the Court, but also the concerns of the customers of MFGI," said the Chapter 11 Trustee. The Chapter 11 Trustee's advisors discussed the PowerPoint presentation with representatives of the SIPA Trustee. The Chapter 11 Trustee said the SIPA Trustee agrees with the conclusion that the cash in the JPM Account as of the Petition Date does not appear to include misappropriated MFGI customer funds. Neither the Chapter 11 Trustee, nor the SIPA Trustee is aware of any evidence indicating that the JPM Account contains misdirected or misappropriated MFGI customer funds. The SIPA Trustee, however, fully reserves his rights with respect to any other opinions and characterizations contained in the PowerPoint presentation. A full-text copy of the forensic report, together with the Powerpoint presentation, is available for free at: http://bankrupt.com/misc/MFGlobal_Feb16CashAccountReview.pdf MFGI Customers React to Report James Koutoulas, Esq., counsel to the Commodity Customer Coalition, reacted to the Chapter 11 Trustee's report, saying that it applies only to one account, something, he says, many customers may not understand, Reuters reported. "Everyone's freaking out today," Mr. Koutoulas told Reuters. "Customers, people calling me, or going on Twitter. I just want to make very clear that it's just one account. This has nothing to do with the far greater picture of the shortfall." Despite the Chapter 11 Trustee's report, the investigation into where customer ended up is ongoing, the SIPA Trustee's spokesperson confirmed to Reuters. "We don't disagree with the report about what the MF Global Holdings Trustee's limited inquiry into an account. In our effort to identify and return property to former customers, our investigation continues into accounts at relevant banks and depositories," Reuters quoted Kent Jarrell, spokesperson for the SIPA Trustee, as saying. * * * Lorenzo Marinuzzi, Esq., at Morrison & Foerster LLP, counsel for the Chapter 11 Trustee, told Judge Glenn that it was unlikely that money from the firm's customer accounts, which are missing an estimated $1.2 billion, could have been used for insurance payments to cover legal defense costs for MF Global's executives, Hilary Russ of BankruptcyLaw360 reported. "It's hard to imagine that the source of the payments would have been anything other than appropriate sources," the report said citing Mr. Marinuzzi. 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: SIPA Trustee Says Customer Shortfall at $1.6 Billion --------------------------------------------------------------- James W. Giddens, the trustee for the liquidation of the business of MF Global, Inc. under the Securities and Investor Protection Act, announced on February 10, 2012, that there is at least a $1.6 billion gap between the value of his estimate of potentially allowable commodities claims and the assets that are currently under the SIPA Trustee's control. The SIPA Trustee recognized that this reconfigured estimate is expected to change over time as claims are processed and assets recovered, and depending on claims reconciliation and the ultimate outcome of claims that he may contest, the estimated deficiency may rise or fall in significant amounts. The estimate applies to claims from commodities customers who traded on US exchanges, as well as commodities customers who traded on foreign exchanges, including approximately $700 million that the Trustee is disputing with the Joint Special Administrators of MF Global UK Limited. The gap was calculated after counting about $6.9 billion in claims by commodity customers, the SIPA Trustee's spokesperson Kent Jarrell told Bloomberg News. The SIPA Trustee has returned approximately $3.9 billion in property from U.S. depositories to former commodities customers in three bulk transfers since MF Global went into bankruptcy on October 31, 2011. This means there's a shortfall of "at least $1.6 billion" to pay the remaining $3 billion owed to those customers, Mr. Jarrell explained in an e-mail sent to Bloomberg. It's a different calculation from the previous one involving missing funds of $1.2 billion, Mr. Jarrell added. Currently, the SIPA Trustee has approximately $1.4 billion in assets under his control, which is being held in reserve. The SIPA Trustee is eager to make additional distributions to former MF Global Inc. customers as soon as possible. However, the SIPA Trustee is required by law to hold an appropriate reserve of funds until disputed claims are resolved either through negotiation or by the Court. At this time, the SIPA Trustee anticipates significant disputed claims against the MF Global Inc. estate by MF Global Holdings Ltd., MF Global UK Limited, and other entities. Early estimates of the analysis of commodities claims show approximately 40% of the US commodity claims came from five states: California, Florida, Illinois, New York and Texas. Approximately 91% of all commodities claims seek less than $100,000, taking into account the previous return of 72% of the US segregated customer property to former retail customers with US futures positions. A separate report by Reuters noted that the $1.6 billion estimate represents a best-case scenario in which the brokerage's entire $1.4 billion reserve can go to customers. Customer advocate group the Commodity Customer Coalition said plenty of gray area still remains, Reuters continued. "There's no doubt that there are duplicate claims or claims that will be disallowed that will bring the number down," John Roe, the group's co-founder, told Reuters. "He's looking at it from two sides of the ledger. He's taking what they've recovered and what people have claimed. We still don't really know what the hole is." In other news, the U.S. Securities and Exchange Commission Chairman Mary Schapiro said she expected 85% of MFGI former securities customers will be paid in full, Jesse Hamilton of Bloomberg News reported. The Commissioner added that the liquidation of the brokerage firm should return most of those funds from about 320 securities accounts, which represented a fraction of the brokerage's commodities-focused business, the report added. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on December 19, 2011. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: $17.8-Mil. Cash Available for Use as of Feb. 17 ---------------------------------------------------------- Pursuant to the bankruptcy court's final cash collateral order, Louis J. Freeh, the Chapter 11 trustee for MF Global Holdings Ltd. and its debtor affiliates' bankruptcy, submitted to the court cash collateral budgets approved in January 2012. The Chapter 11 Trustee expects to have $17.84 million in cash available for use as of Feb. 17, 2012. Schedules of the Cash Collateral Forecast for the weeks December 31, 2011 to January 27, 2012, January 7, 2012 to February 3, 2012, January 14, 2012 to February 10, 2012, and January 21, 2012 to February 17, 2012, are available for free at: http://ResearchArchives.com/t/s?7793 According to MF Global Bankruptcy News, Issue No. 10, schedules of the Cash Collateral Forecast for the weeks December 10, 2011 to January 6, 2012, December 17, 2011 to January 13, 2012, and December 24, 2011 to January 20, 2012, are available for free at http://ResearchArchives.com/t/s?777d As reported in the Jan. 6, 2012 edition of the TCR, the Chapter 11 trustee previously obtained approval from Judge Martin Glenn to continue using up to $21.3 million in cash collateral securing their indebtedness to JPMorgan Chase & Co. The funds will be used to pay for operations, including payment of fees to the trustee overseeing the liquidation of MF Global Inc. under the Securities Investor Protect Act and other professionals involved in the firm's wind-down. 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: Sapere Says Creditors Should Be Out of SIPA Proceeding ----------------------------------------------------------------- The Statutory Creditors' Committee of MF Global Holdings Ltd. has no economic interest in MF Global Inc.'s proceeding under the Securities Investor Protection Act of 1970 so it cannot intervene in the SIPA proceedings, Sapere Wealth Management, LLC, Granite Asset Management, and Sapere CTA Fund L.P. assert in court papers. According to Sapere, under SIPA, the Bankruptcy Code, and the CFTC Part 190 Regulations under SIPA, MFGI's commodities customers have an exclusive right to customer property before any general creditors. This exclusive right cannot be circumvented and is a cornerstone of the protections espoused in controlling law, Sapere asserts. Sapere also asserts that allowing the MFGH Creditors' Committee to intervene in the SIPA proceedings presents a manifest injustice because MFGI commodities customers have no representation on any committee equivalent to the MFGH Creditors' Committee in the Chapter 11 cases. As reported in MF Global Bankruptcy News, Issue No. 10, the Official Committee of Unsecured Creditors of MF Global Holdings Ltd., et al., filed with the Court an opening memorandum in support of its right to appear and be heard in the liquidation of MF Global Inc. under the Securities Investor Protection Act. The filing is in light of a Court-approved stipulation concerning briefing with respect to the Creditors' Committee's right to appear and be heard in MFGI's SIPA Proceeding. Specifically, the Creditors' Committee asks the Court to grant it, as an "interested entity" under Rule 2018(a) of the Federal Rules of Bankruptcy Procedure, intervention in the SIPA Case to enable it to appear and be heard on any issue affecting the return to the Creditors' Committee's constituency. The Creditors' Committee says it does not automatically have those rights pursuant to Section 502(a) of the Bankruptcy Code, made applicable to the SIPA Case by Section 78fff(b) of the SIPA. Proceedings Intertwined Representing the Creditors Committee, Martin J. Bienenstock, Esq., at Dewey & LeBoeuf LLP, in New York, asserts that the Chapter 11 Debtors' cases and the SIPA Case are closely intertwined. He notes that MFGI owes at least $470 million to MF Global Finance USA Inc. The Chapter 11 Debtors also share with the SIPA estate the cost of certain facilities, computer systems, employees and books and records, he points out. Shortly before the bankruptcy filing, MFGH/MFGF drew down at least $952 million of a $1.2 billion credit facility and yet filed their Chapter 11 cases with only approximately $26 million in their bank accounts, Mr. Bienenstock says. It appears that all or a significant portion of those funds were provided to or for the benefit of MFGI, he alleges. 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: NFA Says Payouts Should Follow Commodity Broker Rules ---------------------------------------------------------------- Various entities, including the Chapter 11 trustee of MF Global Holdings Ltd.'s bankruptcy case, react to the memoranda regarding the legal principles and framework for the allocation and distribution of customer property filed by James W. Giddens, trustee for the liquidation of the business of MF Global Inc. under the Securities Investor Protection Act. The Jan. 25, 2012 edition of the TCR reported on the briefs filed by, among others, the statutory committee of unsecured creditors, the Chapter 11 trustee MF Global Holdings Ltd., and various customers. According to MF Global Bankruptcy News, the National Futures Association has joined parties that have filed amicus curiae briefs in connection with the asset distribution. NFA says it has filed a brief to provide the bankruptcy court with the association's regulatory perspective regarding the handling of customer funds held to margin futures positions. NFA said allowing these funds to lose their character in a proceeding under the Securities Investor Protection Act of 1970 or due to a futures commission merchant's failure to segregate them properly would frustrate Congress's intent and could lead to drastically reduced liquidity and a serious loss of confidence in these vital financial markets. NFA explained that Chapter 7 of Title 11 contains special provisions in subchapter IV with respect to commodity broker cases, and Commodity Futures Trading Commission regulations set out the procedures to be followed for ascertaining and distributing commodity customer property. These requirements also apply in a SIPA liquidation case with respect to a securities broker dealer that is also a commodity broker, NFA said. Federal law requires FCMs to segregate customer assets deposited and maintained to margin U.S. futures transactions and has analogous requirements with regard to foreign futures, NFA noted. The character of these assets -- and the corresponding priority - - does not change merely because an FCM may have violated its legal obligation to segregate the funds, NFA told the Court. NFA is represented by: Robert C. Mendelson, Esq. Joshua R. Blackman, Esq. MORGAN, LEWIS & BOCKIUS LLP 101 Park Avenue New York, NY 10178 Tel: (212) 309-6000 Fax: (212) 309-6001 E-mail: rmendelson@morganlewis.com jblackman@morganlewis.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: SIPC Has Letter on SIPA Trustee Counsel Fee Oversight ---------------------------------------------------------------- Josephine Wang, Esq., general counsel of the Securities Investor Protection Corporation, in Washington, D.C., wrote a letter to the Court to give additional details on the SIPC's role in liquidations under the Securities Investor Protection Act and the engagement of a SIPA Trustee's counsel and their compensation. Congress created SIPC in 1970 to administer and enforce the provisions of the SIPA. Under the SIPA, the SIPC is charged with a host of duties related to the commencement and administration of a SIPA liquidation. Thus, the SIPC is the entity responsible for ensuring, in the first instance, that the SIPA liquidations are conducted in accordance with the SIPA, Ms. Wang said. The SIPC, among other things, carefully oversees the process of claims resolution. The SIPC initiates the proceeding, based upon information received from the U.S. Securities and Exchange Commission or one or more of the securities industries self-regulatory organizations, such as the Financial Industry Regulatory Authority. Once a SIPC member firm is placed in liquidation under the SIPA, the SIPC advances funds as needed, and within express statutory limits, to satisfy the claims of the firm's securities customers. To the extent that the general estate is insufficient to fund the administrative expenses of the liquidation of the firm's securities business, the SIPC advances the funds necessary for that purpose, Ms. Wang said. Consequently, the SIPC is often the creditor with the largest financial stake in the proceeding, she noted. More importantly, the SIPC is responsible for the designation of the trustee and his counsel, and the Court must appoint "such persons as SIPC, in its sole discretion, specifies," Ms. Wang disclosed. The SIPC also has an important oversight role with respect to trustee and counsel fees, she stated. The SIPC is responsible for reviewing fee applications by the SIPA trustee and his counsel and for making a recommendation to the court with respect to those applications. In a SIPA case, the SIPC has the oversight role that would normally be performed by the U.S. Trustee in a bankruptcy case. Moreover, the SIPC performs its oversight functions without charge to the estate, and thus does not burden the estate with the additional fees and expenses that would accompany review by any other nongovernmental third party, she noted. In the MF Global Inc. liquidation, the SIPC achieved significant savings for the Debtor's estate before the case even began by requesting, and receiving, a ten percent discount off of the usual hourly rates charged by the SIPA Trustee and his counsel, Hughes Hubbard & Reed LLP, according to Ms. Wang. The SIPC expects that this discount will save the estate millions of dollars in fees through the course of the liquidation. To ensure that fees charged are appropriate, the SIPC receives detailed invoices from the SIPA Trustee and Counsel on a monthly basis which are reviewed initially by the SIPC's lead counsel in the MF Global liquidation, Christopher H. LaRosa, Senior Associate General Counsel- Litigation. Upon completion of his review, Mr. LaRosa prepares a memorandum summarizing the invoices and stating his views and recommendation with respect to them. Mr. LaRosa then submits his memorandum and supporting material, along with the invoices, to Ms. Wang for review. Ms. Wang noted that although she is guided by Mr. LaRosa's recommendation, she performs her own review of each invoice. The SIPC has carefully reviewed the invoices submitted by the Trustee and his counsel in this case, and will continue to do so as this liquidation progresses, she assured the Court. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on December 19, 2011. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MONEY TREE: Small Loans Wins OK for Warren Averett as Advisors -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Alabama authorized Small Loans, Inc., debtor-affiliate of The Money Tree Inc., to employ Warren, Averett, Kimbrough & Marino, LLC, as business and financial advisors; and provide a postpetition retainer. About The Money Tree Bainbridge, Georgia-based The Money Tree Inc. -- http://www.moneytreeinc.com/-- operates a network of lending branches across the Southeast, concentrated in Georgia, Florida and Alabama. The Company and four affiliates filed for Chapter 11 bankruptcy (Bankr. M.D. Ala. Case Nos. 11-12254 thru 11-12258) on Dec. 16, 2011. The other debtor-affiliates are Small Loans, Inc., The Money Tree of Louisiana, Inc., The Money Tree of Florida Inc., and The Money Tree of Georgia of Georgia Inc. Judge William R. Sawyer oversees the case, replacing Judge Dwight H. Williams, Jr. Max A. Moseley, Esq., at Baker Donelson Bearman Caldwell & Berkow, P.C., serves as the Debtors' counsel. The Debtors hired Warren, Averett, Kimbrough & Marino, LLC, as restructuring advisors. Money Tree's consolidated balance sheet reported $34,859,189 in assets, $92,655,010 in liabilities, and $57,795,821 in total stockholders' deficit. The petitions were signed by Biladley D. Bellville, president. The Company's subsidiary, Best Buy Autos of Bainbridge Inc., is not a party to the bankruptcy filing and intends to operate its business in the ordinary course. MONTANA ELECTRIC: Can Access Cash Collateral Until March 16 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Montana entered a fourth interim order authorizing Southern Montana Electric, Generation and Transmission Cooperative, Inc., to use cash collateral until March 16, 2012. Subsequent to the third interim order previously entered by the court, Lee A. Freeman, the duly-appointed Chapter 11 trustee for the Debtor and U.S. Bank National Association as Indenture Trustee, and certain holders consisting of Prudential Insurance Company of America, Universal Prudential Arizona Reinsurance Company, Forethought Life Insurance Company and Modern Woodman of America reached agreement on the terms and conditions for the Trustee's continued use of Cash Collateral. As of the Petition Date, the Debtor was liable to the pre-petition secured parties in respect of obligations under the indenture for (i) the aggregate principal amount of not less than $85 million on account of the notes issued under the indenture; and (ii) unpaid fees, expenses, disbursements, indemnifications, obligations, and charges or claims. The final hearing will be held on March 13 at 1:30 p.m. A full-text copy of the Fourth Interim Order is available for free at http://bankrupt.com/misc/SOUTHERN_4thCashOrd.pdf Great Falls's Objection Prior to the entry of the Fourth Interim Order, the City of Great Falls and Electric City Power, Inc., asked the Court not to enter the proposed 4th Interim Order because it contains material and substantive terms hat have not previously been noticed to interested parties. They assert that entry of the Fourth Order would substantively impair the rights of interested parties and effectively deny them due process. The proposed Fourth Interim Order includes two new provisions (Section 10 Investigation Period and Section 11 Release), which substantive provisions were not contained in the earlier Cash Collateral orders. In an effort to fully and finally resolve the Motion, Great Falls, ECP and the Prepetition Secured Parties stipulate that all rights of Great Falls and ECP to object to the inclusion into the Fourth Interim Order of Section 10 and Section 11 are reserved in connection with the hearing of a Final Order which, among other things, will grant on a final basis, authorization for the Trustee to use the Cash Collateral. About Southern Montana Electric Based in Billings, Montana, Southern Montana Electric Generation and Transmission Cooperative, Inc., was formed to serve five other electric cooperatives. The city of Great Falls later joined as the sixth member. Including the city, the co-op serves a population of 122,000. In addition to Great Falls, the service area includes suburbs of Billings, Montana. Southern Montana filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana estimated assets of $100 million to $500 million and estimated debts of $100 million to $500 million. Timothy Gregori signed the petition as general manager. Jon E. Doak, Esq., at Doak & Associates, P.C., in Billings, Montana, serves as the Debtor's counsel. In December 2011, Southern Montana also sought permission to employ the Goodrich Law Firm, P.C., as general co-counsel. Also in December, Lee A. Freeman was appointed as Chapter 11 trustee. Mr. Freeman retained Horowitz & Burnett, P.C., as his counsel and Waller & Womack, P.C., as local counsel. The United States Trustee for Region 18 has appointed an Official Committee of Unsecured Creditors in the case. After filing for reorganization in October, the co-op agreed to a request for appointment of a Chapter 11 trustee. MOUNT CLEMENS: Moody's Lowers General Obligation Tax Debt Rating ---------------------------------------------------------------- Moody's Investors Service has downgraded to Baa3 from Baa1 the rating on Mount Clemens Community School District's (MI) general obligation unlimited tax debt. The outlook on the district remains negative. The Baa3 rating and negative outlook apply to $59.9 million of outstanding general obligation tax debt. SUMMARY RATINGS RATIONALE The outstanding bonds are secured by the district's general obligation unlimited tax pledge. The downgrade of the district's rating reflects its modestly-sized, depreciating tax base located northeast of Detroit (GO rated Ba3/under review for possible downgrade); with below average socioeconomic characteristics; annual operating deficits resulting in a negative General Fund balance since fiscal 2009; and elevated debt levels with below average amortization. The retention of the negative outlook reflects Moody's belief that the district will struggle to achieve a positive General Fund position in the near term due to steep enrollment declines, state funding pressures and Moody's expectation that an extension of the district's Deficit Elimination Plan with the State of Michigan (GO rated Aa2/stable outlook) may be necessary. STRENGTHS - Continued support of the State of Michigan's School Loan Revolving Fund to meet debt service obligations CHALLENGES - Depreciating tax base with below average socioeconomic characteristics - Deficit General Fund position unlikely to be reversed in the near term - Elevated debt profile with short-term borrowing levels reaching legal capacity Outlook The negative outlook on the district's general obligation rating reflects Moody's expectations that the district will continue to face state aid revenue and enrollment pressures in the near term. Additionally, the reestablishment of a positive General Fund position will likely take longer than is currently presented in the district's most current DEP. Moody's expects these factors to continue to challenge the district potentially leading to the district's credit profile being more consistent with lower rated entities. What Could Make The Rating Go Up (or Removal of Negative Outlook) - Ability to implement and realize the goals of an updated Deficit Elimination Plan in a timely manner - Stable to increasing trends in enrollment leading to increased operating revenues to assist in reestablishing a positive General Fund position What Could Make The Rating Go Down - Failure to eliminate the deficit General Fund balance in a timely manner and/or continued financial deterioration - Continued enrollment declines resulting in greater than anticipated revenue pressure PRINCIPAL METHODOLOGIES The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. MSR RESORT: Wins More Time to Exclusively File Restructuring Plan ----------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that MSR Resort Golf Course LLC won more time Thursday to exclusively file a restructuring plan while it continues to battle a Hilton Worldwide Inc. unit over a property management deal. Though the company was able to reach a deal earlier this month with Marriott International Inc. in a similar property dispute, the lack so far of an accord with Hilton subsidiary Waldorf- Astoria Management LLC led MSR to push for more time to engineer a Chapter 11 plan, according to Law360. