/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120315.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, March 15, 2012, Vol. 16, No. 74 Headlines 155 EAST: Court Allows Canpartners to Submit Credit Bid ALPHA NATURAL: Moody's Issues Summary Credit Opinion AMBAC FINANCIAL: Judge Chapman to Issue Plan Ruling Today AMBAC FINANCIAL: Plan Wins Sufficient Votes AMBAC FINANCIAL: Wis. High Ct. Dismisses Appeal From Rehab Plan AMERICAN AIRLINES: Wants Until June 26 to Decide on Leases AMERICAN AIRLINES: Offers to Freeze Pension to Hasten Talks AMERICAN AIRLINES: Bid for Official Retiree Committee Wins Support AMERICAN AIRLINES: Has Court OK for Weil Gotshal as Bankr. Counsel AMERICAN AIRLINES: American Eagle Files SAL and SOFA AMERICAN APPAREL: Deregisters Unsold Securities AMERICAN INT'L GROUP: Former Bailout Watchdogs Condemn Tax Break ATLANTIC & PACIFIC: Plan Declared Effective; Two Creditors Appeal ATLANTIS OF JACKSONVILLE: Case Summary & Creditors List AVIS BUDGET: Moody's Assigns Ratings to Series 2012-1 Notes AVIS BUDGET: Moody's Assigns Ratings to Series 2012-2 Notes AVISTAR COMMUNICATIONS: C. Lauwers to Resign as Product Officer BANNING LEWIS: Devt. I & II Chapter 11 Case Dismissed BERNARD L. MADOFF: Mets Seek to Bar Phrase "Other Peoples' Money" BERNARD L. MADOFF: Trustee Opposes Top Court Hearing on Claims BEYOND OBLIVION: William Sword-Led Auction on March 20 BGA LLC: Case Summary & 4 Largest Unsecured Creditors CAESARS ENTERTAINMENT: S&P Retains 'B' Corporate Credit Rating CAMARILLO PLAZA: Owner Closes LazerTag, Mulls Sale for $150,000 CANO PETROLEUM: Extends CFO Homier's Employment to August CCM MERGER: S&P Rates $275-Mil. Senior Unsecured Notes at 'CCC+' CHECKOUT HOLDING: Moody's Cuts Corporate Family Rating to 'B2' CHRISTIAN BROTHERS: Aug. 1 Deadline Set for Sex Abuse Claims CHURCH STREET: Small Smiles Asks Judge to Approve April Auction CLARE AT WATER TOWER: Has Buyer for Retirement Community CLIFFS CLUB: Creditors Committee Disputes Bid Protections CLIFFS CLUB: U.S. Trustee Appoints 7th Member to Creditors Panel CLIFFS CLUB: Can Hire BMC Group as Claims and Noticing Agent CLIFFS CLUB: Taps GGG Partners' Katie Goodman as CRO CLIFFS CLUB: Sec. 341 Creditors' Meeting Set for April 13 COLLIER LAND: Has Until April 23 to File a Chapter Plan CONNAUGHT GROUP: Court Approves March 26 Auction CONTAINER STORE: Moody's Assigns 'B3' Corporate Family Rating CONVERTED ORGANICS: Has 1.9 Million Outstanding Common Shares COVANTA HOLDING: 'Ba2' CFR Reflects Protection on UCUA 1998 Bonds CRYSTAL CATHEDRAL: Mediator Appointed to Settle "Greenlaw" Claims CUMULUS MEDIA: Reports $63.8 Million Net Income in 2011 DBK LEASING: Moody's Issues Summary Credit Opinion DELTA PETROLEUM: 2011 Executive Bonuses Are Approved DENNY'S CORP: Reports $112.3 Million Net Income in Fiscal 2011 DLH MASTER: 5th Circ. Denies BofA Late Claim Appeal DOLTON, IL: Fitch Withdraws 'BB' Rating on $15MM Bonds DPNY INC: Domino's Pizza Franchisee Files for Chapter 11 DUNE ENERGY: To Offer 3.2-Mil. Shares Under 2012 Incentive Plan DYNEGY HOLDINGS: To Renegotiate Chapter 11 Plan DYNEGY HOLDINGS: Board to Review Examiner's Report DYNEGY HOLDINGS: Chapter 11 Trustee Sought After Examiner Report EMMIS COMMUNICATIONS: Signs New Employment Deal With R. Cummings ENERGY CONVERSION: Court Sets June 21, 2012 Claims Bar Date ENERGY CONVERSION: Has OK to Hire Kurtzman Carson as Claims Agent ENERGY CONVERSION: Deadline Today to File Schedules & Statements ENERGY CONVERSION: Sec. 341 Creditors' Meeting on March 23 ENERGY CONVERSION: U.S. Trustee Appoints 7-Member Creditors' Panel FILENE'S BASEMENT: Wants May 30 Deadline to Decide on Leases FIRST INDUSTRIAL: Moody's Affirms 'Ba3' Senior Unsecured Rating FRANCISCAN COMMUNITIES: Buyer Offers $15 Million FREEDOM GROUP: Moody's Says CEO's Departure Credit Negative GAME TRADING: Moves Panel's Plan Outline Objection Deadline GIBRALTAR KENTUCKY: Sec. 341 Creditors' Meeting on Friday GRACEWAY PHARMACEUTICALS: Settlement Brings in Additional $6MM GRANITE DELLS: Files for Chapter 11 to Stop Foreclosure GREYSTONE PHARMACEUTICALS: Court Confirms First Texas' Plan GRUBB & ELLIS: Petitions to Stop Finra Proceeding GRUBB & ELLIS: Creditors Object to BGC DIP Financing Terms HD SUPPLY: Enters Into Agreement to Sell PVF Business HOSTESS BRANDS: Kobi Partners to Provide Rayburn as CEO HOUGHTON MIFFLIN: Moody's Cuts CFR to 'Caa3'; Outlook Negative INTELLICELL BIOSCIENCES: Has Sold $2.4MM Common Stock & Warrants IRVINE SENSORS: Nine Directors Elected at Annual Meeting JEFFERSON COUNTY: Bondholders Allowed to Interrogate Officials LAS VEGAS MONORAIL: To Present Plan for Confirmation April 30 LOS ANGELES DODGERS: Beaten Dodgers Fan Wins Additional Discovery LTS NUTRACEUTICALS: Signs Agreement to Merge with YTB Int'l MAINTENANCE AND MACHINERY: Voluntary Chapter 11 Case Summary MEDIA GENERAL: Continues Negotiations on Credit Pact Amendment MONITRONICS INT'L: Moody's Assigns 'B2' Corporate Family Rating MORTGAGES LTD: Judge Approves Sale to Evergreen at $7 Million NEW STREAM: Heading for April 23 Confirmation Hearing NORTHAMPTON GENERATING: Gets Nod to Hire Dilworth as Bond Counsel NPS PHARMACEUTICALS: Wellington Discloses 11.1% Equity Stake OPTIMUMBANK HOLDINGS: Has Not Complied with Nasdaq Bid Price Rule PACIFIC AVENUE: Emerges From Chapter 11 Bankruptcy Protection PACIFIC MESA: Plan Consummated, Asks Court to Close Bankr. Case PARK POINTE: Files for Chapter 11 Bankruptcy Protection PEMCO WORLD AIR: Seeks May 14 Auction to Test Sun Capital Bid PETTERS CO: Ch 11 Trustee Has OK to Hire Stonehill as Consultant PETTERS CO: Court OKs Boies as Trustee's Special Counsel PJ FINANCE: Court Expands E&Y Employment to Include Tax Svcs. QUALITY DISTRIBUTION: FMR LLC Discloses 14% Equity Stake RIM DEVELOPMENT: U.S. Trustee Wins Case Dismissal SAINTS MEMORIAL: Moody's Reviews 'Caa1' Rating for Upgrade SEAHAWK DEVELOPMENT: Files for Chapter 11 Bankruptcy Protection SEALY CORP: H Partners Proposes to Appoint Board Representative SEAWORLD PARKS: Moody's Lowers Corporate Family Rating to 'B1' SHRIJI PRAMUKH: Voluntary Chapter 11 Case Summary SHUANEY IRREVOCABLE: US Trustee Withdraws Case Dismissal Bid SILVER LEGACY: Owners Fail to Pay $142.8 Million Loan STARWOOD HOTELS: Moody's Lifts Sr. Unsec. Ratings From 'Ba1' STOCKDALE TOWER: Disclosure Statement Hearing Today STRADELLA INVESTMENTS: Chapter 11 Case Reassigned to Judge Bauer TCF FINANCIAL: Shift in Strategy Cues Fitch to Downgrade Ratings TELESAT CANADA: Moody's Upgrades Corporate Family Rating to 'B1' THORNBURG MORTGAGE: SEC Sues Former Execs for Hiding $428MM Loss THORNBURG MORTGAGE: Court Approves SEC Offer of Settlement TOWNSEND CORP: Exclusive Plan Filing Period Extended to April 6 TOWNSEND CORP: Case Reassigned to Judge Catherine E. Bauer TRACY PRESS: JP Media Partners to Get 8% Commission From Sale TRANS-LUX CORP: Stockholders OK Increase of Authorized Shares TRIDENT MICROSYSTEMS: Equity Committee Proposes A&M as Advisor TRIDENT MICROSYSTEMS: Equity Committee Has Bayard as Co-Counsel TRIDENT MICROSYSTEMS: Equity Panel Has Dewey & LeBoeuf as Counsel TRIDENT MICROSYSTEMS: Equity Panel Has Quinn as Conflicts Counsel TTM MB PARK: Court Rejects Capmark's Bid for SARE Declaration U.S. STEEL: S&P Rates $400-Mil. Senior Unsecured Notes at 'BB' UNI-PIXEL INC: Signs Agreement with Carestream Tollcoating UNITED RETAIL: Creditors Oppose Versa Credit Bid VILLAGE RESORTS: Taps Worsek & Vihon as Real Estate & Tax Counsel VILLAGE RESORTS: Has Until April 24 to File Chapter 11 Plan VIRGIN ISLANDS: S&P Cuts Rating on Elec. System Bonds to 'BB+' WARNER SPRINGS: Seeks Court Approval to Pay Creditors WASHINGTON MUTUAL: Files Response to Confirmation Order Objection WAVE2WAVE COMMUNICATIONS: Status Conference Set for April 16 WAVE2WAVE COMMUNICATIONS: Files 20 Largest Unsec. Creditors' List WESTERN MOHEGAN: Case Summary & 9 Largest Unsecured Creditors WINTER PARK: Voluntary Chapter 11 Case Summary WOODBURY DEVELOPMENT: Creditors' Proofs of Claim Due May 4 * Inherited IRA is Exempt Asset in Later Bankruptcy * Moody's Updates US Not-for-Profit Healthcare Rating Methodology * Moody's Says Calif. Emissions Standards May Hit Local Refiners * February Commercial Bankruptcy Filings Show Slight Uptick * Junk Bond Defaults Hold Steady in February at 2% * Thompson & Knight Adds M. Blumenthal as Partner * Recent Small-Dollar & Individual Chapter 11 Filings ********* 155 EAST: Court Allows Canpartners to Submit Credit Bid ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Canpartners Realty Holding Co. IV LLC rebuffed an attack by creditors seeking to knock out the secured claim it intends to use to buy the Hooters Casino Hotel in Las Vegas. In a ruling last week, U.S. Bankruptcy Judge Bruce A. Markell in Las Vegas said that the price Canpartners paid in the secondary market to purchase secured notes at a discount doesn't matter when it comes to buying assets with a so-called credit bid. Judge Markell said the price paid by Canpartners also doesn't matter because the secured claim is actually held by the indenture trustee for the noteholders. The bankruptcy judge signed an order on Feb. 24 approving the sale to Canpartners. Canpartners owns 98.4% of the $130 million in 8.75% second-lien senior secured notes. It will acquire the property in exchange for $45 million of the notes and the assumption of $15 million in financing for the bankruptcy. Completion of the sale requires approval of the reorganization plan by Judge Markell's signature on a Chapter 11 plan confirmation order. To fund the plan, Canpartners is allowing the casino to retain $10.6 million cash to cover professional costs and full payment on $3.35 million in secured notes owned by third parties. Unsecured creditors with about $265,000 in claims are to be paid in full. The first-lien credit facility, with about $14.5 million outstanding, will be assumed by the new owners. Wells Fargo Capital Finance Inc. is agent for holders of first-lien debt. 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. ALPHA NATURAL: Moody's Issues Summary Credit Opinion ---------------------------------------------------- Moody's Investors Service issued a summary credit opinion on Alpha Natural Resources and includes certain regulatory disclosures regarding its ratings. The release does not constitute any change in Moody's ratings or rating rationale for Alpha. Moody's current ratings for Alpha Natural Resources are: Long Term Corporate Family Ratings domestic currency rating of Ba2 Probability of Default rating of Ba2 Senior Unsecured (domestic currency) domestic currency rating of Ba3, 68 - LGD4 Senior Unsec. Shelf (domestic currency) domestic currency rating of (P)Ba3 Speculative Grade Liquidity Rating rating of SGL-1 Ratings Rationale Alpha's Ba2 corporate family rating reflects its position as one of the top three U.S. coal companies in terms of production and reserves, its operating diversity with approximately 150 coal mines and a presence in Appalachia and the Powder River Basin (PRB), its ability to export coal though several East Coast and Gulf terminals, blending opportunities and synergies that arise from the Massey merger, and its 5 billion tons of reserves. The rating also reflects its very strong liquidity position, including $586 million of cash and cash equivalents, and availability of $1.1 billion under the revolver and AR securitization facilities. Challenges for the Ba2 CFR include high business concentration in Central Appalachia, where the industry is facing a secular decline and challenging market conditions, including difficult geology, increasing costs, heightened MSHA scrutiny of mine safety, ongoing coal-to-gas substitution, and expected coal plant retirements due to aging fleet and tightening environmental standards. The ratings are also constrained by inherent volatility of met coal prices and current weakness in the seaborne met coal market, as well as the inherent geological and operating risks associated with mining. Rating Outlook The negative outlook reflects weakening operating performance due to the headwinds facing the US coal industry, and in particular the Central Appalachian region, including increasing costs due to difficult geology and regulatory pressures; weak international demand for metallurgical coal due to the ongoing financial crisis in Europe, slowing growth in steel production rates in China and additional supplies coming online globally; and weak domestic demand for steam coal due to ongoing coal to gas substitution, warm weather and environmental regulations that disadvantage coal. What Could Change the Rating - Up An upgrade is unlikely over the next 12-18 months but the outlook could be stabilized if operating performance improves and Debt/EBITDA is considered sustainable below 3.0x, free cash flow to debt is above 5%, and EBIT/ Interest is sustainable above 1.5x. What Could Change the Rating - Down Factors that could lead to a downgrade include a deterioration of prices, further cost increases, and permitting, regulatory, or litigation matters that impact output and costs. An increase in leverage above 3x EBITDA on a sustained basis, persistent free cash flow to debt below 5%, sustained EBIT to interest below 1.5x, or an erosion of liquidity would be signs pointing to a possible downgrade. The principal methodology used in rating Alpha Natural Resources, Inc. was the Global Mining Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. AMBAC FINANCIAL: Judge Chapman to Issue Plan Ruling Today --------------------------------------------------------- Judge Shelley C. Chapman of the U.S. Bankruptcy Court for the Southern District of New York said she will rule on the Fifth Amended Plan of Reorganization of Ambac Financial Group, Inc., Tiffany Kary of Bloomberg News reported. The bankruptcy judge will read her decision on the Plan on March 15, 2012, at 4:00 p.m., a separate Bloomberg report related. The bankruptcy judge heard on March 13 evidence on the Chapter 11 Plan, which is premised on an Amended Plan Settlement among AFG, the Official Committee of Unsecured Creditors, Ambac Assurance Corporation, its Segregated Account, the Office of Commissioner of Insurance for the State of Wisconsin, and the OCI, in his capacity as the rehabilitator of the Segregated Account, according to Bloomberg. The Plan also contains the Debtor's offer to settle the tax disputes with the Internal Revenue Service. "I think there's value to there being certainty and closure in this case," Judge Chapman was quoted as saying, after hearing hours of arguments from individual shareholders asserting why there should be money left for shareholders, and testimony from a financial adviser that there was not, Bloomberg said. The Plan met opposition from various parties, including an ad hoc group of security holders who challenged the Debtor's enterprise value and liquidation value. Other parties also objected to the releases set forth in the Plan. Two more individuals, Gunther Drogis and Perry L. Barnes, objected to the confirmation of the Plan, asserting that the Plan is unfair and inequitable because the actual and future assets of AFG and AAC are not yet determined. In connection with the shareholder objections, Ilene Satko sent to the Court a CD containing the electronic version of the objections filed by individual shareholders. Meanwhile, Wells Fargo Bank, N.A. and Wilmington Trust Company and Wilmington Trust FSB withdrew their objections, as amended, to the Fourth Amended Plan. In its amended objection, WTC raised concerns that any default by AAC or the Segregated Account with respect to its claims arising from policies issued to AAC could be deemed discharged or cured. Modified Plan Ambac submitted to Judge Chapman non-material modifications to its Chapter 11 Plan of Reorganization, as amended. The Debtor filed on March 12, 2012, a fifth amended version of its Chapter 11 Plan clarifying that neither the Plan nor any contract, instrument, release, agreement or document executed or delivered in connection with the Plan, nor the occurrence of the effective date of the Plan, will release, waive, discharge, contribute or assign any of the claims or causes of action against the non-debtor defendants in the class action captioned Veera v. Ambac Financial Group, Inc. et al., Case No. CV 4191, before the U.S. District Court for the Southern District of New York. The Plan also makes clear that the Bankruptcy Court will retain jurisdiction to resolve any disputes or controversies arising from or relating to a stipulation resolving Karthikeyan V. Veera's objection to confirmation of the Plan. A fourth amended version of the Debtor's Plan was filed March 9, 2012. It contained, among other things: (1) A February 24, 2012 offer letter sent by the Debtor, together with the Official Committee of Unsecured Creditors, Ambac Assurance Corporation, its Segregated Account, the Office of the Commissioner of Insurance for the state of Wisconsin, and the OCI, in his capacity as rehabilitator of the Segregated Account to the Internal Revenue Service to resolve the dispute relating to the tax treatment of credit default swaps, which generated $7.3 billion in net operating losses or NOLs. A full-text copy of the Offer Agreement is available for free at: http://bankrupt.com/misc/Ambac_Feb24IRSSettlementOffer.pdf (2) A Ruling Request Agreement, which provides that: * the Debtor and the Committee may submit to the IRS a request to issue a private letter ruling that, pursuant to Section 382(l)(5)(A) of the Internal Revenue Code, no Ownership Change will be experienced by the Debtor or members of its consolidated tax group as a result of the Debtor's emergence from bankruptcy; and * the Debtor will execute a power of attorney authorizing the Rehabilitator to represent the Debtor's consolidated tax group before the IRS on all tax matters arising under the Segregated Account's rehabilitation plan. (3) The exculpation provisions under the Plan, which will not apply to, among other things, any act or omission that might form the basis of any claim by any policyholder or securities holder in connection with or arising out of any policy issued by AAC. (4) A clarification that the Bankruptcy Court will retain jurisdiction to implement, interpret, or enforce any and all matters relating to the Confirmation Order, including the Trading Order and any requirements set forth in any notice disseminated pursuant to that Trading Order. (5) Provisions on the dissolution of the Creditors' Committee on the later of (i) the Effective Date, or (ii) the date on which the New Common Stock and Warrants, as applicable, have been delivered to the Holders of Allowed General Unsecured Claims, Senior Notes Claims, and Subordinated Notes Claims pursuant to the Plan. Full-text copies of the Amended Tax Sharing Agreement and the Ruling Request Agreement as exhibits to the 4th Amended Plan are available for free at: http://bankrupt.com/misc/Ambac_Mar9PlanExhibits.pdf Clean and blacklined copies of the 4th and 5th Amended Plan are available for free at: http://bankrupt.com/misc/Ambac_Mar9Plan.pdf http://bankrupt.com/misc/Ambac_Mar9Plan_blacklined.pdf http://bankrupt.com/misc/Ambac_Mar12Plan.pdf http://bankrupt.com/misc/Ambac_Mar12Plan_blacklined.pdf Plan Satisfies Section 1129 Confirmation Requirements, the Debtor Insists The Plan is premised on the Amended Plan Settlement among the Debtor, the Creditors' Committee, AAC, the Segregated Account, and the OCI, as regulator of AAC and Rehabilitator of the Segregated Account, says Peter A. Ivanick, Esq., at Dewey & LeBoeuf LLP, in New York, counsel to the Debtor. "The Debtor pursued the Amended Plan Settlement to reach a consensual resolution of numerous litigable issues in the Debtor's Chapter 11 case and to emerge from bankruptcy as a reorganized company," he states. Mr. Ivanick recognizes that the settlement process was driven by the fact that the Debtor could not successfully reorganize absent support from the OCI. In practical terms, the OCI, through AAC and the Segregated Account, is funding the Plan, he discloses. Without the OCI support, the Reorganized Debtor could not enter into the Amended TSA, AAC would not be permitted to distribute $30 million in Cash and the Segregated Account would not be permitted to issue $350 million in Junior Surplus Notes to the Reorganized Debtor; the Debtor would not receive any tolling payments in connection with AAC's utilization of NOLs; and AAC would not be permitted to pay the Reorganized Debtor's operating expenses on an ongoing basis, he points out. In connection, the Debtor asks the Bankruptcy Court to approve the injunction, exculpation, and release provisions of the Plan as they form an integral part of the Amended Plan Settlement. More importantly, the Plan satisfies the requirements for confirmation of a plan set forth in Section 1129 of the Bankruptcy Code, Mr. Ivanick asserts. Section 1126(c) of the Bankruptcy Code provides that a class of impaired claims accepts a plan if holders of at least two-thirds in dollar amount and more than one-half in number of the claims in that class vote to accept the plan. In the Debtor's case, Classes 1 and 2 are deemed to accept the Plan pursuant to Section 1126(f) and impaired Classes 3, 4, and 5 voted overwhelmingly to accept the Plan, Mr. Ivanick states. Classes 6 through 8 are conclusively presumed to have rejected the Plan pursuant to Section 1126(g), and thus, Section 1129(a)(8) of the Bankruptcy Code has not been satisfied with respect to those Classes, Mr. Ivanick notes. Nevertheless, the Debtor meets the requirements of Section 1129(b) to "cram down" those Classes of claims that are deemed to have rejected the Plan, he says. He emphasizes that the Debtor's Plan does not "discriminate unfairly" with respect to those Classes deemed to reject the Plan. He adds that Class 6 is not similarly situated to other Classes; there are no claims in Class 7; and Class 8 Equity Interests are classified together and afforded the same treatment under the Plan. "The Plan is fair and equitable as no holder of an Allowed Claim will receive consideration in excess of its entitlements under the Bankruptcy Code," he maintains. The Debtor anticipates that its cash on hand upon emergence and following the Plan Settlement Effective Date will provide sufficient liquidity to make all required payments under the Plan and to satisfy working capital requirements on a going-forward basis. C.J. Brown, managing director of Blackstone Advisory Partners L.P., in an accompanying declaration, disclosed that the Debtor will emerge with no outstanding debt obligations and will receive reimbursement from AAC, pursuant to the Cost Allocation Agreement, of up to $5 million of the Debtor's annual operating expenses. Thus, the Plan is feasible and confirmation of the Plan is not likely to be followed by the liquidation or need for further financial reorganization of the Reorganized Debtor, Mr. Brown declares. In contrast, Mr. Ivanick points out, a Chapter 7 liquidation of the Debtor would result in the elimination of substantial value being delivered to creditors under the Plan. "Under a Chapter 7 liquidation scenario, Ambac's NOLs would not be preserved; the Debtor would not receive $30 million in cash from AAC; $350 million in Junior Surplus Notes from the Segregated Account or any Tolling Payments from AAC; the Debtor would lose all benefits associated with the Cost Allocation Agreement and Mediation Agreement; and the Debtor would incur additional costs in connection with consummating a sale of its ownership interest in AAC," he emphasizes. Reorganized Debtor's Officers In accordance with Section 1129(a)(5) of the Bankruptcy Code, AFG Senior Managing Director and General Counsel Stephen M. Ksenak identified the individuals who will serve as members of the initial board of directors of the Reorganized Debtor, namely: * Diana Adams, AFG's President and Chief Executive Officer, * Charles Lemonides, * Victor E. Mandel, * Jeffrey Stein, and * Nader Tavakoli. Pursuant to the Plan, the Debtor's existing officers will remain in place as officers of the Reorganized Debtor. The only officers who participate in the management of the Debtor, and are considered insiders of the Debtor under Section 101(31)(B) of the Bankruptcy Code, are: * Diana Adams, * Robert B. Eisman - Senior Managing Director, Chief Accounting Officer, and Controller, * Stephen Ksenak, * Michael Reilly - Senior Managing Director, and * David Trick - Senior Managing Director, Chief Financial Officer, and Treasurer. These officers are currently employed and compensated by AAC. In accordance with intercompany cost allocation procedures, the Debtor reimburses AAC for each individual's time that is spent on matters relating to the Debtor. List of Contracts to be Assumed Ambac Financial Group filed with the Court on March 6, 2012, an amended schedule of about 27 executory contracts that it intends to assume in connection with the Fifth Amended Plan of Reorganization. A copy of the amended contract schedule is available for free at: http://bankrupt.com/misc/Ambac_Mar6PlanContractsList.pdf About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMBAC FINANCIAL: Plan Wins Sufficient Votes ------------------------------------------- David Hartie, director with Kurtzman Carson Consultants LLC, filed with the Court on March 8, 2012, a tabulation of votes received for Ambac Financial Group, Inc.'s Fifth Amended Plan of Reorganization. Class 3 General Unsecured Claims, Class 4 Senior Notes Claims and Class 5 Subordinated Notes Claims are entitled to vote on the Plan. Holders of claims and interests in the voting classes voted overwhelmingly in favor of the Plan. The results of the tabulation of valid Ballots are: Accept the Plan Reject the Plan --------------------------- --------------------------- $ Amount Voted/ # of Votes/ $ Amount Voted/ # of Votes/ % of Total % of Number % of Total % of Number Class Dollar Amount of Votes Dollar Amount of Votes ------- --------------- ----------- --------------- ----------- Class 3 General Unsecured $50,705 6 $9,066 1 Claims (84.83%) (85.71%) (15.17%) (14.29%) Class 4 Senior Notes $703,903,158 2,279 $10,083,345 193 Claims (98.59%) (91.53%) (1.41%) (8.47%) Class 5 Subordinated Notes $327,966,493 142 $22,844,321 11 Claims (91.24%) (92.81%) (8.76%) (7.19%) A detailed Ballot report for the Voting Classes is available for free at http://bankrupt.com/misc/Ambac_Mar9TabulationRpt.pdf Mr. Hartie says KCC received 18 Ballots, which were not including in the final tabulation results because the Ballots did not constitute as a valid Ballot. A schedule of the Unacceptable Ballots is available for free at: http://bankrupt.com/misc/Ambac_InvalidBallots.pdf Confirmation Objections Several parties asserted that they oppose confirmation of Ambac Financial Group, Inc.'s Fifth Amended Plan of Reorganization. They include: * Indenture Trustees, * Broadbill Investment Partners, L.P., * Securities Plaintiffs, * Karthikeyan V. Veera, * ad hoc group of equity security holders, * various individual shareholders A. Indenture Trustees Indenture Trustees Wells Fargo Bank, N.A.; Deutsche Bank National Trust Company and Deutsche Bank Trust Company Americas; and U.S. Bank National Association are concerned that any default by AAC or the Segregated Account with respect to any of their claims, including without limitation defaults arising out of or based upon the Policies issued by, and agreements with, AAC, that existed immediately before the Petition Date could be deemed erroneously to have been cured or discharged on the Plan Effective Date as set forth in the Fourth Amended Plan. Nonetheless, the Indenture Trustees note that the objection could be obviated by either redrafting the provisions to make it clear that they apply solely to claims against the Debtor or by including super preemptory language in relation to those provisions similar to that already included in Article VIII of the Third Amended Plan. U.S. Bank, as trustee for certain residential mortgaged-backed securities, other asset-backed securities, collateralized loan obligation and collateralized debt obligation trusts insured by AAC, is represented by: Wendy S. Walker Patrick D. Fleming MORGAN LEWIS & BOCKIUS LLP 101 Park Avenue New York, NY 10178-0600 Tel: 212.309.6306 Fax: 212.309.6001 E-mail: wwalker@morganlewis.com pfleming@morganlewis.com - and - John M. Rosenthal, Esq. Kristine E. Bailey, Esq. MORGAN, LEWIS & BOCKIUS LLP One Market, Spear Street Tower San Francisco, CA 94105 Tel: 415.442.1000 Fax: 415.442.1001 E-mail: jrosenthal@morganlewis.com kbailey@morganlewis.com B. Broadbill Entities Broadbill opposed approval of the third party releases under the Plan and informally met and conferred with counsel for the Debtor regarding its concerns. Broadbill notes that the Third Amended Plan includes modified terms that limit the released claims and expressly excludes from release any claims that policyholders or securities holders may have against AAC or the Segregated Account. Provided that the Plan is not further amended to modify the scope of releases set forth in the Third Amended Plan, Broadbill does not oppose the Third Amended Plan. Broadbill, however, reserves all rights to object to any further amended Plan as it relates to Broadbill's claims or causes of actions. Broadbill is represented by: Tancred V. Schiavoni, Esq. Gary Svirsky, Esq. O'MELVENY & MYERS LLP Times Square Tower 7 Times Square New York, New York 10036 Telephone: (212) 326-2000 Facsimile: (212) 326-2061 E-mail: tschiavoni@omm.com gsvirsky@omm.com - and - Stephen H. Warren, Esq. Karen Rinehart, Esq. O'MELVENY & MYERS LLP 400 S. Hope Street Los Angeles, CA 90071 Telephone: (213) 430-6000 Facsimile: (213) 430-6407 E-mail: swarren@omm.com krinehart@omm.com C. Securities Plaintiffs Lead Plaintiffs and Painting Industry Insurance and Annuity Funds in the securities class action entitled In re Ambac Financial Group, Inc. Securities Litigation Act, Civ. Act. No. 08-00411-NRB before the U.S. District Court for the Southern District of New York are faced with a timing issue because the deadline for filing objections to the Plan occurred prior to a decision on the appeals to the U.S. Court of Appeals for the Second Circuit and that the effective date of the stipulation of settlement with the Debtor will likely not occur before the hearing on the Plan. Accordingly, the Securities Plaintiffs filed this objection out of abundance of caution in the event the Second Circuit does not render a decision on the appeals by the Police and Fire Retirement System of the City of Detroit: (i) affirming the District Court's affirmance of the Bankruptcy Court approval of the stipulation of settlement; and (ii) confirming the District Court's final approval of the settlement. D. Karthikeyan V. Veera Mr. Veera as plaintiff in the action entitled Veera v. Ambac Plan Administrative Committee, et al., Civil Action No: 1:10-cv-4191 objects to the proposed release terms and provisions of the Plan as being overbroad and improper because they attempt to release the claims in the class action against the non-debtor defendants. Such overly broad releases for non-debtors as those found in the Plan are a blatant attempt to create an escape hatch for non- debtors of their obligations where there is none allowed under the law, Mr. Veera stresses. To resolve the objection, the Debtor and Mr. Veera stipulate that the Fifth Amended Plan modifies the injunction and holders' general release provisions, so as to carve-out the Veera Action from their scope. The Fifth Amended Plan also includes the Bankruptcy Code's retention of jurisdiction to resolve any disputes or controversies arising from or relating to this stipulation. E. Equityholders An ad hoc group of equity security holders of the Debtor asserts that it has significant concerns that the Debtor is being undervalued both on an enterprise and liquidation value basis per NHB Advisors, Inc.'s preliminary analysis. As the Equity Group's financial advisor, NHB determined that none of the Rehabilitator's projected scenarios reflect the potential for several billion dollars worth of Net Operating Losses or NOLs that may be realized and used by AAC. NHB notes that market parameters have changed substantially since the Debtor's enterprise value was prepared in connection with the Disclosure Statement. NHB also believes that there are many factors that have changed which necessitate a new calculation of enterprise value for the Debtor to determine if the Plan allocates value in fair and equitable manner. "All those factors indicate there are several billion dollars of accretive value that should be taken into account in the Liquidation Analysis," NHB states. The Equity Group adds that the Disclosure Statement expresses concerns that any alternative to confirmation of the Plan would result in different recoveries for Holders of Allowed Claims and Equity Interests -- even though equity is being wiped out. Thus, the Plan is not confirmable under Section 1129(b) of the Bankruptcy Code, the Equity Group asserts. In the alternative, the Equity Group proposes that the Bankruptcy Court adjourn confirmation for 60 days so that Blackstone can update the Liquidation Analysis. The Equity Group is represented by: Howard P. Magaliff, Esq. Jeffrey M. Traurig, Esq. DICONZA TRAURIG MAGALIFF LLP 630 Third Avenue - 7th Floor New York, NY 10017 Tel No: 212.682.4940 E-mail: hmagaliff@dtmlawgroup.com jtraurig@dtmlawgroup.com In addition, various individual shareholders allege that the neither the Debtor nor the OCI have demonstrated willingness to disclose the full and true value of the assets. The objecting shareholders are: * Wolfgang Drogis * Frederick Sam * Edward F. Hosinger * Thomas W. Barrett * Wanson F. Silva * Bradley A. Sparks * Carlos Castillo * Scott E. Wilbur * Marcelo Fabian Roitman * Raju Porandla * Neelima Vojjala * Sven Preut * Scott E. Wilbur * James P. Knipp * Tom Erangey * Elizabeth Rosshirt * Frank Bucher * Khris E. Pallone * Kayce Glasse * Matthew S. DeCristofaro * Cahit Erdemir * Jeffrey S. Aleck * John Vratsidis * Andrew Stange * Ranulfa D. Cammarano * Daniel J. Hoefer * Ganit Gordon * Ido Bistry * Kevin Moens * Horst Feist Mr. Barrett also filed joinders to the objections filed by Mrs. Frederick Sam and Mr. Hosinger. Bank of America's Statement Bank of America, N.A. -- in its capacity as trustees and in similar capacities in connection with securities issued by certain entities and securitization trusts and on behalf of the holders of such securities related to the rehabilitation of the Segregated Account of Ambac Assurance Corporation -- filed an objection to confirmation of the Debtor's Second Amended Plan on 8, 2012. In a March 12, 2012 notice, BANA revealed that it was no longer serving in those capacities. Debtor Defends Plan, Seeks to Strike References to NHB Analysis Counsel to the Debtor, Peter A. Ivanick, Esq., at Dewey & LeBoeuf LLP, in New York, argues that the Equity Group's Preliminary Analysis is inadmissible. C.J. Brown, managing director of Blackstone Advisory Partners L.P., in an accompanying declaration, insists that its firm properly assessed the Debtor's enterprise and liquidation values. Mr. Brown explains that Blackstone's enterprise valuation includes the tangible sources of value stemming from the Amended Plan Settlement as well as the Debtor's cash position and residual interest in AAC. To the extent there is any value at AAC for the Debtor, this value may only be realized through the payment of ordinary or extraordinary dividends by AAC to the Debtor or as residual equity value once it becomes clear that all current and future policy claims, surplus notes, and approximately $600 million in auction market preferred shares or AMPS can be paid in full, he says. He further notes that $2.6 billion represented the Debtor's best good faith estimate of recoveries AAC was likely to receive from the Put-Back Claims, an estimate which has not changed materially enough, as of December 31, 2011, to require revision to the estimated enterprise or liquidation values. Mr. Brown maintains that nothing has changed materially since Blackstone performed its valuation that would significantly increase the Debtor's Enterprise or Liquidation Values or otherwise permit a recovery for existing shareholders. Based on the most recent statutory filing for the period ending Dec. 31, 2011, AAC's loss reserves have increased to roughly $3.1 billion during 2011 as a result of an increased number of defaulted credits added to the loss reserves -- a condition not indicative of a scenario as favorable as depicted in the Equity Group Objection, he states. As to other objections with respect to the Holders' General Releases, unique circumstances exist justifying the Holders' General Release because OCI -- not the Released Parties which are defendants in the Veera Action -- negotiated for and demanded the Holders' General Release and is funding the Plan through AAC and the Segregated Account pursuant to the Amended Plan Settlement, Mr. Ivanick asserts. "Absent confirmation of the Plan and receipt of the $30 million Cash Grant pursuant to the Amended Plan Settlement or the receipt of other funds from AAC, there is no doubt that the Debtor will eventually burn through its available cash," he maintains. A summary of the other Objections that have been filed and their current status is available for free at: http://bankrupt.com/misc/Ambac_AddlPlanObjsSumm.pdf The Official Committee of Unsecured Creditors joins in the Debtor's responses to the Plan Confirmation Objections. The Creditors' Committee expressed concern that the Objecting Shareholders, who the Debtor has established are out of the money parties, now seek to derail confirmation of a Plan that provides significant value to creditors and was the result of extensive negotiations among the parties. In a separate court filing, the Debtor asks the Court to strike all references to NHB Advisors and its preliminary analysis from the objection of the Equity Group. "The Equity Group failed to offer NHB, its financial advisors, as a financial expert and failed to provide NHB's preliminary analysis for the Debtor's and the Bankruptcy Court's review. The Equity Group failed to provide any basis for the Bankruptcy Court to determine the admissibility and reliability of such preliminary analysis," Mr. Ivanick contends. The Creditors Committee also joins in the Debtor's assertions and arguments in relation to the NHB "preliminary analysis." About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMBAC FINANCIAL: Wis. High Ct. Dismisses Appeal From Rehab Plan --------------------------------------------------------------- The Supreme Court of Wisconsin affirmed the dismissal of the Internal Revenue Service's appeal from the Circuit Court for Dane County, Wisconsin's order confirming the Rehabilitation Plan of Ambac Assurance Corporation's Segregated Account. On Jan. 24, 2011, the Circuit Court entered the confirmation order on the Rehabilitation Plan, which contained a provision enjoining the Internal Revenue Service and other parties from pursuing claims against the Segregated Account and reserving exclusive jurisdiction over "any such actions, claims or lawsuits." The U.S. Government filed an appeal of the order because the IRS had made a tentative tax refund to Ambac of more than $700 million, with the understanding that the IRS is entitled to verify the basis for the refund and recover any amounts it determines were erroneously refunded. The U.S. Court of Appeals for the Seventh Circuit dismissed the IRS Appeal on jurisdictional grounds. The Seventh Circuit however did not decide on whether the IRS had waived its right to appeal issues by failing to appear in the Circuit Court. The IRS then petitioned the Supreme Court for review. "What is inescapable in reviewing the record in this case is the sense that the United States almost begrudgingly took steps 'to preserve its right to appeal' in only the most technical sense while, ironically, overlooking fundamental appellate principles establishing what parties must do to preserve that right: raise their issues in the circuit court in the first instance," the Supreme Court opined. The U.S. Government "chose to remain on the sidelines while the rehabilitation was proceeding in the circuit court and chose not to raise its objections until after the final order was entered," the Supreme Court concluded. The Supreme Court voted 6-0 to dismiss the appeal, according to a separate Bloomberg News report. A full-text copy of the Supreme Court's March 8 Ruling is available for free at: http://bankrupt.com/misc/Ambac_Mar8SupremeCourtRuling.pdf The case is In the Matter of the Rehab. of: Segregated Account of Ambac Assurance Corp., No. 2011AP987. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMERICAN AIRLINES: Wants Until June 26 to Decide on Leases ---------------------------------------------------------- AMR Corporation, American Airlines, Inc., and their debtor- affiliates ask Judge Sean Lane to extend to June 26, 2012, the period by which they may assume or reject their unexpired non- residential real property leases. The Debtors are parties to more than 600 unexpired leases, including certain airport terminal and aircraft maintenance facility leases. A schedule of the Unexpired Leases is available for free at http://bankrupt.com/misc/AmAir_UnexpiredLeases.pdf Section 365(d)(4)(A) of the Bankruptcy Code provides for an initial period of 120 days after the Petition Date during which a debtor may assume or reject unexpired leases of non-residential real property under which the debtor is the lessee. By virtue of their bankruptcy filing, the Debtors' initial period to assume or reject the Unexpired Leases will expire on March 28, 2012. Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in New York, asserts that cause exists to extend the Lease Decision Period. Given the size of the Debtors' operations and the complexity of these Chapter 11 cases, the Debtors must evaluate Unexpired Leases with hundreds of airports and other facilities while also, among other things, (i) actively considering whether to agree to perform all their obligations under the hundreds of aircraft equipment leases the Debtors are party to pursuant to section 1110 of the Bankruptcy Code, (ii) addressing issues with their labor unions, and (iii) continuing to operate one of the world's largest airlines, he stresses. The Debtors have not been able to devote the requisite time and effort necessary to carefully evaluate the economics of the Unexpired Leases in the perspective of the Chapter 11 cases to determine whether the assumption or rejection of each of the Unexpired Leases would inure to the benefit of their estates, their creditors, and other parties in interest, Mr. Youngman asserts. Moreover, the deemed rejection of the Unexpired Leases would abruptly displace the Debtors' ongoing restructuring efforts and greatly disrupt their global operations as many of the Unexpired Leases are for airport terminal and aircraft maintenance facilities that are crucial to the day-to-day operations of the Debtors' business, Mr. Youngman stresses. However, the Debtors are committed to remaining current with respect to all undisputed postpetition obligations under the Unexpired Leases in compliance with Section 365(d)(3) of the Bankruptcy Code, he says. Thus, the proposed extension does not adversely affect the Debtors' lessors with respect to the Unexpired Leases, he adds. Judge Lane will consider the Debtors' request on March 22, 2012. Objections are due no later than March 15. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Offers to Freeze Pension to Hasten Talks ----------------------------------------------------------- AMR Corp.'s American Airlines, Inc., said it would freeze -- not terminate -- pensions for its non-pilot employees to hasten talks towards $1.25 billion in labor concessions, Mary Schlangenstein of Bloomberg News reported. The Transport Workers Union announced on March 7, 2012, that it won a freeze of current pension plans for mechanics, baggage handlers and other airport ground operations workers. The union stated that AMR agreed to drop its demand for an additional $600 to $800 million in concessions, which the company claimed was the cost of a pension plan freeze. In this regard, AMR said it will seek additional capital to fund the frozen pensions without giving out details, Bloomberg noted. American has stressed the need to hasten the labor talks for it emerge from bankruptcy in the near term. Bloomberg noted, however, that the airline has made little progress in talks with its union since it unveiled its cost savings plan in February. Bloomberg also noted that labor concessions constitute a major part of the plan to cut costs by $2 billion a year and raise an additional $1 billion as AMR restructurings under Chapter 11. "We believe this solution would remove a major obstacle to reaching consensual agreements and help to spark needed urgency at the bargaining table," Jeff Brundage, American's senior vice president for human resources, said in a letter to employees obtained by Bloomberg. "It's time to move to the next phase in the restructuring process." Josh Gotbaum, director at the Pension Benefit Guaranty Corporation, welcomed AMR's pension plan freezes as good news. "Bankruptcy forces tough choices, but that doesn't mean pensions must be sacrificed for companies to succeed. We will continue to work with American and the other participants in the bankruptcy to ensure that success," the PBGC director said in a statement. TWU International President Jim Little said, "We would have preferred to keep the existing defined-benefit plan in place, but that simply was not possible." "We're still discussing how to handle retirement savings going forward, as well as a very wide range of other issues. We are not out of the woods." Bloomberg notes that freezing benefits would allow employees to keep full benefits accrued before the date they're stopped. Meanwhile, American intends to not freeze pilot pensions because of an existing lump-sum retirement payout option for pilots, Bloomberg related. The Allied Pilots Association already told members that its advisers had concluded it would not be possible to preserve the lump-sum payout option, the report noted. As a result, affected pilots will vote on whether to support freezing the "A Plan" and giving up that option, union President David Bates said, Bloomberg relayed. The Association of Professional Flight Attendants is also analyzing the freeze proposal's effect on its members. AMR's attorneys are scheduled to update the Bankruptcy Court regarding its progress on the labor concession talks at a March 22, 2012 hearing. Unions Seek Arbitration in Labor Talks American Airlines pilots, flight attendants, mechanics and baggage handlers asked U.S. mediators to make an offer of binding arbitration with respect to labor concession talks, according to Bloomberg. The unions' requests come as American said last week that time is running out for consensual accords at the carrier, Bloomberg noted. Mr. Bates of APA indicated that bargaining a consensual agreement may not prove to be possible. The APA sued AMR last month to block the carrier's rejecting an already expired collective bargaining agreement or changing the employment policies. Mr. Little of TWU said all efforts to reach voluntary agreements through direct negotiations were exhausted, Bloomberg said. AMR said it will wait for NMB before responding to the arbitration proposal, the Dallas News reported. The NMB declined to comment or confirm on whether it received requests for arbitration from American's unions, spokesperson Don West said, Bloomberg relayed. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Bid for Official Retiree Committee Wins Support ------------------------------------------------------------------ AMRRC Inc. and the Official Committee of Unsecured Creditors in AMR Corp.'s Chapter 11 cases support the request of the Ad Hoc Committee of Passenger Service Agents' request for an appointment of an official committee of retired employees pursuant to Section 1114(d) of the Bankruptcy Code. As reported in the Feb. 24, 2012 edition of the Troubled Company Reporter, the group says the appointment of retirees committee is necessary as the Debtors are now proposing to eliminate medical benefits for retirees who were promised that they would have their pre-funded medical benefits upon their retirement and who retired in reliance on that promise. Paul Mazzara, a retiree from American Airlines and chairman of the board of AMRRC, Inc., tells the Court that he works regularly with American Airlines retirees to try to assist them with benefits issues, including problems when American Airlines accidentally drops spouse medical coverage when a covered retiree reaches age 65. Mr. Mazzara says retirees from American Airlines rely on company provided health and related benefits for basic and critical health care and as a necessity for their budgeting and financial planning. Retirees, he added, need those benefits and need to have advanced warning before changes in those benefits that would adversely impact them. He said he, and the other members of the AMRRC board are, willing to serve on an 1114 Committee formed under an order of the bankruptcy court to represent the interests of retirees who are either not represented by a union or whose union declines to represent them under Section 1114 of the Bankruptcy Code. AMRRC is a non-profit corporation organized to advocate for the interests of American Airlines retirees, particularly with regard to their health, prescription drug, and related benefits protected under bankruptcy law. AMRRC is represented by: Neil A. Goteiner, Esq. Dean M. Gloster, Esq. FARELLA BRAUN + MARTEL LLP 235 Montgomery Street, 17th Floor San Francisco, CA 94104 Tel: (415) 954-4400 Fax: (415) 954-4480 E-mail: ngoteiner@fbm.com dgloster@fbm.com Meanwhile, the Official Unsecured Creditors Committee finds the request to form a Section 1114 Committee timely. The Creditors' Committee points to the Debtors' public statements that they are seeking to reduce total costs by 20% in each working group and will no longer provide employer-paid retiree benefits to active employees when they retire. Based on the Debtors' report to the Creditors' Committee, the retiree benefits at issue are not terminable at will, which suggests that Section 1114 is likely to be implicated, the Creditors' Committee says. The Creditors' Committee, however, seeks that only a single retiree committee be appointed to reduce costs and provide for a focused, efficient negotiation for any changes to the retirees' benefits. In a supplement, the Creditors' Committee proposes that the present scope of any Section 1114 Committee should be limited to the threshold issue -- examining whether the Debtors' Other Post-Employment Benefits for any group of their retirees have not yet vested or are otherwise terminable at will. The Debtors, on the other hand, oppose the requests of AMR Retirees Pension Protection Corporation and Ad Hoc Committee of Passenger Service Agents and an ad hoc group of passenger service agents to form committee of retirees under Section 1114(d) of the Bankruptcy Code. The Debtors relate that AMR is engaged in negotiations with the collective bargaining agents who represent substantially all of their non-salaried workforce. AMR has also not initiated any proceedings under Section 1113 of the Bankruptcy Code to reject any of the relevant collective bargaining agreements, the Debtors pointed out. At this juncture, it would be premature to appoint a retirees committee under Section 1114 for unionized employees or retirees, the Debtors argue. Similarly, the Debtors contend that it still premature to appoint a retiree committee for non-unionized retirees as AMR has not initiated any proceedings that deal with retiree benefits. U.S. Grey Eagles, Inc., d/b/a The Grey Eagles, Inc., also objected to the Groups' Motions for reasons stated by the Debtors. U.S. Grey Eagles is represented by: Catherine Steege, Esq. David H. Hixson, Esq. JENNER & BLOCK LLP 353 N. Clark St. Chicago, Illinois 60654 Tel: (312) 222-9350 E-mail: csteege@jenner.com dhixson@jenner.com - and - Patrick J. Trostle JENNER & BLOCK LLP 919 Third Avenue New York, NY 10022 Tel: (212) 891-1600 E-mail: ptrostle@jenner.com Counsel to the ARPPC, Joshua J. Angel, Esq., at Herrick, Feinstein LLP, in New York -- jangel@herrick.com -- argues that none of the responses challenged the core basis for the Sec. 1114 Motion, namely that the Debtors' announced plans to reduce their overall labor costs means that it is a certainty that they will look for substantial reductions -- or perhaps outright elimination of retiree benefits. He further contends that the argument that a committee cannot be appointed absent a pending motion to modify retiree benefits puts the cart before the horse. Under Section 1114(f)(1)(A), before a motion to modify retiree benefits can be made, the trustee must have already made a proposal to the authorized representative of retirees, he points out. He insists that ARPPC is a broadly-based group of AMR retirees with members from all or nearly all of the key employee functions of the Debtors. Thus, if appointed to a Retiree Committee, all of the prospective nominee of the ARPPC would be qualified and able to represent the full spectrum of interests of the Debtors' retirees, he maintains. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Has Court OK for Weil Gotshal as Bankr. Counsel ------------------------------------------------------------------ Judge Sean Lane approved, on a final basis, AMR Corp. and its affiliates' application to employ Weil, Gotshal & Manges LLP as their counsel, nunc pro tunc to the Petition Date. Weil will not withdraw as the Debtors' counsel prior to the effective date of any Chapter 11 Plan confirmed in these Chapter 11 cases without prior approval of the Court, Judge Lane held. As reported in the Jan. 18, 2012 edition of the Troubled Company Reporter, the services to be provided by the firm include the preparation of court papers in connection with the Debtors' bankruptcy plans and the administration of their estates. Weil Gotshal will also handle the prosecution and defense of lawsuits, and the negotiation of disputes involving the Debtors. Weil Gotshal will be paid for its services on an hourly basis and will get reimbursed for expenses. The firm's hourly rates range from $760 to $1,075 for members and counsel; $430 to $750 for associates; and $175 to $310 for paraprofessionals. The firm agreed to cap its hourly rate at $1,000 for the representation. Weil Gotshal received roughly $2.2 million as retainer, according to court papers. Alfredo Perez, Esq., a member of Weil Gotshal & Manges LLP, disclosed in a declaration that his firm does not hold or represent interest adverse to the Debtors' estates, and that it is a "disinterested person" under Section 101(14) of the Bankruptcy Code. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: American Eagle Files SAL and SOFA ---------------------------------------------------- A. Real Property $0 B. Personal Property B.1 Cash on hand Systemwide Station Petty Cash and Working Funds 73,552 B.2 Bank Accounts CIBC-Canadian Imperial Bank Commerce 1,008,197 Grupo Financiero Santander Serfin 76,629 Wells Fargo 0 B.3 Security Deposits with public utilities 1,057,866 See http://bankrupt.com/misc/AmEagleB3Deposits.pdf B.15 Government and corporate bonds Bank Notes and Time Deposits Undetermined B.16 Accounts receivable Intercompany Receivable - American Airlines, Inc. 300,483,184 Trade Receivable - Net 11,245,311 Long Term Notes Receivable 4,452,262 VAT 1,203,823 Insurance Receivable 925,752 Tax Receivable 729,552 Employee Receivable 649,793 B.18 Other liquidated debts Various Insurance Claims for Recovery of Property Damage 1,407,626 Property Tax on Aircraft and Personal Property 60,000 Sales Tax Paid on Fuel used in Exempt Equipment 18,342 B.23 Licenses, franchises and other general intangibles Various Stat Alcohol Licenses Undetermined B.27 Aircraft and accessories Flight Assemblies 67,920,701 Engines-owned 58,687,017 Flight Construction work-in-progress 36,886 B.28 Office equipment, furnishings, and supplies Software 5,731,880 Ground Construction work-in-progress 170,770 Furniture and Office Equipment 56,934 B.29 Machinery, fixtures, equipment and supplies Ramp Equipment-Motorized 6,670,756 Ground Equipment 1,739,344 M&E Equipment 955,971 Ramp Equipment-Nonmotorized 332,750 Ground Vehicles/Equipment 337,584 Flight Training Equipment 202,593 B.30 Inventory Expendable and Rotable Parts, Net 43,703,909 Obsolescence Reserve Spare Parts (24,735,240) Expendable Parts under Contract 11,443,891 Jet Aircraft Fuel 5,650,568 Clearing for AA/PAA Swap 1,349,625 Catering Inventory 703,209 Uniforms Inventory 282,686 B.35 Other personal property Intercompany - Deferred Federal Tax Adjustment 11,645,624 Leasehold Improvements 1,291,611 Non-Operating Aircraft Net 8,141,192 Prepaid Jetfuel 10,850,216 Prepaid Operating Expenses 1,003,031 Prepaid Rentals 856,068 Spare Parts Credit Memo 389,563 TOTAL SCHEDULED ASSETS $538,811,040 =========================================================== C. Property Claimed as Exempt N/A D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims Taxes and Certain Other Debts Owed to Governmental Units 2,277,432 See http://bankrupt.com/misc/AmEagleE1Taxes.pdf F. Creditors Holding Unsecured Nonpriority Claims Trade Payables 35,582,175 See http://bankrupt.com/misc/AmEagleF1TradePayables.pdf Insurance Undetermined See http://bankrupt.com/misc/AmEagleF2Insurance.pdf Litigation Undetermined See http://bankrupt.com/misc/AmEagleF3Litigation.pdf Other Payables Undetermined See http://bankrupt.com/misc/AmEagleF4OtherPayables.pdf TOTAL SCHEDULED LIABILITIES $37,859,608 =========================================================== Statement of Financial Affairs American Eagle Airlines reported income from the operation of its business, mainly from passenger/freight/mail/operating revenue, during the two years immediately preceding the Petition Date: Income Period ------ ------ $2,115,577,435 YTD 11/29/11 $1,992,180,560 FYE 2010 $1,845,822,849 FYE 2009 American Eagle also received income other than from the operation of its business, specifically from interest income, during the two years immediately preceding the Petition Date: Income Period ------ ------ $2,318,132 YTD 11/29/11 $2,064,781 FYE 2010 $93,853,953 FYE 2009 James B. Burnett, authorized agent for American Eagle, stated that the Debtor made payments to various creditors within 90 days immediately before the Petition Date. A schedule of the 90-day payments is available for free at: http://bankrupt.com/misc/AmEagleSofA3b.pdf The Debtor also made payments within one year immediately preceding the Petition Date to or for the benefit of creditors who are or were insiders, as set forth in American Airlines, Inc.'s statement of financial affairs. A schedule of the payments is available for free at: http://bankrupt.com/misc/AmAirSofA3c.pdf The Debtor is party to various lawsuits and administrative proceedings within a year immediately preceding the Petition Date. A schedule of the lawsuits is available for free at: http://bankrupt.com/misc/AmEagleSofA4a.pdf In the ordinary course of business, AMR Corp. and certain of its subsidiaries may return goods received to the seller in exchange for a refund or credit. Likewise, AMR and certain of its subsidiaries may place various aircraft parts or other assets with custodians in the ordinary course of business. John T. Hutchinson is the Debtor's bookkeeper and accountant who within the two years immediately preceding the Petition Date kept or supervised the keeping of books and records. Mr. Hutchinson works as the Debtor's bookkeeper from January 2006 to present. Ernst & Young is the Debtor's auditor within two years preceding the Petition Date. The Debtor's books of account and records are in possession of Mr. Hutchinson. Mr. Burnett disclosed that the last two inventories taken of the Debtor's property, the name of the person who supervised the inventories, and the value of each inventory are: Date of Inventory Value of Inventory Supervisor Inventory --------- ---------- --------- Ongoing (Expendables John D. Nicks $57,483,320 and Rotables) Ongoing (Jet Fuel) John D. Nicks $5,650,568 Each Inventory Supervisors is in possession of the records of the inventory he has taken. These officers own, control or hold 5% or more of the voting or equity securities of the Debtor: Nature and % Name Title of Stock ownership ---- ----- ------------------ AMR Eagle Holding 100% Ownership Corporation Thomas W. Horton Director and Chairman N/A of the Board Daniel P. Garton Director, President, and N/A Chief Executive Officer Fred E. Cleveland Senior Vice President N/A John T. Hutchinson Senior Vice President and N/A Chief Financial Officer Kathleen A. Soled Corporate Secretary N/A Kenneth W. Wimberly Director N/A The Debtor's former officers are: Name Title ---- ----- G. George Hazy Senior Vice President Gerard J. Arpey Director and Chairman of the Board The Debtor also incorporated American Airlines, Inc.'s list of withdrawals or distributions credited or given to an insider, including compensation in any form, bonuses, loans, stock redemptions, options exercised and any other perquisite during one year immediately preceding the Petition Date. The list is available for free at http://bankrupt.com/misc/AmAirSofA23.pdf The Debtor has been contributing to American Eagle 401(k) Capital Accumulation Plan for Employees of Participating AMR Eagle Holding Corporation Subsidiaries and American Eagle Puerto Rico Capital Accumulation Plan for Employees of Participating AMR Eagle Holding Corporation Subsidiaries, within six years immediately before the Petition Date. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN APPAREL: Deregisters Unsold Securities ----------------------------------------------- American Apparel, Inc., filed with the U.S. Securities and Exchange Commission a Post-Effective Amendment No. 1 to the Registration Statement on Form S-1 (File No. 333-176547), which was declared effective by the SEC on Dec. 5, 2011, to deregister all unsold shares of outstanding common stock registered under the Registration Statement as of March 12, 2012, and to terminate the effectiveness of the Registration Statement, because the Company is no longer contractually obligated to maintain the effectiveness of that Registration Statement. A copy of the filing is available for free at http://is.gd/fGEn5w About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price Going Concern Doubt Marcum LLP, in New York, in its audit report on American Apparel's financial statements for the year ended Dec. 31, 2010, expressed substantial doubt about the Company's ability to continue as a going concern. The Company also reported a net loss of $28.15 million on $389.76 million of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $67.01 million on $389.02 million of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $323.64 million in total assets, $267.51 million in total liabilities and $56.12 million in total stockholders' equity. Bankruptcy Warning According to the Form 10-Q for the quarter ended Sept. 30, 2011, the Company incurred a loss from operations of $20,942 for the nine months ended Sept. 30, 2011, compared to a loss from operations of $38,167 for the nine months ended Sept. 30, 2010. The current operating plan indicates that losses from operations will be incurred for all of fiscal 2011. Consequently, the Company may not have sufficient liquidity necessary to sustain operations for the next twelve months and this raises substantial doubt that the Company will be able to continue as a going concern. The Company said there can be no assurance that management's plan to improve its operating performance and financial position will be successful or that the Company will be able to obtain additional financing on commercially reasonable terms or at all. As a result, the Company's liquidity and ability to timely pay its obligations when due could be adversely affected. Any new financing also may be substantially dilutive to existing stockholders and may require reductions in exercise prices or other adjustments of the Company's existing warrants. Furthermore, the Company's vendors and landlords may resist renegotiation or lengthening of payment and other terms through legal action or otherwise. If the Company is not able to timely, successfully or efficiently implement the strategies that it is pursuing to improve its operating performance and financial position, obtain alternative sources of capital or otherwise meet its liquidity needs, the Company may need to voluntarily seek protection under Chapter 11 of the U.S. Bankruptcy Code. AMERICAN INT'L GROUP: Former Bailout Watchdogs Condemn Tax Break ---------------------------------------------------------------- American Bankruptcy Institute reports that former members of a congressional panel that oversaw bailouts during the financial crisis blasted the Treasury Department Monday for quietly granting a tax break worth billions to insurance giant American International Group. About AIG American International Group, Inc. -- http://www.aig.com/-- is an international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services around the world. AIG common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. At the height of the 2008 financial crisis, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. AIG almost collapsed under the weight of bad bets it made insuring mortgage-backed securities. The Company, however, was bailed out by the Federal Reserve, but even after an initial infusion of $85 billion, losses continued to grow. The later rescue packages brought the total to $182 billion, making it the biggest federal bailout in U.S. history. AIG sold off a number of its businesses and other assets to pay down loans received from the U.S. government. ATLANTIC & PACIFIC: Plan Declared Effective; Two Creditors Appeal ----------------------------------------------------------------- Great Atlantic & Pacific Tea Co. formally emerged from the bankruptcy reorganization March 13. U.S. Bankruptcy Judge Robert D. Drain on Feb. 27 entered an order confirming the First Amended Joint Plan of Reorganization dated Feb. 17, 2012, of The Great Atlantic & Pacific Tea Co. The plan was approved despite objections filed by several parties. The Plan provides for, among other things, a $490 million in financing from Yucaipa Cos., cancellation of existing equity interests and zero recovery for shareholders. Yucaipa's Ron Burkle will be chairman of the reorganized entity. The prior iteration of the plan allocated $40 million cash for unsecured creditors and targeted a 2.1% to 2.7% recovery by unsecured creditors. But after the debtors failed to obtain $750 million in plan financing, the Debtors were forced to amend the Plan. Under the revised plan, 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. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Food Employers Labor Relations Association and the United Food & Commercial Workers Pension Fund appealed from the confirmation order on March 12. The appeal by itself didn't stop consummation of the plan. Often, consummating a plan means an appeal will be dismissed, if an appellate court can't grant effective relief. 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 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. The Bankruptcy Court entered an order Feb. 27, 2012, confirming the First Amended Joint Plan of Reorganization filed Feb. 17, 2012. The Plan provides for, among other things, a $490 million in financing from Yucaipa Cos., cancellation of existing equity interests and zero recovery for shareholders. ATLANTIS OF JACKSONVILLE: Case Summary & Creditors List ------------------------------------------------------- Debtor: The Atlantis of Jacksonville Beach, Inc. P.O. Box 330108 Atlantic Beach, FL 32233-0108 Bankruptcy Case No.: 12-01553 Chapter 11 Petition Date: March 9, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Bryan K. Mickler, Esq. LAW OFFICES OF MICKLER & MICKLER 5452 Arlington Expressway Jacksonville, FL 32211 Tel: (904) 725-0822 Fax: (904) 725-0855 E-mail: court@planlaw.com Scheduled Assets: $10,000,000 Scheduled Liabilities: $6,592,590 The Company's list of its five largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-01553.pdf The petition was signed by Chris Hionides, president. Affiliate that previously filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Shoppes of Lakeside 10-05199 06/15/10 AVIS BUDGET: Moody's Assigns Ratings to Series 2012-1 Notes ----------------------------------------------------------- Moody's Investors Service has assigned provisional ratings of (P)Aaa(sf) to the Series 2012-1 Class A fixed rate Rental Car Asset Backed Notes (Class A Notes) and (P)Baa2(sf) to the Series 2012-1 Class B fixed rate Rental Car Asset Backed Notes (Class B Notes and, together with the Class A Notes, the Series 2012-1 Notes). The Series 2012-1 Notes, which have approximately a 41 month expected final maturity, are expected to be issued by Avis Budget Rental Car Funding (AESOP) LLC (the Issuer). The Issuer is an indirect subsidiary of the sponsor, Avis Budget Car Rental, LLC (ABCR). ABCR is a subsidiary of Avis Budget Group, Inc. (B1 corporate family rating/stable outlook). ABCR is the owner and operator of Avis Rent A Car System, LLC (Avis) and Budget Rent A Car System, Inc. (Budget). As described in a separate press release, the Issuer is also planning to contemporaneously issue its Series 2012-2 Notes with a 62 month expected final maturity. Issuer: Avis Budget Rental Car Funding (AESOP) LLC, Series 2012-1 Series 2012-1 Class A Notes, Assigned (P)Aaa(sf) Series 2012-1 Class B Notes, Assigned (P)Baa2(sf) Ratings Rationale As further described below, the provisional ratings for the Series 2012-1 Notes are based on (1) collateral in the form of rental fleet vehicles, (2) the presence of ABCR as lessee under operating leases, (3) minimum liquidity in the form of cash or letters of credit, (4) the legal structure, (5) the capabilities and the expertise of ABCR, (6) and in the case of the Class A Notes, subordination provided by the Class B Notes. The total enhancement requirement for the Series 2012-1 Notes is dynamic and is determined as the sum of (1) 25.00% for vehicles subject to a guaranteed depreciation or repurchase program from eligible manufacturers (program vehicles) rated at least Baa2 (unlimited) or Baa3 (subject to a limit of 10% of the total securitized fleet by net book value); (2) 29.00% for all other program vehicles; and (3) 33.00% for non-program (risk) vehicles; in each case, as a percentage of the outstanding note balance. Consequently, the actual required amount of credit enhancement fluctuates based on the mix of vehicles in the securitized fleet. As in prior transactions the required total enhancement must include a minimum portion which is liquid (in cash and/or letter of credit), sized as a percentage of the outstanding note balance, rather than fleet vehicles. The Class A Notes also benefit from subordination provided by the Class B Notes representing 13% of the outstanding Series 2012-1 Note balance. The transaction allocates cash flows sequentially: (1) interest payments to the subordinate Class B Notes only once all interest due on the Class A Notes is fully paid and (2) if no amortization event occurs and is continuing, principal payments to the subordinate Class B Notes after the Class A Notes are paid in accordance with their scheduled controlled amortization. The Series 2012-1 Notes are to be sold in a privately negotiated transaction without registration under the Securities Act of 1933 (the Act) under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance is expected to be designed to permit resale under Rule 144A. The principal methodology used in rating the notes is described below. Other methodologies that may have been used can be found at www.moodys.com KEY FACTORS IN RATING ANALYSIS The key factors in Moody's rating analysis include (1) the probability of default by ABCR, as lessee, (2) the likelihood of a bankruptcy or default by the auto manufacturers providing vehicles to the rental car fleet owned by the Lessors, and (3) the recovery rate on the rental car fleet in the event that ABCR defaults. Monte Carlo simulation modeling was used to assess the impact on bondholders of these variables. Moody's ratings analysis makes assumptions about key factors, such as (1) the likelihood of default of ABCR (and the vehicle manufacturers who provide program agreements), (2) the composition of the pool's vehicle mix over time and (3) the realizable value of the portion of the fleet backing the ABS should fleet liquidation be necessary. Data is unavailable on vehicle values in a large scale stressed liquidation. To address this variability, Moody's makes assumptions it believes to be conservative about appropriate recovery value haircuts. Consequently, the rating action was based on limited historical data. V-SCORE AND LOSS SENSITIVITY Moody's V Score. The V Score for this transaction is Medium, which is the same as the V score assigned for the U.S. Rental Car ABS sector. The V Score indicates "Medium" uncertainty about critical assumptions. Moody's V Scores provide a relative assessment of the quality of available credit information and the potential variability around the various inputs to a rating determination. The V Score ranks transactions by the potential for significant rating changes owing to uncertainty around the assumptions due to data quality, historical performance, the level of disclosure, transaction complexity, the modeling and the transaction governance that underlie the ratings. V Scores apply to the entire transaction (rather than individual tranches). Moody's Parameter Sensitivities. For this exercise, Moody's analyzed stress scenarios assessing the potential model-indicated output impact if (a) the current B1 corporate family rating (CFR) of ABCR's parent was to immediately decline to B3, Caa1, Caa2 and Caa3 and (b) the assumed modeled haircuts to estimated depreciated vehicle market values were increased by 5%, 10% and 15%. Haircuts are expressed as a percentage of the estimated depreciated market value of the vehicle collateral. Moody's models potential vehicle collateral liquidation value by estimating depreciated market value and then applying haircuts and Moody's uses triangular distributions for those haircuts. The stresses increase the base case triangular distribution haircuts by the following percentage points: 5%, 10% and 15%. For example, if one of the triangular distribution haircuts in the base case is (5%, 15%, 30%), and this is increased by 5% points, then the resulting stressed haircut would be a triangular distribution of (10%, 20%, 35%). Using such assumptions, the Aaa initial model-indicated output for the Class A Notes might change as follows: (a) with ABCR's parent's CFR at B1, the Aaa initial note output would remain Aaa under both the base recovery and 5% increase in market value haircut assumptions but change to Aa2 and A1 with each lower recovery assumption; (b) with ABCR's parent's CFR at B3, the Aaa initial note output would remain Aaa under the base recovery but change to Aa1, Aa2 and A2 with each lower recovery assumption; (c) with ABCR's parent's CFR at Caa1, the Aaa initial note output would remain Aaa under the base recovery but change to Aa1, Aa2 and A3 with each lower recovery assumption; (d) with ABCR's parent's CFR at Caa2, the Aaa initial note output would remain Aaa under the base recovery but change to Aa1, Aa3 and Baa1 with each lower recovery assumption; (e) with ABCR's parent's CFR at Caa3, the Aaa initial note output would remain Aaa under the base recovery but change to Aa1, Aa3 and Baa2 with each lower recovery assumption Also using the above assumptions, the Baa2 initial model-indicated output for the Class B Notes might change as follows: (a) with ABCR's parent's CFR at B1, the Baa2 initial note output would remain at Baa2 using the base recovery assumption but change to Ba1, B2 and below B3 with each lower recovery assumption; (b) with ABCR's parent's CFR at B3, the Baa2 initial note output would remain at Baa2 using the base recovery assumption but change to Ba2, below B3 and below B3 with each lower recovery assumption; (c) with ABCR's parent's CFR at Caa1, the Baa2 initial note output would change to Baa3 using the base recovery assumption and change to Ba3, below B3 and below B3 with each lower recovery assumption; (d) with ABCR's parent's CFR at Caa2, the Baa2 initial note output would change to Baa3 using the base recovery assumption and change to B2, below B3 and below B3 with each lower recovery assumption; (e) with ABCR's parent's CFR at Caa3, the Baa2 initial note output would change to Ba1 using the base recovery assumption and change to B3, below B3 and below B3 with each lower recovery assumption. Parameter Sensitivities are not intended to measure how the rating of the security might migrate over time, rather they are designed to provide a quantitative calculation of how the initial rating might change if key input parameters used in the initial rating process differed. The analysis assumes that the deal has not aged. Parameter Sensitivities only reflect the ratings impact of each scenario from a quantitative/model-indicated standpoint. Qualitative factors are also taken into consideration in the ratings process, so the actual ratings that would be assigned in each case could vary from the information presented in the Parameter Sensitivity analysis. AVIS BUDGET: Moody's Assigns Ratings to Series 2012-2 Notes ----------------------------------------------------------- Moody's Investors Service has assigned provisional ratings of (P)Aaa(sf) to the Series 2012-2 Class A fixed rate Rental Car Asset Backed Notes (Class A Notes) and (P)Baa2(sf) to the Series 2012-2 Class B fixed rate Rental Car Asset Backed Notes (Class B Notes and, together with the Class A Notes, the Series 2012-2 Notes). The Series 2012-2 Notes, which have approximately a 62 month expected final maturity, are expected to be issued by Avis Budget Rental Car Funding (AESOP) LLC (the Issuer). The Issuer is an indirect subsidiary of the sponsor, Avis Budget Car Rental, LLC (ABCR). ABCR is a subsidiary of Avis Budget Group, Inc. (B1 corporate family rating/stable outlook). ABCR is the owner and operator of Avis Rent A Car System, LLC (Avis) and Budget Rent A Car System, Inc. (Budget). As described in a separate press release, the Issuer is also planning to contemporaneously issue its Series 2012-1 Notes with a 41 month expected final maturity. Issuer: Avis Budget Rental Car Funding (AESOP) LLC, Series 2012-2 Series 2012-2 Class A Notes, Assigned (P)Aaa(sf) Series 2012-2 Class B Notes, Assigned (P)Baa2(sf) Ratings Rationale As further described below, the provisional ratings for the Series 2012-2 Notes are based on (1) collateral in the form of rental fleet vehicles, (2) the presence of ABCR as lessee under operating leases, (3) minimum liquidity in the form of cash or letters of credit, (4) the legal structure, (5) the capabilities and the expertise of ABCR, (6) and in the case of the Class A Notes, subordination provided by the Class B Notes. The total enhancement requirement for the Series 2012-2 Notes is dynamic and is determined as the sum of (1) 25.00% for vehicles subject to a guaranteed depreciation or repurchase program from eligible manufacturers (program vehicles) rated at least Baa2 (unlimited) or Baa3 (subject to a limit of 10% of the total securitized fleet by net book value); (2) 30.25% for all other program vehicles; and (3) 34.00% for non-program (risk) vehicles; in each case, as a percentage of the outstanding note balance. Consequently, the actual required amount of credit enhancement fluctuates based on the mix of vehicles in the securitized fleet. As in prior transactions the required total enhancement must include a minimum portion which is liquid (in cash and/or letter of credit), sized as a percentage of the outstanding note balance, rather than fleet vehicles. The Class A Notes also benefit from subordination provided by the Class B Notes representing 13% of the outstanding Series 2012-2 Note balance. The transaction allocates cash flows sequentially: (1) interest payments to the subordinate Class B Notes only once all interest due on the Class A Notes is fully paid and (2) if no amortization event occurs and is continuing, principal payments to the subordinate Class B Notes after the Class A Notes are paid in accordance with their scheduled controlled amortization. The Series 2012-2 Notes are to be sold in a privately negotiated transaction without registration under the Securities Act of 1933 (the Act) under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance is expected to be designed to permit resale under Rule 144A. The principal methodology used in rating the notes is described below. Other methodologies that may have been used can be found at www.moodys.com KEY FACTORS IN RATING ANALYSIS The key factors in Moody's rating analysis include (1) the probability of default by ABCR, as lessee, (2) the likelihood of a bankruptcy or default by the auto manufacturers providing vehicles to the rental car fleet owned by the Lessors, and (3) the recovery rate on the rental car fleet in the event that ABCR defaults. Monte Carlo simulation modeling was used to assess the impact on bondholders of these variables. Moody's ratings analysis makes assumptions about key factors, such as (1) the likelihood of default of ABCR (and the vehicle manufacturers who provide program agreements), (2) the composition of the pool's vehicle mix over time and (3) the realizable value of the portion of the fleet backing the ABS should fleet liquidation be necessary. Data is unavailable on vehicle values in a large scale stressed liquidation. To address this variability, Moody's make assumptions it believes to be conservative about appropriate recovery value haircuts. Consequently, the rating action was based on limited historical data. V-SCORE AND LOSS SENSITIVITY Moody's V Score. The V Score for this transaction is Medium, which is the same as the V score assigned for the U.S. Rental Car ABS sector. The V Score indicates "Medium" uncertainty about critical assumptions. Moody's V Scores provide a relative assessment of the quality of available credit information and the potential variability around the various inputs to a rating determination. The V Score ranks transactions by the potential for significant rating changes owing to uncertainty around the assumptions due to data quality, historical performance, the level of disclosure, transaction complexity, the modeling and the transaction governance that underlie the ratings. V Scores apply to the entire transaction (rather than individual tranches). Moody's Parameter Sensitivities. For this exercise, Moody's analyzed stress scenarios assessing the potential model-indicated output impact if (a) the current B1 corporate family rating (CFR) of ABCR's parent was to immediately decline to B3, Caa1, Caa2 and Caa3 and (b) the assumed modeled haircuts to estimated depreciated vehicle market values were increased by 5%, 10% and 15%. Haircuts are expressed as a percentage of the estimated depreciated market value of the vehicle collateral. Moody's models potential vehicle collateral liquidation value by estimating depreciated market value and then applying haircuts and Moody's uses triangular distributions for those haircuts. The stresses increase the base case triangular distribution haircuts by the following percentage points: 5%, 10% and 15%. For example, if one of the triangular distribution haircuts in the base case is (5%, 15%, 30%), and this is increased by 5% points, then the resulting stressed haircut would be a triangular distribution of (10%, 20%, 35%). Using such assumptions, the Aaa initial model-indicated output for the Class A Notes might change as follows: (a) with ABCR's parent's CFR at B1, the Aaa initial note output would remain Aaa under the base recovery but change to Aa1, Aa2 and A1 with each lower recovery assumption; (b) with ABCR's parent's CFR at B3, the Aaa initial note output would remain Aaa under the base recovery but change to Aa1, Aa2 and A2 with each lower recovery assumption; (c) with ABCR's parent's CFR at Caa1, the Aaa initial note output would remain Aaa under the base recovery but change to Aa1, Aa3 and A3 with each lower recovery assumption; (d) with ABCR's parent's CFR at Caa2, the Aaa initial note output would remain Aaa under the base recovery but change to Aa1, Aa3 and Baa1 with each lower recovery assumption; (e) with ABCR's parent's CFR at Caa3, the Aaa initial note output would remain Aaa under the base recovery but change to Aa1, Aa3 and Baa2 with each lower recovery assumption Also using the above assumptions, the Baa2 initial model-indicated output for the Class B Notes might change as follows: (a) with ABCR's parent's CFR at B1, the Baa2 initial note output would remain at Baa2 using the base recovery assumption but change to Ba1, B2 and below B3 with each lower recovery assumption; (b) with ABCR's parent's CFR at B3, the Baa2 initial note output would change to Baa2 using the base recovery assumption and change to Ba2, below B3 and below B3 with each lower recovery assumption; (c) with ABCR's parent's CFR at Caa1, the Baa2 initial note output would change to Baa3 using the base recovery assumption and change to Ba3, below B3 and below B3 with each lower recovery assumption; (d) with ABCR's parent's CFR at Caa2, the Baa2 initial note output would change to Baa3 using the base recovery assumption and change to B1, below B3 and below B3 with each lower recovery assumption; (e) with ABCR's parent's CFR at Caa3, the Baa2 initial note output would change to Ba1 using the base recovery assumption and change to B3, below B3 and below B3 with each lower recovery assumption. Parameter Sensitivities are not intended to measure how the rating of the security might migrate over time, rather they are designed to provide a quantitative calculation of how the initial rating might change if key input parameters used in the initial rating process differed. The analysis assumes that the deal has not aged. Parameter Sensitivities only reflect the ratings impact of each scenario from a quantitative/model-indicated standpoint. Qualitative factors are also taken into consideration in the ratings process, so the actual ratings that would be assigned in each case could vary from the information presented in the Parameter Sensitivity analysis. AVISTAR COMMUNICATIONS: C. Lauwers to Resign as Product Officer --------------------------------------------------------------- Dr. Chris Lauwers notified Avistar Communications Corporation, that he would resign as the Company's Chief Technology and Product Officer, effective as of March 23, 2012. About Avistar Communications Headquartered in San Mateo, California, Avistar Communications Corporation (Nasdaq: AVSR) -- http://www.avistar.com/-- holds a portfolio of 80 patents for inventions in video and network technology and licenses IP to videoconferencing, rich-media services, public networking and related industries. Current licensees include Sony Corporation, Sony Computer Entertainment Inc. (SCEI), Polycom Inc., Tandberg ASA, Radvision Ltd. and Emblaze-VCON. The Company also reported a net loss of $4.11 million on $6.78 million of total revenue for the nine months ended Sept. 30, 2011, compared with net income of $6.32 million on $18.03 million of total revenue for the same period a year ago. The Company reported a net loss of $6.42 million on $7.95 million of revenue for the twelve months ended Dec. 31, 2011, compared with net income of $4.45 million on $19.65 million of total revenue during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $5.16 million in total assets, $18.10 million in total liabilities and a $12.93 million total stockholders' deficit. BANNING LEWIS: Devt. I & II Chapter 11 Case Dismissed ----------------------------------------------------- The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware has issued a preliminary order dismissing the Chapter 11 case of Banning Lewis Ranch Development I & II, LLC. The Chapter 11 case will remain open pending resolution of professional fee applications. The Court will schedule a hearing on March 26, 2012, at 2:00 p.m. to consider final fee applications of professionals as they relate to Banning Lewis Ranch Development I & II, LLC. About Banning Lewis The Banning Lewis Ranch Co. is the owner of the undeveloped portion of a 21,000-acre ranch in Colorado Springs, Colo. The Banning Lewis Ranch is a master-planned community in Colorado Springs, Colorado. The first section built, the 350-acre Northtree Village, opened in September 2007 and will have 1,000 homes priced from the high $100,000s to the mid-$300,000s. The Banning Lewis Ranch filed for Chapter 11 bankruptcy protection from creditors (Bankr. D. Del. Case No. 10-13445) on Oct. 28, 2010. It estimated assets of $50 million to $100 million and debts of $100 million to $500 million in its Chapter 11 petition. An affiliate, The Banning Lewis Ranch Development I & II, LLC, also filed for Chapter 11 (Bankr. D. Del. Case No. 10-13446). Kevin Scott Mann, Esq., at Cross & Simon, LLC, serves as counsel to the Debtors. Edward A. Phillips of Eisner Amper LLP has been retained as the Company's chief restructuring officer. The Devco assets, or the northern portion, drew at a bankruptcy auction a high bid of $24.5 million from KeyBank NA as agent for lenders who will pay by swapping secured debt for ownership. The southern portion of the project, brought in a high bid of $26.25 million from Ultra Resources Inc. BERNARD L. MADOFF: Mets Seek to Bar Phrase "Other Peoples' Money" ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee for Bernard L. Madoff Investment Securities Inc. along with Fred Wilpon and other owners of the New York Mets baseball club filed more than 30 papers asking U.S. District Judge Jed Rakoff either to permit or disallow specified pieces of evidence at the trial to begin March 19 in which the trustee will ask a jury to require the return of $303 million by the Wilpon group. The report relates that among the disputes, the Wilpon group wants Judge Rakoff to bar the trustee from saying that the money taken out of the Madoff firm represented "other peoples' money." The Wilpon suit in district court is Picard v. Katz, 11-03605, U.S. District Court, Southern District of New York (Manhattan). 30 Witnesses Lined Up Mr. Rochelle, in a separate report, says the Madoff trustee, and the Mets owners filed a pretrial order listing the witnesses, agreed facts and contentions they will make at the jury trial scheduled to begin March 19 in U.S. District Court in New York. According to the report, the trial will decide whether the Wilpon group must pay the Madoff trustee $303 million on top of $83 million the federal district judge already is requiring them to give up. The report relates that the Madoff trustee plans on calling 18 witnesses while the Wilpon group has 12 on its witness list. In addition to Fred Wilpon, the Mets owners will call Hall of Fame pitcher Sandy Koufax and former Manhattan District Attorney Robert Morgenthau as witnesses. 