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. The resorts have agreement with lenders allowing the companies to remain in Chapter 11 at least until September 2012. Donald Trump has a contract to buy the Doral Golf Resort and Spa in Miami for $170 million. There will be an auction to learn if there is a better bid. The resorts have said that Trump's offer price implies a value for all the properties "significantly" exceeding the $1.5 billion in debt. The Official Committee of Unsecured Creditors is represented by Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP, in New York. MUSICLAND HOLDINGS: Seeks Doc to Prove Best Buy Owes $232 Mil. -------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that Musicland Holding Corp. said former parent Best Buy Co. Inc. owes the liquidated music retailer $232 million in preferential transfers it received in 2003, according to court documents filed Friday seeking admission into evidence of ledgers it says prove the amount. Musicland and its official committee of unsecured creditors are seeking either an order that the monthly ledgers are business records admissible to evidence the transfers or an order granting the presumption that Best Buy received at least $232 million, Law360 relates. About Musicland Holding Based in New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 06-10064) on Jan. 12, 2006. Kirkland & Ellis represented the Debtors in their restructuring effort. Hahn & Hessen LLP, represented the Official Committee of Unsecured Creditors. The Debtors disclosed $20,121,000 in total assets and $321,546,000 in total liabilities as of March 31, 2007. On May 12, 2006, the Debtors filed their Joint Plan of Liquidation. On Sept. 14, 2006, they filed an amended Plan and a Second Amended Plan on Oct. 13, 2006. The Bankruptcy Court approved the adequacy of the Amended Disclosure Statement on Oct. 13, 2006. The Debtor's Second Amended Joint Plan of Liquidation was declared effective as of Jan. 30, 2008. NASSAU BROADCASTING: Judge Clears to Auction Assets in May ---------------------------------------------------------- Dow Jones' DBR Small Cap reports that a bankruptcy judge has cleared radio-station owner Nassau Broadcasting Corp. to auction off its assets in May without designating a lead bidder to set a floor price for its assets. About Nassau Broadcasting Nassau Broadcasting Partners LP is a radio-station owner and operator. Three secured lenders -- affiliates of Goldman Sachs Group Inc., Fortress Investment Group LLC and P.E. Capital LLC -- filed involuntary Chapter 7 bankruptcy petitions (Bankr. D. Del. Case No. 11-12934) on Sept. 15, 2011, against Nassau Broadcasting Partners LP, the owner of 45 radio stations in the northeastern U.S. The lender group said in court papers that they are owed $83.8 million secured by all of Nassau's property. Involuntary petitions were also filed against three affiliates of Nassau, which is based in Princeton, New Jersey. The lenders said the stations aren't worth enough to pay them in full. Nassau Broadcasting in October won a Delaware bankruptcy court's blessing to convert its involuntary Chapter 7 bankruptcy -- pressed by creditors including Goldman Sachs Lending Partners LLC -- to a proceeding on its own terms in Chapter 11. The company owes $283,742,525 under its credit agreement with the lenders. OTERO COUNTY: Has Deal With BofA on Cash Access for 9 Months ------------------------------------------------------------ Otero County Hospital Association Inc., asks the U.S. Bankruptcy Court for the District of New Mexico to extend a stipulation with Bank of America, N.A., providing for the continued use of cash collateral; and approving payment of extension fee. The Debtor had two principle goals in its negotiations with the Bank, each of which are satisfied by the extension agreement. First, the Debtor sought a nine month extension of the term. The Debtor believes that such an extension will resolve all cash collateral issues through the remainder of the case and will permit the Debtor to reorganize without the need for any further extensions. Second, the Debtor sought additional covenant relief from the Bank. Among other things, for reasons unrelated to the Debtor, the State of New Mexico has delayed paying approximately $2.3 million in "sole community provider payments" to the Debtor, which has strained the Debtor's cash position. In addition, the patient census at the Debtor's hospital was unusually low from August to November of 2011, which affected the Debtor's revenue. The new financial covenants set forth in the Extension Agreement will allow the Debtor to function comfortably for the remainder of the case. The Debtor related that the stipulation with BofA expired on Feb. 16. The extension agreement contains these material terms, among other things: -- The term of the stipulation will be extended to the earliest to occur of (i) Nov. 15, 2012, or (ii) the occurrence of a Termination Event. -- The cash on hand covenant set forth in the stipulation is reduced from 75 days cash on hand in the stipulation to 55 days of cash on hand. In short, the Debtor must maintain at least 55 days cash on hand on the last day of each fiscal quarter in order to prevent a default under the terms of the Reimbursement Agreement with BofA. -- The Bank will be entitled to retain a financial advisor of its choice at the expense of the Debtor to conduct financial and other analysis of the Debtor and its operations. -- The Debtor will pay to the Bank an Extension fee in the amount of $225,000, which will be fully earned on the date the Court enters an Order approving the motion. Of that amount, $75,000 will be payable on the Effective Date, an additional $75,000 will be payable on May 16, 2012, and the final $75,000 will be payable on Aug. 16, 2012. In exchange for these accommodations, the Debtor has agreed to provide the Bank with additional adequate protection. 1. The Debtor will grant the Bank an additional replacement lien in the real estate and improvements located on the Debtor's main medical campus that were to not part of the Bank's prepetition collateral. The additional replacement lien will secure all of the Debtor's obligations to the Bank, including any prepetition obligations. The stipulation provides the Bank with a lien on the real estate to secure any diminution in the value of the Bank's prepetition collateral. The Extension Agreement expands the lien to secure the prepetition obligations themselves. 2. The Debtor will agree to pay the reasonable cost of a financial advisor for the Bank. 3. The Debtor will provide additional financial reporting to the Bank. 4. The Debtor will pay for an appraisal of the Bank's collateral, and, finally, the Debtor will pay an extension fee of $225,000. The terms of the stipulation is available for free at http://bankrupt.com/misc/OTEROCOUNTY_CC_stipulation_ext.pdf About Otero County Hospital Otero County Hospital Association Inc. filed for Chapter 11 protection (Bankr. D. N.M. Case No. 11-13686) in Albuquerque, New Mexico, on Aug. 16, 2011. The Alamogordo, New Mexico-based nonprofit developed and operates the Gerald Champion Regional Medical Center. GCRMC serves a total population of approximately 70,000 people. Otero County Hospital Association also does business as Mountain View Catering. Judge Robert H. Jacobvitz presides over the case. Craig H. Averch, Esq., and Roberto J. Kampfner, Esq., at White & Case, LLP, in Los Angeles; and John D. Wheeler, Esq., at John D. Wheeler & Associates, PC, in Alamogordo, New Mexico, serve as bankruptcy counsel. Kurtzman Carson Consultants, LLC, serves as claims agent. The Debtor disclosed $124,186,104 in assets and $40,506,759 in liabilities as of the Chapter 11 filing. Alice Nystel Page, U.S. Trustee for Region 20, appointed five creditors to serve on the Official Committee of Unsecured Creditors of the Debtor. Gardere Wynne Sewell LLP serves as the Committee's counsel. The Committee tapped James Morell of JCM Advisors, LLC, as healthcare management consultant. The U. S. Trustee appointed E. Marissa Lane PLLC as patient care ombudsman on Sept. 13, 2011. No trustee or examiner has been requested or appointed in the Chapter 11 Case. PACESETTER FABRICS: Working on Exit; Exclusivity Tackled March 7 ---------------------------------------------------------------- The Hon. Ernest M. Robles of the U.S. Bankruptcy Court for the Central District of California will convene a hearing on March 7, 2012, at 10:00 a.m., to consider Pacesetter Fabrics, LLC's motion to extend its exclusive periods. The Debtor is asking the Court to further extend its exclusive periods to file and solicit acceptances for the proposed plan of reorganization until June 13, 2012, and Aug. 10, respectively. The Debtor explained that it is working to exit the Chapter 11 case and has identified potential replacement financing sources and is in the process of negotiating an exit transaction with them. The Debtor will proceed with all due speed toward negotiating definitive agreements and ultimately, it hopes, consummating a plan of reorganization. About Pacesetter Fabrics Based in City of Commerce, California, Pacesetter Fabrics, LLC, dba Pacesetter Off Price and Pacesetter Garments, is a distributor of quality textile and garment fabrics in the United States and international markets. The Company has been in business for over 14 years. The Company is owned 98% by Net, LLC, a California limited liability company, 1% by Leora Namvar (Ramin Namvar's wife), and 1% by Massoud Poursalimi (Leora Namvar and David Poursalimi's father). Net LLC is in turn owned 99% by Ramin Namvar and 1% Leora Namvar. Pacesetter Fabrics filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-36330) on June 17, 2011. Judge Ernest M. Robles presides over the case. The Debtor is represented by Brian L. Davidoff, Esq., C. John M. Melissinos, Esq., and Claire E. Shin, Esq., at Rutter Hobbs & Davidoff Incorporated. The Debtor disclosed $33,695,869 in assets and $28,599,582 in liabilities as of the Chapter 11 filing. Brian Wygle -- Brian@lazarusresources.com -- president of Lazarus Resources Group, LLC, a corporate turnaround consultant, assists Pacesetter with its turnaround and reorganization efforts and the financial affairs and management of the Company. PALISADES 6300: Plan Outline Hearing Scheduled for March 7 ---------------------------------------------------------- Palisades 6300 West Lake Mead, LLC submitted to the U.S. Bankruptcy Court for the District of Nevada an Amended Disclosure Statement explaining the proposed Plan of Reorganization. According to the Amended Disclosure Statement, the Plan provides that through reorganization, the Debtor will continue operations, which income will be used to satisfy all administrative and priority claims, and to pay general unsecured creditors a pro rata distribution over a five year period. Under the Plan, the Debtor proposes to fully pay all claims except for that of insider who will recover nothing. Payments and distributions under the Plan will be funded by the Reorganized Debtor. Claims will be paid from the proceeds of the Reorganized Debtor's ongoing business operations. A full-text copy of the Amended Disclosure Statement is available for free at http://bankrupt.com/misc/PALISADES_6300_ds_amended.pdf The judge will hold a hearing on March 7, 2012, at 2:30 p.m. to consider adequacy of the Disclosure Statement. About Palisades 6300 Palisades 6300 West Lake Mead, LLC, filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case No. 11-26180) on Oct. 13, 2011. Judge Linda B. Riegle oversees the case. Marjorie A. Guymon, Esq., at Goldsmith & Guymon, P.C., serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $17,452,917 in assets and $14,733,148 in liabilities. The professionals assisting the Debtor consist of Valuation Consultants as real estate appraiser; B&RE Property Management as property manager and leasing agent for real property belonging to the estate; and Kenneth Funsten, FamCo Advisory Services, as interest rate expert. PAN AM LAND: Chapter 11 Case Dismissed at Landlord's Behest ----------------------------------------------------------- The Hon. Redfield T. Baum of the U.S. Bankruptcy Court for the District Arizona dismissed the Chapter 11 case of Pan Am Land LLC. As reported in the Troubled Company Reporter on Jan. 5, 2012, Pleasant Valley Airport Associates sought dismissal or conversion of the Chapter 11 case for, among other things, the absence of a reasonable likelihood of rehabilitation and a likelihood of continuing loss to or diminution of the estate, the Debtor's failure to file 11 monthly financial reports for February 2011 through December 2011, and the Debtor's failure to pay quarterly fees to the United States Trustee. Pleasant Valley claims a landlord's lien on the Personal Property. Subsidiary Holdings asserts that pursuant to Arizona State Law, that landlord's lien does not apply to third party who is not a party to the lease. About Pan Am Land LLC Sherri S. Parkin, Michael P. Potekhen, and Aaron C. Valenzuela, filed for Involuntary Chapter 11 against Phoenix, Arisona-based Pan Am Land LLC (Bankr. D. Ariz. Case No. 11-02234) on Jan. 27, 2011. Redfield T. Baum, Sr. presided over the case. PINNACLE AIRLINES: May File for Ch. 11 Absent Deal With UAL ----------------------------------------------------------- Pinnacle Airlines Corp. updated its employees on the restructuring program announced on Dec. 8, 2011. As reported by the TCR on Dec. 12, 2011, the Company planned to seek modifications to its agreements with its mainline airline partners, equipment lessors, debt holders, real property lessors and vendors. The company also intended to seek to work with its pilots and other employees (both union and non-union) to reduce labor costs. In a letter to employee, the Company said its focus right now is working with United Airlines on a possible long-term arrangement. The Company is also working with its labor unions on the necessary contract concessions to get the Company's employee costs more in line with the Company's business model. "We still have work to do to reduce our costs and we still have work to do to make our partner agreements profitable. Unless we have long-term agreements in place, the best way for us to improve our financial performance and ensure a viable future for our company may still be the court-supervised Chapter 11 process," said Sean Menke, president and chief executive officer of the Company. A full-text copy of the letter to employees is available at: http://is.gd/VP5Qt2 About Pinnacle Airlines Corp. Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. The Company reported $8.81 million on $938.05 million of total operating revenue for the nine months ended Sept. 30, 2011, compared with net income of $17.02 million on $729.13 million of total operating revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. PJ FINANCE: Exclusive Solicitation Period Extended to March 31 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended through March 31, 2012, PJ Finance Company, LLC, et al.'s exclusive period to solicit votes for the First Amended Joint Plan of Reorganization dated Jan. 25, 2012. As previously reported by the Troubled Company Reporter on Feb. 6, 2012, the Court approved the First Amended Disclosure Statement explaining the Debtors' First Amended Plan. The Court also set February 21 as the deadline to solicit acceptances of that Plan. Pursuant to the Plan terms, Equity Interests (Class 7) will not receive any distribution under the Plan and are deemed to have rejected the Plan. The Senior Secured Lender (Class 2), owed $479.9 million, will recover a 95.7% recovery under the revised plan. The Senior Secured Lender will receive the New Senior Debt in full satisfaction of the Senior Lender Claim, including the Senior Lender Secured Claim and the Senior Lender Deficiency Claim. General unsecured creditors (Class 5), owed $6.5 million, are to be paid in full. The Plan was jointly filed by the Debtors and the Official Committee of Unsecured Creditors. County of Denton Objects The County of Denton objects to confirmation of the Plan because it fails to provide fair and equitable treatment to its secured claim. The County's claim arose from personal liability and a lien which attached to the real property located in the state of Texas. The County asserts that the administrative expenses taxes for the 2012 tax year are entitled to be timely paid, with penalties and interest. About PJ Finance Chicago, Illinois-based PJ Finance Company, LLC, owns apartment communities in the states of Arizona, Florida, Georgia, Tennessee and Texas. PJ Finance owns or holds ownership interests in 32 apartment communities that collectively have more than 9,500 rentable units. It has 20 apartment locations in Texas, and the remaining 12 in Arizona, Florida, Georgia and Tennessee. The day- to-day operations of the portfolio are managed by a third party, WestCorp Management Group One, Inc. PJ Finance and various affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-10688) on March 7, 2011. Matthew L. Hinker, Esq., at Greenberg Traurig, LLP, in Wilmington, Delaware; and Michelle E. Marino, Esq., and Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington, Delaware, serve as bankruptcy counsel. Ernst & Young LLP serves as the Debtors' independent auditors. Kurtzman Carson Consultants, LLC, is the Debtors' claims and notice agent. An official committee of unsecured creditors has been named in the case. Christopher A. Jarvinen, Esq., Janine M. Cerbone, Esq., Joseph Orbach, Esq., and Mark T. Power, Esq., at Hahn & Hessen LLP, in New York, N.Y. represent the committee as lead counsel. Kimberly A. Brown, Esq., Matthew B. McGuire, Esq., and Richard Scott Cobb, Esq., at Landis Rath & Cobb, in Wilmington, Del., serve as the Committee's local counsel. The Debtors estimated total assets of at least $275 million (estimated value of portfolio securing loan to Bank of America) and total debts of at least $479 million ($475 million owed to BofA, $4.4 million trade debt). On Jan. 26, 2012, the Bankruptcy Court approved the First Amended Disclosure Statement explaining P.J. Finance Company, LLC, et al., and the Official Committee of Unsecured Creditors' First Amended Joint Plan of Reorganization, dated Jan. 25, 2012. The hearing to consider confirmation of the Plan will be held on Feb. 27, 2012, at 9:00 a.m. PLS INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: PLS, Inc. dba Park Plastic Products 4720 Clubview Drive Fort Wayne, IN 46804 Bankruptcy Case No.: 12-10409 Chapter 11 Petition Date: February 22, 2012 Court: United States Bankruptcy Court Northern District of Indiana (Fort Wayne Division) Judge: Robert E. Grant Debtor's Counsel: Daniel J. Skekloff, Esq. Sarah Mustard Heil, Esq. Scot T. Skekloff, Esq. SKEKLOFF, ADELSPERGER & KLEVEN, LLP 927 South Harrison Street Fort Wayne, IN 46802 Tel: (260) 407-7000 Fax: (260) 407-7137 E-mail: djs@sak-law.com sheil@sak-law.com sts@sak-law.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/innb12-10409.pdf The petition was signed by Peter C. Sorg, president. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Ossian Smoked Meats Cop. 12-10275 02/10/12 PMI GROUP: Executive Salaries Down, Bonuses Up as Approved ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, notes that when PMI Group Inc. sought bankruptcy court approval for salaries and bonuses that could have paid the top two officers $3.5 million, the result was a formal objection from the U.S. Trustee and informal objection from the official creditors' committee. PMI modified the proposed salaries and bonuses, enabling the bankruptcy judge to approve revised employment contracts last week. Mr. Rochelle reports that originally, base salaries would have been $1.25 million for Chief Executive L. Stephen Smith and $690,000 for Donald P. Lofe Jr., chief financial officer. As revised, the base salaries are $700,000 and $489,000, respectively. Severance benefits of $650,000 for both were eliminated. On the other hand, incentive bonuses keyed to confirmation of a reorganization plan were increased. Originally, the bonuses would have been $360,000 for Smith and $180,000 for Lofe. As revised, Mr. Smith's bonus can be $1 million if a plan is confirmed by Aug. 31. It declines by one-third each month thereafter. For Mr. Lofe, the bonus is $500,000 for an Aug. 31 confirmation, declining month-by-month like Mr. Smith's. Both would receive an additional bonus of 2% of value generated in excess of $203 million. About PMI Group Del.-based The PMI Group, Inc., is an insurance holding company whose stock had, until Oct. 21, 2011, been publicly-traded on the New York Stock Exchange. Through its principal regulated subsidiary, PMI Mortgage Insurance Co., and its affiliated companies, the Debtor provides residential mortgage insurance in the United States. The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor disclosed $167,963,354 in assets and $770,362,195 in liabilities. Stephen Smith signed the petition as chairman, chief executive officer, president and chief operating officer. The Debtor said in the filing that it does not have the financial resources to pay the outstanding principal amount of the 4.50% Convertible Senior Notes, 6.000% Senior Notes and the 6.625% Senior Notes if those amounts were to become due and payable. The Debtor is represented by James L. Patton, Esq., Pauline K. Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP. PMI GROUP: Committee Taps Peter Solomon as Financial Advisor ------------------------------------------------------------ The Official Committee of Unsecured Creditors of The PMI Group, Inc., seeks permission from the Bankruptcy Court to retain Peter J. Solomon Company as its financial advisor, nunc pro tunc to Jan. 24, 2012. PJSC will, among other things, advise and assist the Committee (a) in assessing the operating and financial performance of, and strategies for, the Debtor, (b) in evaluating the Debtor and its assets and liabilities, including valuations proposed by any interested party, and (c) regarding restructuring of the Debtor's existing indebtedness. PJSC will seek payment (i) for compensation on a fixed monthly basis of $75,000 per month, plus (ii) reimbursement of actual and necessary expenses incurred by it. In addition to the Monthly Fee, PJSC will be entitled to receive a transaction fee equal to 1.0% of Recovery Amount. Once the Monthly Fees paid to PJSC exceed $225,000, PJSC will begin crediting 50% of its monthly fees going forward against the Transaction Fee. "Recovery Amount" means the value of all cash, securities, contractual arrangements and other properties paid or payable or distributed, directly or indirectly, to the creditors represented by the Committee, including, without limitation, in connection with, or as a consequence of, a Transaction or other means of realizing value including, but not limited to, recoveries from litigation commenced for the benefit of the Creditors received before the Emergence Date. The Debtor will indemnify and hold harmless PJSC and its affiliates from and against any losses, claims, damages or liabilities related to this engagement. The Debtor, however, will have no obligation to indemnify PJSC or provide contribution or reimbursement to PJSC for any claim or expense that is judicially determined to have arisen from PJSC's bad faith, self-dealing, breach of fiduciary duty, gross negligence or willful misconduct. About PMI Group Del.