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: Trustee Opposes Top Court Hearing on Claims -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee for Bernard L. Madoff Investment Securities Inc. said in court papers that the U.S. Supreme Court has no reason to accept an appeal of a circuit court opinion deciding how to calculate customer claims in a brokerage liquidation. The report recounts that the U.S. Court of Appeals for the Second Circuit ruled in August that Madoff customer claims must equal the amount of cash invested less the amount taken out. Dozens of customers filed a petition for certiorari in the Supreme Court. According to the report, in briefs filed March 9, the Madoff trustee and the Securities Investor Protection Corp. told the justices there is no important unsettled question of federal law that that should undergo another appeal. Irving Picard, the trustee, argues that the approved calculation method is proper under the plain meaning of the statute, which says that customers' claims are to be determined "insofar as such obligations are ascertainable from the books and records." The Wilpon appeal to the Supreme Court is Sterling Equities Associates v. Picard, 11-968, U.S. Supreme Court. 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. BEYOND OBLIVION: William Sword-Led Auction on March 20 ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Beyond Oblivion Inc. decided that an affiliate of William Sword & Co. will make the first bid at auction scheduled for March 20. Sword is offering $1.5 million in cash and a $1.5 million note with 6% interest payable in one year. Beyond Oblivion's investment banker values the note at $900,000. Sword had been an investment adviser for Beyond Oblivion before the bankruptcy filing. Other bids are due initially on March 15. A hearing to approve the sale is set for March 26. About Beyond Oblivion Beyond Oblivion Inc. is a digital music startup that raised $87 million from investors like Rupert Murdoch's News Corp and investment bank Alle & Co. director Snaley Shuman. Beyond Oblivion aimed to compete with Apple Inc.'s iTunes but its music service never saw the light of day. Beyond Oblivion Inc. filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 12-10282) on Jan. 24, 2012, estimating assets of between $1 million and $10 million, and debts of between $100 million to $500 million. The Company owes $50 million each to Sony Music Entertainment and Warner Music Group in unsecured 'trade debt.' Gerard Sylvester Catalanello, Esq., at Duane Morris LLP, in New York, serves as counsel. BGA LLC: Case Summary & 4 Largest Unsecured Creditors ----------------------------------------------------- Debtor: BGA LLC 500 Skokie Boulevard, Suite 325 Northbrook, IL 60062 Bankruptcy Case No.: 12-09277 Chapter 11 Petition Date: March 9, 2012 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Susan Pierson Sonderby Debtor's Counsel: William J Factor, Esq. THE LAW OFFICE OF WILLIAM J. FACTOR, LTD 1363 Shermer Road, Suite 224 Northbrook, IL 60062 Tel: (847) 239-7248 Fax: (847) 574-8233 E-mail: wfactor@wfactorlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ilnb12-09277.pdf The petition was signed by Bernard Wiczer, manager. CAESARS ENTERTAINMENT: S&P Retains 'B' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its issue-level and recovery ratings to Las Vegas-based Caesars Entertainment Operating Co. Inc.'s (CEOC), a wholly owned subsidiary of Caesars Entertainment Corp., extended first-lien senior secured $1.86 billion B-6 term loan due Jan. 28, 2018 and $25 million extended revolver due Jan. 28, 2017. "At the same time, we assigned issue- level and recovery ratings to the $1.25 billion 8.5% senior secured notes (first-lien) offering issued jointly by Caesars Operating Escrow LLC and Caesars Escrow Corp. (the escrow issuers) and then subsequently assumed by CEOC. We assigned the term loan, revolver, and notes our 'B' issue-level rating (one notch higher than our 'B-' corporate credit rating on the company) and our recovery rating of '2' indicating our expectation for substantial (70%-90%) recovery for lenders in the event of a payment default. CEOC used nearly $1.1 billion of the net proceeds of the 8.5% notes to repay a portion of its term loans," S&P said. "Our rating assignment follows the closing of all the transactions and our review of final documentation," S&P said. "Our 'B-' corporate credit rating on CEOC and its parent company, Caesars Entertainment Corp. (Caesars) remains unchanged. The rating outlook is stable," S&P said. "Our 'B-' corporate credit rating on Las Vegas-based Caesars Entertainment Corp. reflects our assessment of the company's financial risk profile as 'highly leveraged' and our assessment of the company's business risk profile as 'satisfactory,' according to our criteria," S&P said. "Our assessment of Caesars' financial risk profile as 'highly leveraged' reflects its very weak credit measures and our belief that prospects for meaningful growth in net revenue and EBITDA in 2012 or 2013 do not seem promising, given the current economic outlook and competitive dynamics in the company's key markets," said Standard & Poor's credit analyst Melissa Long. "Our rating outlook on Caesars is stable, reflecting our expectation that EBITDA will grow modestly in 2012 and 2013, which, despite very weak credit measures, should allow the company to continue meeting debt service obligations and maintain an adequate cushion under its financial covenant. In addition, the stable rating outlook reflects minimal debt maturities over the next several years," S&P said. "A revision of the rating outlook to negative or a downgrade could result without at least modest growth over the next few quarters and an expectation for positive operating momentum to continue to build in 2013: Caesars could otherwise be challenged to meet fixed charges while servicing its current capital structure and might again seek to restructure its debt obligations. Given very weak credit measures and limited capacity for debt repayment, an upgrade seems unlikely over the next few years and would require sustained meaningful growth in cash flow generation," S&P said. CAMARILLO PLAZA: Owner Closes LazerTag, Mulls Sale for $150,000 --------------------------------------------------------------- David Yamamoto at Ventura Star reports that LazerTag Extreme in Camarillo, California, is for sale. According to the report, Arnie Klein, who with his wife, Tina, owns bankrupt Camarillo Shopping Plaza on East Daily Drive, home of LazerTag, said he's not interested in running the business himself anymore and has leased its space to a higher-paying tenant. "I don't have the strength to keep it going," the report Mr. Klein as saying. "My business is really real estate, not retail." The report notes LazerTag is expected to close March 18, 2012. Mr. Klein would like to sell the business for $150,000. According to the report, Mr. Klein related that LazerTag began in Oxnard as LazerStar and moved to Camarillo 13 years ago. The first manager rented the business and ran it very well. The Kleins bought it from the owner four years ago and sold it to someone local. After two years, Mr. Klein and his wife took it back, he said. According to the report, Mr. Klein said he's rented LazerTag's spot to Camarillo International Market and that the grocer will pay "a much better rent" that he didn't disclose. The extra monthly income will help Mr. Klein pay off the shopping center's debts. The report notes the Kleins filed to stop default interest accumulating on late payments on a $12 million loan. About Camarillo Plaza LLC Shopping center operator Camarillo Plaza LLC, based in Los Angeles, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-59637) on Dec. 5, 2011. Judge Sheri Bluebond was assigned to the case. At the Debtor's behest the next day, the case was transferred to the Northern Division (Bankr. C.D. Calif. Case No. 11-bk-15562). The case in the Los Angeles Division was closed, and Judge Robin Riblet took over from Judge Bluebond. The Debtor scheduled assets of $21,646,714 and liabilities of $12,286,585 as of the Chapter 11 filing. Janet A. Lawson, Esq., in Ventura County, California, serves as the Debtor's counsel. The petition was signed by Aaron Arnold Klein, managing partner. CANO PETROLEUM: Extends CFO Homier's Employment to August --------------------------------------------------------- Cano Petroleum, Inc., on March 6, 2012, entered into a second amendment to the Consulting Agreement dated July 11, 2011, with John H. Homier, as amended on Feb. 8, 2012. Pursuant to the Consulting Agreement, Mr. Homier serves as the Chief Financial Officer and Secretary of the Company. The Second Consulting Agreement Amendment amends the Consulting Agreement by (i) extending the Consulting Period from June 30, 2012, to Aug. 31, 2012, and (ii) providing a bonus to Mr. Homier in the amount of $150,000 upon the first to occur of (A) termination of the Consulting Agreement by the Company for any reason other than Mr. Homier's gross negligence or willful misconduct and (B) the effective date of a confirmed plan of reorganization involving the Company filed with the United States bankruptcy court. On March 6, 2012, the Company entered into a second amendment to the Engagement Letter dated Feb. 10, 2011, between the Company and Blackhill Partners LLC as amended on Feb. 8, 2012. Pursuant to the Engagement Letter, James R. Latimer III serves as Chief Executive Officer and a member of the board of directors of the Company. The Second Engagement Letter Amendment amends the Engagement Letter by (i) eliminating the expense retainer of $10,000, reducing the amount of the fee retainer from $75,000 to $45,000 and making that retainer applicable to both fees and expenses and (ii) providing a bonus to Blackhill in the amount of $250,000 upon the first to occur of (A) termination of the Engagement Agreement by the Company for any reason other than gross negligence or willful misconduct and (B) the effective date of a confirmed plan of reorganization involving the Company and its subsidiaries filed with the United States bankruptcy court. About Cano Petroleum Cano Petroleum, Inc., is an independent Texas-based energy producer with properties in the mid-continent region of the United States. Cano's primary focus is on increasing domestic production from proven fields using enhanced recovery methods. Cano trades on the NYSE Amex Stock Exchange under the ticker symbol CFW. The Company filed for Chapter 11 bankruptcy (Bank. N.D. Tex. Case No. 12-31549) on March 7, 2012. The Company's balance sheet at Sept. 30, 2011, showed $63.37 million in total assets, $116.25 million in total liabilities, and a $52.88 million total stockholders' deficit. The petitions were filed by James R. Latimer, III, chief executive officer. Judge Barbara J. Houser oversees the case. The Debtors are represented by Cassandra Ann Sepanik, Esq., at Thompson & Knight LL, in Dallas Texas. CCM MERGER: S&P Rates $275-Mil. Senior Unsecured Notes at 'CCC+' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned Detroit, Mich.-based CCM Merger Inc.'s (CCM) proposed $275 million senior unsecured notes due 2019 a preliminary 'CCC+' issue-level rating (two notches lower than its 'B' corporate credit rating). "We also assigned this debt a preliminary recovery rating of '6', indicating our expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default. The company plans to use proceeds from the proposed issuance to repay its existing senior unsecured notes due August 2013. Our preliminary ratings are subject to our review of final documentation," S&P said. "At the same time, we affirmed our 'B' corporate credit rating on CCM; the rating outlook is stable," said Standard & Poor's credit analyst Michael Halchak. "Our corporate credit rating on CCM reflects our assessment of the company's financial risk profile as 'highly leveraged' and its business risk profile as 'weak,' according to our criteria," S&P said. "Our assessment of CCM's financial risk profile as 'highly leveraged' reflects its high debt leverage, but we expect the leverage profile to gradually improve. Our assessment of CCM's financial risk profile also considers its meaningful debt maturity in 2013, but, based on our performance expectations, we expect CCM will address this maturity," S&P said. "Our assessment of CCM's business risk profile as weak reflects its narrow business focus as an operator of a single casino property in a highly competitive market, and the persistent, challenging economic conditions in the market in which the company operates. CCM's relatively stable operating performance over the economic cycle and its ability to maintain a sizable market share somewhat temper these factors. CCM owns and operates the Motorcity Casino Hotel in downtown Detroit," S&P said. CHECKOUT HOLDING: Moody's Cuts Corporate Family Rating to 'B2' -------------------------------------------------------------- Moody's Investors Service lowered the corporate family rating (CFR) and probability of default rating for Checkout Holding Corp., the parent company of Catalina Marketing Corporation, to B2 from B1 and revised the outlook to stable from negative. Moody's also assigned a Ba2 rating to Checkout's extended senior secured term loan and adjusted instrument ratings as shown below. The company intends to extend the maturity of a portion of its approximately $600 million term loan to October 2017 from October 2014. The proposed transaction favorably extends the maturity profile but does not impact leverage and would likely result in higher interest expense. The downgrade incorporates Moody's expectations for gross leverage to remain above 5.75 times debt-to-EBITDA (per Moody's standard adjustments and including debt at both Checkout and Catalina) over the intermediate term, a level inconsistent with the prior B1 CFR, especially given elevated business risk from changing consumer behavior and client spending patterns as both shift a portion of their time and money to online avenues. The business transition creates execution risk, and margins could erode based on the likelihood for lower pricing (albeit also lower costs) for its digital offerings. Checkout Holding Corp. Corporate Family Rating, Downgraded to B2 from B1 Probability of Default Rating, Downgraded to B2 from B1 $438.6mm 10.125% Senior Discount Notes due 2015, Downgraded to Caa1, from B3, LGD6, 91% Outlook, Changed To Stable From Negative Catalina Marketing Corporation Senior Secured Bank Credit Facility, Assigned Ba2, LGD2, 20% Senior Secured Bank Credit Facility, Affirmed Ba2, LGD2, 20% 11.625% Sr Subordinate Bonds due 2017, Downgraded to Caa1, LGD5, 80% from B3, LGD5, 80% 10.5% (11.125% if PIK) Senior Unsecured Toggle Notes due 2015, Downgraded to B3, LGD4, 61%, from B2, LGD4, 61% Outlook, Changed To Stable From Negative Ratings Rationale Checkout's B2 CFR incorporates the aggressive capital structure resulting from the 2007 LBO and November 2010 dividend, with gross leverage of approximately 6.4 times debt-to-EBITDA (for the year ended December 31, 2011, per Moody's standard adjustments, including debt at both Checkout and Catalina). Net leverage is approximately 5.7 times, and the good liquidity and strong EBITDA margin enable the company to better manage this leverage. However, the PIK accretion on its senior discount notes (approximately $30 million annually) raises the hurdle for growth or debt repayment merely to maintain leverage. Furthermore, changing consumer behavior and client spending patterns elevate business risk. Checkout's leading position in POS marketing services, the breadth of its retail base, its data on purchasing history, and its long term relationships with both retailers and consumer packaged goods manufacturers position it well to manage this evolving landscape and expand its digital presence, but execution risk exists. Also, notwithstanding its strong position within its niche, Checkout's lack of scale limits its ability to invest in technology to expand its digital presence and to weather the negative impact of economic conditions. The company derives the majority of its revenue from cyclical client advertising / marketing spending, exposing it to volatility related to economic conditions and shifts in marketing budgets, but the extension of its retail base both in the United States and internationally provides growth opportunities over the long term. The stable outlook incorporates expectations for continued positive free cash flow and for gross leverage to trend to around 6 times debt-to-EBITDA, driven by some debt repayment. Investment to adapt to changing client spending patterns and consumer behavior will likely pressure both absolute EBITDA and EBITDA margins over the intermediate term, and the stable outlook at the B2 CFR builds in tolerance for such a decline. The aggressive fiscal policy and high leverage limit upward ratings momentum. Moody's would consider a positive rating action with expectations for sustained leverage in the mid 5 times gross debt-to-EBITDA range or better and sustained free cash flow in excess of 5% of debt. An upgrade would also require maintenance of good liquidity, evidence of success in the business transition with expectations for EBITDA growth, and more clarity on the fiscal strategy. Deterioration of the liquidity profile or expectations for leverage sustained in the high 6 times range, whether due to weak performance or a material debt funded acquisition or dividend, could warrant a downgrade. The principal methodology used in rating Checkout Holding was the Global Publishing Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Catalina, headquartered in St. Petersburg, Florida, is the leader in point-of-sale (POS) promotional marketing services. The company operates in three business segments: Catalina Marketing Services provides in-store PoS coupons at grocery and other retail checkout counters; Catalina Health provides pharmacy consumers with PoS prescription and health condition-specific information; and Catalina Marketing International, which provides the CMS service outside the U.S. Checkout Holding Corp. (Checkout) is Catalina's parent company. Hellman & Friedman acquired Catalina in a 2007 leveraged buyout. CHRISTIAN BROTHERS: Aug. 1 Deadline Set for Sex Abuse Claims ------------------------------------------------------------ VOCM relates that victims of sexual abuse at the Christian Brothers' Institute and the Christian Brothers of Ireland have until August 1, 2012, to file a claim. The Christian Brothers' Institute and The Christian Brothers of Ireland filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 11-22820 and 11-22821) on April 28, 2011. Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, serves as the Debtors' bankruptcy counsel. The Christian Brothers' Institute disclosed assets of $63,418,267 and $8,484,853 in liabilities. CBOI estimated its assets at $500,000 to $1 million and debts at $1 million to $10 million. The U.S. Trustee for Region 2 appointed seven members to the official committee of unsecured creditors in the Debtors' Chapter 11 cases. Pachulski Stang Ziehl & Jones LLP represents the Committee as its counsel. CHURCH STREET: Small Smiles Asks Judge to Approve April Auction --------------------------------------------------------------- Dow Jones' DBR Small Cap reports that Small Smiles Dental Centers wants to sell itself at an April 20 auction with an opening bid from an affiliate of private equity firm Garrison Investment Group, which would keep the company's 67 clinics operating and pay off a wave of expensive settlements that followed a government investigation into its dental practices. About Church Street Church Street Health Management, LLC, a provider of management services for 67 dental practices in 22 states, filed a Chapter 11 petition (Bankr. M.D. Tenn. Case No. 12-01573) in Nashville, Tennessee on Feb. 20, 2012. The following day, four affiliates, Small Smiles Holding Company, LLC, Forba NY, LLC, EEHC, Inc., and Forba Services, LLC, filed their Chapter 11 petitions (Case Nos. 12-01574 to 12-01577). As of the Petition Date, the Debtors' assets have book value of $895 million, with debt totaling $303 million. There is about $131.5 million owing on first-lien obligations, plus $25.6 million on a second-lien obligation. There is an additional $152 million on three subordinated debts. The company's finances are structured to comply with Islamic Shariah financing regulations. In the Chapter 11 cases, the Debtors have engaged Waller Lansden Dortch & Davis, LLP as bankruptcy counsel, and Alvarez & Marsal Healthcare Industry Group, LLC, as financial and restructuring advisor. Martin McGahan, a managing director at A&M, will serve as chief restructuring officer of Church Street. Morgan Joseph TriArtisan, LLC, is the investment banker. Garden City Group is the claims and notice agent. Garrison Investment Group is providing funding for the Chapter 11 case. The credit agreement will provide the Debtor with up to an aggregate principal amount of $12 million in a revolving credit facility. CLARE AT WATER TOWER: Has Buyer for Retirement Community -------------------------------------------------------- Clare at Water Tower's Chapter 11 plan and the $12 million DIP facility from Redwood Capital Investments LLC require a sale of the assets. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Chicago Senior Care LLC has signed a deal to purchase the Debtor's business and assets for $29.5 million, absent higher and better offers. The Debtor intends to conduct an auction on April 12 where Chicago Senior Care will make the opening bid. The Debtor also proposes an April 10 deadline for initial bids. The Debtor will seek approval of the auction rules and schedules at a March 20 hearing. The Chapter 11 Plan As reported in the March 2 edition of the Troubled Company Reporter, the Debtor will seek approval at the March 20 hearing of the disclosure statement explaining the Chapter 11 plan. The Plan will be funded from the proceeds of the asset sale, including, but not limited to, sale proceeds, and all other remaining assets of the Debtor. Under the Plan, the Debtor will treat claims as, among other things, DIP Claims will be paid full in cash on the Effective Date. For the benefit of all holders of Variable Rate Bonds ($137,605,136), its pro rata share of the sale proceeds and the proceeds of the sale of any other assets securing the Variable Rate Bondholder Claims, less certain amounts. Other secured claims and resident claims will recover 100% of their claims. Holder of an Allowed General Unsecured Claim will be entitled to receive Cash equal to the holder's pro rata share of any funds available after payment in full of compensation and Reimbursement Claims Allowed as of the Effective Date. Each holder of an interest in Debtor will not receive any distribution on account of the interest. The Debtor set a hearing on April 17, 2012, at 10:00 a.m. (prevailing Central Time), before the Hon. Susan P. Sonderby. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/THE_CLARE_AT_WATER_ds.pdf The DIP Financing On Dec. 21, 2011, the U.S. Bankruptcy Court entered a final order authorizing The Clare at Water Tower to obtain up to $12,000,000 in postpetition financing on a senior secured superpriority basis from Redwood or its designee. The DIP Facility matures by May 11, 2012, and requires the Debtor to pursue a sale of its assets. The DIP Agreement contains milestones that must be achieved to avoid the termination of Debtor's ability to borrow thereunder. These milestones require the Debtor to, among other things, either (x) (i) file a plan of reorganization not later than Feb. 15, 2012; (ii) obtain entry of an order approving the Disclosure Statement not later than March 21, 2012; (iii) obtain entry of the Confirmation Order not later than April 27, 2012; and (iv) satisfy each condition to the Plan's Effective Date not later than May 11, 2012; or (y)(i) file a motion for approval of bidding procedures for the asset sale not later than Feb. 15, 2012; (ii) obtain entry of an order approving bidding procedures for the Asset Sale not later than March 21, 2012, (iii) obtain entry of an order approving the asset sale not later than April 30, 2012, and (iv) consummate the asset sale not later than May 11, 2012 About The Clare at Water Tower The Clare at Water Tower is an upscale 334-unit high-rise continuing-care retirement community in Chicago, Illinois. The project is only 42% occupied because the target population either hasn't been able to sell homes or lacks sufficient cash to make required deposits as the result declining investments following the recession. The facility is a 53-story building on land rented from Loyola University of Chicago. The facility is managed and developed by a unit of the Franciscan Sisters of Chicago, who invested more than $14 million. The project opened in December 2008. Residents must make partially refundable deposits ranging from $263,000 to $1.2 million. Monthly fees are an additional $2,700 to $5,500. The Clare filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 11-46151) on Nov. 14, 2011, after defaulting on $229 million in tax-exempt bond financing used to build the project. Judge Susan Pierson Sonderby presides over the case. Matthew M. Murphy, Esq., at DLA Piper LLP, serves as the Debtor's counsel. Houlihan Lokey Capital, Inc., as its investment banker and financial advisor. Deloitte Financial Advisory Services LLP serves as restructuring advisor. Epiq Bankruptcy Solutions serves as claims and noticing agent. The Debtor, in its amended schedules, disclosed $56,778,671 in assets and $321,747,63 in liabilities. The petition was signed by Judy Amiano, president. The Official Committee of Unsecured Creditors proposed to retain SNR Denton US LLP as counsel. The Committee also tapped FTI Consulting, Inc., as its financial advisor. CLIFFS CLUB: Creditors Committee Disputes Bid Protections --------------------------------------------------------- The newly minted official committee of unsecured creditors in the Chapter 11 case of The Cliffs Club & Hospitality Group, Inc., wasted no time in making its presence felt in the case. The Committee filed a limited objection to the Debtors' request for approval of bidding procedures and auction to designate a sponsor for the Debtors' Chapter 11 plan of reorganization. Specifically, the Committee disputes the proposed bid protections given to the Carlile Group. The Committee contends Carlile should be bound to consummate the transaction to receive stalking horse bidder protections. The Committee also argues that no basis has been provided for the $1 million breakup fee. The Committee noted that the amount of the breakup fee is so substantial that it has a "chilling effect" on other potential buyers. Requiring bids to be sufficiently high enough to cover a $1 million breakup fee will narrow the number of bids received at the outset of the sale process to the detriment of the estates and their creditors. The Committee also suggests that the timetable for certain bid procedure events be extended to allow sufficient time to review and negotiate. The Committee also filed objections to the Debtors' request to use cash collateral and obtain DIP financing. Among other things, the Committee argues that avoidances actions and related proceeds should be available solely for general unsecured creditors and carved out of superpriority claims. The Committee notes that although the DIP lien and Supplemental Lien do not attach to proceeds of actions or claims arising under Chapter 5 of the Bankruptcy Code, each of the DIP Lender and the Indenture Trustee is permitted to satisfy their superpriority claims from the avoidance action proceeds. This is a backdoor means of achieving the same result as if the DIP Liens and Supplemental Lien had attached to the Avoidanced Action Proceeds. The Committee also seeks automatic standing to pursue a challenge of the DIP lender's and the Indenture Trustee's liens. The Committee notes the Indenture Trustee has agreed to confer the Committee with automatic standing. Any proposed final DIP order should similarly provide the Committee with the same. "The outcome of these cases will directly affect the lives of homeowners who have paid in their money, and continue to pay dues every month, and whose homes and neighborhood communities depend on a successful reorganization, and to the trade and local workers who have committed their hard labor and resources to the developments; they too hang in the balance," the Committee said. The Debtors will return to the Bankruptcy Court on March 16 at 9:00 a.m. for a final hearing on their request to: -- use cash collateral of Wells Fargo Bank, N.A., in its capacity as indenture trustee and collateral trustee for the holders of the Debtors' Series A and Series B notes issued April 2010, and provide adequate protection; and -- obtain postpetition secured financing of up to $7.5 million from Carlile Development Company LLC. The Debtors earlier this month won interim approval to use the noteholders' cash collateral and borrow up to $3 million from the DIP facility. The Notes were issued in the aggregate principal amount of $64,050,000 pursuant to an Indenture dated April 30, 2010. The Debtors' obligations under the Notes are secured by an interest in and lien on the Debtors' personal property. As of the petition date, the Debtors' obligations under the Notes total $73,531,505, including interest. Steve and Penny Carlile of Marshall, Texas, the principals of Carlile Development, own a lot in High Carolina, one of the Debtors' communities, and are holders of a Series A Note and a Series B Note. The Debtors' obligations under the DIP facilitgy are secured by first-priority liens that are senior to those of the Indenture Trustee. When they filed for bankruptcy, the Debtors said Carlile and other interested investors are currently in discussions with various secured creditors of different non-debtor DevCo entities about the potential acquisition of specific real estate collateral, including lots and undeveloped land in the Cliffs communities. Carlile will commit up to $85 million to acquire, joint venture, land bank, or otherwise gain control of development land and lots. Under the Interim Cash Collateral Order, the Debtors agreed to conduct a process by which they solicit competing proposals from third-parties to become the sponsor of the Debtors' anticipated plan of reorganization, according to this timeline: 17th day after the The Debtors obtain approval of Petition Date bidding procedures in connection with (March 16) the solicitation of a plan sponsor; the procedures will provide for the payment of a breakup fee to Carlile in the event it is not selected as plan sponsor 45th day after the Deadline for submitting competing Petition Date plan sponsor bids (April 13) 53th day after the Deadline for competing bidders to Petition Date submit definitive asset purchase (April 21) agreement No later than 55 days Auction date, if competing bids after Petition Date are received (April 23) No later than 75 days Debtors shall file a plan and after Petition Date disclosure statement incorporating (May 13) the terms of the Successful Bid Any competing bids must provide for the ability to pay: * the Carlile DIP facility, * a $2 million prepetition bridge facility with SP 50 Investments, LTD, an affiliated entity that the Carliles own; * a breakup fee to Carlile of $1 million, plus a $750,000 expense reimbursement; and * administrative costs and expenses of the bankruptcy cases and the fees and expenses of the Indenture Trustee and its professionals. The expense reimbursement may increase by an additional $100,000 per month beginning September 2012 until the breakup fee and expense reimbursement is paid. About Cliffs Club Units of The Cliffs Communities, led by The Cliffs Club & Hospitality Group, Inc., doing business as The Cliffs Golf & Country Club, along with 10 affiliates, sought Chapter 11 protection (Bankr. D. S.C. Lead Case No. 12-01220) on Feb. 28, 2012. The Cliffs has eight premier, private master-planned residential communities, each to have its own world-class golf course. Approximately 3,734 lots have been sold. There are currently 1,385 finished homes, with 63 under construction. The properties for sale are owned by non-debtor DevCo entities. The Feb. 28 Debtors operate the exclusive membership clubs for golf, tennis, wellness and social activities at The Cliffs' communities in North and South Carolina. The clubs have 2,280 members, and there are 766 resigned members with refundable deposits totaling $37 million. The Debtors do not own the golf courses -- they only own or lease all the "core amenities" for the operation of the golf courses. Another affiliate, Keowee Falls Investment Group, LLC, filed a Chapter 11 petition (Bankr. D. S.C. Case No. 12-01399) in Spartanburg, South Carolina, on March 2, 2012. Travelers Rest- based Keowee Falls estimated at least $100 million in assets and liabilities of up to $50 million. Judge John E. Waites presides over the Debtors' cases. Lawyers at McKenna Long & Aldridge LLP serve as the Debtors' lead counsel. Dana Elizabeth Wilkinson, Esq., serves as local counsel. Grisanti Galef & Goldress serves as restructuring advisors and Katie S. Goodman of GGG serves as CRO. BMC Group Inc. serves as the Debtors' claims and noticing agent. According to papers filed in Court, the Debtors' total assets had a $175 million book value at Dec. 31, 2011. The Debtors' total liabilities had a $333 million book value at Dec. 31, 2011. The petition was signed by Timothy P. Cherry, authorized officer. Wells Fargo, as Indenture Trustee, is represented in the case by Daniel S. Bleck, Esq., at Mintz Levin Cohn Ferris Glovsky and Popeo P.C.; and Elizabeth J. Philp, Esq., and Michael Beal, Esq., at McNair Law Firm P.A. The Official Committee of Unsecured Creditors is represented in the case by John B. Butler, III, P.A., and Jonathan B. Alter, Esq., at Bingham McCutchen LLP. CLIFFS CLUB: U.S. Trustee Appoints 7th Member to Creditors Panel ---------------------------------------------------------------- Raymond O. Gibson on Monday was appointed by the U.S. Trustee as the seventh member of the official committee of unsecured creditors in the Chapter 11 case of The Cliffs Club & Hospitality Group, Inc. The committee members are: 1. John W. Sager 104 Eagle Rock Road Landrum, SC 29356 Tel: (864) 895-1756 2. Janet D. Hilligoss 2 Sunlight Peak Court Travelers Rest, SC 29690 Tel: (864) 836-0409 3. Harrell's, LLC Attn: Bill Schoppman 720 Kraft Road Lakeland, FL 33815 Tel: (800) 780-2774 ext. 2266 4. H. Michael Krimbill 5620 E. 114th Street Tulsa, OK 74137 Tel: (918) 629-0841 5. TJF Golf, Inc. Attn: Daniel E. Hitchcock, Esquire Adams Herndon Carson, Crow & Saenger, PA Post Office Box 2714 Asheville, NC 288802 Tel: (828) 252-7381 6. John Mack Post Office Box 700 Annandale, VA 22003 Tel: (703) 980-0465 7. Raymond O. Gibson 339 Glen Hollow Road Travelers Rest, SC 29690 Tel: (864) 836-7897 Original committee members William Whisnant and William M. Clear have stepped down. The U.S. Trustee subsequently added H. Michael Krimbill, John Mack and Harrell's LLC. About Cliffs Club Units of The Cliffs Communities, led by The Cliffs Club & Hospitality Group, Inc., doing business as The Cliffs Golf & Country Club, along with 10 affiliates, sought Chapter 11 protection (Bankr. D. S.C. Lead Case No. 12-01220) on Feb. 28, 2012. The Cliffs has eight premier, private master-planned residential communities, each to have its own world-class golf course. Approximately 3,734 lots have been sold. There are currently 1,385 finished homes, with 63 under construction. The properties for sale are owned by non-debtor DevCo entities. The Feb. 28 Debtors operate the exclusive membership clubs for golf, tennis, wellness and social activities at The Cliffs' communities in North and South Carolina. The clubs have 2,280 members, and there are 766 resigned members with refundable deposits totaling $37 million. The Debtors do not own the golf courses -- they only own or lease all the "core amenities" for the operation of the golf courses. Another affiliate, Keowee Falls Investment Group, LLC, filed a Chapter 11 petition (Bankr. D. S.C. Case No. 12-01399) in Spartanburg, South Carolina, on March 2, 2012. Travelers Rest- based Keowee Falls estimated at least $100 million in assets and liabilities of up to $50 million. Judge John E. Waites presides over the Debtors' cases. Lawyers at McKenna Long & Aldridge LLP serve as the Debtors' lead counsel. Dana Elizabeth Wilkinson, Esq., serves as local counsel. Grisanti Galef & Goldress serves as restructuring advisors and Katie S. Goodman of GGG serves as CRO. BMC Group Inc. serves as the Debtors' claims and noticing agent. According to papers filed in Court, the Debtors' total assets had a $175 million book value at Dec. 31, 2011. The Debtors' total liabilities had a $333 million book value at Dec. 31, 2011. The petition was signed by Timothy P. Cherry, authorized officer. Wells Fargo, as Indenture Trustee, is represented in the case by Daniel S. Bleck, Esq., at Mintz Levin Cohn Ferris Glovsky and Popeo P.C.; and Elizabeth J. Philp, Esq., and Michael Beal, Esq., at McNair Law Firm P.A. The Official Committee of Unsecured Creditors is represented in the case by John B. Butler, III, P.A., and Jonathan B. Alter, Esq., at Bingham McCutchen LLP. CLIFFS CLUB: Can Hire BMC Group as Claims and Noticing Agent ------------------------------------------------------------ The Cliffs Club & Hospitality Group, Inc., won Bankruptcy Court authority to employ BMC Group, Inc., as the Debtors' claims, noticing, and balloting agent. The Debtors will pay and reimburse BMC according to the terms of the parties' Services Agreement as an administrative expense, subject to terms of the DIP budget. The Debtors said they have roughly 8,000 creditors and other parties in interest, many of whom are expected to file proofs of claim. The Debtors believe that noticing, receiving, docketing and maintaining proofs of claim would impose heavy administrative and other burdens on the Court and the Office of the Clerk of Court. The Debtors have provided BMC a $31,216 retainer. The firm, however, has applied $31,216 in connection with services already performed by the firm. Accordingly, BMC holds a $0 balance. About Cliffs Club Units of The Cliffs Communities, led by The Cliffs Club & Hospitality Group, Inc., doing business as The Cliffs Golf & Country Club, along with 10 affiliates, sought Chapter 11 protection (Bankr. D. S.C. Lead Case No. 12-01220) on Feb. 28, 2012. The Cliffs has eight premier, private master-planned residential communities, each to have its own world-class golf course. Approximately 3,734 lots have been sold. There are currently 1,385 finished homes, with 63 under construction. The properties for sale are owned by non-debtor DevCo entities. The Feb. 28 Debtors operate the exclusive membership clubs for golf, tennis, wellness and social activities at The Cliffs' communities in North and South Carolina. The clubs have 2,280 members, and there are 766 resigned members with refundable deposits totaling $37 million. The Debtors do not own the golf courses -- they only own or lease all the "core amenities" for the operation of the golf courses. Another affiliate, Keowee Falls Investment Group, LLC, filed a Chapter 11 petition (Bankr. D. S.C. Case No. 12-01399) in Spartanburg, South Carolina, on March 2, 2012. Travelers Rest- based Keowee Falls estimated at least $100 million in assets and liabilities of up to $50 million. Judge John E. Waites presides over the Debtors' cases. Lawyers at McKenna Long & Aldridge LLP serve as the Debtors' lead counsel. Dana Elizabeth Wilkinson, Esq., serves as local counsel. Grisanti Galef & Goldress serves as restructuring advisors and Katie S. Goodman of GGG serves as CRO. BMC Group Inc. serves as the Debtors' claims and noticing agent. According to papers filed in Court, the Debtors' total assets had a $175 million book value at Dec. 31, 2011. The Debtors' total liabilities had a $333 million book value at Dec. 31, 2011. The petition was signed by Timothy P. Cherry, authorized officer. Wells Fargo, as Indenture Trustee, is represented in the case by Daniel S. Bleck, Esq., at Mintz Levin Cohn Ferris Glovsky and Popeo P.C.; and Elizabeth J. Philp, Esq., and Michael Beal, Esq., at McNair Law Firm P.A. The Official Committee of Unsecured Creditors is represented in the case by John B. Butler, III, P.A., and Jonathan B. Alter, Esq., at Bingham McCutchen LLP. CLIFFS CLUB: Taps GGG Partners' Katie Goodman as CRO ---------------------------------------------------- The Cliffs Club & Hospitality Group, Inc., sought and obtained authority from the Bankruptcy Court to employ GGG Partners, LLC, and Katie S. Goodman as Chief Restructuring Officer. GGG will act as the Debtors' Chief Restructuring Officer, and its representative, Ms. Goodman, will be the highest officer of each Chapter 11 Debtor. GGG will bill on an hourly basis at these rates: Professional Hourly Rate ------------ ----------- Katie S. Goodman, Managing Partner & CRO $350 Joseph V. Pegnia, Partner $325 Sam Horgan, Partner $275 The firm will also seek reimbursement for reasonable out-of-pocket expenses. The Court order provides that, on an interim basis, the Debtors will not be required to seek authority to engage either GGG or Ms. Goodman as a professional under section 327 of the Bankruptcy Code. However, approval of the Debtors' engagement of GGG and Ms. Goodman is subject to objections being filed on or before 12:00 p.m. on March 15, 2012. If any objection is filed, then the Court will consider the objection at the hearing scheduled on March 16 at 9:00 a.m. The Court order also provides that the Debtors are not authorized to indemnify GGG according to the terms set forth in the Services Agreement; however, the Debtors are authorized to indemnify individually the professionals employed by GGG who are providing services to the Debtors, namely Katie S. Goodman, Joseph V. Pegnia, and Sam Horgan, according to the same indemnification terms originally in favor GGG set forth in the Services Agreement. GGG has received a $105,000 retainer from the Debtors. GGG currently holds a $13,160 balance from the retainer after applying fees and expenses incurred pre-bankruptcy. The Debtors believe that each of GGG and Ms. Goodman is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. The U.S. Trustee has objected to GGG's engagement. The U.S. Trustee noted that the Debtors' motion and proposed order attempt to improperly circumvent the requirements of obtaining a chapter 11 trustee. The proposed order changes the terms of the service agreement and allows GGG to merely consult with and take advice from the Board of Directors and others. The proposed order also makes GGG's termination subject to Court approval. GGG and Goodman are not a chapter 11 trustee in this case. They are a professional sought to be retained by the debtors and contracted to act at the direction of the Board. The proposed order should not modify this relationship or seek to change the capacity or powers of GGG and Ms. Goodman. In light of the U.S. Trustee's objection, the Court reserves ruling on GGG's services until the hearing on March 16. The Court, however, held that GGG will consult with and take advice from the Board and from other parties in interest as GGG will determine. About Cliffs Club Units of The Cliffs Communities, led by The Cliffs Club & Hospitality Group, Inc., doing business as The Cliffs Golf & Country Club, along with 10 affiliates, sought Chapter 11 protection (Bankr. D. S.C. Lead Case No. 12-01220) on Feb. 28, 2012. The Cliffs has eight premier, private master-planned residential communities, each to have its own world-class golf course. Approximately 3,734 lots have been sold. There are currently 1,385 finished homes, with 63 under construction. The properties for sale are owned by non-debtor DevCo entities. The Feb. 28 Debtors operate the exclusive membership clubs for golf, tennis, wellness and social activities at The Cliffs' communities in North and South Carolina. The clubs have 2,280 members, and there are 766 resigned members with refundable deposits totaling $37 million. The Debtors do not own the golf courses -- they only own or lease all the "core amenities" for the operation of the golf courses. Another affiliate, Keowee Falls Investment Group, LLC, filed a Chapter 11 petition (Bankr. D. S.C. Case No. 12-01399) in Spartanburg, South Carolina, on March 2, 2012. Travelers Rest- based Keowee Falls estimated at least $100 million in assets and liabilities of up to $50 million. Judge John E. Waites presides over the Debtors' cases. Lawyers at McKenna Long & Aldridge LLP serve as the Debtors' lead counsel. Dana Elizabeth Wilkinson, Esq., serves as local counsel. Grisanti Galef & Goldress serves as restructuring advisors and Katie S. Goodman of GGG serves as CRO. BMC Group Inc. serves as the Debtors' claims and noticing agent. According to papers filed in Court, the Debtors' total assets had a $175 million book value at Dec. 31, 2011. The Debtors' total liabilities had a $333 million book value at Dec. 31, 2011. The petition was signed by Timothy P. Cherry, authorized officer. Wells Fargo, as Indenture Trustee, is represented in the case by Daniel S. Bleck, Esq., at Mintz Levin Cohn Ferris Glovsky and Popeo P.C.; and Elizabeth J. Philp, Esq., and Michael Beal, Esq., at McNair Law Firm P.A. The Official Committee of Unsecured Creditors is represented in the case by John B. Butler, III, P.A., and Jonathan B. Alter, Esq., at Bingham McCutchen LLP. CLIFFS CLUB: Sec. 341 Creditors' Meeting Set for April 13 --------------------------------------------------------- The U.S. Trustee for the District of South Carolina will convene a Meeting of Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 cases of The Cliffs Club & Hospitality Group, Inc., on April 13, 2012, at 1:00 p.m. at Spartanburg. Units of The Cliffs Communities, led by The Cliffs Club & Hospitality Group, Inc., doing business as The Cliffs Golf & Country Club, along with 10 affiliates, sought Chapter 11 protection (Bankr. D. S.C. Lead Case No. 12-01220) on Feb. 28, 2012. The Cliffs has eight premier, private master-planned residential communities, each to have its own world-class golf course. Approximately 3,734 lots have been sold. There are currently 1,385 finished homes, with 63 under construction. The properties for sale are owned by non-debtor DevCo entities. The Feb. 28 Debtors operate the exclusive membership clubs for golf, tennis, wellness and social activities at The Cliffs' communities in North and South Carolina. The clubs have 2,280 members, and there are 766 resigned members with refundable deposits totaling $37 million. The Debtors do not own the golf courses -- they only own or lease all the "core amenities" for the operation of the golf courses. Another affiliate, Keowee Falls Investment Group, LLC, filed a Chapter 11 petition (Bankr. D. S.C. Case No. 12-01399) in Spartanburg, South Carolina, on March 2, 2012. Travelers Rest- based Keowee Falls estimated at least $100 million in assets and liabilities of up to $50 million. Judge John E. Waites presides over the Debtors' cases. Lawyers at McKenna Long & Aldridge LLP serve as the Debtors' lead counsel. Dana Elizabeth Wilkinson, Esq., serves as local counsel. Grisanti Galef & Goldress serves as restructuring advisors and Katie S. Goodman of GGG serves as CRO. BMC Group Inc. serves as the Debtors' claims and noticing agent. According to papers filed in Court, the Debtors' total assets had a $175 million book value at Dec. 31, 2011. The Debtors' total liabilities had a $333 million book value at Dec. 31, 2011. The petition was signed by Timothy P. Cherry, authorized officer. Wells Fargo, as Indenture Trustee, is represented in the case by Daniel S. Bleck, Esq., at Mintz Levin Cohn Ferris Glovsky and Popeo P.C.; and Elizabeth J. Philp, Esq., and Michael Beal, Esq., at McNair Law Firm P.A. The Official Committee of Unsecured Creditors is represented in the case by John B. Butler, III, P.A., and Jonathan B. Alter, Esq., at Bingham McCutchen LLP. COLLIER LAND: Has Until April 23 to File a Chapter Plan ------------------------------------------------------- The Bankruptcy Court has extended until April 23, 2012, Collier Land & Coal Development, LP's deadline to file a Disclosure Statement and Plan of Reorganization. If a Plan is not filed by that date, a status conference will be held on April 25. About Collier Land Clairton, Pennsylvania-based Collier Land & Coal Development, LP, began its operations in 2007 with the intention of mining the coal on the real estate and then subdividing the land and selling approximately 59 buildable lots to developers. The Company filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 10-22059) on March 25, 2010. Robert S. Bernstein, Esq., and Scott E. Schuster, Esq., at Bernstein Law Firm, P.C., serve as the Debtor's bankruptcy counsel. The Debtor estimated its assets at 10 million to $50 million and debts at $1 million to $10 million, as of the petition date. CONNAUGHT GROUP: Court Approves March 26 Auction ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Connaught Group Ltd. was given authority from the bankruptcy judge to sell the business at auction on March 26. Bids are due by March 22. A hearing to approve the sale is set for April 4. The Debtor has not yet signed a deal for a buyer to open the auction. The Debtors say 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. 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 bid procedures allow the Debtors to select a stalking horse bidder. 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. CONTAINER STORE: Moody's Assigns 'B3' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service assigned B3 Corporate Family and Probability of Default Ratings to The Container Store, Inc., and assigned a B3 rating to the company's proposed $275 million guaranteed senior secured term loan. The rating outlook is stable. The assigned ratings are subject to review of final documentation and closing of the transaction as proposed. This is a first time rating for TCS. Proceeds from the proposed term loan will be used in conjunction with balance sheet cash to refinance TCS`s existing debt and pay related fees and expenses. Ratings assigned: Corporate Family Rating (CFR) at B3 Probability of Default Rating (PDR) at B3 $275 million guaranteed senior secured term loan due 2019 at B3 (LGD4, 52%) The ratings outlook is stable. Ratings Rationale The B3 Corporate Family Rating reflects TCS's high debt load and weak credit metrics that result primarily from the 2007 acquisition of the company by Leonard Green and Partners, L.P. ("LGP"). For the latest twelve month period ended November 26, 2011, lease-adjusted debt/EBITDA exceeded 7.5 times (1.5 times of which resulted from treating 25% of the company's preferred stock as debt). The rating also reflects the company's small scale and limited product focus relative to other global retailers, relatively discretionary product offering, and moderate seasonality. Positive rating consideration is given to TCS's solid market position in the narrowly defined "storage and organization" category of specialty retail, and its recognized brand name. Further consideration is given to the company's demonstrated ability to maintain solid gross profit margins through economic cycles, largely due to the sizeable offering of exclusive/proprietary products, highly trained sales force, and a more affluent customer base. TCS's liquidity is adequate, reflecting the expectation that excess cash, modest cash flow and availability under its proposed $75 million asset based revolver (not rated by Moody's) should be sufficient to cover growth capital spending and debt amortization over the next twelve months. The stable outlook reflects the expectation that TCS's credit metrics will modestly improve over time mainly through revenue and earnings growth, and that liquidity will remain adequate. A ratings upgrade would require the company to manage profitable growth while improving its credit metrics such that debt/EBITDA is sustained below 6.5 times and EBITA/Interest rises above 1.5 times. An upgrade would also require the company to maintain adequate liquidity and a conservative financial policy. The ratings could be downgraded in the event of degradation in credit metrics from current levels or an erosion in liquidity. A downgrade could also occur if financial policy becomes more aggressive with respect to growth or shareholder returns. The principal methodology used in rating The Container Store 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. The Container Store, Inc., headquartered near Dallas, TX, is a retailer of organization and storage products in the United States and Europe. The company operates 54 leased specialty retail stores in the United States and operates in Europe through its wholly owned Swedish subsidiary, Elfa International. Net revenue for the latest twelve month period ended November 26, 2011 exceeded $600 million. CONVERTED ORGANICS: Has 1.9 Million Outstanding Common Shares ------------------------------------------------------------- On Jan. 12, 2012, Converted Organics Inc. issued a senior secured convertible note, in exchange for the senior secured convertible note issued on Nov. 2, 2011, in the aggregate original principal amount of $3,474,797, which had $2,456,595 of principal outstanding on Jan. 12, 2012, immediately prior to the exchange, for a senior secured convertible note in the aggregate original principal amount of $2,456,595, as well as additional consideration. The terms of the Note are substantially identical to the terms of the Original As of March 12, 2012, the principal amount of the Note has declined to $1,948,990. From Feb. 10, 2012, until March 12, 2012, a total of $121,418 in principal had been converted into 1,031,500 shares of common stock. Since the issuance of the Original Note, a total of $1,901,010 in principal had been converted into 1,880,026 shares of common stock. The Note holder is an accredited investor and the shares of common stock were issued In reliance on Section 4(2) under the Securities Act of 1933, as amended. As of March 12, 2012, the Company had 1,908,490 shares of common stock outstanding. About Converted Organics Boston, Mass.-based Converted Organics Inc. utilizes innovative clean technologies to establish and operate environmentally friendly businesses. Converted Organics currently operates in three business areas, namely organic fertilizer, industrial wastewater treatment and vertical farming. The Company reported a net loss of $8.9 million on $2.8 million of revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $31.6 million on $2.8 million of revenues for the same period last year. The Company's balance sheet at Sept. 30, 2011, showed $17.2 million in total assets, $11.9 million in total liabilities, and stockholders' equity of $5.3 million. As reported in the TCR on April 7, 2011, CCR LLP, in Glastonbury, Connecticut, expressed substantial doubt about Converted Organics' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2010. The independent auditors noted that the Company has an accumulated deficit at Dec. 31, 2010, and has suffered significant net losses and negative cash flows from operations. COVANTA HOLDING: 'Ba2' CFR Reflects Protection on UCUA 1998 Bonds ----------------------------------------------------------------- Moody's Investors Service has affirmed Union County Utility Authority's (UCUA) 1998 Landfill Revenue Bonds. The affirmation and stable outlook reflects continued stable operations of the facility, a consistently robust waste delivery stream and financial performance consistent for the rating level. The outlook remains stable. Ratings Rationale The landfill bonds are principally secured by payments under a residue disposal agreement, whose payments are recourse to Covanta Holding Corp. (Ba2, corporate family rating, CFR). Covanta is a well-performing albeit, non-investment grade entity. The rating distinction between UCUA's landfill bonds and Covanta's CFR reflects structural protections for the benefit of the landfill bonds such as a one-year, cash-funded debt service reserve and a cash flow waterfall that treats landfill bond payments as an operating expense of Covanta Union, senior to Covanta Union's Senior Lease payment obligations. Offsetting the seniority in the waterfall however is lack of security in the landfill asset itself and lack of any distribution test. Moody's rating on the landfill bonds incorporates total debt obligations issued on behalf of Covanta, including unrated lease debt of approximately $138 million. The UCUA has an additional $69 million of 2011 Solid Waste System Bonds (Aaa; negative outlook), the ultimate obligation of Union County (Aaa; negative outlook) pursuant to a deficiency agreement. Under the agreement, the county effectively backstops debt service payments in the event of a shortfall through deposits to the Solid Waste System Bonds debt service reserve funds. The obligation of the county under the agreement is unconditional and backed by its full faith and credit. The principal methodology used in this rating was Credit Risks and Opportunities for the Municipal Solid Waste Sector published in October 1999. CRYSTAL CATHEDRAL: Mediator Appointed to Settle "Greenlaw" Claims ----------------------------------------------------------------- The Bankruptcy Court has assigned the objection of Crystal Cathedral Ministries and the Plan Agent to the claim of Greenlaw Partners to the bankruptcy mediation program of the district. The Court appointed Mark Shinderman as mediator and Franklin C. Adams as alternate mediator. The mediators can be reached at: Mediator Mark Shinderman MILBANK TWEED HADLEY & MCCLOY LLP 601 S Figueroa Street, 30th Floor Los Angeles, CA 90017 Tel: 213-892-4411 Fax: 213-629-5063 E-mail: mschinderman@milbank.com Alternate Mediator Franklin C. Adams BEST, BEST & KRIEGER 3750 University Avenue Riverside, CA 92502 Tel: 951-686-1450 Fax: 949-686-3083 Email: Franklin.Adams@bblaw.com The Bankruptcy Case of Crystal Cathedral Ministries, Case No. 10- 24771 has been closed. The Case was transferred from Santa Ana Division to Los Angeles Division. The new Bankruptcy Case No. is 12-15665. About Crystal Cathedral Crystal Cathedral Ministries is a Southern California-based megachurch founded by television evangelist Robert Schuller. The church, known for its television show "The Hour of Power." Mr. Schuller retired from his role as senior pastor of Crystal Cathedral in 2006. His daughter Sheila Schuller Coleman has been senior pastor since July 2009. Contributions declined 24% in 2009, in part on account of "unsettled leadership." Crystal Cathedral filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. 