-based The PMI Group, Inc., is an insurance holding company whose stock had, until Oct. 21, 2011, been publicly-traded on the New York Stock Exchange. Through its principal regulated subsidiary, PMI Mortgage Insurance Co., and its affiliated companies, the Debtor provides residential mortgage insurance in the United States. The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor disclosed $167,963,354 in assets and $770,362,195 in liabilities. Stephen Smith signed the petition as chairman, chief executive officer, president and chief operating officer. The Debtor said in the filing that it does not have the financial resources to pay the outstanding principal amount of the 4.50% Convertible Senior Notes, 6.000% Senior Notes and the 6.625% Senior Notes if those amounts were to become due and payable. The Debtor is represented by James L. Patton, Esq., Pauline K. Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP. PMI GROUP: Committee Wants to Retain Roshka as Special Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors of The PMI Group, Inc., seeks permission from the Bankruptcy Court to retain Roshka Dewulf & Patten as its special counsel, nunc pro tunc to Jan. 24, 2012. Roshka Dewulf will assist the Committee in addressing certain actions taken by the Arizona Department of Insurance. Specifically, on Aug. 19, 2011, the Director of the ADI, the Debtor's principal regulator, issued an order placing certain of the Debtor's regulated insurance subsidiaries, PMI Mortgage Insurance Co. and PMI Insurance Co., under supervision pursuant to Section 20-169 of the Arizona Revised Statutes. Also on Oct. 20, 2011, the ADI Director entered an order placing the Debtor's principal regulated reinsurance subsidiaries, PMI Reinsurance Co., PMI Mortgage Guaranty Co., and Residential Insurance Co. under supervision. The Principal Regulated Reinsurance Subsidiaries filed an administrative appeal with respect to that supervisory order, and that appeal is tentatively scheduled for hearing on April 4, 2012. The lead attorneys who will represent the Committee and their current hourly rates are: Paul J. Roshka Jr. $500 Matthew J. Derstine $400 Jennifer A. Baker $300 The firm will also seek for reimbursement of its actual and necessary out-of-pocket expenses. The Committee believes that RD&P is a disinterested person because it does not hold or represent an interest adverse to the Debtor's estate with respect to the matters for which RD&P is to be employed. About PMI Group Del.-based The PMI Group, Inc., is an insurance holding company whose stock had, until Oct. 21, 2011, been publicly-traded on the New York Stock Exchange. Through its principal regulated subsidiary, PMI Mortgage Insurance Co., and its affiliated companies, the Debtor provides residential mortgage insurance in the United States. The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor disclosed $167,963,354 in assets and $770,362,195 in liabilities. Stephen Smith signed the petition as chairman, chief executive officer, president and chief operating officer. The Debtor said in the filing that it does not have the financial resources to pay the outstanding principal amount of the 4.50% Convertible Senior Notes, 6.000% Senior Notes and the 6.625% Senior Notes if those amounts were to become due and payable. The Debtor is represented by James L. Patton, Esq., Pauline K. Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP. PONCE TRUST: Files Chapter 11 Petition in Miami ----------------------------------------------- Ponce Trust, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 12-14247) in Miami, on Feb. 22, 2012. Ponce Trust says that it's a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B) and its principal assets are located at 1300 Ponce de Leon Boulevard, in Miami. It estimated assets and debts of up to $50 million. The list of creditors indicates that the Debtor owes 1300 Ponce Holdings, LLC, $37.3 million, with $19 million of the debt secured. PORTS AMERICA: Bank Debt Trades at 26% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Ports America is a borrower traded in the secondary market at 73.50 cents-on-the- dollar during the week ended Friday, Feb. 24, 2012, a drop of 0.88 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 150 basis points above LIBOR to borrow under the facility. The bank loan matures on March 15, 2014. The loan is one of the biggest gainers and losers among 149 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Ports America -- http://www.portsamerica.com/-- is the largest US terminal operator and stevedore, with operations in every major port in the nation. With over 85 years of experience through predecessor companies, Ports America possesses dedicated resources that only a company of such scale and scope can deliver, including: skilled personnel, robust training programs, best-in class technology and experienced management. RCS CAPITAL: Wins Nod to Hire Bifferato as Special Counsel ---------------------------------------------------------- U.S. Bankruptcy Judge Randolph J. Haines authorized RCS Capital, LLC, to employ Bifferato Gentilotti LLC as Special Delaware counsel. RCS is a creditor and party-in-interest in the Chapter 15 case of A.B.C. Learning Centres Limited, et al., Case No. 10-11711, and an appellant in an appeal of a bankruptcy matter in the ABC Case pending before the District Court, Case No. 11-cv-245. After the Debtor filed its Voluntary Petition, Bifferato Gentilotti was required by the District Court to file certain letter of status reports with the Court. Despite the firm's uncertainty as to whether it would be retained as special counsel in the bankruptcy case, the firm complied with the requirements of the District Court and incurred approximately $1,500 in fees and expenses between the Petition Date and Jan. 6, 2012. Accordingly, the Debtor seeks to employ Bifferato Gentilotti so that the firm may be compensated for its fees and expenses. The firm's hourly rates are: Garvan F. McDaniel $375 per hour Mary E. Augustine $340 per hour Paralegals $195 per hour To the best of the Debtor's knowledge, Bifferato Gentilotti does not hold or represent any interest adverse to the Debtor or its estate. About RCS Capital RCS Capital Development, LLC, et al., filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 11-28746) on Oct. 12, 2011. Michael W. Carmel, Esq., at Michael W. Carmel, Ltd., in Phoenix, Ariz., represents the Debtor as counsel. RCS's bankruptcy schedules reflect assets of US$57,038,210, of which the largest is a judgment in the approximate amount of US$57,000,000 against ABC Learning Centres Ltd., an Australia- based operator of childcare centers. RCS's bankruptcy schedules reflect liabilities of approximately of US$47,169,203, the most significant of which is the disputed US$41,000,000 claim of ABC. Judge Randolph J. Haines presides over RCS's case. RCS had various contractual relationships with ABC that resulted in litigation in Maricopa County. That litigation resulted in a US$50 million jury verdict against ABC and judgment (worth US$56,456,732 as of Nov. 15, 2011). Liquidators for ABC filed for recognition under Chapter 15 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware about two weeks after RCS obtained its verdict. Judge Kevin Gross entered an order on Nov. 16, 2010, that recognized the Chapter 15 proceeding. ABC liquidators contended in papers filed in Delaware that RCS violated the Chapter 15 order by continuing actions in Nevada to seize property in which the liquidators claimed an interest. At a hearing in U.S. Bankruptcy Court in Delaware on Oct. 4, 2011, the liquidators asked Judge Gross to rule that RCS violated the automatic stay. The liquidators also wanted RCS to be held in contempt, directed to return property and assessed with punitive damages. Judge Gross concluded the Oct. 4, 2011 hearing and said he would rule later. As reported by the Troubled Company Reporter on Oct. 17, 2011, Bill Rochelle, the bankruptcy columnist for Bloomberg News, noted that perhaps hoping to preclude Judge Gross from handing down an unfavorable ruling, RCS filed its own Chapter 11 petition on Oct. 12, 2011, in Phoenix. RCS CAPITAL: Court OKs Collins as Committee's Counsel ----------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of RCS Capital Development, LLC, et al., sought and obtained authority from the U.S. Bankruptcy Court to retain Collins, May, Potenza, Baran & Gillespie, P.C., to represent and assist the Committee in pursuing the interests of unsecured creditors. Compensation will be payable to Collins at an hourly basis in accordance with the firm's fee schedule. Daniel P. Collins, Esq., a shareholder of Collins, May, Potenza, Baran & Gillespie, P.C., assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About RCS Capital RCS Capital Development, LLC, et al., filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 11-28746) on Oct. 12, 2011. Michael W. Carmel, Esq., at Michael W. Carmel, Ltd., in Phoenix, Ariz., represents the Debtor as counsel. RCS's bankruptcy schedules reflect assets of US$57,038,210, of which the largest is a judgment in the approximate amount of US$57,000,000 against ABC Learning Centres Ltd., an Australia- based operator of childcare centers. RCS's bankruptcy schedules reflect liabilities of approximately of US$47,169,203, the most significant of which is the disputed US$41,000,000 claim of ABC. Judge Randolph J. Haines presides over RCS's case. RCS had various contractual relationships with ABC that resulted in litigation in Maricopa County. That litigation resulted in a US$50 million jury verdict against ABC and judgment (worth US$56,456,732 as of Nov. 15, 2011). Liquidators for ABC filed for recognition under Chapter 15 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware about two weeks after RCS obtained its verdict. Judge Kevin Gross entered an order on Nov. 16, 2010, that recognized the Chapter 15 proceeding. ABC liquidators contended in papers filed in Delaware that RCS violated the Chapter 15 order by continuing actions in Nevada to seize property in which the liquidators claimed an interest. At a hearing in U.S. Bankruptcy Court in Delaware on Oct. 4, 2011, the liquidators asked Judge Gross to rule that RCS violated the automatic stay. The liquidators also wanted RCS to be held in contempt, directed to return property and assessed with punitive damages. Judge Gross concluded the Oct. 4, 2011 hearing and said he would rule later. As reported by the Troubled Company Reporter on Oct. 17, 2011, Bill Rochelle, the bankruptcy columnist for Bloomberg News, noted that perhaps hoping to preclude Judge Gross from handing down an unfavorable ruling, RCS filed its own Chapter 11 petition on Oct. 12, 2011, in Phoenix. RITE AID: J. Donald Won't Seek for Re-Election at Annual Meeting ---------------------------------------------------------------- James L. Donald, a member of the Board of Directors of Rite Aid Corporation, notified the Company that he does not intend to stand for re-election at the Company's 2013 annual meeting of stockholders. On Feb. 22, 2012, the Company adopted the Rite Aid Corporation Executive Incentive Plan for Officers of Rite Aid Corporation, a cash bonus plan for the executive officers of the Company, other corporate officers and key managers, and the Compensation Committee of the Board adopted corporate performance goals thereunder for the fiscal year ending March 2, 2013. Under the EIP, each Company executive is eligible for a bonus award for each fiscal year. The bonus award for any executive is based on the achievement of various levels in relation to the performance target specified by the Committee. The bonus may also be based on individual performance criteria or other non-financial operating performance measures. A full-text copy of the Form 8-K disclosure is available at: http://is.gd/cSWDPG About Rite Aid Corp. Drugstore chain Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, has more than 4,700 stores in 31 states and the District of Columbia and fiscal 2010 annual revenues of $25.7 billion. For the 39-week period ended Nov. 26, 2011, the Company reported a net loss of $207.32 million on $18.97 billion of revenue, compared with a net loss of $349.73 million on $18.75 billion of revenue for the 39-week period ended Nov. 27, 2010. The Company's balance sheet at Nov. 26, 2011, showed $7.55 billion in total assets, $9.96 billion in total liabilities and a $2.40 billion total stockholders' deficit. * * * Rite Aid carries 'Caa2' probability of default and corporate family ratings from Moody's Investors Service. It has a 'B-' corporate credit rating from Standard & Poor's Ratings Services. The TCR reported on Feb. 21, 2011 that Standard & Poor's Ratings Services said that it assigned its 'B+' issue rating and '1' recovery rating to Rite Aid Corp.'s proposed $343 million senior secured term loan tranche 5 due 2018. The '1' recovery rating indicates S&P's expectation for very high (90%-100%) recovery in the event of a payment default. According to the company, it will use the proceeds to repay about $321 million in borrowings under its tranche 3 term loan due 2014. "The ratings reflect the difficulties Rite Aid faces in improving its well-below-average operating performance relative to its peers, especially amid intense industry competition," said Standard & Poor's credit analyst Ana Lai. They also reflect the company's significant debt burden and thin cash flow protection measures. As reported by the Troubled Company Reporter on Feb. 22, 2011, Moody's assigned a B3 rating to Rite Aid Corp.'s proposed $343 million Tranche 5 senior secured first lien term loan due 2018. All other ratings including its Caa2 Corporate Family Rating, Caa2 Probability of Default Rating, and SGL-3 Speculative Grade Liquidity rating were affirmed. The rating outlook is stable. The proceeds will be used to repay the $343 million (including $21.2 original issue discount) Tranche 3 term loan due 2014. Following the repayment, the Tranche 3 term loan will be retired and its B3 rating withdrawn. ROTHSTEIN ROSENFELDT: Victims Object to Gibraltar Bank Settlement ----------------------------------------------------------------- Steven Melendez at Bankruptcy Law360 reports that victims of attorney Scott Rothstein's $1.2 billion Ponzi scheme have objected to a $70 million settlement with Florida's Gibraltar Private Bank & Trust over its alleged role in the scheme, saying a provision barring other suits against Gibraltar exceeds the bankruptcy court's jurisdiction. Razorback Funding LLC and others who say they lost a total of $160 million in the scam asked the Florida federal court to withdraw the Feb. 16 settlement proposal from the bankruptcy court, according to Law360. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. RQB RESORT: Hearing on Further Access to Cash Collateral Today -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, in an eighth order, authorized RQB Resort LP and RQB Development LP's continued use of the cash collateral which Goldman Sachs until March 2, 2012. A continued hearing on the Debtors' cash collateral motion will be held Feb. 28, at 11:30 a.m. The Debtors may use the cash collateral to fund their business operations postpetition. The Debtors will not disburse any amounts to insiders, and will not pay any prepetition debt. As reported in the Troubled Company Reporter on Dec. 27, 2011, as adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant Goldman Sachs a replacement lien on all postpetition account receivable to the same extent, validity and priority as the security interests Goldman Sachs held as of the Petition Date, and superpriority administrative expense claim status. As additional adequate protection, the Debtor will provide Goldman Sachs by the 15th of each month with each of the financial reports previously provided to Goldman Sachs by the Debtors prepetition. About RQB Resort RQB Resort LP and RQB Development LP own Florida's Sawgrass Marriott Resort, the site of the U.S. PGA Tour's Tournament Players Championship. Ponte Vedra Beach, Florida-based RQB Resort, LP, aka Sawgrass Marriott Resort & Cabana Club, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 10-01596) on March 1, 2010. The Company's affiliate -- RQB Development, LP, aka Sawgrass Marriott Golf Villas & Spa -- filed a separate Chapter 11 petition. The Company estimated its assets and debts at $100 million to $500 million in its Chapter 11 petition. SAAB AUTOMOBILE: Judge Refuses to Transfer Unit's Ch. 11 -------------------------------------------------------- Delaware bankruptcy judge Christopher S. Sontchi turned down a request to transfer Saab Cars North America Inc.'s Chapter 11 case to Michigan, siding with 48 affiliated dealers that pushed an involuntary petition on the company. Royal Oak, Mich.-based SCNA -- the North American operating subsidiary of bankrupt Swedish carmarker Saab Automobile AB -- had asked the court to transfer the venue of the case to the Eastern District of Michigan, noting that the dealers together hold less than 14% of the company's total outstanding debt. The dealers have claims aggregating $1.2 million while total debt of the company is estimated at $8.9 million. Saab Cars said it intended to file bankruptcy on Jan. 31 in Detroit until dealers beat them to the courthouse by filing an involuntary bankruptcy petition in Delaware. Dealers that pushed Saab's U.S. into bankruptcy opposed the move, stating that the case should continue in Delaware rather than in the "automotive capital of the world." About Saab Cars North America More than 40 U.S.-based Saab dealerships have signed an involuntary chapter 11 bankruptcy petition for Saab Cars North America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30, 2012. The petitioners, represented by Wilk Auslander LLP, assert claims totaling $1.2 million on account of "unpaid warranty and incentive reimbursement and related obligations" and/or "parts and warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia Gentile & Associates, in New York, signed the Chapter 11 petition on behalf of the dealers. The dealers want the vehicle inventory and the parts business to be sold, free of liens from Ally Financial Inc. and Caterpillar Inc., and "to have an appropriate forum to address the claims of the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg News. Saab Cars N.A. is the U.S. sales and distribution unit of Swedish car maker Saab Automobile AB. Saab Cars N.A. named in December an outside administrator, McTevia & Associates, to run the company as part of a plan to avoid immediate liquidation following its parent company's bankruptcy filing. Saab Automobile AB is a Swedish car manufacturer owned by Dutch automobile manufacturer Swedish Automobile NV, formerly Spyker Cars NV. Saab Automobile AB, Saab Automobile Tools AB and Saab Powertain AB filed for bankruptcy on Dec. 19, 2011, after running out of cash. About Saab Saab, or Svenska Aeroplan Aktiebolaget (Swedish Aircraft Company), was founded in 1937 as an aircraft manufacturer and revealed its first prototype passenger car 10 years later after the formation of the Saab Car Division. In 1990, Saab Automobile AB was created as a separate company, jointly owned by the Saab Scania Group and General Motors, and became a wholly owned GM subsidiary in 2000. In February 2010, Spyker Cars N.V. was renamed Swedish Automobile N.V. (Swan) on June 15, 2011. Saab Automobile AB currently employs approximately 3,700 staff in Sweden, where it operates production and technical development facilities at its headquarters in Trollhattan, 70 km north of Gothenburg. Saab Cars North America is located in Royal Oak, Michigan employing approximately 50 people responsible for sales, marketing and administration duties for the North American market. On Dec. 19, 2011, Swedish Automobile N.V. disclosed that Saab Automobile AB (Saab Automobile), Saab Automobile Tools AB and Saab Powertrain AB filed for bankruptcy with the District Court in Vanersborg, Sweden. After having received the recent position of GM on the contemplated transaction with Saab Automobile, Youngman informed Saab Automobile that the funding to continue and complete the reorganization of Saab Automobile could not be concluded. The Board of Saab Automobile subsequently decided that the company without further funding will be insolvent and that filing bankruptcy is in the best interests of its creditors. Swan does not expect to realize any value from its shares in Saab Automobile and will write off its interest in Saab Automobile completely. SABRE HOLDINGS: S&P Affirms 'B' Revolving Credit Facility Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' issue-level rating on the revolving credit facility of Southlake, Texas-based online travel services company Sabre Holdings Corp.'s operating subsidiary, Sabre Inc., following the company's proposal to amend the loan and extend the maturity date to Sept. 30, 2016. "The recovery rating on the revolver remains at '3', indicating our expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. In addition, we assigned the proposed extended portion of the company's term loan due Sept. 30, 2017 an issue-level rating of 'B' with a recovery rating of '3'," S&P said. The revolving credit facility commitment will likely begin at $500 million. "If the commitment exceeds $400 million, the commitment will reduce to $400 million on March 30, 2013, the original maturity date. Sabre is also looking to extend at least $750 million of its existing $2.9 billion term loan to September 2017. Both the revolving credit facility and the extended term loan will be subject to a 'springing' maturity. If Sabre's 8.35% notes due 2016 are still outstanding and total debt leverage exceeds 4.5x, the revolving credit facility and the extended term loan will mature on Dec. 15, 2015. Additionally, the revolving credit facility will mature on June 30, 2014 if as of that date more than $750 million of term loan borrowings with a maturity date before Dec. 31, 2016 remain outstanding," S&P said. "The corporate credit rating on Sabre is 'B' and the rating outlook is stable. The 'B' rating incorporates our assumption of fairly stable operating performance, despite the company's ongoing dispute with one of its airline customers and competitive pressure at its online travel agency, Travelocity. We expect that overall growth in the travel market will more than offset the specific risks that Sabre faces. We assess the company's business risk profile as 'fair', reflecting its market-leading position in travel distribution in the U.S. and growing demand for travel- related services. We view Sabre's financial risk profile as 'highly leveraged,' as the company still faces significant debt maturities in 2014 and its debt leverage remains high, at more than 5x. We expect that the company will seek to refinance the remainder of its 2014 maturities, as well as its senior notes due 2016," S&P said. "The stable rating outlook incorporates Standard & Poor's expectation that Sabre's credit measures will gradually improve in 2012. However, contract disputes and litigation with its airline customers remain a risk factor in the rating, especially if this leads to a disruption of the global distribution system (GDS) business model (a GDS is an intermediary between travel suppliers (airlines, hotels, car renters, cruises, etc.) and travel agencies). If we become convinced that airlines will not be successful in circumventing GDSs, airline litigation is satisfactorily resolved, and the company can sustain its EBITDA margin and reduce its sizable 2014 maturities to less than $1 billion, we could raise the rating. On the other hand, if the airlines are able to disintermediate GDSs, leading to margin deterioration, or if Sabre is unable to make meaningful progress in refinancing its sizable 2014 maturities well in advance of them coming due, we could lower the rating," S&P said. Ratings List Sabre Holdings Corp. Corporate Credit Rating B/Stable/-- Amended & extended revolver due 2016 B Recovery Rating 3 New Rating Sabre Inc. Extended term loan due 2017 B Recovery Rating 3 SACRAMENTO APARTMENTS: 9th Cir. BAP Affirms Sanctions v. Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Appellate Panel for the Ninth Circuit held that the bankruptcy court did not abuse its discretion in sanctioning Timothy A. Wilson, Esq., for filing Sacramento Apartments Holdings LLC's chapter 11 case for the improper purpose of hindering and delaying LB-RPR REO Holdings LLC's in its efforts to foreclose on the apartment complex. The bankruptcy court also did not abuse its discretion either in determining the amount of sanctions awarded to LB or in holding Mr. Wilson in civil contempt for failing to pay LB the sanctions awarded. Sacramento Apartments was formed on Dec. 18, 2009, the day of the hearing to appoint a receiver for Gold River Apartments LLC. Gold River owned an apartment complex located in Sacramento, California. Brian Baniqued and Roderick Farmer were the members of Gold River. LB held the sole trust deed on the apartment complex securing repayment of a $2.7 million loan made to Gold River. After Gold River defaulted on its loan payments to LB, LB recorded a notice of default and sought judicial foreclosure and the appointment of a receiver in state court in February 2009. Shortly thereafter, on March 2, 2009, Gold River filed its chapter 11 petition (Bankr. N.D. Calif. Case No. 09-41589) in Oakland. Gold River scheduled the apartment complex as its only asset. r. Wilson represented Gold River in its chapter 11 case. Gold River was unable to obtain approval of a disclosure statement while Wilson acted as its counsel. On Dec. 2, 2009, LB obtained relief from the stay to foreclose its lien on the apartment complex. Gold River appealed the relief from stay order to the Ninth Circuit BAP. The Gold River appeal was dismissed by stipulation on Feb. 23, 2010. After it obtained the Gold River relief from stay order, LB again sought in state court the appointment of a receiver to market and sell the apartment complex. Mr. Wilson appeared at the receiver appointment hearing requesting that it be continued so that he could file an opposition on Gold River's behalf. The state court agreed to continue the receiver appointment hearing to Dec. 22, 2009. Hours before the continued receiver appointment hearing, Gold River transferred the apartment complex to Sacramento Apartments, without authorization from the bankruptcy court. On the same day, Sacramento Apartments filed a chapter 11 petition (Bankr. N.D. Calif. Case No. 09-34054) in San Francisco. Sacramento Apartments filed its schedules, statement of financial affairs and list of 20 largest unsecured creditors, as well as an amended petition, on Jan. 4, 2010, listing the apartment complex as its only asset. Sacramento Apartment estimated $1 million to $10 million in assets and debts. The petition was signed by Roderick Farmer, member of the Company. Mr. Wilson represented Sacramento Apartments in its chapter 11 case, but he did not seek the bankruptcy court's approval of his employment as Sacramento Apartments' counsel. LB filed an ex parte motion to transfer venue of Sacramento Apartments' chapter 11 case from the San Francisco Division to the Oakland Division of the bankruptcy court. Sacramento Apartments opposed the transfer venue motion; however, it admitted in its opposition to the transfer venue motion that it filed the chapter 11 case to stop the appointment of a receiver. The bankruptcy court granted LB's transfer venue motion. A day later, LB filed a motion for relief from stay seeking in rem relief as to the apartment complex under 11 U.S.C. Sec. 362(d)(4)(A) and (B). Following several hearings, the bankruptcy court granted LB's relief from stay motion, entering an order on Feb. 18, 2010. The U.S. Trustee and LB sought sanctions against Mr. Wilson. The U.S. Trustee asserted that Mr. Wilson filed the Sacramento Apartments chapter 11 case to circumvent the Gold River relief from stay order. On March 1, 2010, the bankruptcy court entered an order granting the sanctions motion. The U.S. Trustee requested $2,850 in total fees incurred by two of its trial attorneys. LB's counsel sought $68,018 in fees and $1,177 in costs, for a total of $69,195. The appellate case is TIMOTHY A. WILSON, Appellant, v. LB-RPR REO HOLDINGS, LLC; UNITED STATES TRUSTEE, Appellees, BAP No. NC-10- 1294-DHDo (9th Cir. BAP). A copy of the BAP's Feb. 22, 2012 Memorandum is available at http://is.gd/5MCPd5from Leagle.com. SAVANNAH OUTLET: To Present Plan for Confirmation on April 17 ------------------------------------------------------------- The Bankruptcy Court approved the disclosure statement explaining Savannah Outlet Shoppes, LLC's Chapter 11 Plan as containing adequate information. As reported in the Troubled Company Reporter on Aug. 17, 2011, the Plan, among other things, provides for the satisfaction of all allowed administrative claims on the Effective Date or as soon as practicable thereafter. As to each administrative claim allowed thereafter, payment will be made soon as practicable. The Plan also provides for the satisfaction of all priority tax indebtedness either in cash or over a five-year period in installments with interest. March 27, 2012, is fixed as the last day for filing written acceptances or rejections of the Plan. A hearing on confirmation of the Plan will be held on April 17, 2012, at 11:00 a.m. 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. SAXBY'S COFFEE: Portion of IRS Claim Declared Unsecured ------------------------------------------------------- Bankruptcy Judge Eric L. Frank sustained, in part, Saxby's Coffee Worldwide LLC's objection to the proof of claim filed by the Internal Revenue Service for payroll taxes. The IRS amended the Proof of Claim several times. The most recent amendment, Proof of Claim No. 1-6, was filed on Nov. 12, 2010, asserting $190,082. Of that amount, the IRS claims that $153,250.98 is entitled to priority treatment under 11 U.S.C. Sec. 507(a)(8). The Debtor asserts the payroll taxes that are the subject of the Proof of Claim are not contractual obligations of the Debtor and not tax obligations entitled to priority. Judge Frank said the IRS' claim for the employer portion of employment taxes under FICA and FUTA does not qualify as a priority debt under Sec. 507(a)(8)(D) and must be classified as a general unsecured claim. The IRS is directed to file, on or before March 15, 2012, an amended Proof of Claim itemizing those amounts attributable to the employee trust fund taxes as a priority claim and the employer payroll taxes as a general unsecured claim. A copy of the Court's Feb. 23, 2012 Order is available at http://is.gd/zs1O6Ofrom Leagle.com. Conshohocken, Pennsylvania-based Saxby's Coffee Worldwide LLC is a 37-store chain that operates 14 stores in Pennsylvania, where it acquired parts of the former Bucks County Coffee Co. in 2008, along with others scattered from Washington and Atlanta to California. The Company filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 09-15898) on Aug. 5, 2009. Paul J. Winterhalter, Esq., serves as the Debtor's counsel. The Company estimated up to $50,000 in assets and $1 million to $10 million in debts when it filed for bankruptcy. By Order dated May 4, 2011, as modified by Order dated Dec. 8, 2011, the Court confirmed the Debtor's Fifth Amended Plan of Reorganization. SEARS HOLDINGS: Moody's Says B3 CFR Unaffected by Asset Sales ------------------------------------------------------------- Moody's Investors Service commented that Sears Holdings Corporations' (Sears) announcements that it has (i) entered into a definitive agreement to sell eleven Sears full line store locations to General Growth Properties for a purchase price of $270 million and (ii) intends to separate its Sears Hometown and Outlet Businesses and certain hardware stores through a proposed rights offerring that is expected to raise approximately $400 - 500 million are positive for the company's liquidity profile, however there is no immediate impact on the company's B3 Corporate Family Rating or the negative rating outlook. The principal methodology used in rating Sears Holdings Corporation was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Sears Holdings Corporation is the parent company of Kmart Corporation and Sears, Roebuck and Co. The company also owns a 94% stake in Sears Canada. Revenues are approximately $41.6 billion. SEQUENOM INC: Faces Infringement Lawsuit in California ------------------------------------------------------ Sequenom, Inc., and its wholly-owned subsidiary Sequenom Center for Molecular Medicine, LLC, were named as defendants in a complaint filed by plaintiffs Verinata Health, Inc., and The Board of Trustees of the Leland Stanford Junior University in the United States District Court for the Northern District of California. In the complaint: (i) Verinata seeks a judicial declaration that activities related to its non-invasive prenatal test using cell-free DNA circulating in the blood of a pregnant woman do not directly or indirectly infringe any claim of U.S. Patent No. 6,258,540 entitled Non-Invasive Prenatal Diagnosis, which the Company has exclusively in-licensed from Isis Innovation Limited; (ii) Verinata seeks a judicial declaration that each claim of the 540 Patent is invalid for failure to comply with the requirements of the patent laws of the United States; and (iii) Verinata and Stanford allege that the Company and Sequenom CMM, by performing its non-invasive prenatal MaterniT21 laboratory developed test, have and continue to directly infringe U.S. Patent No. 8,008,018 entitled Determination of Fetal Aneuploidies by Massively Parallel DNA Sequencing and U.S. Patent No. 7,888,017 entitled Non-invasive Fetal Genetic Screening by Digital Analysis, each of which have been exclusively licensed to Verinata by Stanford. The Company intends to vigorously defend against the judicial declarations sought and allegations of infringement set forth in the complaint. About Sequenom Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. Sequenom reported a net loss of $120.85 million in 2010 and a net loss of $71.01 million in 2009. The Company also reported a net loss of $51.98 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $152.99 million in total assets, $42.13 million in total liabilities and $110.85 million in total stockholders' equity. Ernst & Young LLP of San Diego, California, in its audit report attached to the 2010 financial statements, did not include a going concern qualification for Sequenom. E&Y, in its report on the 2009 results, expressed substantial doubt against Sequenom's ability as a going concern, noting that the Company "has incurred recurring operating losses and does not have sufficient working capital to fund operations through 2010." SNOKIST GROWERS: March 16 Hearing on Sale of Assets --------------------------------------------------- The Bankruptcy Court will hold a hearing March 16, 2012, at 9:30 a.m. on the request of Snokist Growers to sell its assets free and clear of liens, encumbrances, claims or interests, to Truitt Brothers, Inc., subject to higher and better offers. The Court will also hold a hearing on the Debtor's omnibus motion to assume and assign leases and executory contracts. Any objections to the Sale Motion or the Assumption Motion must be filed and served no later than 4:00 p.m. on March 15. Potential bidders must pre-qualify by delivering to the Debtor (i) an executed non-disclosure and confidentiality agreement; and (ii) demonstrate to the satisfaction of the Debtor that the potential bidder has adequate financial resources to pay a minimum of $1,000,000 in cash to purchase the assets. Truitt Brothers is directed to deposit $250,000 as earnest money, subject to same conditions as other potential bidders in the auction process and be due March 9, 2012. All Qualified Bidders and their representatives interested in submitting a bid may conduct due diligence on or before 5:00 p.m. on March 12. Competing bids must provide for a total cash purchase price no less than the sum of: (a) $42,450,000;(b) $500,000 for the Break Up Fee Cap; and (c) $100,000 as overbid amount. The Break-Up Fee is payable to TBI in the event it is not the prevailing bidder. If no Qualified Bid exists on the Bid Deadline, the Debtor will not proceed with the auction. Competing bids are due 4:00 p.m. PST, March 14. The Assets being sold to TBI include (i) Snokist's Cannery located in Terrace Heights; (ii) Snokist's warehouse facility located in Sawyer; (iii) all equipment and vehicles owned by Snokist; (iv) Snokist's inventory, including finished goods, supplies and ingredients; (v) Snokist's accounts receivable; (vi) substantially all of Snokist's rights under leases and executory contracts; and (vii) Snokist's goodwill and intangible personal property. The primary asset to be retained by Snokist will be any cash accumulated by Snokist through the closing of the sale. Snokist estimates it will have roughly $8.0 million in cash on the closing date. The purchase price for the Assets under the APA consists of (i) TBI's assumption or payment of roughly $37.5 million of debt to Snokist's primary secured creditors, Rabo AgriFinance, KeyBank National Association and Community Bank; (ii) payment of between $5.15 million and $6.65 million in cash; and (iii) payment of up to $3.0 million between 2014-2018 depending upon the profitability of TBI's operations. The Debtor's obligations to Rabo, Community Bank and KeyBank would be paid in full on closing of the sale to TBI. Snokist believes the best measure of the value of the Assets is what an independent third party is willing to pay in an arms' length transaction. The only written offer for substantially all of its Assets which Snokist has received is from TBI. Prior to executing the APA, Snokist and TBI engaged in extensive negotiations regarding the price for the Assets. The Purchase Price reflected in the APA is significantly more than TBI's initial offer and was the result of substantial give and take between the parties. Snokist is not aware of any higher or better offers for the Assets. If the sale of the Assets to TBI (or another successful bidder) is closed, Snokist estimates it will have between $13 million and $13.5 million in cash available with which to pay its remaining creditors after closing. After closing, Snokist believes that its remaining creditors (other than equity holders) will consist of: Employees $580,000 Non-Member Growers & Brokers $3,500,000 Trade Payables - Pre-Petition $2,700,000 Trade Payables - Post-Petition $500,000 Member Ledger Accounts $5,600,000 Administrative Claims $500,000 ------------ Total $13,380,000 Snokist projects that unsecured creditors will receive close to full payment on their allowed unsecured claims. After closing of the sale of the Assets, the Debtor intends to submit a proposed chapter 11 plan of liquidation which will provide for distribution of the Sales Proceeds to creditors. The Official Committee of Unsecured Creditor has joined in the U.S. Trustee's objection to the bidding procedures. Any break-up fee, the Committee said, should be tied to premium that a successful bidder other than TDI pays for the business. The Committee does not oppose a provision which would reimburse TDI for out of pocket expense, but believes this number should be estimated and capped, so that it may be included as a portion of any initial overbid. SOLYNDRA LLC: Jones Lang to Market Silicon Valley Facility ---------------------------------------------------------- Jones Lang LaSalle has been chosen by Solyndra LLC to sell the solar panel manufacturer's corporate headquarters and primary production facility located at 47488 Kato Road in Fremont, Calif., and the engagement has been approved by the Bankruptcy Court overseeing Solyndra's bankruptcy case. The team in charge of marketing the building is led by Bart Lammersen, Greg Matter and Jason Ovadia. The approximately 450,000-square-foot manufacturing facility, completed in 2010, is suited to a variety of cleantech and technology businesses, as well as global manufacturers and companies looking for a signature presence in California's Silicon Valley. The 280,000-square-foot manufacturing space is rated as Class 100,000 Clean Room (ISO Clean 8) and the two-story office space, totaling approximately 30,000 square feet, was constructed to LEED Gold standards. The property sits on a 30-acre parcel, with prominent Interstate 880 frontage minutes from San Jose International Airport, Oakland International Airport and a short drive from the Port of Oakland and the San Francisco Peninsula. The property includes plans for an additional 200,000-plus-square- foot expansion facility. "This is a unique opportunity for a manufacturer or other user to acquire a brand new, state-of-the-art facility in the heart of Silicon Valley," said Bart Lammersen, Managing Director in the firm's Palo Alto office. "This caliber of property, with its high level of sophisticated infrastructure, is unique in California and even the world, making it extremely appealing to investors seeking a discount to replacement value." The facility was designed to exceed California seismic standards and can be operating immediately following a seismic event. The building's 21 KV electrical service is backed up by two diesel emergency generators, each with 2MW capacity, and the building carries a cool membrane roof with a 1.2 MW solar installation. "For companies interested in getting into the market quickly, this facility reduces speed to market, improves supply chain flexibility and mitigates risk at a fraction of replacement cost," said Greg Matter, Vice President, Jones Lang LaSalle's Supply Chain and Logistics Solutions team. About Jones Lang LaSalle Jones Lang LaSalle -- htpp://www.joneslanglasalle.com/ -- is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company's investment management business, is one of the world's largest and most diverse in real estate with $47.7 billion of assets under management. SOPHIA LP: S&P Assigns 'B' Corporate Credit Rating -------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Sophia L.P. The outlook is stable. "At the same time, we assigned a 'B+' issue-level rating (one notch higher than the 'B' corporate credit rating) to the company's first-lien senior secured credit facility, which includes a $125 million revolver facility and a $1.075 billion term loan. The recovery rating is '2', indicating our expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default," S&P said. "In addition, we assigned a 'CCC+' issue-level rating to the company's $530 million in senior unsecured notes. The recovery rating is '6' indicating our expectation of negligible (0% to 10%) recovery for noteholders in the event of a payment default," S&P said. "The ratings reflect Sophia's 'highly leveraged' financial profile, and our view that near-term integration risks offset the combined company's improved market position. Sophia is the leading provider of enterprise resource planning (ERP) software products to more than 2,300 higher education institutions. The company primarily operates in North America, but has a growing client base in Asia, Europe, and South America," S&P said. "Its suite of ERP software modules includes solutions for student administration, financial aid, finance, human resources, and fundraising. We view Sophia's business risk profile as 'fair,' reflecting the company's leading market position, a revenue base in which approximately 92% of the combined entity's total revenues are contractually recurring or sales to existing customers, and good customer diversity. However, these factors are offset in part by a relatively narrow business profile and near-term integration execution risk, given a merger of this scale," S&P said. "Sophia's relatively stable installed base of customers, related contractually recurring maintenance revenues, and expected good FOCF provide critical rating support," said Standard & Poor's credit analyst Jacob L. Schlanger. "We could lower the rating if debt approaches a seasonal peak of about 8x due to higher-than- expected seasonal borrowing, reduced sales, or margin compression. The potential for a positive rating action is limited over the next year due to the company's highly leveraged financial profile and limited ability to materially reduce leverage." SP NEWSPRINT: BDO Approved as Committee's Financial Advisor ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware, in a revised order, authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of SP Newsprint Holdings LLC, et al., to retain BDO Consulting as financial advisor nunc pro tunc Nov. 30, 2011. BDO Consulting is a division of BDO USA, LLP. The Court also ordered that the Jan. 6 order is vacated. As reported in the Troubled Company Reporter on Jan. 24, 2012, BDO sought payment for compensation of professional services on a fixed monthly basis of $75,000 per month for the first three months and $50,000 per month thereafter, plus reimbursement of actual and necessary expenses. 