10-24771) on Oct. 18, 2010. The Debtor disclosed $72,872,165 in assets and $48,460,826 in liabilities as of the Chapter 11 filing. Marc J. Winthrop, Esq., at Winthrop Couchot P.C. represents the Debtor. Todd C. Ringstad, Esq., at Ringstad & Sanders, LLP, represents the Official Committee of Unsecured Creditors. In November 2011, Crystal Cathedral won Court permission to sell its property to the Roman Catholic Diocese of Orange for $57.5 million. The Diocese beat a rival bid from Chapman University. The sale agreement provides that the congregation will have three years to find new premises. Chapman University, the secular bidder, has been the preferred buyer as far as the church members are concerned, because Chapman would allow the ministry to continue to use the main buildings on the premises. It also offered the option of allowing church administrators to buy the property back at a later point. Chapman had raised its bid to $59 million, but the Crystal Cathedral board still chose the Diocese. CUMULUS MEDIA: Reports $63.8 Million Net Income in 2011 ------------------------------------------------------- Cumulus Media Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing net income of $63.86 million on $549.54 million of net revenues for the year ended Dec. 31, 2011, compared with a net loss of $29.40 million on $263.33 million of net revenues during the prior year. The Company reported a net loss of $13.13 million on $290.20 million of net revenues for the quarter ended Dec. 31, 2011, compared with net income of $7.51 million on $69.78 million of net revenues for the same period a year ago. The Company's balance sheet at Dec. 31, 2011, showed $4.04 billion in total assets, $3.63 billion in total liabilities, $113.47 million n total redeemable preferred stock, and $290.71 million in total stockholders' equity. Bankruptcy Warning The lenders under the 2011 Credit Facilities have taken security interests in substantially all of the Company's consolidated assets, and the Company has pledged the stock of certain of its subsidiaries to secure the debt under the 2011 Credit Facilities. If the lenders accelerate the repayment of borrowings, the Company may be forced to liquidate certain assets to repay all or part of such borrowings, and the Company cannot assure that sufficient assets will remain after it has paid all of the borrowings under those 2011 Credit Facilities. If the Company was unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness and the Company could be forced into bankruptcy or liquidation. Lew Dickey, Chairman & CEO stated, "The integration of Citadel into Cumulus is ahead of schedule as we have achieved 100% of our stated run-rate synergies in the first 100 days. With this large and transformative acquisition, we have built a true platform company with multiple organic growth drivers, including compelling new content, that will enable us to generate significant free cash to rapidly de-lever our balance sheet." A copy of the Form 10-K is available for free at: http://is.gd/g4ZC3Q About Cumulus Media Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ: CMLS) -- http://www.cumulus.com/-- is the second largest radio broadcaster in the United States based on station count, controlling 350 radio stations in 68 U.S. media markets. In combination with its affiliate, Cumulus Media Partners, LLC, the Company believes it is the fourth largest radio broadcast company in the United States when based on net revenues. Cumulus Media put AR Broadcasting Holdings Inc. and three other units to Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13674) after struggling to pay off debts that topped $97 million as of June 30, 2011. Holdings estimated debts between $50 million and $100 million but said assets are worth less than $50 million. AR Broadcasting are Missouri and Texas radio stations. * * * Standard & Poor's Ratings Services in October 2011 affirmed is 'B' corporate credit rating on Cumulus Media. "The ratings reflect continued economic weakness and higher post- acquisition leverage than we initially expected," said Standard & Poor's credit analyst Jeanne Shoesmith. "They also reflect the combined company's sizable presence in both large and midsize markets throughout the U.S." DBK LEASING: Moody's Issues Summary Credit Opinion -------------------------------------------------- Moody's Investors Service issued a summary credit opinion on DBK Leasing and includes certain regulatory disclosures regarding its ratings. This release does not constitute any change in Moody's ratings or rating rationale for DBK Leasing. Moody's current ratings on DBK Leasing are: Long Term Issuer (domestic and foreign currency) ratings of Ba3 Senior Unsecured (domestic currency) ratings of Ba3 Senior Unsecured MTN Program (domestic currency) ratings of (P)Ba3 Short Term Issuer (domestic and foreign currency) ratings of NP Ratings Rationale Moody's assigns Ba3 long-term and Not Prime short-term foreign and local currency issuer ratings to DBK Leasing (DBKL). The ratings reflect a combination of the company's intrinsic credit qualities and Moody's assessment of a high probability of support for DBKL from its parent, the Development Bank of Kazakhstan (DBK). DBKL's Baseline Credit Assessment (BCA) of B3 is constrained by: (i) weak asset quality, (ii) a high concentration of large-scale projects in the leasing book, (iii) the company's participation in low-income state-leasing programmes and resultant low profitability, and (iv) the possibility of politically motivated rather than economically efficient decisions given its ownership structure and mandate. At the same time, the rating is supported by DBKL's strong liquidity position stemming from significant funding from the parent, and access to joint leasing projects with the parent. The Ba3 issuer rating incorporates a three-notch uplift from the company's B3 BCA, based on Moody's assessment of the very high probability of extraordinary support from the parent. This reflects: (i) DBKL's 100% ownership and more than 80% funding by DBK, which has a BCA of 11-13 on Moody's scale (ranging from 1 to 21, whereby 1 represents lowest credit risk) for government- related issuers, and an issuer rating of Baa3; (ii) DBKL's relatively moderate size, which enables the parent to extend the necessary level of support to DBKL in the event of need; and (iii) DBKL's good fit with DBK's strategy. DBKL is highly dependent on DBK, which currently provides most of its funding, capital and the bulk of the leasing projects. The outlook on all DBKL's ratings is negative. Rating Outlook The outlook on all DBKL's ratings is negative and is driven by the significant reduction in its safety buffers in the form of capital and loan loss reserves that materialised over time as a result of worsening asset quality and weak profitability. What Could Change the Rating - Up Upward pressure could be exerted on the ratings as a result of (i) successful development of the company's franchise, with improving risk profile, (ii) improving safety buffers in the form of capital and loan loss reserves, and (iii) the development of risk management systems, which is possible in the currently stabilising economic environment in Kazakhstan. What Could Change the Rating - Down A further deterioration of DBKL's leasing book and inability to attract additional capital from the parent could have negative rating implications, as could any sovereign downgrade or a downgrade of the parent's ratings. Signs of diminished willingness on the part of DBK to further develop DBKL, or the parent's decision to privatise the company could also exert negative pressure on the company's ratings. The methodologies used in this rating were Analyzing The Credit Risks of Finance Companies published in October 2000 and Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology published in March 2007. DELTA PETROLEUM: 2011 Executive Bonuses Are Approved ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Delta Petroleum Corp. persuaded the bankruptcy judge in Delaware to approve $1.5 million in 2011 bonuses for 29 executives. Delta argued successfully that the bonuses for last year are part of managers' ordinary compensation and thus weren't proscribed by Congress. U.S. Bankruptcy Judge Kevin J. Carey in Wilmington, Delaware, approved the bonuses on March 7 even in situations where the bonus might be more than an employee was entitled to receive as a priority claim. In those instances, Judge Carey said, the bonuses are approved under the "necessity of payment doctrine." About Delta Petroleum Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil and gas company engaged primarily in the exploration for, and the acquisition, development, production, and sale of, natural gas and crude oil. Natural gas comprises over 90% of Delta's production services. The core area of its operations is the Rocky Mountain Region of the United States, where the majority of the proved reserves, production and long-term growth prospects are located. Delta and seven of its subsidiaries sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013, inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31, 2012 scheduled maturity of its $38.5 million secured credit facility with Macquarie Bank Limited and after several months of unsuccessful attempts to sell the business. Delta disclosed $375,498,248 in assets and $310,679,157 in liabilities, which also include $152,187,500 in outstanding obligations on account of the 7% senior unsecured notes issued in March 2005 with US Bank National Association indenture trustee; and $115,527,083 in outstanding obligations on account of 3-3/4% Senior Convertible Notes due 2037 issued in April 2007. In its amended schedules, the Delta Petroleum disclosed $373,836,358 in assets and $312,864,788 in liabilities. W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A. Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard & Reed LLP, in New York, N.Y., represent the Debtors as counsel. Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights, Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del., represent the Debtors as co-counsel. Conway Mackenzie is the Debtors's restructuring advisor. Evercore Group L.L.C. is the financial advisor and investment banker. The Debtors selected Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The petition was signed by Carl E. Lakey, chief executive officer and president. Delta will hold an auction for the business on March 26, 2012. No buyer is under contract. There is $57.5 million in financing for the Chapter 11 effort. The U.S. Trustee told the bankruptcy judge that there was insufficient interest from creditors to form an official committee of unsecured creditors. DENNY'S CORP: Reports $112.3 Million Net Income in Fiscal 2011 -------------------------------------------------------------- Denny's Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing net income of $112.28 million on $538.53 million in total operating revenue for the fiscal year ended Dec. 28, 2011, compared with net income of $22.71 million on $548.46 million of total operating revenue for the year ended Dec. 29, 2010. The Company's balance sheet at Dec. 28, 2011, showed $350.50 million in total assets, $360.17 million in total liabilities and a $9.67 million total shareholders' deficit. As the Company is heavily franchised, its financial results are contingent upon the operational and financial success of its franchisees. The Company receives royalties, contributions to advertising and, in some cases, lease payments from its franchisees. The Company has established operational standards, guidelines and strategic plans for its franchisees; however, the Company has limited control over how its franchisees' businesses are run. While the Company is responsible for ensuring the success of its entire chain of restaurants and for taking a longer term view with respect to system improvements, the Company's franchisees have individual business strategies and objectives, which might conflict with the Company's interests. The Company's franchisees may not be able to secure adequate financing to open or continue operating their Denny's restaurants. If they incur too much debt or if economic or sales trends deteriorate such that they are unable to repay existing debt, it could result in financial distress or even bankruptcy. If a significant number of franchisees become financially distressed, it could harm the Company's operating results through reduced royalties and lease income. A copy of the Form 10-K is available for free at: http://is.gd/Qyrnn1 About Denny's Corporation Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ: DENN) -- http://www.dennys.com/-- Denny's is one of America's largest full-service family restaurant chains, consisting of 1,348 franchised and licensed units and 232 company-owned units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. * * * Denny's carries 'B2' corporate family and probability of default ratings from Moody's Investors Service and a 'B+' corporate credit rating from Standard & Poor's. DLH MASTER: 5th Circ. Denies BofA Late Claim Appeal --------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that the Fifth Circuit on Tuesday denied Bank of America NA's appeal of an order disallowing it from filing a late proof of claim in the Chapter 11 case of DLH Master Land Holding LLC, the developer of the Dallas Logistics Hub. About Allen Capital Allen Capital Partners LLC and subsidiary DLH Master Land Holding LLC, are the developers of Dallas Logistics Hub, a 6,000-acre multimodal logistics park 12 miles (19 kilometers) from downtown Dallas. Allen Capital Partners, LLC, dba The Allen Group, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-30562) on Jan. 25, 2010. Mark MacDonald, Esq., at MacDonald + MacDonald, P.C., represents the Debtor. Lain, Faulkner & Co. is the Debtor's financial advisor. Allen disclosed $220,325,201 in assets and $160,622,236 in liabilities as of the Chapter 11 filing. The Debtor's affiliate -- DLH Master Land Holding, LLC, dba The Allen Group -- filed a separate Chapter 11 bankruptcy petition. Another affiliate, Visalia, California-based Richard S. Allen, Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D. Texas Case No. 10-33211) on May 3, 2010. Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, represents the Debtor. The Company disclosed $76,158,469 in assets and $53,728,982 in liabilities as of the petition date. An Official Committee of Unsecured Creditors has been appointed. Secured creditor BBVA Compass is represented by Kenneth Stohner, Jr., Esq. -- kstohner@jw.com -- at Jackson Walker L.L.P. So-called Pool 2 and Pool 4 secured creditors are represented by Robert Yaquinto, Jr., Esq., at Sherman & Yaquinto, L.L.P. There are two separate Chapter 11 plans filed in the Debtors' Chapter 11 cases -- one filed by RSAI and Richard Allen, and another filed by DLH and Allen Capital Partners. Debtors Richard Allen and RSAI filed their original Joint Plan of Reorganization on Aug. 18, 2010. However, after filing the original Plan, due to delays and disputes related to the DLH and ACP Plan, Allen and RSAI determined it was most efficient to wait until the ACP and DLH Plan was confirmed before proceeding to confirmation of the Allen and RSAI Plan. An Amended Fifth Joint Plan of Reorganization was filed for Allen Capital Partners and DLH Master Land Holding, but in an order dated Oct. 12, 2011, Bankruptcy Judge Harlin D. Hale confirmed the Plan only as to ACP. In November 2011, Bankruptcy Judge Harlin Dewayne Hale confirmed the Amended and Restated Seventh Plan of Reorganization for DLH Master Land Holding filed with the Court on Nov. 22, 2011. Judge Hale also approved the Term Loan to Reorganized DLH. DOLTON, IL: Fitch Withdraws 'BB' Rating on $15MM Bonds ------------------------------------------------------ Fitch Ratings downgrades and withdraws its rating on Dolton, Illinois' (the village) unlimited tax general obligation bonds (ULTGOs) due to lack of timely and sufficient information as follows: -- $15.08 million ULTGO bonds, series 2004C, 2004D, 2009A, and taxable 2009B to 'BB' from 'BBB+'. The bonds are removed from Rating Watch Negative and assigned a Negative Rating Outlook. Although the level of ongoing information available is insufficient for Fitch to continue to properly assess the village's credit quality, Fitch believes that the 'BB' rating most accurately reflects the village's current credit position based on the limited available information. The bonds are general obligations of the village for which its full faith and credit have been irrevocably pledged and are payable from ad valorem taxes levied on all taxable property within the village, without limitation as to rate or amount. EXTREMELY LIMITED LIQUIDITY: The downgrade to 'BB' reflects Fitch's concern regarding the general fund's lack of liquidity. The fiscal 2010 audit and the fiscal 2011 estimates show zero cash on hand and a large increase in assets due from other funds. RESTORATION OF LIQUIDITY UNCERTAIN: The Negative Outlook reflects the village's lack of a clear plan to restore liquidity in the general fund. HISTORY OF LATE AUDITS: The village's audits are historically late and contain material weaknesses. The 2010 audit (the most recent available) does not present fairly, in conformity with generally accepted accounting principles, the financial position of the pension trust funds of the village due to the omission of the fire department and police pension trust funds. ELEVATED DEBT BURDEN: The village's debt burden is elevated both as a percentage of market value and per capita. The downgrade to 'BB' reflects Fitch's continued concern over the lack of liquidity in the general fund. While unaudited fiscal 2011 results show general fund reserves at $10.6 million (60% of total expenditures), the balance is not liquid and is made up of monies due from other funds. Cash and investments have declined from a high of nearly $8 million in fiscal 2007 to $0 in fiscal 2010 - the last year of audited financial statements. Unaudited results for fiscal 2011 also show a zero cash balance. No plan to restore liquidity has been articulated to Fitch. Village management indicated the decline in fund balance is due largely to the general fund support of a number of its special revenue and enterprise funds, most notably in the 911 fund, the Dorchester fund (senior center operations) and the recreation center fund. Unaudited fiscal 2011 results show fund balances of negative $3.82 million in the 911 fund, negative $2.2 million in the Dorchester fund, and negative $1.7 million in the recreation center fund. To reduce and eliminate these deficits, the village has hired an outside management company to operate its fitness center and Dorchester as well as joining a cooperative 911 system, which management states could minimize losses in the 911 fund by approximately $200,000 per year. In addition to the village's poor financial performance, there have been issues with consistent delays in releasing timely audits and material weaknesses. The village has indicated its intent to improve financial reporting and hired an outside consulting firm to help finalize prior period audits. Despite the stated effort to improve, the fiscal 2010 audit was delayed and not made available to Fitch until February of 2012; the village's fiscal year ends April 30. To date the fiscal 2011 audit remains in draft form. The fiscal 2009 audit contained material weaknesses. However, management indicated that these would be addressed through heightened oversight and increased training. The village expected no material weaknesses in the fiscal 2010 audit, but this was not the case and many of the same issues that plagued the village in fiscal 2009 remained in fiscal 2010. While the village does not expect any material weaknesses in the fiscal 2011 audit, Fitch cannot comment at this time on the reliability of this claim. The village's debt burden is high at $3,558 per capita and 8.7% of market value, largely due to overlapping debt. Principal amortization is rapid and 68% of the outstanding debt will be retired within 10 years. The fiscal 2010 audit failed to include updated results for the village's three pension plans, but older data suggests that the plans were over 90% funded as of April 30, 2008. DPNY INC: Domino's Pizza Franchisee Files for Chapter 11 -------------------------------------------------------- DPNY, Inc. filed for Chapter 11 bankruptcy (Bankr S.D.N.Y. Case No. 12-10935) on March 8, 2012. The firm is represented by Leslie Ann Berkoff, Esq., at Moritt, Hock & Hamroff, LLP. Judge James M. Peck presides over the case. The Debtor is required to file its schedules of assets and liabilities and statement of financial affairs by March 21, 2012. The Debtor also has filed so-called "first day" motions including a request to pay critical vendors. Ms. Berkoff can be reached at: Leslie Ann Berkoff, Esq., MORITT, HOCK & HAMROFF, LLP 400 Garden City Plaza, Suite 202 Garden City, NY 11530 Tel: (516) 873-2000 Fax: (516) 873-2010 Email: lberkoff@moritthock.com According to Lisa Fickenscher at Crain News Service, David Melton, owner of four of Manhattan Domino's Pizza stores, filed for bankruptcy protection, blaming litigation for his troubles. The report notes DPNY Inc. owner Mr. Melton said in the bankruptcy filing that his company cannot afford the continuing litigation. DPNY estimated assets of up to $500,000 and debts of up to $1 million. All together, the four restaurants employ about 90 workers. The report says more than 50 delivery employees who worked at the four restaurants sued their employer and certain managers in 2010, alleging wage and hour labor violations. They are being represented by the Legal Aid Society. The employees "were routinely not paid at all for many hours that they worked and that they were systematically underpaid for other hours that they worked in violation of minimum and overtime mandates," said Richard Blum, a staff attorney for the Legal Aid Society, according to the report. "The time and expense required to defend the lawsuit threatens to shut down the restaurants," the report quotes Mr. Blum as saying, "putting all of its employees out of work and likely forcing the Meltons into bankruptcy." The report notes Mr. Melton retained two law firms for $135,000 to represent him. Moritt Hock & Hamroff of Garden City, N.Y., and Frost Brown Todd of Nashville are handling the case. Mr. Melton said the Nashville-based law firm had also represented his company in the employee lawsuit. DUNE ENERGY: To Offer 3.2-Mil. Shares Under 2012 Incentive Plan ------------------------------*-------------------------------- Dune Energy, Inc., filed with the U.S. Securities and Exchange Commission a Form S-8 registering 3.25 million shares of common stock issuable under the Company's 2012 Stock Incentive Plan. The proposed maximum aggregate offering price is $11.08 million. A copy of the prospectus is available at http://is.gd/TVpfFl 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. DYNEGY HOLDINGS: To Renegotiate Chapter 11 Plan ----------------------------------------------- Dynegy Holdings LLC will renegotiate its Chapter 11 restructuring plan under the guidance of an examiner who was appointed to investigate into the company's bankruptcy, according to a March 12 report by Reuters. Dynegy spokeswoman Katy Sullivan said Susheel Kirpalani, Esq., the court-appointed examiner, was ordered at the hearing on Monday to work with the company and creditors to reach an agreement on a restructuring plan. Judge Cecilia Morris of the U.S. Bankruptcy Court for the Southern District of New York ordered the examiner to work with the groups and set a hearing date of April 4 for the involved parties to report back to her, according to Ms. Sullivan. "We look forward to working with Mr. Kirpalani and Dynegy Holdings' creditors to maintain an open and productive dialogue to make progress in the Chapter 11 proceeding," Reuters quoted Ms. Sullivan as saying. Thomas Kreller, a lawyer for Dynegy bondholder Franklin Advisers, also welcomed the renegotiation of the restructuring plan. "We think this case deserves -- and we think creditors deserve -- the ability to sit down, focus and try to get to that kind of plan," he said at the hearing. The bankruptcy judge's decision comes after the examiner released the results of his investigation last week, which found that the sale of Dynegy Holdings' coal-powered plant assets to its parent, Dynegy Inc., was a fraudulent transfer. In a related development, creditors of Dynegy Holdings opposed the company's newly revised restructuring plan, saying it strips holders of so-called "subordinated notes claims" of their right to vote on the plan. Dynegy Holdings previously proposed changes to the plan to resolve objections from creditors on the supposed inadequacies of the outline of the plan or the so-called disclosure statement. The new opposition comes from Wells Fargo Bank N.A., Claren Road Asset Management LLC and CQS DO S1 Limited, which criticized the improper classification of claims of holders of subordinated notes. "The revised plan improperly classifies Class 4 as unimpaired. Such classification is clearly designed to deprive holders of Subordinated Notes Claims of their voting rights," said Well Fargo's lawyer, Andrew Silfen, Esq., at Arent Fox LLP, in New York. CQS DO, which holds subordinated notes worth about $49 million, said Dynegy Holdings violates the "absolute priority rule" by seeking to wipe out the subordinated notes claims while proposing to retain its parent's equity interests in the company. For its part, Claren Road said the outline of the plan "lacks any analysis as to how or why these creditors could, under any rational basis, be deemed unimpaired." Wells Fargo is represented by: Andrew I. Silfen, Esq. George P. Angelich, Esq. Ronni N. Arnold, Esq. ARENT FOX LLP 1675 Broadway New York, NY 10019 Tel: 212-484-3900 Fax: 212-484-3990 E-mail: silfen.andrew@arentfox.com angelich.george@arentfox.com arnold.ronni@arentfox.com Claren Road is represented by: Matthew J. Williams, Esq. Shira D. Weiner, Esq. GIBSON, DUNN & CRUTCHER LLP 200 Park Avenue New York, NY 10166-0193 Tel: (212) 351-4000 Fax: (212) 351-4035 E-mail: mjwilliams@gibsondunn.com sweiner@gibsondunn.com CQS DO is represented by: Paul N. Silverstein Jeremy B. Reckmeyer ANDREWS KURTH LLP 450 Lexington Avenue, 15th Floor New York, NY 10017 Tel: (212) 850-2800 Fax: (212) 850-2929 E-mail: paulsilverstein@andrewskurth.com jeremyreckmeyer@andrewskurth.com About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7 to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16, 2011. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) DYNEGY HOLDINGS: Board to Review Examiner's Report -------------------------------------------------- Dynegy Inc. said in a press statement it has received an executive summary of the report filed by the examiner appointed in the Chapter 11 bankruptcy proceedings for its wholly owned subsidiary Dynegy Holdings LLC (DH) and four of DH's subsidiaries. The Board of Directors of Dynegy and the Board of Managers of DH take the examiner's findings seriously and intend to review the full report, once it is made available, to determine its impact on DH's chapter 11 proceedings, if any. Susheel Kirpalani, the Court-appointed Chapter 11 Examiner, found that although the first phase of the prepetition restructuring of Dynegy Holdings, LLC, and its debtor affiliates was permissible, the second phrase, which consisted of the transfer of CoalCo, was fraudulent. In a report submitted to the U.S. Bankruptcy Court for the Southern District of New York on March 9, 2012, the Chapter 11 Examiner detailed his findings resulting from his investigation into certain issues relating to the conduct of the Debtors in the months leading up to their Nov. 7, 2011 bankruptcy filing. The Chapter 11 Examiner related that Dynegy Inc., in carrying out its restructuring strategy, believed that even if Dynegy Holdings was insolvent, as long as it transferred assets in exchange for what the law considers "reasonably equivalent value," then creditors would have no legitimate cause to complain. The Chapter 11 Examiner said that the first phase of the prepetition restructuring -- transfers incident to the creation of two distinct silos of assets, CoalCo and GasCo -- was permissible because those transfers did not injure creditors and were not, in and of themselves, intended to do so. While it is true that as a result of the ring-fencing and attendant refinancing of pre- existing secured bank debt, unsecured creditors of Dynegy Holdings could look only to the residual equity value of CoalCo and GasCo, this was, as a practical matter, always the case for unsecured creditors of Dynegy Holdings, regardless of whether the silos were created, the Chapter 11 Examiner added. With respect to the second phase of the restructuring, the Chapter 11 Examiner said that strategy was ill-conceived. The second phase involved the transfer or purported "sale" of CoalCo by Dynegy Holdings to Dynegy Inc. in exchange for an illiquid, unsecured, highly unusual financial instrument called an "undertaking." The Examiner said the undertaking had no covenants to protect the holder's value against other actions that might be taken by Dynegy Inc. The Examiner believes that the undertaking had a midpoint value at the time of approximately $860 million. The Chapter 11 Examiner pointed out that immediately after Dynegy Inc. provided the undertaking, Dynegy Inc. and Dynegy Holdings agreed to amend it so Dynegy Inc. could reduce its payment obligations by $1.678 over the course of the payment stream -- an amount apparently designed to mimic a dollar-for-dollar present value reduction -- for each dollar face amount of Dynegy Holdings bonds that was acquired or otherwise retired by Dynegy Inc., even if that debt was acquired or retired at a discount to the face amount. Dynegy took the position that Dynegy Inc.'s future satisfaction of Dynegy Holdings's debt would constitute value, as a matter of law, measured by the face amount of that debt -- no matter what Dynegy Inc. paid for that debt, and regardless of whether Dynegy Inc. paid for that debt by pledging the stock of its newly acquired direct subsidiary, CoalCo. In this way, Dynegy Holdings transferred to Dynegy Inc. not only CoalCo, but also the corporate opportunity to use CoalCo as a vehicle for exchanging its outstanding bonds for structurally senior bonds at a discount, or otherwise to control its own restructuring of indebtedness with its own assets, the Chapter 11 Examiner related in court papers. The Chapter 11 Examiner further said that the addition of the payment reduction mechanism into the amended undertaking rendered the undertaking unsalable to third-parties, and thereby further eroded the value of the undertaking to Dynegy Holdings. The transaction transferred hundreds of millions of dollars away from Dynegy Inc.'s creditors in favor of its stockholders, the Chapter 11 Examiner opined. The Examiner concluded that the conveyance of CoalCo to Dynegy Inc. was an actual fraudulent transfer and, assuming that Dynegy Holdings was insolvent on the date of the transfer, a constructive fraudulent transfer, and a breach of fiduciary duty by the board of directors of Dynegy Holdings. Dynegy Inc., through its board of directors, used its power to control the affairs of Dynegy Holdings -- an insolvent subsidiary whose property should have been maximized, or at least safeguarded, for the benefit of Dynegy Holding's creditors -- to disadvantage Dynegy Holdings for the benefit of Dynegy Inc., the Examiner pointed out. The Examiner said Dynegy Inc.'s conduct provides a basis for disregarding the corporate separateness among Dynegy Inc., Dynegy Holdings, and Dynegy Holdings's newly formed shell subsidiary, DGI. Because of that DGI should be considered the alter ego of Dynegy Holdings, and DGI's transfer of CoalCo should be deemed a transfer to Dynegy Inc. of an interest in property of Dynegy Holdings, the Examiner said. In that event, Dynegy Holdings would have a claim against Dynegy Inc. for the fraudulent transfer of CoalCo, the Examiner told the Court. Alternatively, to remedy the injustice occasioned upon Dynegy Holdings and, derivatively, its creditors, CoalCo should be deemed property of Dynegy Holdings's bankruptcy estate, the Examiner held. Finally, the breach of fiduciary duty by the board of directors of Dynegy Holdings should be equally attributed to the board of directors of Dynegy Inc., the Examiner added. The Examiner further concluded that the Bankruptcy Court could confirm a Chapter 11 plan for Dynegy Holdings, but, in light of the conduct of all but one of the members of the board of Dynegy Inc. as of September 1, 2011, four of whom now constitute the majority of the board of Dynegy Holdings, any plan that provides for these individuals to continue as directors would not be consistent with the interests of creditors and with public policy. The Examiner does not believe the continued service by senior management of Dynegy Inc., even in director or officer capacities, would be contrary to creditor interests or public policy. A redacted copy of the Examiner's Report dated March 9, 2012, is available for free at: http://bankrupt.com/misc/dynegyexamrpt0309.pdf * * * Dynegy Inc. closed at a record low on March 9 after the Chapter 11 Examiner reported that the prepetition restructuring of its units was fraudulent and harmed creditors, David McLaughlin and Jim Polson of Bloomberg News reported on March 10. Dynegy plunged 36% to 76 cents in New York Stock Exchange composite trading, bringing the past year's decline to 86%, the March 10 Bloomberg report related. Dynegy Holdings' $1 billion of 8.375% debt due 2016 rose 4.25 cents to 69 cents on the dollar at 2:20 p.m. New York time, on March 9, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority, Bloomberg related. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7 to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16, 2011. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) DYNEGY HOLDINGS: Chapter 11 Trustee Sought After Examiner Report ---------------------------------------------------------------- The U.S. Trustee, an agency of the U.S. Department of Justice overseeing bankruptcy cases, said an outside trustee should take over Dynegy Holdings LLC's Chapter 11 case to better protect creditors. In a motion filed with the U.S. Bankruptcy Court in Manhattan, the agency called for the appointment of a bankruptcy trustee, citing mismanagement of Dynegy Holdings by its executives. "The mismanagement of the debtors by their current management to the financial detriment of the debtors' creditors provides cause for the appointment of an independent fiduciary to manage the affairs of these debtors," U.S. Trustee lawyer, Susan Golden, Esq., said. The move comes on the heels of a report by Susheel Kirpalani, the court-appointed examiner, about the results of his investigation into Dynegy Holdings' bankruptcy. The report said creditors were harmed by the fraudulent transfer of the company's coal-powered plant assets to its parent, Dynegy Inc. "Current management is not in a position to assess the findings and conclusion of the Examiner, and to pursue any and all of the appropriate remedies," Ms. Golden said. "Only a Chapter 11 trustee will have the statutory authority to do so." A bankruptcy trustee is often appointed when it may serve the bankruptcy estate's best interest, or when executives of the bankrupt company are suspected of wrongdoing. Judge Cecelia Morris will hold a hearing on April 4, 2012, to consider approval of the request. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7 to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16, 2011. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) EMMIS COMMUNICATIONS: Signs New Employment Deal With R. Cummings ---------------------------------------------------------------- Emmis Communications Corporation, on March 7, 2012, entered into a new one-year employment agreement with Richard F. Cummings to serve as President of Emmis Radio Programming, effective March 1, 2012. Under the agreement, Mr. Cummings' base salary is $464,100 and his annual incentive compensation target is 60% of his base salary. The annual incentive bonus will be paid, if at all, based upon achievement of certain performance goals to be determined by the Company. The Company retains the right to pay such annual incentive compensation in cash or shares of the Class A common stock. Mr. Cummings will continue to receive an automobile allowance and will continue to be reimbursed for up to $5,000 per year in premiums for life or other insurance and retains the right to participate in all of the Company's employee benefit plans for which he is otherwise eligible. He will also be entitled to severance equal to $470,000 in the event he is not offered substantially similar employment upon the expiration of the term and his employment terminates. If he is entitled to severance, Mr. Cummings will be offered a four year part-time programming role with total payments over the four years of $530,000. The switch from full-time to part-time employment is designed to constitute a 'separation from service' within the meaning of section 409A of the Internal Revenue Code. The same day, the Company entered into a new Change in Control Severance Agreement with Mr. Cummings that provides that if Mr. Cummings' employment is terminated by the company within two years after a change in control of the company, other than for cause, or is terminated by the executive for good reason, Mr. Cummings is entitled to (1) a payment equal to the executive's base salary through the termination date, plus a pro-rata portion of the executive's target bonus for the year and accrued vacation pay; (2) a severance payment equal to three times his highest annual base salary and highest annual incentive bonus during the preceding three years; (3) continued accident and life insurance benefits for three years; (4) reimbursement for COBRA premiums for continuation of medical and dental benefits for 18 months and reimbursement for private medical and dental benefits of an equivalent level for 18 months following termination of the COBRA reimbursement; and (5) if the payments exceed certain limits, additional tax "gross up" payments to compensate him for the excise tax imposed by section 4999 of the Internal Revenue Code; provided, however that the amount of the "gross up" payment may be reduced by up to 10% if that reduction would prevent payment of the excise tax. Mr. Cummings is obligated not to voluntarily leave employment with Emmis during the pendency of a change in control other than as a result of disability, retirement or an event that would constitute good reason if the change-of-control had occurred. About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. The Company reported a consolidated net loss of $11.54 million on $251.31 million of net revenues for the year ended Feb. 28, 2011, compared with a consolidated net loss of $118.49 million on $242.56 million of net revenues during the prior year. For the nine months ended Nov. 30, 2011, the Company reported net income attributable to common shareholders of $97.72 million on $185.08 million of net revenues, compared with a net loss attributable to common shareholders of $7.92 million on $193.24 million of net revenues for the same period during the prior year. The Company's balance sheet at Nov. 30, 2011, showed $365.70 million in total assets, $344.92 million in total liabilities,$56.38 million in series A cumulative convertible preferred stock and a $35.60 million total deficit. ENERGY CONVERSION: Court Sets June 21, 2012 Claims Bar Date ----------------------------------------------------------- The Hon. Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern District of Michigan has established June 21, 2012, at 5:00 p.m. EST as the deadline for individuals or entity to file proofs of claim against Energy Conversion Devices, Inc., et al. The Court also set Aug. 13, 2012, at 5:00 p.m. EST, as the bar date applicable to governmental units. Original proof of claim forms must be delivered by U.S. mail, hand delivery or overnight courier to Kurtzman Carson Consultants LLC at: Energy Conversion Devices Claims Processing Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 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 estimated 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. The Debtors hired Kurtzman Carson Consultants LLC as claims, noticing and balloting agent. ENERGY CONVERSION: Has OK to Hire Kurtzman Carson as Claims Agent ----------------------------------------------------------------- The Hon. Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern District of Michigan granted Energy Conversion Devices, Inc., and United Solar Ovonic LLC permission to hire Kurtzman Carson Consultants LLC as claims, noticing and balloting agent. As reported by the Troubled Company Reporter on Feb. 23, 2012, the Debtors have identified hundreds of entities or persons to which notice must be given for various purposes, making utilization of an outside claims and noticing agent appropriate in their cases. Noticing and receiving, docketing and maintaining proofs of claim would impose heavy administrative and other burdens upon the Court and the Office of the Clerk of the Court. Preparing and serving the notices on all creditors and parties in interest and docketing and maintaining the large number of proofs of claim that may be filed in the cases would strain the resources of the Clerk's Office. In this regard, the Debtors sought court approval to employ KCC. The Debtors said that if KCC is not engaged, then they may have to divert substantial manpower to, or employ other professionals to, among other tasks, manage the claims process and implement the plan solicitation process. Under the parties' engagement agreement, KCC is to receive a $40,000 retainer. 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 estimated 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 CONVERSION: Deadline Today to File Schedules & Statements ---------------------------------------------------------------- The Hon. Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern District of Michigan extended until March 15, 2012, the deadline for Energy Conversion Devices, Inc., and United Solar Ovonic LLC to file their (a) schedules of assets and liabilities, current income and expenditures, and executory contracts and unexpired leases; (b) statement of financial affairs; and (c) list of equity security holders. As reported by the Troubled Company Reporter on Feb. 23, 2012, the Debtors asked the Court for more time to file their schedules, statement of financial affairs, and list of equity security holders, saying that they have roughly 4,983 potential creditors, including current and former employees. The Debtors said that the conduct and operation of the Debtors' business operations require the Debtors to maintain voluminous books and records and complex accounting systems. 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 estimated 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. The Debtors hired Kurtzman Carson Consultants LLC as claims, noticing and balloting agent. ENERGY CONVERSION: Sec. 341 Creditors' Meeting on March 23 ---------------------------------------------------------- Daniel McDermott, the U.S. Trustee for Region 9, will convene a meeting of creditors pursuant to 11 U.S.C. Sec. 341(a) in the Chapter 11 case of Energy Conversion Devices, on March 23, 2012, at 2:00 p.m. at Room 315 E, 211 W. Fort Street Building, Detroit 341. 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 estimated 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. The Debtors hired Kurtzman Carson Consultants LLC as claims, noticing and balloting agent. ENERGY CONVERSION: U.S. Trustee Appoints 7-Member Creditors' Panel ------------------------------------------------------------------ Daniel McDermott, the U.S. Trustee for Region 9, pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Energy Conversion Devices, Inc., et al. The Creditors Committee members are: 1) Donna J. Parisi The Bank of New York Mellon Trust Company, National Association, as Indenture Trustee 6525 West Campus Oval, Suite 200 New Albany, OH 43054 Tel: (614) 775-5279 Fax: (614) 775-5636 E-mail: donna.parisi@bnymellon.com 2) Richard Rathvon c/o Liberty Power 1901 W. Cypress Creek, Suite 600 Fort Lauderdale, Florida 33309 Tel: (954) 616-7201 E-mail: rrathvon@gmail.com 3) Bob Daily The Pegasus Group, Inc. 1148 Alpine Road Walnut Creek, California 94596 Tel: (925) 930-0810 ext. 102 Fax: (925) 256-0300 E-mail: daileyb@pegasusgroup.net 4) Ajay Goel Ameri-Source 5372 Enterprise Boulevard Bethel Park, PA 15102 Tel: (412) 831-9400 Fax: (412) 831-9401 E-mail: ajay@ameri-source.com 5) Jeffrey Weiss, Esq. Praxair, Inc. 39 Old Ridgebury Road Danbury, CT 06810 Tel: (203) 837-2104 Fax: (203) 837-2515 E-mail: Jeffrey_weiss@praxair.com 6) David Goodman Advanced Green Technologies, Inc. 2100 NW 21st Street Fort Lauderdale, FL 33311 Tel: (954) 734-2641 Fax: (954) 734-2644 E-mail: davidg@agt.com 7) Narendra Patel Marubeni Itochu Steel America, Inc. 20 North Martingale Road, Suite 270 Schaumburg, IL 60173 Tel: (847) 330-8651 Fax: (847) 995-8063 E-mail: pateln@misa.com 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 estimated 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. The Debtors hired Kurtzman Carson Consultants LLC as claims, noticing and balloting agent. FILENE'S BASEMENT: Wants May 30 Deadline to Decide on Leases ------------------------------------------------------------ Filene's Basement, LLC, et al., ask the Bankruptcy Court to extend their deadline within which they may assume or reject unexpired leases of nonresidential real property, including subleases or other agreements through May 30, 2012. As of the Petition Date, the Debtors were party to numerous nonresidential real property leases, including leases for store locations in the District of Columbia and the following states: Connecticut, Florida, Georgia, Illinois, Massachusetts, Maryland, New Jersey, New York, Ohio, Texas, and Virginia. The Debtors relate they are currently discussing and negotiating chapter 11 plan terms with the Official Committees in these cases. The Debtor-owned properties situated on leased premises are important and valuable assets that will be treated under any plan. The Debtors tell the Court that they remain in the process of evaluating their remaining leases and are in discussions about certain lease terms, the status of the Remaining Leases, and related assumption and cure matters. The Debtors maintain they seek to avoid or resolve any potential disputes that might arise in connection with the assumption of any of the Remaining Leases, and believe additional time will facilitate that objective. About Syms Corp. Massachusetts-based Filene's Basement, also called The Basement, is the oldest off-price retailer in the United States. The Basement focuses on high-end goods and is known for its distinctive, low-technology automatic markdown system. Filene's Basement first filed for Chapter 11 bankruptcy protection in August 1999. Filene's Basement was bought by a predecessor of Retail Ventures, Inc., the following year. Retail Ventures in April 2009 transferred the unit to Buxbaum. Filene's Basement, Inc. and its affiliates filed for Chapter 22 (Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy Solutions serves as claims and notice agent. The Debtors estimated $50 million to $100 million in assets and $100 million to $500 million in debts. The 2009 Debtor was formally renamed FB Liquidating Estate, following the sale of all of its assets to Syms Corp. in June 2009. Pursuant to the Liquidating Plan confirmed in January 2010, secured creditors in the Chapter 11 case have been paid in full, and holders of priority, administrative and convenience class claims have received 100% of their allowed claims. As reported by the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen, Chairman of Abacus Advisors LLC and Chief Restructuring Officer for FB Liquidating Estate disclosed that a second distribution of dividend checks to Filene's unsecured creditors amounting to 12.5% of approved claims has been made, bringing the cumulative distributions on unsecured claims to 62.5%. On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-13511 to 11-13514) after a failed bid to sell the business. The two units are Syms Clothing Inc. and Syms Advertising Inc. Judge Kevin J. Carey presides over the case. Lawyers at Skadden Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The Debtors tapped Rothschild Inc. as investment banker and Cushman and Wakefield Securities, Inc., as real estate financial advisors. Syms shuttered its namesake and Filene's Basement outlets upon the bankruptcy filing and tapped a joint venture of Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC to run the going-out-of-business sales. The sale may continue until Jan. 31, 2012. Filene's Basement estimated $1 million to $10 million in assets and $50 million to $100 million in debts. The petitions were signed by Gary Binkoski, authorized representative of Filene's Basement. The official committee of unsecured creditors appointed in the 2011 case has retained Hahn & Hessen LLP as legal counsel. Holders of equity in Syms Corp. pushed for an official shareholders' committee and separation of the Syms and Filene's Basement bankruptcy estates. Gordon Brothers and Hilco are represented by Goulston & St FIRST INDUSTRIAL: Moody's Affirms 'Ba3' Senior Unsecured Rating --------------------------------------------------------------- Moody's Investors Service affirmed the ratings of First Industrial L.P. (senior unsecured at Ba3) and First Industrial Realty Trust, Inc. (preferred stock at B2) and revised the rating outlook to positive from stable. Ratings Rationale The rating action reflects First Industrial's progress in leasing up its portfolio, reducing its leverage and enhancing its liquidity. In 2011, First Industrial increased its in-service occupancy to 87.9% from 85%; on a same-property basis occupancy rose by 3.3% during the year. Simultaneously, the REIT's tenant retention increased to 69.9% in 2011 from 55.4% in 2010 (by square footage). Also positively, First Industrial continued to de-lever its balance sheet via asset sales and equity issuances, as well as extended its maturities through debt buy-backs where economical. The REIT's effective leverage declined to 52.8% at YE11 from 61.9% at YE10 and its net debt/EBITDA dropped to 7.2x from 8.5x over the same period. In 2011, the REIT's asset sales totaled $86.6 million at an average cap rate of 6.3% (for operating properties). First Industrial also originated approximately $255 million of mortgages to address some of its 2011 and 2012 maturities. In addition, in December 2011, First Industrial entered into a new $450 million revolving credit facility due 2014 (with a one-year extension option); this facility refinanced its prior line of credit that was due to mature in 2012. First Industrial's liquidity is strong with over $300 million available on its revolving credit facility as of year-end, and combined debt maturities of under $100 million in the next two years. Counterbalancing these positives, First Industrial's portfolio occupancy remains relatively low at below 90%, and re-leasing spreads continue to be negative. The inflection point in re- leasing spreads is anticipated around year-end 2012 when 2009 leases begin to roll-over. As a result, the REIT's fixed charge remains depressed at 1.7x (excluding JVs, gains on sale and adjusting for amortized financing costs) for 2011. The positive rating outlook reflects Moody's view that First Industrial will continue to bolster its debt protection measures and that progress in leasing up its vacancies at stabilizing to gradually increasing rental rates will support improvement in its fixed charge coverage. Continuing upward rating momentum would be predicated on portfolio lease-up and achievement of economically profitable rental rates as indicated by improvement in fixed charge coverage closer to 2.0x, reduction in net debt/EBITDA to below 7.0x and maintenance of secured leverage below 20%. Ample liquidity would also be required for an upgrade. Negative rating pressure would result from challenges in leasing up the portfolio at adequate rental rates as evidenced by weakness in fixed charge coverage on sustained basis at or below 1.5x. Net debt/EBITDA over 8.5x or secured debt in excess of 25% of undepreciated assets would also be viewed negatively, as well as any liquidity challenges. The following ratings were affirmed with a positive outlook: First Industrial Realty Trust, Inc. -- Preferred stock at B2; preferred stock shelf at (P)B2 First Industrial L.P. -- Senior unsecured at Ba3; senior unsecured shelf at (P)Ba3 Moody's last rating action with respect to First Industrial was on March 2, 2011, when Moody's affirmed the ratings of First Industrial Realty Trust and First Industrial L.P. (senior unsecured debt at Ba3) and revised the rating outlook to stable from negative. First Industrial Realty Trust, Inc. (NYSE: FR) is a leading owner and operator of industrial real estate which owns, manages and has under development 66 million square feet of industrial space including bulk and regional distribution centers, light industrial, and other industrial facility types. At December 31, 2011, the REIT had $2.7 billion in assets and $1.1 billion in equity. The principal methodology used in this rating was the Global Rating Methodology for REITs and Other Commercial Property Firms published in July 2010. FRANCISCAN COMMUNITIES: Buyer Offers $15 Million ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Franciscan Communities St. Mary of the Woods Inc. lined up a buyer for its retirement community and nursing home. Orion Properties Eleven LLC will buy the assets for $15 million cash, absent higher and better offers at an auction. At a hearing on March 22, the Debtor will ask the bankruptcy judge in Cleveland to approve auction and sale procedures. The Debtor proposes an April 15 deadline for initial bids, an auction on April 17, and a sale-approval hearing on April 19. About Franciscan Communities Illinois-based Franciscan Communities St. Mary of the Woods, Inc., owns and operates a senior living community in Avon, Ohio. The not-for-profit community is owned and managed by the Franciscan Sisters of Chicago Service Corp. Franciscan Communities St. Mary of the Woods filed for Chapter 11 bankruptcy (Bankr. N.D. Ohio Case No. 11-19865) on Nov. 21, 2011, after it failed to negotiate an out-of-court workout with holders of tax-free bonds. Judge Jessica E. Price Smith oversees the case. The Debtor disclosed assets of $36 million and debt totaling $48 million as of the Chapter 11 filing. In its schedules, the Debtor disclosed $22,314,854 in assets and $49,555,487 in liabilities. The Debtor is represented by Heather Lennox, Esq., Carl E. Black, Esq., and Daniel M. Syphard, Esq., at Jones Day, as bankruptcy counsel. The Garden City Group, Inc., is the claims and noticing agent. The Debtor tapped Deloitte Financial Advisory Services LLP as restructuring advisor, and Houlihan Lokey Capital, Inc., as its investment banker. The U.S. Trustee appointed Beverly Laubert as patient care ombudsman. Franciscan Sisters of Chicago, the sole member of the Debtor, is providing $4.5 million in DIP loans. The DIP Lender is represented by George Mesires, Esq., and Daniel P. Strzalka, Esq., at Ungaretti & Harris LLP. The Bank of New York Mellon Trust Company, N.A., the bond trustee, is represented by Bruce H. White, Esq., and Clifton R. Jessup, Esq., at Greenberg Traurig LLP. Wells Fargo Bank, N.A., as Master Trustee, is represented by Daniel S. Bleck, Esq., at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., and John R. Weiss, Esq., at Duane Morris LLP. Sovereign Bank, provider of the Debtor's letter of credit facility, is also represented by John R. Weiss, Esq., at Duane Morris LLP. The Official Committee of Unsecured Creditors in the Chapter 11 cases of the Debtor is represented by McDonald Hopkins LLC as counsel. FREEDOM GROUP: Moody's Says CEO's Departure Credit Negative ----------------------------------------------------------- Freedom Group said on March 12 that its CEO, Bon Nardelli, resigned. George Kollitides, a member of Freedom Group board of directors has been named chairman and will act as interim CEO until a permanent CEO is found. Moody's Investors Service said that it doesn't think Freedom will change its long term strategy just because the CEO resigned. "However, until a new CEO is named and announces his/her vision, a certain amount of uncertainty will prevail," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. "That said, because of Cerberus' ownership interest in Freedom, we are confident that the new CEO will share Cerberus's strategy of growing Freedom Group both organically and through strategic acquisitions, while maintaining financial flexibility," he noted. Ratings Rationale Freedom's Group's B1 Corporate Family Rating reflects its modest size with revenue of around $750 million, single industry segment in firearms and related areas, exposure to volatile raw material prices and susceptibility to discretionary consumer spending. The rating is supported by its subsidiaries long operating history and strong brand recognition and growth in the government, military and law enforcement markets. Further supporting Freedom Group's rating is its leading market position in key categories (shotguns, rifles, and ammunition), relatively stable hunting participation rates and its historical ability to pass through price increases, although that may be more challenging in today's uncertain economy. The rating is constrained by generally modest, yet improving credit metrics with Debt/EBITDA above 4 times and retained cash flow/net debt in the single digits. The stable outlook reflects Moody's belief that both revenue and earnings will likely grow modestly in the near to mid-term and that any additional shareholder returns will be funded from free cash and will not increase leverage. The rating could be upgraded over the longer term if the company completes an IPO and demand significantly improves. Key credit metrics driving a potential upgrade would be debt/EBITDA sustained around 3 times and retained cash flow/net debt consistently above 20%. If the company does not complete an IPO in the next year or two or operating performance weakens , the rating could be downgraded. Key credit metrics that could prompt a downgrade would be debt/EBITDA remaining above 5.5 times for a prolonged period or retained cash flow/net debt not approaching 10% or more. The Ba3 rating on the secured notes would likely get downgraded one or two notches if the Holdco PIK notes are repaid with the proceeds from an IPO. This is because the secured notes would lose the loss absorption that the Holdco PIK notes currently provide. GAME TRADING: Moves Panel's Plan Outline Objection Deadline ----------------------------------------------------------- Bankruptcy Judge Nancy V. Alquist approved a Stipulation and Consent Order extending the time for the official committee of unsecured creditors to respond to Game Trading Technologies, Inc.'s disclosure statement accompanying its plan of reorganization. The deadline to respond to the Disclosure Statement was March 9, 2012. The Stipulation extended the deadline through and including March 12, 2012. A copy of the Stipulation, approved by the Court March 12, is available at http://is.gd/pm5pKyfrom Leagle.com. On Feb. 8, 2012, the Companies filed their proposed plan of reorganization and motion to establish bidding procedures for and sale of substantially all of the companies' assets. Pursuant to the sale and bid procedures motion, the companies seek to sell, subject to higher and better offers and bankruptcy Court approval, substantially all of their assets to two stalking horse bidders, DK Trading Partners, LLC, and Mantomi Sales, LLC, respectively. Mantomi Sales, LLC, is 100% owned by Mr. Hays. Pursuant to the Mantomi Sales, LLC asset purchase agreement, (i) Mr. Hays was required to resign as President and Chief Executive Officer of the companies on or before the execution of the Mantomi APA; (ii) the companies' Chief Restructuring Officer may employ Mr. Hays as an independent consultant to the companies in matters unrelated to the sale; and (iii) nothing in the Mantomi APA constitutes or will be deemed a breach of the employment agreement between Mr. Hays and the companies. Game Trading Technologies Inc. fka City Language Exchange, Inc. (OTC BB: GMTD) filed for Chapter 11 protection (Bankr. D. Md. Lead Case No. 12-11519) on Jan. 30, 2012. James Edward Van Horn, Jr., Esq., at McGuirewoods LLP, represents the Debtor. When it filed for bankruptcy, Game Trading estimated $0 to $50,000 in assets and $1,000,000 to $10 million in debts. Affiliate Gamers Factory, Inc., filed a separate petition for Chapter 11 relief (Bankr. D. Md. Case No. 12-11522) on the same day. Counsel for the Official Committee of Unsecured Creditors are: Gary H. Leibowitz, Esq. G. David Dean, Esq. COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A. 300 East Lombard Street, Suite 2000 Baltimore, MD 21202 Fax: (410) 528-9400 E-mail: gleibowitz@coleschotz.com ddean@coleschotz.com GIBRALTAR KENTUCKY: Sec. 341 Creditors' Meeting on Friday --------------------------------------------------------- The U.S. Trustee for the Southern District of Florida in Miami will convene a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a) in the Chapter 11 case of Gibraltar Kentucky Development, LLC, on March 16, 2012, at 9:30 a.m. at 1515 N Flagler Dr Room 870, in West Palm Beach. The deadline to file a complaint to determine dischargeability of certain debts is May 15, 2012. Proofs of Claim are due June 14, 2012. About Gibraltar Kentucky Development Gibraltar Kentucky Development, LLC, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 12-13289) on Feb. 10, 2012, in West Palm Beach, Florida. Palm Beach Gardens-based Gibraltar Kentucky estimated up to $500 million in assets and just under $10 million in liabilities. It says that it is not a small business debtor under 11 U.S.C. Sec. 101(51D). Documents attached to the petition indicate that McCaugh Energy LLC owns 42.15% of the "fee