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: Raymond James OK'd as Investment Banking Advisor -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized SP Newsprint Holdings LLC, et al., to employ Raymond James & Associates, Inc. as their external investment banking advisor. As reported in the Troubled Company Reporter on Feb. 8, 2012, Raymond James is expected to, among other things: a) review and analyze the Debtors' business, operations, properties, financial condition, and prospects; b) assist the Debtors in evaluating potential Business Combination Transaction alternatives and strategies; c) assist the Debtors in identifying Interested Parties that may be interested in participating in a Business Combination Transaction; and d) on behalf of the Debtors, contacting Interested Parties that Raymond James, after consultation with the Debtors' management, believes meet certain industry, financial, and strategic criteria, and assisting the Debtors in negotiating and structuring a Business Combination Transaction. The Debtors have been advised by Raymond James that it will coordinate with the other retained professionals in the cases to eliminate unnecessary duplication or overlap of work. The Debtors proposes to compensate Raymond James as: a) Monthly Advisory Fee -- The Debtors would pay Raymond James a nonrefundable fee of $75,000 upon the entry of an order approving the application and an additional $75,000 upon each subsequent monthly anniversary of the date of the Engagement Letter. b) Reimbursement -- The Debtors would reimburse Raymond James, within 30 days of receipt of an invoice therefor, for reasonable out-of-pocket expenses (including legal fees). c) Business Combination Transaction Fee -- At the closing of a Business Combination Transaction, other than in the event of a Sale Process Termination, pursuant to which GECC, as collateral agent, or a designee on behalf of the secured parties under the Prepetition Credit Facility or DIP Credit Facility (for the avoidance of doubt, including a cash bid, credit bid, or some combination thereof) is the purchaser, whether effectuated pursuant to Bankruptcy Code Section 363 or a confirmed plan of reorganization, Raymond James would be paid a cash fee, in the amount of $400,000; provided, however, that, if the Debtors have paid Monthly Advisory Fees which, in the aggregate, exceed $150,000, the Business Combination Transaction Fee would be reduced by the amount that such fees exceed $150,000. Notwithstanding the forgoing, if the Business Combination Transaction is effected by a purchase for consideration other than a GECC Bid, or if GECC sells all or a substantial portion of its prepetition and post-petition indebtedness prior to the consummation of a Business Combination Transaction to a party that has entered into a non-disclosure agreement or a confidentiality agreement with the Debtors in connection with a potential Business Combination Transaction, and such party submits a credit bid and is deemed the successful bidder for the assets, then the Business Combination Transaction Fee would be paid out of proceeds as a cost of sale at the closing of the Business Combination Transaction; provided further, however, that if the Debtors have paid Monthly Advisory Fees, which, in the aggregate, exceed $150,000, the Business Combination Transaction Fee would be reduced by the amount that the fees exceed $150,000. d) Sale Process Termination Fee -- If any of the Debtors' existing secured lenders submits a binding credit bid to purchase all or substantially all of the assets of the Debtors, and the Debtors, in consultation with their advisors, determine that engaging in a full marketing and sale process via the entry of sale procedures would not benefit the Debtors' bankruptcy estates, and the Debtors subsequently instruct Raymond James to terminate the marketing process as a result thereof, Raymond James' would be due a cash fee equal to $300,000 in the event a Sale Process Termination occurs prior to or on Jan. 18, 2012, or a pro rata amount ranging from $300,000 to $500,000, as calculated pursuant to a Sale Process Termination occurring after Jan. 18, 2012, but prior to March 31, 2012, (which would be reduced by the monthly advisory fees previously received). The Sale Process Termination Fee would be paid in two installments consisting of (i) 80% of the Sale Process Termination Fee upon the earlier of a closing or 30 days from the Sale Process Termination and (ii) the remaining 20% of such Sale Process Termination Fee upon a closing. In the event the Debtors elect to pursue the entry of sale procedures or revive any aspect of the 363 sale marketing process after a Sale Process Termination, Raymond James would be entitled to a Business Combination Transaction Fee. In the event a Sale Process Termination occurs after a portion of the Company has already been sold, and a Business Combination Transaction Fee has already been earned under section 2(c) above for that partial sale, Raymond James would credit such prior-earned Business Combination Transaction Fee against any related fee due under the section 2(d) for the subsequent Sale Process Termination (provided that such credited fee earned under section 2(c) would not exceed the amount due under this section 2(d)). e) Testimony Fee -- In the event that any professional employed by Raymond James is requested to provide testimony, whether at depositions, hearings, or trial, Raymond James would provide up to two days of Testimony, including preparation for and traveling to the Testimony. Any additional time expended by Raymond James in traveling to, preparing for, and providing the Testimony would be charged separately at $900 per hour per professional. f) Fee for Additional Services -- In the event the Debtors request that Raymond James provide services in addition to those outlined above, and subject to any required approval of the Bankruptcy Court, the Debtors and Raymond James would negotiate in good faith to agree on reasonable compensation to Raymond James for those additional services (whether as a monthly fee, success fee, or otherwise), which would reflect the customary investment banking fees for institutions of Raymond James' stature for similar services. The Debtors would also indemnify Raymond James and each of its directors, officers, agents, employees, and controlling persons in accordance with the indemnification provisions set forth in the Engagement Letter. To the best of the Debtors' knowledge, Raymond James is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About SP Newsprint Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers, Southeastern Paper Recycling and SP Newsprint Merger LLC -- and three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011. SP Newsprint Holdings LLC is a newsprint company controlled by polo-playing mogul Peter Brant. It is one of the largest producers of newsprint in North America. SP Recycling Corporation, a Georgia corporation and the Debtors' other operating company, was established in 1980 as a means for SP to secure a ready supply of recycled fiber, a key raw material for its newsprint. SP Newsprint is the second Brant-owned newsprint company to tumble into bankruptcy proceedings in recent years. Current and former affiliated entities are Bear Island Paper Company, L.L.C., Brant Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint, Inc., White Birch Paper Company. Judge Christopher S. Sontchi presides over the case. Joel H. Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr., Esq. -- jlevitin@cahill.com , mpeleg@cahill.com and rstieglitz@cahill.com -- at Cahill Gordon & Reindel LLP serve as the Debtors' lead counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq. -- kaufman@rlf.com and collins@RLF.com -- at Richards, Layton & Finger, P.A., serve as the Debtors' Delaware counsel. AlixPartners LLP serves as the Debtors' financial advisors and The Garden City Group Inc. serves as the Debtors' claims and noticing agent. SP Newsprint Co., LLC, disclosed $317,992,392 in assets and $322,674,963 in liabilities as of the Chapter 11 filing. The petitions were signed by Edward D. Sherrick, executive vice president and chief financial officer. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler PC. Ashby & Geddes, P.A., serves as its Delaware counsel, and BDO Consulting serves as its financial advisor. SPRINGLEAF: Bank Debt Trades at 10% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Springleaf Finance Inc. is a borrower traded in the secondary market at 90.33 cents- on-the-dollar during the week ended Friday, Feb. 24, 2012, a drop of 0.86 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 425 basis points above LIBOR to borrow under the facility. The bank loan matures on May 10, 2017, and carries Moody's B2 rating and Standard & Poor's CCC+ rating. The loan is one of the biggest gainers and losers among 149 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Springleaf Springleaf was incorporated in Indiana in 1927 as successor to a business started in 1920. From Aug. 29, 2001, until the completion of its sale in November 2010, Springleaf was an indirect wholly owned subsidiary of AIG. The consumer finance products of Springleaf and its subsidiaries include non-conforming real estate mortgages, consumer loans, retail sales finance and credit-related insurance. * * * The Troubled Company Reporter said on Feb. 8, 2012, that Standard & Poor's Ratings Services lowered its issuer credit rating on Springleaf Finance Corp. and its issue credit rating on the company's senior unsecured debt to 'CCC' from 'B'. Standard & Poor's also said it lowered its issue credit ratings on Springfield's senior secured debt to 'CCC+' from 'B+' and on the company's preferred debt to 'CC' from 'CCC-'. The outlook on Springleaf's issuer credit rating is negative. "Springleaf's announcement that it will shut down about 60 branches and stop lending in 14 states highlights the operating, funding, and liquidity challenges that the firm faces as it works to pay down the $2 billion of debt coming due in 2012 and to establish a stable long-term funding strategy. The downgrade also reflects the company's poor earnings, exposure to weak residential markets and uncertainty about its ability to refinance debt or securitize assets over the coming year. We believe that should its funding or securitization options become unavailable, the company will not have enough liquidity to survive 2012, and in that case a distressed debt exchange would be likely. The company has retained financial advisors to assess its options," S&P said. As reported by the Troubled Company Reporter on Sept. 9, 2011, Fitch Ratings has downgraded the Issuer Default Ratings (IDRs) and unsecured debt ratings on Springleaf Finance, Inc. (Springleaf) and affiliates to 'CCC' from 'B-'. The downgrade of Springleaf's IDR was driven by Fitch's continued concerns regarding the company's lack of meaningful liquidity and funding flexibility, as $2 billion of unsecured debt matures in 2012. Minimal progress has been made in implementing a long-term funding plan since the acquisition by Fortress Investment Group LLC (Fortress) in November 2010; therefore, barring meaningful access to the securitization market over the next several months, Springleaf may have insufficient flexibility to address its near- term debt maturities. STANFORD FIN'L: SEC Says There's Probable Cause for SIPC Coverage ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Securities and Exchange Commission made another pitch last week for defrauded investors in the R. Allen Stanford Ponzi scheme to have some of their claims paid by the Securities Investor Protection Corp. The SEC filed with U.S. District Judge Robert L. Wilkins in Washington a brief to support its contention to force the SIPC to take over the liquidation of Stanford's brokerage firm, Stanford Group Co. The SEC, according to the report, says there should be SIPC coverage for some of the losses because the Stanford brokerage and bank in Antigua "were operated in such a highly interconnected manner that deposits of cash with [the bank] to purchase fraudulent CDs should be deemed deposits of cash" with the brokerage. The SEC argues that SIPC coverage doesn't need to be crystal clear. In the Commission's opinion, it's sufficient if there is "probable cause" to believe there are "customers" covered by SIPC protection. SIPC, the report notes, believes its fund can't be used to pay Stanford's victims because the fraud involved certificates of deposit issued by a bank in Antigua, not by a broker in the U.S. that's a member of SIPC. About Stanford International Bank Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On Feb. 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. The U.S. Securities and Exchange Commission, on Feb. 17, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi- billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him in June before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money-laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. The criminal case is U.S. v. Stanford, H-09-342, U.S. District Court, Southern District of Texas (Houston). The civil case is SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District Court, Northern District of Texas (Dallas). STOCKTON, CA: May Suspend Payments as It Mulls Bankruptcy --------------------------------------------------------- The city of Stockton, California warned bondholders Friday that it could suspend payments on a portion of its debt as it determines whether to seek Chapter 9 bankruptcy protection. Lisa Uhlman at Bankruptcy Law360 reports that the California farming city of Stockton is mulling a possible municipal bankruptcy filing, according to documents from the city council. In an update included in an agenda for a city council meeting set to take place Tuesday, City Manager Bob Deis cited the city's "dire fiscal situation" and a best-case/worst-case scenario of $20 million to $38 million projected deficit for fiscal year 2012-13, as he recommended conducting a so-called State AB506 confidential neutral evaluation process, Law360 reports. Separately, American Bankruptcy Institute reports that the City Council of Stockton, Calif., will be asked to vote this week to default on bonds and take the first steps toward bankruptcy. STREETCAR PARTNERS: Case Summary & 7 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Streetcar Partners, LLLP 1634 Steele Street Denver, CO 80206 Bankruptcy Case No.: 12-12943 Chapter 11 Petition Date: February 22, 2012 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Michael E. Romero Debtor's Counsel: David Warner, Esq. Harvey Sender, Esq. SENDER & WASSERMAN, P.C. 1660 Lincoln St., Ste. 2200 Denver, CO 80264 Tel: (303) 296-1999 Fax: (303) 296-7600 E-mail: david.warner@sendwass.com Sendertrustee@sendwass.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cob12-12943.pdf The petition was signed by David Barber, manager of IPS Holdings, LLC, general partner. SUNCOR DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Suncor Development Company 80 E. Rio Salado Parkway, #410 Tempe, AZ 85281 Bankruptcy Case No.: 12-03433 Chapter 11 Petition Date: February 24, 2012 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Thomas J. Salerno, Esq. SQUIRE SANDERS (US) LLP 1 E. Washington Street, #2700 Phoenix, AZ 85004 Tel: (602) 528-4043 Fax: (602) 253-8129 E-mail: thomas.salerno@squiresanders.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $0 to $50,000 The Company?s list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/azb12-03433.pdf The petition was signed by Joseph F. Lapinsky, authorized representative. Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- StoneRidge - Prescott Valley LLC 12-03429 Assets: $1,000,001 to $10,000,000 Debts: $0 to $50,000 Avimor, LLC 12-03435 Assets: $0 to $50,000 Debts: $0 to $50,000 BV at Hayden Ferry Lakeside LLC 12-03438 Assets: $50,001 to $100,000 Debts: $0 to $50,000 Edgewater at Hayden Ferry Lakeside LLC 12-03439 Assets: $0 to $50,000 Debts: $0 to $50,000 StoneRidge Golf Course LLC 12-03440 Kabuto SunCor Joint Venture 12-03441 SunCor Construction AZ, Inc. 12-03443 Assets: $0 to $50,000 Debts: $0 to $50,000 SunCor Construction, Inc. 12-03446 Assets: $0 to $50,000 Debts: $0 to $50,000 Lakeside Residential Communities LLC 12-03447 Assets: $0 to $50,000 Debts: $0 to $50,000 Rancho Viejo de Santa Fe, Inc. 12-03449 Assets: $50,001 to $100,000 Debts: $0 to $50,000 SunCor Golf, Inc. 12-03450 Assets: $0 to $50,000 Debts: $0 to $50,000 StoneRidge Commercial LLC 12-03451 SunCor Homes, Inc. 12-03452 SunCor Idaho, Inc. 12-03454 Assets: $0 to $50,000 Debts: $0 to $50,000 SunCor New Mexico, Inc. 12-03455 Assets: $50,001 to $100,000 Debts: $0 to $50,000 SunCor Utah, Inc. 12-03457 Assets: $100,001 to $500,000 Debts: $0 to $50,000 Sedona Golf Resort LC 12-03458 Assets: $0 to $50,000 Debts: $100,001 to $500,000 SUPERMEDIA INC: Incurs $771 Million Net Loss in 2011 ---------------------------------------------------- Supermedia Inc. reported 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 reported net income of $138 million on $384 million of operating revenue for the three months ended Dec. 31, 2011, compared with net income of $56 million on $426 million of operating revenue for the same period 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. "We believe we made good progress during 2011, as expense reduction initiatives drove adjusted EBITDA results of $602 million, reflecting improved EBITDA margin. Utilization of related cash flows and efforts to efficiently deleverage also allowed us to reduce our debt," said president and CEO Peter McDonald. "Initiatives in these areas continue into 2012." A full-text copy of the press release is available for free at: http://is.gd/ktOy7z 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. * * * 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. TALON THERAPEUTICS: Board Adopts Amended 2010 Incentive Plan ------------------------------------------------------------ The Board of Directors of Talon Therapeutics, Inc., adopted an amendment to the Company's 2010 Equity Incentive Plan increasing the total number of shares of the Company's common stock issuable thereunder from 8,500,000 to 10,000,000. Effective as of Feb. 17, 2012, the Company adopted the Talon Therapeutics, Inc. 2012 Severance Payment Plan. All full-time regular employees of the Company are eligible to participate in the Severance Plan, except those employees with individual employment agreements that provide for benefits in connection with a termination of employment. Effective as of Feb. 17, 2012, the Company adopted the Talon Therapeutics, Inc. 2012 Change of Control Payment Plan. Full-time Company employees serving at and above the level of Vice President as of the time of the change of control transaction are eligible to receive benefits under the Change of Control Plan upon the effective time of a "change of control" transaction. On Feb. 17, 2012, the Board approved base salary increases for 2012 and cash bonus payments for the 2011 fiscal year to be paid to the Company's named executive officers. The 2012 base salaries and 2011 bonuses to be paid to Dr. Deitcher and Mr. Carlson are: Name and Title 2012 Base Salary 2011 Bonus -------------- ---------------- ---------- Steven R. Deitcher $467,857 $227,115 President, CEO Craig W. Carlson $333,566 $77,724 Sr. V.P., CFO Mr. Deitcher's potential FDA bonus is $90,846 while Mr. Carlson's potential FDA bonus is $51,816. Also on Feb. 17, 2012, the Company granted 10-year stock options pursuant to the 2010 Plan to Dr. Deitcher and Mr. Carlson to purchase 1,000,000 and 400,000 shares of the Company's common stock, respectively. Each stock option is exercisable at a price of $0.905 per share, the closing sale price of the Company's common stock on the date of grant, and vest in 48 equal monthly installments commencing on the first month anniversary of the grant date. Each stock option grant is evidenced by a separate stock option agreement in the Company's standard form for use under the 2010 Plan. About Talon Therapeutics Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc. (TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical company dedicated to developing and commercializing new, differentiated cancer therapies designed to improve and enable current standards of care. The company's lead product candidate, Marqibo, potentially treats acute lymphoblastic leukemia and lymphomas. The Company has additional pipeline opportunities some of which, like Marqibo, improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity. Effective Dec. 1, 2010, Hana Biosciences Inc. changed its name to Talon Therapeutics Inc. The name change was effected by merging Talon Therapeutics, Inc., a wholly-owned subsidiary of the Company, with and into the Company, with the Company as the surviving corporation in the merger. The Company reported a net loss of $25.98 million in 2010 and a net loss of $24.14 million in 2009. The Company also reported a net loss of $17.17 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $5.66 million in total assets, $32.66 million in total liabilities, $30.64 million in 10 million shares authorized, and a $57.64 million total stockholders' deficit. The Company does not generate any recurring revenue and will require substantial additional capital before it will generate cash flow from its operating activities, if ever. The Company does not currently have sufficient capital to fund its entire development plan beyond 2011. The Company's continued operations depend entirely upon obtaining additional capital. The Company will be unable to continue development of its product candidates unless it is able to obtain additional funding through equity or debt financings or from payments in connection with potential strategic transactions. The Company can give no assurances that any additional capital that it is able to obtain, if any, will be sufficient to meet its needs. Moreover, there can be no assurance that such capital will be available to the Company on favorable terms or at all, especially given the current economic environment which has severely restricted access to the capital markets. If anticipated costs are higher than planned or if the Company is unable to raise additional capital, it will have to significantly curtail planned development to maintain operations through 2011. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. As reported by the TCR on April 1, 2011, BDO USA, LLP, in San Francisco, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. BDO noted that the Company suffered recurring losses from operations and has a net capital deficiency. TEN SAINTS: Taps Bancroft & John to Appeal 2012-2013 Tax Value -------------------------------------------------------------- Ten Saints LLC asks the U.S. Bankruptcy Court for the District of Nevada for permission to employ Bancroft & John, P.C. as special counsel with regard to the 2012-2013 property tax appeal. The Debtor seeks authorization to employ Bancroft to appeal the 2012- 2013 assessed tax value of the Hampton Inn in Clark County, Nevada, in an effort to reduce its corresponding 2012-2013 tax obligation for the property. For the 2010-2011 tax year, the debtor engaged Bancroft to appeal the assessed tax value for the property, which appeal resulted in a reduction, from $7,602,991 to 2,344,182 in the taxable value of the property, and which resulted in a corresponding of its tax obligations. For the 2011-2012 tax year, the Debtor engaged Bancroft to appeal the taxable value for the Hampton Inn, which appeal resulted in a reduction, from $6,991,800 to $2,885,120, in the taxable value of the property, and which resulted in a reduction of its tax obligations. As stated in the 2012-2013 notice of value, the assessed tax value of the property is $2,825,120. The value may still be in excess of the property's full cash value under current market conditions and, if it is, the Debtor's tax obligations for the property for the 2012-2013 tax year will be greater than they must be. Paul D. Bancroft, Esq. will be the individual primarily responsible for performing the services required by the Debtor. Bancroft will receive 33% of any property tax savings achieved for tax year 2012-2013. To the best of the Debtor's knowledge, Bancroft does not hold or represent interests adverse to the Debtor. The Debtor set a March 7, 2012, hearing at 9:30 a.m., on its request to employ Bancroft. About Horizon Village Square et al. Four related Las Vegas, Nevada-based entities sought Chapter 11 bankruptcy protection on July 13, 2011. The businesses are owned or managed by local business people and firms, including Todd Nigro, Nigro Development LLC, a Nigro family trust and other investors. Horizon Village Square LLC (Bankr. D. Nev. Case No. 11-21034) owns the Vons-anchored Horizon Village Square Shopping Center near I-515 and Horizon Drive in Henderson. The property includes five retail buildings with nearly 43,000 square feet of space. Ten Saints LLC (Bankr. D. Nev. Case No. 11-21028) owns the 134- room Hampton Inn & Suites at St. Rose Parkway and Seven Hills Drive in Henderson. Beltway One Development Group LLC (Bankr. D. Nev. Case No. 11- 21026) owns the Desert Canyon Business Park at Russell Road and the Las Vegas Beltway. It has two buildings and 15 acres. Nigro HQ LLC (Bankr. D. Nev. Case No. 11-21014) owns an office building at 9115 W. Russell Road occupied by Bank of George, Infinity Plus LLC and Nigro Construction Inc. Todd Nigro said the four bankruptcies were caused by threatened foreclosures -- typically related to Wells Fargo Bank demanding payments to keep loan-to-value ratios at specified levels. Judge Mike K. Nakagawa presides over the cases. Lawyers at Gordon Silver serve as the Debtors' bankruptcy counsel. The bankruptcy petitions estimated assets and debts from $1 million to $10 million each for Nigro HQ; and from $10 million to $50 million in both assets and debts for Horizon Village, Ten Saints and Beltway One. A fifth related business, Russell Boulder LLC, filed for bankruptcy (Bankr. D. Nev. Case No. 10-29724) on Oct. 19, 2010. It owns the 600-suite Siena Suites extended stay property at Boulder Highway and Russell Road. Edward M. Zachary, Esq., at Bryan Cave LLP, in Bryan Cave LLP, in Phoenix, Ariz., and Robert M. Charles, Jr., Esq., at Lewis and Roca LLP, in Los Vegas, Nev., represent Wells Fargo Bank, N.A., as counsel. THORNBURG MORTGAGE: Credit Suisse Wins Most of Servicing Proceeds ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, notes that Credit Suisse Securities (USA) LLC, as collateral agent, was determined by the bankruptcy judge in Baltimore to have a valid security agreement in about $75.3 million of the $96.2 million that Thornburg Mortgage Inc. received early in its Chapter 11 case from selling mortgage servicing rights. The servicing portfolio was sold in March 2010. Before the sale, Credit Suisse started a lawsuit, claiming to have a valid security interest in all sale proceeds. According to the report, the bankruptcy judge previously decided there were no disputed issues of fact requiring a trial. As a result he determined that Credit Suisse's lien didn't encompass $16.9 million in servicing fees and advances. The judge reiterated his conclusion in a 23-page opinion on Feb. 22. The report relates that last week's opinion by U.S. Bankruptcy Judge Duncan W. Keir was the result of a trial resolving the remainder of the controversy over $79.3 million the buyer paid for the servicing rights themselves. Judge Keir concluded that all but 5% of the value of the servicing rights belonged to Credit Suisse, as agent for the secured lenders. Thornburg was servicing 29 securitizations containing mortgages with outstanding balances aggregating $11.05 billion when it applied to the judge to sell the portfolio. The mortgage- servicing business was sold to an affiliate of Credit Suisse for 0.77% of the unpaid principal balances of the mortgage loans. About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- was a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originated, acquired, and retained investments in adjustable and variable rate mortgage assets. Its ARM assets comprised of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage and its four affiliates filed for Chapter 11 bankruptcy (Bankr. D. Md. Lead Case No. 09-17787) on May 1, 2009. Thornburg changed its name to TMST, Inc. Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, served as counsel to Thornburg Mortgage. Orrick, Herrington & Sutcliffe LLP served as special counsel. Jim Murray, and David Hilty, at Houlihan Lokey Howard & Zukin Capital, Inc., served as investment banker and financial advisor. Protiviti Inc. served as financial advisory services. KPMG LLP served as the tax consultant. Epiq Systems, Inc., serves claims and noticing agent. Thornburg disclosed total assets of $24.4 billion and total debts of $24.7 billion, as of Jan. 31, 2009. On Oct. 28, 2009, the Court approved the appointment of Joel I. Sher as the Chapter 11 Trustee for the Company, TMST Acquisition Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging Strategies, Inc. He is represented by Shapiro Sher Guinot & Sandler. TRIBUNE CO: Funding for $32-Mil. ERISA Settlement Completed ----------------------------------------------------------- The U.S. Department of Labor's Employee Benefits Security Administration has announced that the Tribune Co., GreatBanc Trust Co. and various insurance carriers have completed funding of a global settlement in the amount of $32 million to be allocated among the Tribune Employee Stock Ownership Plan's participants, and to pay for legal and administrative expenses. The settlement is with, among others, the department and the plaintiffs in a private class action lawsuit, and resolves the department's claims of violations of the Employee Retirement Income Security Act. "This settlement ensures that the Tribune Employee Stock Ownership Plan's participants and beneficiaries will be able to receive the benefits that are rightfully theirs," said Secretary of Labor Hilda L. Solis. "I am pleased that participants' hard earned retirement savings have been returned." "The fulfillment of this settlement is good news for participants in the Tribune Employee Stock Ownership Plan," said Phyllis C. Borzi, assistant secretary of labor for employee benefits security. "It is the culmination of my agency's commitment and extreme hard work in this case to ensure that the employees' contributions to the plan are handled with the utmost of care according to the law and according to what is right." On Jan. 30, 2012, the U.S. District Court for the Northern District of Illinois approved the global settlement agreement, which had received prior approval in October 2011 by the U.S. Bankruptcy Court for the District of Delaware. In accordance with the global settlement agreement, the department has concluded its investigation of the plan. EBSA initiated an investigation of the plan to review its 2007 purchase of Tribune Co. stock for $250 million and the roles played by the plan's fiduciaries, the company and the plan's trustee, GreatBanc Trust Co. The department claimed that the company failed to act prudently and in participants' best interests when it engaged in the ESOP transaction. Additionally, the department claimed that the ESOP transaction was prohibited, a claim consistent with the findings of the district court in the private plaintiffs' action. As part of its 2007 corporate re-structuring, the Tribune Co. became a privately-held entity owned by the plan. In September 2008, a class action lawsuit was filed on behalf of the plan's participants. While initially filed in California, the case was moved to the Northern District of Illinois in November 2008. In December 2008, the Tribune Co. and some of its subsidiaries filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The department filed claims in the company's bankruptcy proceedings and objected to confirmation of plans to reorganize it. These matters were resolved as part of the global settlement agreement. As of Dec. 31, 2010, the Tribune ESOP had 13,020 participants. The settlement amount has been deposited into an independently managed settlement account. The Chicago Regional Office of the Employee Benefits Security Administration conducted the investigation into the Tribune ESOP. Employers and workers can contact that office at 312-353-0900 or toll-free at 866-444-3272 for assistance with problems related to private sector pension and health plans. 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. 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: Bank Debt Trades at 37% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Tribune Co. is a borrower traded in the secondary market at 62.78 cents-on-the- dollar during the week ended Friday, Feb. 24, 2012, a drop of 0.63 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank loan matures on May 17, 2014. The loan is one of the biggest gainers and losers among 149 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. 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. 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: Trustee Appoints 3 Equity Committee Members ----------------------------------------------------------------- Roberta A. DeAngelis, the U.S. Trustee for Region 3, on Feb. 14, 2012, appointed three members to the Committee of Trident Microsystems, Inc. Equity Security Holders, namely: (1) Barry A. Shaw Sr. Attn: Barry Alex Shaw Jr. 210 14th Ave S., Jacksonville Beach FL 32250 Phone: 904-866-9112 Fax: 904-677-7799 (2) Brencourt Credit Opportunities LP Attn: William Pulman, CFA Brencourt Advisors 280 Park Ave., 30th Floor New York, NY 10017 Phone: 212-313-9734 Fax: 212-313-9787 (3) Toan Tran 22 W. Washington St. Chicago, IL 60602 Phone: 312-696-6419 Fax: 312-696-6001 The U.S. Trustee has continued to Feb. 24, 2012, the meeting of creditors of Trident Microsystems. This is the first meeting of creditors under Section 341(a) of the Bankruptcy Code. The meeting offers creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. Attendance by the Debtor's creditors at the meeting is welcome, but not required. 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. TRIDENT MICROSYSTEMS: Creditors Committee Has Imperial as Advisor ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Trident Microsystems, Inc., et al., seeks permission from the Bankruptcy Court to retain Imperial Capital, LLC, as investment banker and financial advisor, nunc pro tunc to Jan. 19, 2012. Imperial Capital will receive a monthly fee until the conclusion or termination of its engagement at the rate of $125,000. In addition, Imperial Capital will be entitled to seek approval by the Bankruptcy Court of a completion fee of not less than $500,000 and not more than $1,000,000. Imperial Capital will receive monthly reimbursements for reasonable out-of-pocket expenses incurred with the rendition of investment banking and financial advisory services. To the best of the Committee's knowledge, Imperial Capital is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtors have agreed, among other things, to indemnify, hold harmless and provide contribution and reimbursement to Imperial Capital and its affiliates, counsel and other professional advisors, and the respective officers, controlling persons, agents and employees under certain circumstances. 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. TRIDENT SYSTEMS: Committee Taps Pachulski Stang as Counsel ---------------------------------------------------------- The Official Committee of Unsecured Creditors of Trident Microsystems, Inc., et al., seeks permission from the Bankruptcy Court to retain Pachulski Stang Ziehl & Jones LLP as its counsel, nunc pro tunc to Jan. 18, 2012. The professionals and paralegals presently designated to represent the Committee and their current standard hourly rates are: (a) Richard M. Pachulski $975 (b) Debra Grassgreen $855 (c) John D. Fiero $745 (d) Bruce Grohsgal $725 (e) Gabrielle A. Rohwer $595 (f) John W. Lucas $525 (g) Peter J. Keane $395 (h) Patricia Jeffries $275 The Debtors will reimburse Pachulski Stang for all other expenses the firm incurred in connection with its representation. John D. Fiero, Esq., a partner of Pachulski Stang Ziehl & Jones LLP, assures the Court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. 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. TXU Corp: Bank Debt Trades at 39% Off in Secondary Market --------------------------------------------------------- Participations in a syndicated loan under which TXU Corp., now known as Energy Future Holdings Corp., is a borrower traded in the secondary market at 60.90 cents-on-the-dollar during the week ended Friday, Feb. 24, 2012, a drop of 1.50 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 350 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 10, 2014, and carries Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 149 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Energy Future Holdings Corp. filed with the U.S. Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $1.91 billion on $7.04 billion of operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.81 billion on $8.23 billion of operating revenues during the prior year. 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. 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. * * * 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. TXU Corp: Bank Debt Trades at 44% Off in Secondary Market --------------------------------------------------------- Participations in a syndicated loan under which TXU Corp., now known as Energy Future Holdings Corp., is a borrower traded in the secondary market at 56.17 cents-on-the-dollar during the week ended Friday, Feb. 24, 2012, a drop of 0.92 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 10, 2017, and carries Moody's B2 rating and Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 149 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Energy Future Holdings Corp. filed with the U.S. Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $1.91 billion on $7.04 billion of operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.81 billion on $8.23 billion of operating revenues during the prior year. 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. 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. * * * 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. UNISYS CORP: Reports $141.2 Million Net Income in 2011 ------------------------------------------------------ Unisys Corporation filed with the U.S. Securities and Exchange Commission a Form 10-K disclosing net income of $141.20 million on $3.85 billion of revenue for the year ended Dec. 31, 2011, compared with net income of $241.30 million on $4.02 billion of revenue during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $2.61 billion in total assets, $3.92 billion in total liabilities, and a $1.31 billion total deficit. A full-text copy of the Form 10-K is available for free at: http://is.gd/T2GZK2 About Unisys Corp. Based in Blue Bell, Pennsylvania, Unisys Corporation (NYSE: UIS) -- http://www.unisys.com/-- provides a portfolio of IT services, software, and technology that solves critical problems for clients. With more than 26,000 employees, Unisys serves commercial organizations and government agencies throughout the world. * * * As reported by the Troubled Company Reporter on Feb. 24, 2011, Moody's Investors Service has affirmed Unisys' B1 corporate family rating and all other ratings, and also changed the rating outlook to positive from stable. This outlook change follows the announcement by Unisys of plans to issue mandatory convertible preferred stock, redeem secured notes, and tender for additional bonds which Moody' estimates will reduce secured debt by up to $390 million. Upon completion of the transactions, the loss given default assessments will be revised based on the remaining debt balances. In the May 5, 2011 edition of the TCR, Standard & Poor's Ratings Services raised its corporate credit rating on Blue Bell, Pa.- based Unisys Corp. to 'BB-' from 'B+', and removed the ratings from CreditWatch, where they were placed with positive implications on Feb. 22, 2011. "The upgrade reflects Unisys' improved financial profile following the recent debt redemptions," said Standard & Poor's credit analyst Martha Toll-Reed, "and adequate liquidity, which provides some capacity at the current rating for potential earnings volatility." "The ratings reflect our view that Unisys' improved financial profile and consistently positive annual free cash flow will provide sufficient cushion in the near term to mitigate the potential for ongoing revenue declines and operating performance volatility," added Ms. Toll- Reed. As reported by the TCR on Oct. 18, 2011, Fitch Ratings has affirmed and withdrawn the 'BB-' long-term Issuer Default Rating of Unisys Corporation. Fitch has decided to discontinue the rating, which is uncompensated. UNITED RENTALS: Moody's Assigns 'Ba3' Rating to $750-Mil. Notes --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the $750 million senior secured notes and B3 to the two tranche unsecured notes totaling $2.075 billion to be issued by United Rentals, Inc. (URI) through its subsidiary UR Financing Escrow Corporation (UR Financing) for the acquisition of RSC Holdings Inc. (RSC). The corporate family and probability of default ratings at United Rentals (North America), Inc., URI's primary operating subsidiary, were affirmed at B2 with a stable ratings outlook. RATING RATIONALE The B2 corporate family rating (CFR) reflects URI's moderate leverage for its rating, large scale relative to its competitors, and the expectation for strengthening operating margins. These attributes are balanced against the ongoing cyclicality of the non-residential construction sector, meaningful uncertainty in the commercial market, and negative cash flows when fleet equipment is added in response to increased demand. The B2 CFR reflects Moody's expectation that recent increases in capital expenditures, in response to higher rental demand growth, will constrain free cash flow generation in 2012, but will allow for improved coverage metrics over time. The rating considers the company's acquisition of RSC, including the assumption of debt, the issuance of equity, and the related synergies. Proceeds from the debt issuance will initially be held by UR Financing until they are applied to fund the acquisition and $525 million is to be applied towards the refinaning of RSCs 9.5% notes due 2014. The acquisition is scheduled to be completed in the second quarter of 2012. The new debt will initially be secured by a perfected first priority lien on the escrow account. Upon the escrow release date and the springing security date, the $750 million senior secured notes will be secured by a second priority lien on the collateral securing United Rentals $1.9 billion ABL facility (unrated) and the $2.075 billion notes becoming unsecured. Both the notes issued will be guaranteed by URI (the holding company) and by the domestic restricted subsidiaries that are guarantors under the ABL. Assignments: Issuer: UR Financing Escrow Corporation -- Senior Secured Regular Bond/Debenture, Assigned a range of 23 - LGD2 to Ba3 -- Senior Unsecured Regular Bond/Debenture, Assigned a range of 63 - LGD4 to B3 Adjustments: Issuer: United Rentals (North America), Inc. -- Senior Subordinated Conv./Exch. Bond/Debenture, affirmed at Caa1, LGD changed to LGD6, 93% from LGD5, 87% -- Senior Subordinated Regular Bond/Debenture, affirmed at Caa1, LGD changed to LGD6, 93% from LGD5, 87% Issuer: United Rentals Trust I -- Pref. Stock Preferred Stock, affirmed at Caa1, LGD changed to LGD6, 96% from LGD6, 95% Affirmation: Issuer: United Rentals (North America), Inc. SGL affirmed at SGL-3 Rating outlook, remains stable. The rating outlook or ratings could strengthen if positive revenue growth coincided with improving operating margins and improved return on assets. Positive ratings traction could develop were the company's pretax income to average assets to improve to above 4%, EBITA/Interest above 1.5 times, debt/EBITDA below 4.25 times and deemed to be improving (all ratios per Moody's standard accounting adjustments), with at least an adequate liquidity profile. The stable outlook could be under pressure if EBITA/Interest falls below 1.3 times, or the company generates negative free cash not driven by an increase in capital expenditures due to greater demand. The ratings may be downgraded if the company's operating margin was anticipated to contract, or if EBITA/Interest was anticipated to fall below 1.0 times on a projected basis. Debt/EBITDA trending towards 5.0 times could also result in a ratings downgrade. The principal methodology used in rating United Rentals, Inc. and subsidiaries was the Global Equipment and Automobile Rental Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in July 2010. United Rentals, Inc. is a holding company that conducts its operations through its wholly owned subsidiary, United Rentals (North America), Inc. and its subsidiaries (collectively "URI"). URI is the world's largest equipment rental company operating approximately 529 rental locations in the United States (48 states; serving 99 of the 100 largest metropolitan areas) and each Canadian province. Revenues are derived primarily from equipment rentals, sales of used rental equipment, sales of new equipment, and contractor supplies sales and service. Revenues for 2011 totaled $2.6 billion. RSC Holdings III, is an intermediate holding company that is the direct parent to RSC Equipment Rental, Inc, which is an indirect wholly-owned subsidiary of RSC Holdings Inc. RSC is one of the largest equipment rental companies in North America operating 440 locations throughout the United States and Canada. The company maintains over 900 categories of equipment having an original equipment cost of $2.7 billion. RSC Holdings total revenues for 2011 totaled $1.5 billion. UNITED RETAIL: Set for Auction With Stalking Horse Bid ------------------------------------------------------ Lisa Uhlman at Bankruptcy Law360 reports that United Retail Group Inc. is set to sell itself after a New York bankruptcy judge approved sale procedures Wednesday, following a contentious hearing over whether the proposed sale unfairly benefits would-be buyer Versa Capital Management LLC. Attorneys for the debtor, Versa and the official committee of unsecured creditors painstakingly hashed out dates for an auction and a sale hearing before U.S. Bankruptcy Judge Stuart M. Bernstein, Law360 relates. About United Retail Group United Retail Group Inc., owner of the Avenue brand of women's fashion apparel and a subsidiary of Redcats USA, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Feb. 1, 2012, as it seeks to sell the business to Versa Capital Management for $83.5 million, subject to higher and better offers. The Company's legal advisor is Kirkland & Ellis LLP; AlixPartners LLP serves as restructuring advisor and Peter J. Solomon Company serves as financial advisor and investment banker; and Donlin Recano & Company Inc. is the notice, claims and administrative agent. Versa Capital's legal advisor is Sullivan & Cromwell LLP. United Retail has arranged a $40 million Debtor-in-Possession facility from its existing revolving credit lender, Wells Fargo, to provide sufficient working capital for Avenue to continue to operate the business as usual. Wells Fargo is represented in the case by Jonathan N. Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Avenue has 433 stores and an e-commerce site -- http://www.avenue.com/. Avenue employs roughly 4,422 employees, roughly 294 of which are located at Avenue's corporate headquarters in Rochelle Park, New Jersey or at the Troy Distribution Facility. The Company disclosed $117.2 million in assets and $67.3 million in liabilities as of the Chapter 11 filing. UNITED RETAIL: Hearing Today on Lease Decision Extension -------------------------------------------------------- The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York will convene a hearing today, Feb. 28, 2012, at 10:00 a.m. (ET), to consider United Retail Group Inc., et al.'s request to extend the lease decision period. The Debtors sought entry of an order extending their time until Aug. 29, 2012, to assume or reject the unexpired leases pursuant to Section 365(d)(4) of the Bankruptcy Code, which is set to expire on May 31. The Debtors relate that they have commenced the Chapter 11 cases to maximize the value of their estates by addressing their real estate and other operational issues and by selling substantially all of their assets to the highest bidder at a Court-approved auction. On Feb. 1, the Debtors entered into an Asset Purchase Agreement with Redcats USA, Inc., and Ornatus URG Acquisition, LLC, an affiliate of Versa Capital Management, Inc. The APA provides for Ornatus, the proposed stalking horse bidder in the Chapter 11 cases, to designate certain of the Debtors' leases for assumption and assignment to Ornatus, or for rejection, both from the Closing Date until the later of (a) 90 days from the Closing Date and (b) 150 days from the Petition Date. Following the first day hearing in the chapter 11 cases, the Court entered an order approving on an interim basis the Debtors' entry into the $40 million super-priority senior secured debtor-in- possession credit agreement , by and among the Debtors, Wells Fargo Bank, N.A. and the other credit parties. The DIP Credit Agreement contains certain covenants and milestones, including that the Debtors obtain entry of an order extending the lease deadline under section 365(d)(4) of the Bankruptcy Code no later than 30 days following the Petition Date, which corresponds to March 2, 2012. About United Retail Group United Retail Group Inc., owner of the Avenue brand of women's fashion apparel and a subsidiary of Redcats USA, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Feb. 1, 2012, as it seeks to sell the business to Versa Capital Management for $83.5 million, subject to higher and better offers. The Company's legal advisor is Kirkland & Ellis LLP; AlixPartners LLP serves as restructuring advisor and Peter J. Solomon Company serves as financial advisor and investment banker; and Donlin Recano & Company Inc. is the notice, claims and administrative agent. Versa Capital's legal advisor is Sullivan & Cromwell LLP. United Retail has arranged a $40 million Debtor-in-Possession facility from its existing revolving credit lender, Wells Fargo, to provide sufficient working capital for Avenue to continue to operate the business as usual. Wells Fargo is represented in the case by Jonathan N. Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Avenue has 433 stores and an e-commerce site -- http://www.avenue.com/. Avenue employs roughly 4,422 employees, roughly 294 of which are located at Avenue's corporate headquarters in Rochelle Park, New Jersey or at the Troy Distribution Facility. The Company disclosed $117.2 million in assets and $67.3 million in liabilities as of the Chapter 11 filing. US CAPITAL: Plantation Fashion Mall Owners File for Chapter 11 -------------------------------------------------------------- US Capital Holdings, LLC, and an affiliate, US Capital/Fashion Mall, LLC, filed Chapter 11 petitions (Bankr. S.D. Fla. Case Nos. 12-14517 and 12-14519) in Forth Lauderdale, Florida, on Feb. 24, 2012. The Debtors have filed an application to employ Ivan J. Reich and GrayRobinson, PA, as counsel. Other first day motions include a request to jointly administer the Chapter 11 cases, requests to pay prepetition claims of critical vendors and employees, and a plea to grant adequate protection to utilities. US Capital/Fashion Mall is the owner of the former "Fashion Mall at Plantation", now vacant, located at 321 N. University Drive, in Plantation, Florida. US Capital Holdings is the 100% owner of US Capital/Fashion Mall. The mall -- http://www.321north.com-- is presently dormant, in part, as a result of a redevelopment plan for the mall of a project called 321 North, which is intended to be a major, retail, office and residential project. The mall suffered extensive hurricane damage from Hurricane Wilma, and has yet to be paid on its insurance claim. After the remaining tenants -- two restaurants -- abandoned the premises, and due to issues with the city of Plantation on a new fire system, the Debtors closed the mall and pursued redevelopment efforts. With the mall closed and without any income, the Debtors began obtaining all funding for the redevelopment efforts by borrowing from Holdings' parent company, Mapuche, LLC. Mapuche is owned primarily by a Chinese company, Tangshan Ganglu Iron & Steel Co., Ltd. The Debtors' manager, Mr. Wei Chen, owns a small interest in Mapuche. The two restaurant tenants, Cheeseburger in Paradise (Cheeseburger-South Florida, LP) and Bonefish Grill (OS Tropical, LLC), sued for wrongful termination of their leases. The circuit court in Broward County entered judgment against Cheeseburger- South Florida LP obtained a judgment in the amount of $3.56 million against Fashion Mall, and on Jan. 13, 2012, recorded a certified copy of the judgment as a lien against the mall property. At the same trial OS Tropical, LLC also prevailed against Fashion Mall, and it has been anticipated that a judgment exceeding $3.32 million would be entered. The Debtor is appealing the rulings. As a result of the recordation of the judgment by Cheeseburger- South Florida, LP and Fashion Mall's inability to secure the funds necessary to post a bond and obtain a stay of execution during the appeal lender Canpartners Realty Holding Company IV, LLC, declared the mortgage loan in default, and on Feb. 16 filed a mortgage foreclosure action against the mall property, though the debtors were current in their mortgage payments. Wei Chen, manager of the Debtors, says it is the Debtors' intention by the filing of the reorganization petition to secure sufficient third party postpetition financing in the form of either debt or equity to address the repayment of the Canyon loan, the redevelopment of the 321 North project, the appeal of the OSI judgments, and to confirm a chapter 11 plan that will provide a fair treatment of the other creditors' claims. US CAPITAL: Case Summary & 10 Largest Unsecured Creditors --------------------------------------------------------- Debtor: US Capital Holdings, LLC 8181 West Broward Boulevard, Suite 380 Plantation, FL 33324 Bankruptcy Case No.: 12-14517 Chapter 11 Petition Date: February 24, 2012 Court: U.S. Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: John K. Olson Debtor's Counsel: Ivan J. Reich, Esq. GRAYROBINSON, P.A. 401 E. Las Olas Boulevard, #1850 Fort Lauderdale, FL 33301 Tel: (954) 761-8111 Fax: (954) 761-8112 Email: ireich@gray-robinson.com - and ? Patrick S. Scott, Esq. GRAYROBINSON, P.A. 401 E. Las Olas Boulevard, #1850 Fort Lauderdale, FL 33303 Tel: (954) 761-8111 Fax: (954) 761-8112 E-mail: patrick.scott@gray-robinson.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- US Capital/Fashion Mall, LLC 12-14519 02/24/12 Assets: $10,000,001 to $50,000,000 Debts: $10,000,001 to $50,000,000 The petitions were signed by Wei Chen, manager. A. US Capital Holdings's List of Its 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Canpartners Realty Holdings Co. Lawsuit $15,638,385 c/o Denise D. Dell-Powell Burr & Forman, LLP 200 S. Orange Avenue, Suite 800 Orlando, FL 32801 Mapuche, LLC Loan $5,237,416 8181 West Broward Boulevard, Suite 380 Plantation, FL 33324 321 North Construction Management Loan $94,495 8181 W. Broward Boulevard, Suite 380 Plantation, FL 33324 Wei Chen -- $48,276 Berger Singerman LLP Legal Services $21,256 Philip Xiaopeng Guo Legal Services $15,000 Neighborhood Health Health Insurance $5,590 Grace He -- $4,827 United Healthcare Health Insurance $2,835 Konica Minolta Office Copier Lease $266 B. US Capital/Fashion Mall, LLC's List of Its 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ OS Tropical, LLC Lawsuit $3,319,286 c/o Christian C. Burden Quarles & Brady LLP 101 E. Kennedy Boulevard, Suite 3400 Tampa, FL 33602 Fashion Mall Managing Member Corp. Lawsuit $3,000,000 c/o Gregory R. Beck Gregory R. Beck, P.A. 707 Southeast 3rd Avenue, 6th Floor Fort Lauderdale, FL 33316 US Alliance Management Corp. Lawsuit $1,000,000 dba US Security c/o Michael William Skop 12865 W. Dixie Highway, 2nd Floor Miami, FL 33161 Becker & Poliakoff, P.A. Legal Services $221,897 Seiler, Sautter, Zaden, Rimes Legal Services $168,506 & Weihe Akerman Senterfitt & Eidson PA Legal Services $110,335 PHF Plantation LP Account Payable $108,242 Jones Lang LaSalle Consulting Services $35,000 Business Valuation Systems Expert Witness $15,096 Keith and Schnars, P.A. Consulting Services $5,950 Property Tax Adjusters, Inc. Legal Services $5,060 Capital Credit Inc. Security Service $1,425 Hartford Insurance Co. Flood Insurance $751 U.S. Legal Support, Inc. Court Reporter $311 USI HOLDINGS: S&P Affirms 'B-' Counterparty Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' counterparty credit rating on USI Holdings Corp. and revised the outlook to positive from stable. "At the same time, we revised our recovery rating on USI's existing senior secured credit facilities, which consist of a $550 million senior secured term loan B, a $100 million senior secured incremental term loan A, and a $100 million revolving credit facility, to '2' from '3', indicating our expectation of substantial (70%-90%) recovery for lenders in the event of a payment default. As a result, Standard & Poor's raised its ratings on these loans to 'B' (one notch higher than the 'B-' counterparty credit rating on the company) from 'B-', in accordance with our notching criteria for a recovery rating of '2'. We also affirmed the '6' recovery rating and 'CCC' issue- level rating on USI's unsecured credit facilities, which consist of senior floating-rate notes and senior subordinated notes, indicating our expectation of negligible (0%-10%) recovery for lenders in the event of a payment default," S&P said. "The outlook revision to positive is based on our expectation that USI is in a position to display tangible organic revenue improvements and earnings momentum over the coming year," said Standard & Poor's credit analyst Julie Herman. "We believe this improvement will stem from a combination of realized benefits from structural improvements in the company's sales tactics and operational platforms that the company has undertaken over the past three years as well as stabilized rates and exposures in both the company's property/casualty (P/C) and employee benefits markets. In 2011, the company already began to show improvement. For the first time since 2007, the company reversed its negative organic growth to flat for the first nine months of 2011, partly because of favorable new business and retention trends. In addition, the company displayed modest credit metrics improvement, with adjusted EBITDA fixed charge coverage of 2.3x for the first nine months of 2011 (from 1.8x in 2010) and debt to EBITDA of 6.4x as of Sept. 30, 2011 (from 7.2x in 2010)," S&P said. "We raised the ratings on USI's senior secured credit facilities based on our reevaluation of the company's enterprise value in our simulated default scenario. We have increased our EBITDA multiple to value the company because of our belief that stabilizing insurance pricing and economic fundamentals will benefit USI's market valuation if the company were to reorganize," S&P said. "The outlook is positive. We believe that with its business initiatives over the past three years, USI has positioned itself to begin to display tangible organic revenue improvements and earnings growth. We expect USI's organic revenue in 2012 to be modestly positive (low single digits) as a result of favorable new business and retention trends because of the company's strategic initiatives and producer investments, and supplemented by a neutral to positive impact from rate and exposure trends in the company's markets. Further, we expect that the company's EBITDA margins (excluding earnout payments) will continue to exceed 25% and that the company will demonstrate margin improvement as it continues to focus on synergies and expense savings. EBITDA coverage likely will be 2x or higher because of earnings growth as well as lower weighted average interest payments (resulting from a more favorable interest rate hedging agreement the company entered during the third quarter of 2011). Further, we expect debt to adjusted trailing-12-months EBITDA of approximately 6.5x (flat from 2011) as relatively high earnout payments in 2012 mitigate earnings growth. However, excluding expected earnout payments, adjusted debt to EBITDA should continue to show improvement at below 6x for 2012. Finally, we expect USI to have positive cash flow, and we believe that it will be able to meet its restrictive covenants in the near to medium term," S&P said. "We would consider raising the rating over the next 12 months if the company continues to display favorable operating and financial performance traction in 2012. The company could demonstrate this by posting positive organic revenue growth as a result of favorable new business and retention trends and sound market fundamentals; and EBITDA growth through sustained margin improvements, fewer recurring charges, and selective strategic acquisitions. Credit metrics of EBITDA coverage above 2x and debt to adjusted EBITDA (excluding expected earnout payments) below 6x that we believe are sustainable would also likely be needed in order for us to consider raising the rating. Alternatively, we could lower the ratings if the company's revenue and profitability fall short of our expectations because of the unsuccessful execution of recent strategic initiatives, a negative market impact, or more aggressive financial management. Covenant cushion at less than 10%, weak liquidity, or debt leverage above 8x would also precipitate a likely downgrade," S&P said. VADIUM TECHNOLOGY: Section 341(a) Meeting Slated for March 6 ------------------------------------------------------------ The U.S. Trustee for Region 18 will convene a meeting of creditors in Vadium Technology, Inc.'s Chapter 11 case on March 6, 2012, at 1:00 p.m. The meeting will be held at the US Courthouse, Room 4107 (341 Meetings). This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Seattle, Washington-based Vadium Technology, Inc. filed for Chapter 11 protection (Bankr. W.D. Wash. Case No. 12-10808) on Jan. 30, 2012. Bankruptcy Judge Marc Barreca presides over the case. Dallas W. Jolley, Jr., Esq. represents the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million. The petition was signed by Rodney Gene Nicholls, president & CEO. VALHALLA CLO: Moody's Assigns 'B1' Rating to Class Q-1 Notes ------------------------------------------------------------ Moody's Investors Service has assigned this rating to notes issued by Valhalla CLO, Ltd.: US$10,000,000 Class Q-1 Extendable Securities (current rated balance of $1,968,160), Assigned B1 (sf). RATINGS RATIONALE The Class Q-1 combination securities are comprised of $5 million of Class C-2 Notes and $5 million of Income Notes of Valhalla CLO , Ltd. The rating on the Class Q-1 combination securities addresses the ultimate receipt of the Class Q-1 Rated Principal plus a coupon of 2%. The rating is also based upon the transaction's legal structure and characteristics of the collateral pool. Due to the impact of revised and updated key assumptions referenced in "Moody's Approach to Rating Collateralized Loan Obligations" published in June 2011, key model inputs used by Moody's in its analysis, such as par, weighted average rating factor, diversity score, and weighted average recovery rate, may be different from the trustee's reported numbers. In its base case, Moody's analyzed the reference pool to have a swap notional balance of $787 million, an eligible investments balance of $139.5 million, defaulted par balance of $47 million, a weighted average default probability of 17.7% (implying a WARF of 2959), a weighted average recovery rate upon default of 48.3%, and a diversity score of 51. The default and recovery properties of the reference pool are incorporated in cash flow model analysis where they are subject to stresses as a function of the target rating of each CLO liability being reviewed. The default probability is derived from the credit quality of the collateral pool and Moody's expectation of the remaining life of the reference pool. The average recovery rate to be realized on future defaults is based primarily on the seniority of the assets in the reference pool. In each case, historical and market performance trends and collateral manager latitude for trading the collateral are also factors. Moody's noted that the underlying portfolio includes a number of investments in securities that mature after the maturity date of the notes, and that such exposure has grown as a result of the deal's decision to participate in amend-and-extend activities. Based on Moody's calculations, as of the October 2011 trustee report, securities that mature after the maturity date of the notes make up approximately 11.2% of the underlying portfolio. The high percentage of these securities potentially exposes the notes to market risk in the event of liquidation at the time of the notes' maturity. Valhalla CLO, Ltd., issued in August of 2004, is a synthetic collateralized loan obligation referencing a portfolio of primarily senior secured loans. The methodologies used in this rating were "Moody's Approach to Rating Collateralized Loan Obligations" published in June 2011 and "Using the Structured Note Methodology to Rate CDO Combo-Notes" published in February 2004. Moody's modeled the transaction using the Binomial Expansion Technique, as described in Section 2.3.2.1 of the "Moody's Approach to Rating Collateralized Loan Obligations" rating methodology published in June 2011. Moody's notes that this transaction is subject to a high level of macroeconomic uncertainty, as evidenced by 1) uncertainties of credit conditions in the general economy and 2) the large concentration of speculative-grade debt maturing between 2014 and 2016 which may create challenges for issuers to refinance. CLO notes' performance may also be impacted by 1) the manager's investment strategy and behavior and 2) divergence in legal interpretation of CLO documentation by different transactional parties due to embedded ambiguities. Below is a summary of the impact of different default probabilities (expressed in terms of WARF levels) on all rated notes (shown in terms of the number of notches' difference versus the current model output, where a positive difference corresponds to lower expected loss), assuming that all other factors are held equal: Moody's Adjusted WARF - 20% (2367) Class Q-1: +2 Moody's Adjusted WARF + 20% (3550) Class Q-1: -1 Sources of additional performance uncertainties are: 1) Amortization of the reference pool: The main source of uncertainty in this transaction is the pace of amortization of the reference pool from scheduled and unscheduled payments. Delevering of the notes may accelerate due to high prepayment levels in the loan market and/or collateral sales by the manager, which may have significant impact on the notes' ratings. 2) Recovery of defaulted assets: Market value fluctuations in defaulted assets reported by the trustee and those assumed to be defaulted by Moody's may create volatility in the deal's overcollateralization levels. Further, the timing of recoveries and the manager's decision to work out versus sell defaulted assets create additional uncertainties. Moody's analyzed defaulted recoveries assuming the lower of the market price and the recovery rate in order to account for potential volatility in market prices. 3) Long-dated assets: The presence of assets that mature beyond the CLO's legal maturity date exposes the deal to liquidation risk on those assets. Moody's assumes an asset's terminal value upon liquidation at maturity to be equal to the lower of an assumed liquidation value (depending on the extent to which the asset's maturity lags that of the liabilities) and the asset's current market value. VITRO SAB: Judge Clear Bondholders to Go After Interest Payments ---------------------------------------------------------------- Eric Hornbeck at Bankruptcy Law360 reports that a New York state judge on Friday allowed hedge funds and other investors in bonds of Vitro SAB de CV to pursue collection actions for unpaid interest despite the Company's attempt to halt the litigation. According to Law360, New York Supreme Court Judge Bernard Fried denied Vitro's request for a temporary restraining order to stop several actions by investors, including affiliates of Aurelius Capital Management LP and Elliott Management Corp., which have already won judgments against the glassmaker over interest from $1.2 billion in debt. 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." W.R. GRACE: Lenders Appeal Plan Order Before 3rd Circuit -------------------------------------------------------- Certain lenders under the Debtors' Prepetition Bank Credit Facilities' notified the U.S. District Court for the District of Delaware that they will take an appeal to the United States Court of Appeals for the Third Circuit from Judge Ronald L. Buckwalter's memorandum opinion and order affirming the confirmation of the Debtors' Joint Plan of Reorganization dated January 30, 2012. The Bank Lender Group includes Archer Capital Management, L.P.; Babson Capital Management, Inc.; Bank of America, N.A.; Barclays Bank PLC; BBT Fund, L.P.; BBT Master Fund, L.P.; Caspian Capital Advisors, LLC; Halcyon Master Fund L.P.; Intermarket Corp.; JP Morgan Chase, N.A. Credit Trading Group; Loeb Partners Corporation; Macquarie Bank Limited; Massachusetts Mutual Life Insurance Company; MSD Credit Opportunity Master Fund, L.P.; Normandy Hill Capital, L.P.; Onex Debt Opportunity Fund Ltd.; P. Schoenfeld Asset Management, LLC; Royal Bank of Scotland, PLC; Solus Alternative Asset Management LP; Taconic Capital Advisors L.P.; Visium Asset Management, L.P.; and Waterstone Capital Management L.P., together with certain funds affiliated with or managed by those entities. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Wins Nod to Contribute $109.3-Mil. to Pension Plan -------------------------------------------------------------- Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware authorized the Debtors to contribute in 2012 up to approximately $109.3 million to the trust holding and investing assets for the benefit of their U.S. defined benefit employee retirement plans. The 2012 Contribution comprises two components: (1) A $36.4 million contribution that the Debtors have contemplated making during 2012, of which approximately $25.9 million is required by statute; and (2) An additional contribution of up to $72.9 million. The Debtors' January 2012 Contribution of $12.1 million is approved. The Debtors are authorized, but not required, to make the remainder of the 2012 Contribution, totaling $97.2 million, on or before March 31, 2012. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Submits Post-Confirmation Report for 4th Quarter ------------------------------------------------------------ W.R. Grace & Co. and its debtor affiliates filed with the U.S. Bankruptcy Court for the District of Delaware a post-confirmation report for the quarter ended December 31, 2011. W.R. Grace & Co. Post-Confirmation Quarterly Summary Report As of December 31, 2011 Beginning Cash Balance $654,835,822 All receipts received by the debtor: Cash Sales: 0 Collection of Accounts Receivable: 1,659,212,438 Proceeds from Litigation (settlement or otherwise): 0 Sale of Debtor's Assets: 0 Capital Infusion pursuant to the Plan: 0 ------------- Total of cash received: 1,659,212,438 ------------- Total of cash available: $2,314,048,260 ============= Less all disbursements or payments (including payments made under the Confirmed Plan) made by the Debtor: Disbursements made under the Plan, excluding the administrative claims of bankruptcy professionals: $0 Disbursements made pursuant to the administrative claims of bankruptcy professionals: 1,525,436,781 All other disbursements made in the ordinary course: 0 ------------- Total Disbursements 1,525,436,781 ------------- Ending Cash Balance $788,611,479 ============= A full-text copy of the Post-Confirmation Report is available for free at http://bankrupt.com/misc/WRG_PostCon_Report_Dec2011.pdf On January 31, 2011, Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware issued an order confirming the Joint Plan of Reorganization proposed by the Debtors, and co-proposed by the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. On January 30, 2012, Judge Ronald L. Buckwalter of the U.S. District Court for the District of Delaware has denied all objections and confirmed the Joint Plan its entirety. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WADE CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Wade Construction, Inc. 100031 S Hwy 177 Meeker, OK 74855 Bankruptcy Case No.: 12-10731 Chapter 11 Petition Date: February 22, 2012 Court: United States Bankruptcy Court Western District of Oklahoma (Oklahoma City) Judge: Niles L. Jackson Debtor's Counsel: Kenneth Lee Peacher, Esq. 4101 Perimeter Center Dr., Suite 200 Oklahoma City, OK 73112 Tel: (405) 917-5000 Fax: (405) 917-5005 E-mail: kpeacher@nashfirm.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/okwb12-10731.pdf The petition was signed by Bobby R. Wade, president. WILCOX EMBARCADERO: Taps Gabrielson & Company as Accountant ----------------------------------------------------------- Wilcox Embarcadero Associates, LLC, asks the U.S. Bankruptcy Court for the Northern District of California for permission to employ Gabrielson & Company as accountant. Gabrielson will: a. assist the Debtor in the preparation of required financial reports to the Court and parties-in-interest, including monthly operating reports; and b. consult and advise with respect to any other tax and accounting matter the Debtor believes are relevant to the administration of the bankruptcy estate. Michael R. Gabrielson has agreed to undertake the matter at his standard hourly rate of $325. To the best of the Debtor's knowledge, Mr. Gabrielson does not now hold or represent any interest materially adverse to the interests of the estate or of any class of creditors or equity security holders. About Wilcox Embarcadero Associates Wilcox Embarcadero Associates, LLC, filed a Chapter 11 petition in Oakland (Bankr. N.D. Calif. Case No. 12-40758) on Jan. 26, 2012. Wilcox operates a commercial building, leasing warehouse, wholesale, retail and office space. Wilcox operates in the Bay Area and has been in business for 10 years. The Debtor says it is a single asset real estate case. Steele, George, Schofield & Ramos LLP represents the Debtor in its restructuring efforts. In its schedules, The Debtor disclosed $10.2 million in assets and under $8.6 million in liabilities. The Debtor's property secures an $8.55 million debt to Wells Fargo and Owens Mortgage Investment Fund, LP. The Debtor said it incurred financial difficulty when its primary lender, the holder of the First Deed of Trust, refused to extend, modify or refinance the loan. The Debtor is in negotiations with a new lender to take out the lender, but needs more time to accomplish this task. Judge Roger L. Efremsky presides over the case. WILCOX EMBARCADERO: Access to WF Cash Collateral Ends Aug. 31 ------------------------------------------------------------- The Hon. Roger L. Efremsky of the U.S. Bankruptcy Court for the Northern District of California approved a stipulation authorizing, on an interim basis, Wilcox Embarcadero Associates, LLC to use the cash collateral until Aug. 31, 2012. The stipulation entered between the Debtor and secured creditor Wells Fargo Bank, N.A. provides for (i) authorizing Debtor to use cash collateral; (ii) modifying automatic stay; (iii) granting postpetition liens; and )(iv) granting adequate protection. Under the stipulation, the Debtor will make payments on the note in the sum of $19,342 per month on the first day of each month, beginning on March 1, 2012. Wells will continue to receive monthly payments in the sum of $19,342 on the first day of each month until there is a final order on use of cash collateral, a Plan of Reorganization or another agreement between the Parties. About Wilcox Embarcadero Associates Wilcox Embarcadero Associates, LLC, filed a Chapter 11 petition in Oakland (Bankr. N.D. Calif. Case No. 12-40758) on Jan. 26, 2012. Wilcox operates a commercial building, leasing warehouse, wholesale, retail and office space. Wilcox operates in the Bay Area and has been in business for 10 years. The Debtor says it is a single asset real estate case. Steele, George, Schofield & Ramos LLP represents the Debtor in its restructuring efforts. In its schedules, the Debtor disclosed $10.2 million in assets and under $8.6 million in liabilities. The Debtor's property secures an $8.55 million debt to Wells Fargo and Owens Mortgage Investment Fund, LP. The Debtor said it incurred financial difficulty when its primary lender, the holder of the First Deed of Trust, refused to extend, modify or refinance the loan. The Debtor is in negotiations with a new lender to take out the lender, but needs more time to accomplish this task. Judge Roger L. Efremsky presides over the case. WILSON INTERNATIONAL: Meeting to Form Creditors' Panel on March 8 ----------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold aan organizational meeting on March 8, 12, 2012, at 10:00 a.m. in the bankruptcy case of Wilson Development Associates, LLC. The meeting will be held at: J. Caleb Boggs Federal Building 844 King Street, Room 5209 Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Wilson International Camden, New Jersey-based Wilson International Partners, LLC, and an affiliate filed bare-bones Chapter 11 petitions (Bankr. D. Del. Case Nos. 12-10578 and 12-10579) in Delaware on Feb. 21, 2012. Wilson International Partners estimated up to $10 million in assets and liabilities. Affiliate Wilson Development Associates, LLC, which claims to be a Single Asset Real Estate as defined in 11 U.S.C. Sec. 01(51B), estimated assets and debts of up to $50 million. WINDOW FACTORY: American Integrity Wants Ch. 11 Trustee Appointed ----------------------------------------------------------------- Creditor American Integrity Corporation asks the U.S. Bankruptcy Court for the Southern District of California to appoint a trustee in the Chapter 11 case of Window Factory, Inc. American Integrity explains that in the instant case, the compelling reason for the appointment of a trustee is the fact of a corporate Debtor without representation by counsel. The principals of the Debtor have stated the Debtor does not have the ability to retain counsel to represent the corporate Debtor and the only way to protect the interests of creditors is by the appointment of a trustee. Further, with the Debtor not having counsel, a trustee would be able to more effectively and efficiently accomplish the goal of a chapter 11 case than would the Debtor. Additionally, American Integrity relates that the principals of the Debtor are the same management which incurred over $350,000 in IRS employee withholding liability and the filing of several tax liens, and what appears to be over $50,000 in unpaid wage claims to employees. A trustee would be able to ensure postpetition employee wages are timely paid and the appropriate tax withholding occurs and disbursements made for only essential expenses required to keep the business operations continuing. The court will hold a hearing on March 8, 2012, at 10:00 a.m. on the appointment of a trustee. American Integrity is represented by: Jeffrey D. Schreiber, Esq. 2635 Camino Del Rio South, Suite 301 San Diego, CA 92108 Tel: (619) 296-8600 Fax: (619) 795-8993 About The Window Factory, Inc. On Dec. 8, 2011, American Integrity Corp., Ajit Ahooja, and Herde Computer Services signed involuntary Chapter 11 petitions for The Window Factory, Inc., (Bankr. S.D. Calif. Case No. 11-19842). Judge Laura S. Taylor presides over the case. Jeffrey D. Schreiber, Esq., at The Schreiber Law Firm, serves as counsel to the petitioning creditors, which allege $407,000 in total claims. As reported in the Troubled Company Reporter on Jan. 27, 2012, the Court ordered that, in consideration of the involuntary petition filed by American Integrity Corp., Ajit Ahooja, and Herde Computer Services against The Window Factory, Inc., an order for relief under Chapter 11 of Title 11 of the United State Code is granted. WOODBURY DEVELOPMENT: Taps Backenroth Frankel as Counsel -------------------------------------------------------- Woodbury Development LLC seeks Bankruptcy Court authority to employ Backenroth Frankel & Krinsky, LLP, as counsel. Backenroth will be paid at these hourly rates: Paralegal: $125 Scott A. Krinsky: $450 Mark A. Frankel: $485 Abraham J. Backenroth: $550 The firm was not paid a retainer by the Debtor prior to the bankruptcy filing. Mark Frankel, Esq., a member of the firm, attests that Backenroth represents no interest adverse to the Debtor or its creditors, and is a disinterested person within the meaning of Sec. 101(14) of the Bankruptcy Code. Brooklyn-based Woodbury Development, LLC, filed a bare-bones Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 12-40652) on Jan. 31, 2012. The Debtor, a Single Asset Real Estate in 11 U.S.C. Sec. 101 (51B), scheduled $14 million in assets and $7.4 million in liabilities. Its sole asset is the Site A of the Interstate Commerce Center in Woodbury, New York, which is valued at $14 million. The property serves as collateral to a $7.2 million debt to Woodbury R.E. Group LLC. Judge Jerome Feller presides over the case. The petition was signed by Deborah Harfanes, president. WOODBURY DEVELOPMENT: Sec. 341 Creditors' Meeting on March 12 ------------------------------------------------------------- The United States Trustee for Region 2 will convene a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a) in the Chapter 11 case of Woodbury Development LLC on March 12, 2012, at 10:00 a.m. at 271 Cadman Plaza East, Room 4529, in Brooklyn, New York. Brooklyn-based Woodbury Development, LLC, filed a bare-bones Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 12-40652) on Jan. 31, 2012. The Debtor, a Single Asset Real Estate in 11 U.S.C. Sec. 101 (51B), scheduled $14 million in assets and $7.4 million in liabilities. Its sole asset is the Site A of the Interstate Commerce Center in Woodbury, New York, which is valued at $14 million. The property serves as collateral to a $7.2 million debt to Woodbury R.E. Group LLC. Judge Jerome Feller presides over the case. The petition was signed by Deborah Harfanes, president. WOODBURY DEVELOPMENT: Status Conference Scheduled for April 17 -------------------------------------------------------------- The Bankruptcy Court has scheduled a Status Conference in the Chapter 11 case of Woodbury Development LLC for April 17, 2012, at 10:00 a.m. at Courtroom 3554. Brooklyn-based Woodbury Development, LLC, filed a bare-bones Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 12-40652) on Jan. 31, 2012. The Debtor, a Single Asset Real Estate in 11 U.S.C. Sec. 101 (51B), scheduled $14 million in assets and $7.4 million in liabilities. Its sole asset is the Site A of the Interstate Commerce Center in Woodbury, New York, which is valued at $14 million. The property serves as collateral to a $7.2 million debt to Woodbury R.E. Group LLC. Judge Jerome Feller presides over the case. The petition was signed by Deborah Harfanes, president. Z TRIM HOLDINGS: Sells 311,545 Common Shares to Brightline ---------------------------------------------------------- Z Trim Holdings, Inc., on Feb. 23, 2012, entered into a private placement subscription agreement with Brightline Ventures I-B, LLC, pursuant to which the Company sold 311,545 shares of Common Stock, for a price of $1.50 per share and received gross proceeds of $467,318. Between January 20 and Feb. 17, 2012, the Company secured bridge financing from three accredited investors pursuant to which the Company sold senior secured convertible promissory notes and warrants and received gross proceeds of $200,000. The Notes have a twenty-four month term and accrue interest at the rate of 8% per annum. The principal balance of the Notes is convertible at the rate of $1.00 per share into an aggregate of 200,000 shares of our common stock, $.00005 par value. The interest is payable either upon maturity of the Notes or quarterly at the Investors' option in shares of the our Common Stock. Any amount of principal or interest which is not paid when due shall bear interest at a rate of interest equal to the 18% per annum. The Notes will be secured by a first lien on all of the Company's assets for so long as the Notes remain outstanding. The Notes are callable at any time by the Company, at which time the Investors may choose to either convert the note into Common Stock or to receive re-payment in cash. The Investors also received a five year warrant, to purchase an aggregate of 100,000 shares of Common Stock per unit with an exercise price of $1.50 per share. The Warrants are also callable by the Company in the event that the ten day trailing average closing price per share of Common Stock exceeds $2.99. The Company expects to use the proceeds from the sale of the Notes, net of transaction expenses, for general corporate purposes, including working capital. On Feb. 17, 2011, the Company entered into an Investment Banking Agreement with Legend Securities, Inc., pursuant to which Legend agreed to provide business advisory services to the Company for a period of up to eighteen months with the Company's ability to further extend the term of the Investment Banking Agreement for an additional six months. The Company can terminate the Investment Banking Agreement at any time for any reason except during the first ninety days which requires a material breach by Legend that is uncured for ten days following notification of that breach. In exchange for Legend's services, the Company agreed to pay Legend the sum of $10,000 per month and to issue Legend a warrant for the purchase of 550,000 shares of the Company's common stock at an exercise price of $0.71 per share. The Legend Warrants vest as follows: 91,666 of the Legend Warrants vest on the Effective Date and then 91,666 of the Legend Warrants vest each 90 day period thereafter. The Legend Warrants will have a term of five years. When issued, the Legend Warrants will contain a cashless exercise provision and certain "piggy-back" registration rights, pursuant to which the Company will register the shares underlying the Legend Warrants under the Securities Act of 1933, as amended, in a registration statement filed with the U.S. Securities and Exchange Commission. About Z Trim Mundelein, Ill.-based Z Trim Holdings, Inc., is a functional food ingredient company which provides custom product solutions that help answer the food industry's problems. Z Trim's revolutionary technology provides value-added ingredients across virtually all food industry categories. Z Trim's all-natural products, among other things, help to reduce fat and calories, add fiber, provide shelf-stability, prevent oil migration, and add binding capacity -- all without degrading the taste and texture of the final food products. The Company reported a net loss of $10.91 million in 2010 and a net loss of $12.21 million in 2009. The Company's balance sheet at June 30, 2011, showed $6.50 million in total assets, $16.09 million in total liabilities, $1.52 million in total commitment and contingencies, and a $11.11 million total stockholders' deficit. As reported in the Troubled Company Reporter on April 12, 2010, M&K, CPAs, PLLC, in Houston, expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted that the Company has suffered recurring losses from operations and requires additional financing to continue in operation. The Company said that for the year ended Dec. 31, 2009, it did not have enough cash on hand to meet its current liabilities or to fund on-going operations beyond one year. As a result, the report of independent registered public accounting firm included an explanatory paragraph in respect to the substantial doubt of the Company's ability to continue as a going concern. The Company's cash on hand as of Dec. 31, 2010 is $2,327,013. Since June 2010, the Company brought in $8,170,988 in funds through the sale of Preferred Stock, and our investors converted approximately $8,100,000 of convertible debt into common stock. In addition to the fundraising efforts, the Company intends to make capital expenditures necessary to increase its capacity and to reduce its cost per pound. Due to the expected increase in production capacity, the Company anticipates its sales for fiscal year ended Dec. 31, 2011 will approximately double those of fiscal year ended Dec. 31, 2010. Although the Company has recurring operating losses and negative cash flows from operating activities, the Company has positive working capital and believe it has enough cash on hand to satisfy current obligations. If the Company is unsuccessful in its plans to increase revenue and capacity, the impact may have a material impairment on its ability to continue as a going concern. * Oaktree Capital Reports Wider Net Loss for 2011 Ahead of IPO ------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that investment- management firm Oaktree Capital Group LLC said its net loss widened to $96 million in 2011, while revenue fell 24% to $155.8 million. * Investors Bet on Retirement Home Bonds Despite High Default Rate ------------------------------------------------------------------ Mike Cherney, writing for The Wall Street Journal, reports that Municipal Market Advisors said earlier this month that 2.13% of bonds tied to so-called continuing-care retirement communities are in default, the sixth-highest of 46 types of municipal debt tracked by the research-and-advisory firm. WSJ says investors, however, remain optimistic, betting that an improving real-estate market and legions of baby boomers approaching retirement age bode well for the industry. WSJ says these types of bonds, which often carry higher yields than safer debt issued by states or cities, had returned more than 5.5% this year as of Thursday, Feb. 23, according to the Barclays Capital Municipal Bond index. In contrast, 10-year investment- grade municipal debt returned about 1.3%. WSJ explains that continuing-care communities are one-stop shops for seniors. They include residential units where healthy seniors live on their own, assisted-living units for those who need some help, and nursing beds for people requiring constant care. The nonprofit entities that run them can issue tax-exempt bonds through cooperative local government agencies. The report notes the communities typically charge entrance fees for new residents, in the hundreds of thousands of dollars. Many seniors sell their homes to pay the fees, but the real-estate downturn made that more difficult. As a result, retirement communities attracted fewer residents than expected. Some tumbled into bankruptcy. The Clare at Water Tower facility in downtown Chicago filed for Chapter 11 bankruptcy in November, with $229 million in municipal bonds outstanding. Firms, according to WSJ, that trade in these bonds include: 1. Lord Abbett & Co., which owns more than $100 million worth of retirement bonds. 2. Thornburg Investment Management, which recently purchased bonds tied to the Kendal at Lexington center, near Washington and Lee University in Lexington, Va., according to Josh Gonze, the firm's co-portfolio manager. In September, the firm scooped up $1 million in bonds maturing in 2028 for less than 90 cents on the dollar, for a 6.4% yield. 3. Michael Walls, who manages the Waddell & Reed Advisors Municipal High Income Fund and the Ivy Municipal High Income Fund, has been buying debt tied to the Edgemere community in Dallas. He has picked up the bonds at prices ranging from 87 cents on the dollar to 101.5 cents, near where it is trading now. 4. EdenHill Communities, in New Braunfels, Texas, sold about $50 million in unrated tax-exempt bonds in January, with the 2047 maturity offering a yield of 7.4%. WSJ notes, however, that many of the facilities are start-ups that are exposed to higher construction or economic risk than the typical municipal investment, leading to higher default rates. That can make the bonds less liquid during difficult times. Overall, about $28 billion worth of municipal debt tied to continuing-care communities is in the market, according to Municipal Market Advisors, WSJ reports. Another $6.5 billion has been issued by facilities that offer less-comprehensive services, such as only independent living, assisted living or nursing care. According to WSJ, Municipal Market Advisors said defaults for less-comprehensive facilities exceed those of continuing-care communities -- 4.48% for assisted living, 4.19% for independent living and 3.97% for nursing homes. In contrast, debt backed by the taxing power of state and local governments had a 0.01% default rate. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- ABSOLUTE SOFTWRE ABT CN 125.3 (7.2) 10.8 ACCO BRANDS CORP ABD US 1,116.7 (61.9) 316.8 AMC NETWORKS-A AMCX US 2,121.5 (1,065.5) 519.5 AMER AXLE & MFG AXL US 2,328.7 (419.6) 187.0 AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2) AMERISTAR CASINO ASCA US 2,039.6 (105.7) (50.8) AMYLIN PHARM INC AMLN US 1,870.2 (138.7) 125.2 ANOORAQ RESOURCE ARQ SJ 927.7 (148.7) 29.2 AUTOZONE INC AZO US 5,932.6 (1,347.1) (736.3) BAZAARVOICE INC BV US 46.8 (15.4) (18.2) BLUEKNIGHT ENERG BKEP US 320.8 (12.5) (69.9) BLUESKY SYSTEMS BSKS US 0.1 (0.2) - BOSTON PIZZA R-U BPF-U CN 146.9 (105.3) (2.0) CABLEVISION SY-A CVC US 6,740.1 (5,525.9) (886.1) CADIZ INC CDZI US 49.3 (4.7) 2.5 CAPMARK FINANCIA CPMK US 20,085.1 (933.1) - CC MEDIA-A CCMO US 16,542.0 (7,471.9) 1,556.3 CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) CENVEO INC CVO US 1,407.1 (331.1) 222.9 CERES INC CERE US 33.1 (13.7) 12.0 CHENIERE ENERGY CQP US 1,737.3 (545.0) 57.7 CHENIERE ENERGY LNG US 2,651.4 (446.9) (282.7) CHOICE HOTELS CHH US 467.9 (14.4) 28.0 CINCINNATI BELL CBB US 2,683.8 (626.1) 22.7 CLOROX CO CLX US 4,290.0 (199.0) (289.0) CLOVIS ONCOLOGY CLVS US 26.4 (18.1) (19.2) CROWN HOLDINGS I CCK US 6,868.0 (239.0) 318.0 DEAN FOODS CO DF US 5,754.4 (98.7) 423.3 DELTA AIR LI DAL US 43,499.0 (1,396.0) (4,972.0) DENNY'S CORP DENN US 350.5 (9.7) (25.9) DIGITAL DOMAIN M DDMG US 178.9 (85.7) (38.3) DIRECTV-A DTV US 18,423.0 (2,842.0) (502.0) DISH NETWORK-A DISH US 11,470.2 (419.0) 527.3 DISH NETWORK-A EOT GR 11,470.2 (419.0) 527.3 DOMINO'S PIZZA DPZ US 438.2 (1,221.0) 118.2 DUN & BRADSTREET DNB US 1,775.6 (558.0) (478.3) FREESCALE SEMICO FSL US 3,415.0 (4,480.0) 1,432.0 GENCORP INC GY US 939.5 (207.2) 101.1 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GOLD RESERVE INC GRZ US 85.2 (19.9) 60.2 GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 HANDY & HARMAN L HNH US 380.4 (0.9) 39.2 HCA HOLDINGS INC HCA US 26,898.0 (7,014.0) 1,679.0 HUGHES TELEMATIC HUTCU US 94.0 (111.8) (39.0) HUGHES TELEMATIC HUTC US 94.0 (111.8) (39.0) INCYTE CORP INCY US 329.0 (227.1) 175.2 IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 137.5 (34.8) (7.5) JUST ENERGY GROU JE US 1,644.4 (394.5) (338.4) JUST ENERGY GROU JE CN 1,644.4 (394.5) (338.4) LIN TV CORP-CL A TVL US 815.8 (115.0) 56.6 LIZ CLAIBORNE LIZ US 1,144.0 (420.0) (97.3) LORILLARD INC LO US 3,008.0 (1,513.0) 1,079.0 MAINSTREET EQUIT MEQ CN 477.7 (11.1) - MANNING & NAPIER MN US 66.1 (184.6) - MARRIOTT INTL-A MAR US 5,910.0 (781.0) (1,234.0) MEAD JOHNSON MJN US 2,766.8 (168.0) 689.6 MEDIVATION INC MDVN US 188.3 (3.9) 89.4 MERITOR INC MTOR US 2,553.0 (983.0) 180.0 MONEYGRAM INTERN MGI US 5,175.6 (110.2) (40.4) MOODY'S CORP MCO US 2,876.1 (158.4) 290.4 MORGANS HOTEL GR MHGC US 480.8 (77.2) (4.1) NATIONAL CINEMED NCMI US 820.2 (346.8) 68.4 NEXSTAR BROADC-A NXST US 582.7 (187.0) 26.2 NPS PHARM INC NPSP US 214.0 (46.1) 156.0 NYMOX PHARMACEUT NYMX US 6.5 (5.5) 3.3 ODYSSEY MARINE OMEX US 25.8 (0.7) (4.1) OTELCO INC-IDS OTT US 316.1 (10.1) 22.9 OTELCO INC-IDS OTT-U CN 316.1 (10.1) 22.9 PALM INC PALM US 1,007.2 (6.2) 141.7 PDL BIOPHARMA IN PDLI US 269.5 (204.3) 100.5 PETROALGAE INC PALG US 8.3 (76.0) (77.4) PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PRIMEDIA INC PRM US 208.0 (91.7) 3.6 PROTECTION ONE PONE US 562.9 (61.8) (7.6) QUALITY DISTRIBU QLTY US 304.3 (105.9) 44.1 REGAL ENTERTAI-A RGC US 2,262.0 (555.7) (25.8) RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) RENTECH NITROGEN RNF US 152.4 (76.1) (32.3) REVLON INC-A REV US 1,157.1 (692.9) 183.3 RSC HOLDINGS INC RRR US 3,141.0 (38.4) (1.0) RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SALLY BEAUTY HOL SBH US 1,792.7 (168.5) 482.3 SINCLAIR BROAD-A SBGI US 1,571.4 (111.4) (111.5) SINCLAIR BROAD-A SBTA GR 1,571.4 (111.4) (111.5) SMART TECHNOL-A SMT US 529.8 (7.1) 183.9 SMART TECHNOL-A SMA CN 529.8 (7.1) 183.9 SUN COMMUNITIES SUI US 1,368.0 (100.7) - SYNERGY PHARMACE SGYP US 2.1 (8.6) (6.1) TAUBMAN CENTERS TCO US 3,336.8 (256.2) - THERAVANCE THRX US 258.8 (87.1) 199.3 UNISYS CORP UIS US 2,612.2 (1,311.0) 487.3 VECTOR GROUP LTD VGR US 931.0 (66.7) 252.6 VERISIGN INC VRSN US 1,856.2 (88.1) 788.9 VERISK ANALYTI-A VRSK US 1,379.9 (158.9) (234.2) VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) WEIGHT WATCHERS WTW US 1,121.6 (409.8) (279.7) WESTMORELAND COA WLB US 769.0 (174.4) (5.9) ********* 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 ***