simple" securities. According to the Web site http://www.gibraltarenergygroup.com/ Gibraltar Kentucky is part of the Gibraltar Energy Group. The various companies of the group are involved with the drilling, development and production of oil and gas, as well as, the sale of coal and timber. Offices are in Michigan and Florida and investments are in Michigan and Kentucky. Judge Erik P. Kimball presides over the case. David L. Merrill, Esq., at Talarchyk Merrill, LLC, serves as the Debtor's counsel. The petition was signed by Bill Boyd, as manager. GRACEWAY PHARMACEUTICALS: Settlement Brings in Additional $6MM -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Graceway Pharmaceuticals LLC received approval from the bankruptcy court of a settlement that will bring in an additional $6 million for distribution to unsecured creditors under the liquidating Chapter 11 plan scheduled for approval at an April 11 confirmation hearing. The settlement arose from a $9.13 million payment Graceway made in 2010 to its owners, including GTCR Golder Rauner LLC. The company contended the payment could be recovered in bankruptcy. The settlement calls for GTCR to pay $4.5 million to the first-lien lenders and $1.5 million to Graceway for distribution under the Chapter 11 plan. About Graceway Pharmaceuticals Based in Bristol, Tennessee, Graceway Pharmaceuticals LLC offered dermatology, respiratory, and women's health products. Its Zyclara Cream is used for the treatment of external genital and perianal warts (EGW) in patients 12 years of age and older. The company offers products for the treatment of dermatology conditions, such as actinic keratosis, superficial basal cell carcinoma, external genital warts, atopic dermatitis, and acne; and respiratory conditions, such as asthma. Graceway Pharmaceuticals and its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 11-13036) on Sept. 29, 2011. The company's debt includes $430.7 million owing on a first-lien revolving credit and term loan. Second-lien debt is $330 million, with mezzanine debt totaling another $81.4 million. Attorneys at Young Conaway Stargatt & Taylor LLP serve as counsel to the Debtors. Latham & Watkins LLP is the co-counsel. Alvarez and Marsal North America, LLC, is the financial advisor. Lazard Freres & Co. LLC is the investment banker. PricewaterhouseCoopers LLP is the tax consultant. BMC Group serves as claims and notice agent. Lowenstein Sandler PC serves as the committee counsel. Graceway Pharmaceuticals LLC completed the sale of the business in December 2011 to Medicis Pharmaceutical Corp. for $455 million. GRANITE DELLS: Files for Chapter 11 to Stop Foreclosure ------------------------------------------------------- Scottsdale, Arizona-based Granite Dells Ranch Holdings Llc filed a bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-04962) in Phoenix, on March 13, 2012. The Debtor estimated assets and debts of $100 million to $500 million. According to the docket, the schedules of assets and liabilities and statement of financial affairs are due March 27, 2012. A meeting of creditors under 11 U.S.C. Sec. 341 is scheduled for April 17, 2012 at 9:30 a.m. The Debtor is represented by Alan A. Meda, Esq., at Stinson Morrison Hecker LLP, in Phoenix. The resolution authorizing the bankruptcy filing says the Company is commencing legal actions against Stuart Swanson, Arizona ECO Development LLC, and related entities relating to the purchase by Mr. Swanson of a promissory note payable by the Company to the parties that sold a certain property to the Company. According to Law 360, Arizona Eco sued Granite Dells on March 6 asking the Arizona court to appoint a receiver. Arizona Eco is foreclosing on a secured loan backed by 15,000 acres of Arizona land. Cavan Management Services, LLC is the Debtor's manager. David Cavan, member of the firm, signed the Chapter 11 petition. GREYSTONE PHARMACEUTICALS: Court Confirms First Texas' Plan ----------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Tennessee has confirmed the Second Amended Plan of Reorganization for Greystone Pharmaceuticals, Inc., as proposed by First Texas Medical Partners, LLC. The objections to the confirmation by the Chapter 11 Trustee, the U.S. Trustee and the Official Committee of Unsecured Creditors were withdrawn in consideration of disclosure of officers and directors of First Texas and upon modification and classification to the Plan. The objection the confirmation by the Internal Revenue Service has been resolved by a separate order resolving the IRS's objection to confirmation entered on Jan. 11, 2012. The Court held that the Plan complies with all applicable provisions of Section 1129 of the Bankruptcy Code. Pursuant to the Plan, all avoidance actions of the Debtors which could have been brought by the Debtor or the Chapter 11 Trustee prior to Plan confirmation are retained and preserved by the Debtor or the Liquidation Agent, and may be pursued by the Liquidation Agent notwithstanding the absence of any specific identification of those claims in the disclosure statement or Plan. First Texas has established a $300,000 security deposit. If First Texas does not have the funding to meet the cash obligations required as of the Effective Date of the Plan, then this security deposit will be forfeited to the Debtor. If First Texas doe have funding to meet the cash obligations as required as of the Effective Date of the Plan, then the security deposit will be released by the Debtor and can be used to meet the obligations required on the Effective Date of the Plan. First Texas will fund payment of Administrative Claims on the effective date that have been Court approved by a final order on the effective date. Other pending Administrative Claims will be funded after the entry of a final order approving that claim. First Texas will establish a reserve account for future payment of Chapter 11 Trustee's commissions, with the initial reserve funds to be $62,500. Certain sections of the Plan regarding Secured and Administrative Claims of Lender were modified. Class 2 which consist of prepetition Secured Claim, post-petition Secured Claim and Administrative Claim of the Lender, all of which secured and Administrative Claims are deemed irrevocably allowed for all purposes under the Plan in the amount of $1.72 million. Lender holds a lien on substantially all of the Debtor's assets to secure its Allowed Claims. This claim is impaired under the Plan. Class 2 Claim of the Lender, which is an Allowed Claim pursuant to Section 3.2 of the Plan, will be satisfied in full solely upon payment to Fifth Third Bank on or before Feb. 28, 2012, or the Effective Date, whichever occurs first, of $1.30 million. About Greystone Pharmaceuticals Fort Myers, Florida-based Greystone Pharmaceuticals, Inc. -- aka Greystone Medical, Inc., and Greystone Medical Group, Inc. -- operates a pharmaceutical company. The Company filed for Chapter 11 bankruptcy protection (Bankr. W.D. Tenn. Case No. 09-32236) on Nov. 2, 2009. Kevin Crumbo has been appointed as Chapter 11 trustee in the Debtor's case. Butler, Snow, O'Mara, Stevens & Cannada PLLC serves as the trustee's counsel. David J. Cocke, Esq., at Evans Petree PC, in Memphis, Tenn., represents the Unsecured Creditors' Committee as counsel. In its schedules, the Debtor disclosed $25,467,546 in assets, and $22,601,150 in liabilities as of the Petition Date. GRUBB & ELLIS: Petitions to Stop Finra Proceeding ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Grubb & Ellis Co. started a lawsuit March 13 in bankruptcy court to halt proceedings against former officers and directors before the Financial Industry Regulatory Authority Inc. The report recounts that the Finra proceeding began in 2009 when the owners of Greystone Park Mobile Homes Inc. sought $25 million in damages for having been counseled to make allegedly inappropriate investments with proceeds from an $8 million asset sale. The investment was allegedly made at the behest of subsidiary Grubb & Ellis Securities Inc. Noting that the Finra proceeding was automatically halted against Grubb & Ellis by the Chapter 11 filing, the brokerage wants the bankruptcy judge to halt the action against the former directors and officers on account of their indemnification rights, according to the report. Revised Loan Program The report also said that Grubb & Ellis was scheduled to be in bankruptcy March 14 to seek approval of a program for making loans to brokers in lieu of paying commissions on deals in process before the Chapter 11 filing. The creditors' committee is tentatively opposing final approval of financing unless changes are made to satisfy the panel's objections. Grubb & Ellis modified the loan program for brokers whose commissions were caught up in Chapter 11 process. In lieu of commissions the brokers would have earned for deals in process when G&E filed under Chapter 11 on Feb. 20, the company will make loans to brokers representing 70 percent of the commissions they otherwise would have received. Under the program as originally cast, the loans would be forgiven for brokers remaining with the company for three years. Responding to criticism from some of the 1,300 brokers, the revised program calls for the loans to be forgiven if a broker stays with the company for two years, rather than three. Originally, brokers would have been required to repay the loans if G&E were liquidated in Chapter 7. Now the loans are forgiven if there is a liquidation. Originally, the loans would come due if BGC wasn't the successful buyer. That provision was deleted. G&E still expects the loan program to cost $15 million. The loan will be funded in part by a new $10 million loan from BGC. 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 Company has won court approval for a March 21 auction to test whether an affiliate of BGC has the best offer for the assets. Sale procedures approved by the bankruptcy judge call for competing bids on March 20, followed by the auction on March 21 and a hearing to approve the sale March 22. The creditors' committee was opposed to a quick sale, contending that the absence of competitive bidding "guarantees" there will be no recovery by unsecured creditors. 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., at Goodwin Procter LLP. GRUBB & ELLIS: Creditors Object to BGC DIP Financing Terms ---------------------------------------------------------- Carolina Bolado at Bankruptcy Law360 reports that Grubb & Ellis Co.'s unsecured creditors objected Thursday to the terms of the Company's planned debtor-in-possession financing agreement with BGC Partners Inc., saying the deal favors BGC over any other potential bidders in the proposed Grubb & Ellis sale. In an objection filed in New York bankruptcy court, the unsecured creditors committee called certain provisions in the interim DIP order "unacceptable" and recommended modifications to terms that the creditors say unfairly favor stalking-horse bidder BGC. 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 Company has won court approval for a March 21 auction to test whether an affiliate of BGC has the best offer for the assets. Sale procedures approved by the bankruptcy judge call for competing bids on March 20, followed by the auction on March 21 and a hearing to approve the sale March 22. The creditors' committee was opposed to a quick sale, contending that the absence of competitive bidding "guarantees" there will be no recovery by unsecured creditors. 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., at Goodwin Procter LLP. HD SUPPLY: Enters Into Agreement to Sell PVF Business ----------------------------------------------------- HD Supply has entered into a definitive agreement to sell its Industrial PVF business to Shale-Inland Holdings LLC, an affiliate of investment firms TowerBrook Capital Partners LP and The Stephens Group, LLC. The transaction is expected to close in March 2012, subject to obtaining customary approvals. "After careful evaluation, we determined that divesting our Industrial PVF business is in the best interests of our company as we seek to continue strengthening our industry-leading businesses," said Joe DeAngelo, CEO of HD Supply. "The Industrial PVF team, with the expertise of its many seasoned industry veterans, has done a tremendous job and they can be proud that this new chapter is the result of the momentum they have built and the success of their initiatives." HD Supply's strong liquidity, with approximately $1.2 billion in available funds as of Jan. 29, 2012, provides ample capital to fund growth and meet its financial obligations. Once the sale is complete, the proceeds from the transaction will provide HD Supply with additional financial and strategic flexibility to further strengthen its portfolio of industry-leading businesses. "As evidenced by HD Supply's performance in 2011 and so far in 2012, we're pleased with the strategic and financial results that the company has been able to achieve. We will continue to invest in our company to drive organic growth, review potential acquisitions that would fuel growth in adjacent verticals and product categories, as well as expand our geographic footprint," added DeAngelo. "We remain committed to positioning HD Supply for future success by building our reputation in the marketplace, delivering quality products and providing outstanding customer service." HD Supply was advised by Deutsche Bank Securities Inc., lead financial advisor; Robert W. Baird & Co. Inc., financial advisor; and King & Spalding, lead legal advisor on the divestiture. About HD Supply HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the largest North American wholesale distributors supporting residential and non-residential construction and to a lesser extent electrical consumption and repair and remodeling. HDS also provides maintenance, repair and operations services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates through approximately 800 locations throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. The Company's balance sheet at Oct. 30, 2011, showed $6.96 billion in total assets, $7.21 billion in total liabilities and a $257 million total stockholders' deficit. The Company reported a net loss of $543 million for the fiscal year ended Jan. 29, 2012, compared with a net loss of $619 million for the fiscal year ended Jan. 30, 2011. * * * HD Supply carries 'Caa2' probability of default rating and corporate family rating, with negative outlook, from Moody's Investors Service, and a 'B' corporate credit rating, with negative outlook, from Standard & Poor's Ratings Services. In April 2010, when Moody's downgraded the ratings to 'Caa2' from 'Caa1', it said, "The downgrade results from Moody's views that the construction industry, the main driver of HDS' revenues, will continue to be weak for the foreseeable future, pressuring the company's ability to generate meaningful levels of earnings and free cash flow relative to its debt." HOSTESS BRANDS: Kobi Partners to Provide Rayburn as CEO ------------------------------------------------------- Hostess Brands, Inc. earlier disclosed it has retained Gregory F. Rayburn of Kobi Partners LLC as its Chief Restructuring Officer. Effective as of March 9, 2012, the Debtors' CEO, Brian Driscoll, resigned his position with the Debtors. Hostess Brands Inc. now wants to amend the CRO Motion and seek an order authorizing the employment of Kobi to provide a chief executive officer and Gregory F. Rayburn to act as CEO, nunc pro tunc, as of Feb. 22, 2012. In particular, Mr. Rayburn will serve as Hostess' CEO to perform the services as set forth in amended Kobi's amended engagement letter, dated as of Feb. 22, 2012. Kobi's engagement is governed by an Amended Engagement Letter, which reflects the substantial efforts that will be required in this engagement and the services to be rendered by Mr. Rayburn, for which Kobi will be paid a monthly fee. In his role as CEO of Hostess and pursuant to the Amended Engagement Letter, Mr. Rayburn will: (a) Report to the Board of Directors and serve as a member of the Board of Directors; (b) Lead the negotiations with the Debtors' unions; (c) Assist the Debtors with the identification of core business assets and the disposition of assets or liquidation of unprofitable operations; (d) Oversee and direct the preparation and presentation of disclosures and other information in connection with the Debtors' chapter 11 cases; (e) Review, analyze and advise the Board of Directors with respect to the Debtors' turnaround plan, and oversee and direct the implementation the turnaround plan, as it may be revised by the Board of Directors; (f) Lead negotiations and direct analysis, proposal, prosecution and consummation of the chapter 11 plan as directed by the Board of Directors; (g) Oversee and direct the day-to-day implementation of the Debtors' reorganization plan and the Debtors' overall corporate strategies as directed by the Board of Directors; (h) Oversee and direct any liquidation process of the Debtors; (i) Oversee and direct the implementation of any strike preparedness plan of the Debtors that may be necessary or appropriate; (j) Provide testimony in court as required or appropriate during the Debtors' chapter 11 cases; (k) Participate in meetings internally or with outside constituencies as requested by the Board of Directors; and (l) Provide other services, advice or assistance as may be requested by the Board of Directors from time to time. Kobi will be compensated for Mr. Rayburn's services as CEO of Hostess with a non-refundable monthly advisory fee of $125,000 to be paid in advance. In addition to the fees, Kobi will bill for all direct reasonable out-of-pocket expenses incurred in the performance of Mr. Rayburn's services. A March 13 hearing was scheduled to consider the employment of Kobi Partners, LLC to provide a chief restructuring officer; and Gregory F. Rayburn, a managing partner with Kobi to act as CRO, nunc pro tunc, as of Feb. 22, 2012. 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. HOUGHTON MIFFLIN: Moody's Cuts CFR to 'Caa3'; Outlook Negative -------------------------------------------------------------- Moody's Investors Service downgraded Houghton Mifflin Harcourt Publishers Inc.'s (HMH) Corporate Family Rating (CFR), Probability of Default Rating (PDR) and debt instrument ratings to Caa3 from Caa2. The downgrade reflects Moody's view that a debt restructuring in the near term is increasingly likely. The rating outlook is negative. Downgrades: Issuer: Houghton Mifflin Harcourt Publishers Inc. Corporate Family Rating, Downgraded to Caa3 from Caa2 Probability of Default Rating, Downgraded to Caa3 from Caa2 Senior Secured Bank Credit Facility, Downgraded to Caa3, LGD4 - 53% from Caa2, LGD3 - 47% Senior Secured Regular Bond/Debenture, Downgraded to Caa3, LGD4 - 53% from Caa2, LGD3 - 47% Rating Rationale Moody's considers HMH's capital structure to be unsustainable without a significant rebound in earnings. There is limited time to accomplish this with the looming maturities of the revolver and term loan in December 2013 and June 2014, respectively, and ongoing educational funding pressures at state and local governments. Management indicated in HMH's fourth quarter earnings call that the company is actively looking at ways to strengthen the balance sheet and that the company does not have funding for all of the investments it wants to makes. Moody's believes HMH's ability to maintain share relative to its two primary competitors -- both of which are much more conservatively capitalized and diversified -- would become increasingly challenging without additional financial flexibility to invest. In Moody's opinion, this suggests a debt restructuring is more likely in the near term to alleviate the negative effects on the business from the highly leveraged balance sheet. HMH's Caa3 CFR is based on its high debt restructuring risk and the operational and investment risks associated with stabilizing earnings and then generating the growth that is necessary to sustain the capital structure. The CFR also reflects Moody's view that the family recovery rate in a restructuring would be slightly below 50% based on a scenario in which earnings rebound from 2011 levels over the next 3-5 years. A recovery based on 2011's level of earnings would likely be meaningfully lower. Moody's updated the loss given default assessments to reflect the reduction the revised family recovery rate assumption. HMH's very high debt-to-EBITDA leverage (exceeding 15x incorporating Moody's standard adjustments and factoring in cash prepublication and restructuring costs as a reduction to EBITDA), negative projected free cash flow generation, and sizable debt maturities in 2013/2014 provide limited time and flexibility to generate the earnings improvement necessary to avoid a restructuring. In Moody's opinion, there are meaningful risks to achieving a turnaround including factors that are not in the company's control such as continued pressure on state and local budget appropriations and the actions of competitors. The significant overlap in the company's debt and equity ownership (more than 75% of the debt and equity are owned by a group of 10 investors) could affect the timing of a restructuring, as the group has the ability to waive or amend covenants. The investor group is also incentivized to minimize the dilution of their equity ownership percentage in a restructuring, and this would likely depend on a rebound in earnings that would take time to materialize. The company's sizable cash balance and undrawn accounts receivable facility relative to its 2011 cash burn rate provides some capacity to sustain operations, although seasonal cash needs are significant. Despite the uncertainty that these issues could have on the timing, Moody's believes a debt restructuring would improve financial flexibility and alleviate pressure on the business and will be difficult to avoid. HMH has a good market position within K-12 educational publishing and continues to win a reasonable share of new adoptions, but the company is vulnerable to fluctuations in textbook adoption cycles and is dependent for a majority of revenue on state and local government funding that continues to face cutbacks due to budget pressures. Lower than anticipated spending in the Texas Language Arts adoption in 2011 that may carry over into the spending rate in 2012 , and projected declines in HMH's adoption and open territory markets in 2012 will make it difficult for the company to rebound quickly from the drop in 2011 earnings. The negative rating outlook reflects the potential for additional downward rating actions if the likelihood of a debt restructuring increases further, or Moody's believes the family recovery rate would be lower than currently assumed. Downward rating pressure could occur if free cash flow remains negative, earnings are not stabilized, or the maturities approach without a meaningful improvement in the leverage, cash flow and liquidity position. Heightened risk of an imminent default, downward revision to the family recovery estimate, depletion of cash resources, diminished or lost access to the accounts receivable facility, an inability to meet maintenance covenants, potential discounted debt repurchases, or changes in the debt and/or equity ownership could also lead to downward rating pressure. Moody's does not believe an upgrade is likely. The principal methodology used in rating HMH was the Global Publishing Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Houghton Mifflin Harcourt Publishers Inc., headquartered in Boston, MA, is one of the three largest U.S. education publishers focusing on the K-12 market with approximately $1.3 billion of revenue for fiscal year ended December 2011. INTELLICELL BIOSCIENCES: Has Sold $2.4MM Common Stock & Warrants ---------------------------------------------------------------- Between Feb. 24, 2012, and Feb. 29, 2012, Intellicell Biosciences, Inc., entered into securities purchase agreements with accredited investors, as defined In regulation D promulgated under the Securities Act of 1933, as amended, pursuant to which the Company sold (i) an aggregate of 435,000 shares of the Company's common stock, par value $0.001 per share, (ii) class A warrants to purchase an aggregate of 870,000 shares of Common Stock, and (iii) class B warrants to purchase an aggregate of 870,000 shares of Common Stock, for aggregate gross cash proceeds of $435,000. To date, the Company has sold its Common Stock and Warrants for aggregate gross proceeds of $2,475,000, which consisted of $1,975,000 of cash and the exchange and cancelation of a promissory note and a warrant. The Class A Warrants are exercisable for a period of five years from the date of issuance at an initial exercise price of $2.00, subject to adjustment. The Class B Warrants are exercisable for a period of five years from the date of issuance at an initial exercise price of $3.75, subject to adjustment. The exercise price of the Warrants are subject to anti-dilution adjustment for subsequent lower price issuances by the Company, as well as customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like. The investors may exercise the Warrants on a cashless basis anytime after the six month anniversary of the initial exercise date of the Warrants if the shares of common stock underlying the Warrants are not then registered pursuant to an effective registration statement. In the event the investors exercise the Warrants on a cashless basis, the Company will not receive any proceeds. The investors have contractually agreed to restrict their ability to exercise the Warrants such that the number of shares of the Company common stock held by the investors and their respective affiliates after such exercise does not exceed 9.99% of the Company's then issued and outstanding shares of Common Stock. A copy of the Form 8-K is available for free at: http://is.gd/jPSKwt About Intellicell Biosciences Intellicell BioSciences, Inc., headquartered in New York, N.Y., was formed on Aug. 13, 2010, under the name "Regen Biosciences, Inc." as a pioneering regenerative medicine company to develop and commercialize regenerative medical technologies in large markets with unmet clinical needs. On Feb. 17, 2011, the company changed its name from "Regen Biosciences, Inc." to "IntelliCell BioSciences Inc". To date, IntelliCell has developed proprietary technologies that allow for the efficient and reproducible separation of stromal vascular fraction (branded "IntelliCell(TM)") containing adipose stem cells that can be performed in tissue processing centers and in doctors' offices. The Company's balance sheet at Sept. 30, 2011, showed $1.0 million in total assets, $21.2 million in total current liabilities, and a stockholders' deficit of $20.2 million. "The Company has incurred losses since inception resulting in an accumulated deficit of $20.1 million and a working capital deficit of $21.0 million as of Sept. 30, 2011, respectively, however, if the non-cash expense related to the Company's derivative liability is excluded the accumulated deficit amounted to $3.1 million and working capital deficit amounted to $3.7 million, respectively,? the Company said in the filing. "Further losses are anticipated in the continued development of its business, raising substantial doubt about the Company's ability to continue as a going concern." IRVINE SENSORS: Nine Directors Elected at Annual Meeting ------------------------------------------------------- The 2012 annual meeting of stockholders of ISC8 Inc., formerly known as Irvine Sensors Corporation, was held on March 6, 2012. The stockholders elected John C. Carson, Marc Dumont, Seth W. Hamot, Bill Joll, Jack Johnson, Thomas M. Kelly, Edward J. Scollins, Chester P. White and Robert L. Wilson to serve on the Company's Board of Directors until the next annual meeting of stockholders or until their successors are duly elected and qualified. The appointment of Squar, Milner, Peterson, Miranda & Williamson, LLP, as the independent auditors of the Company for the fiscal year ended Sept. 30, 2012, was ratified. About Irvine Sensors Headquartered in Costa Mesa, Calif., Irvine Sensors Corporation (OTC BB: IRSN) -- http://www.irvine-sensors.com/-- is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating said products. Irvine Sensors also conducts research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications. The Company reported a net loss of $15.76 million on $14.09 million of total revenues for the fiscal year ended Oct. 2, 2011, compared with a net loss of $11.15 million on $11.71 million of total revenues for the fiscal year ended Oct. 3, 2010. The Company's balance sheet at Oct. 2, 2011, showed $10.58 million in total assets, $29.29 million in total liabilities, and a $18.71 million total stockholders' deficit. JEFFERSON COUNTY: Bondholders Allowed to Interrogate Officials -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Thomas B. Bennett in Montgomery ruled at a hearing March 13 that holders of Jefferson County, Alabama, sewer debt can interrogate county officials to gain information for use at trial next month over how much revenue from the sewers can be withheld from bondholders to maintain the system. The report relates that under an interim settlement, bondholders are receiving $5.5 million a month. The settlement, expiring in May, was intended to generate some cash flow for bondholders until the bankruptcy judge decides how much they are entitled to receive. The interim settlement was reached after Judge Bennett ruled that the bondholders' receiver for the sewers was automatically ousted from control of the system and its revenue by the Chapter 9 filing. The bondholders are appealing. 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. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. LAS VEGAS MONORAIL: To Present Plan for Confirmation April 30 ------------------------------------------------------------- U.S. Bankruptcy Judge Bruce Markell set a hearing for April 30, 2012, to consider confirmation of Las Vegas Monorail's Chapter 11 plan after Judge Markell approved the Company's request to send out the disclosure statement explaining the Plan. In November 2011, Judge Markell derailed a previous version of the plan as leaving the monorail with too much debt and prone to another default in future years. Previously, the monorail had worked out a deal with creditors to repay $658 million in bonds with three IOUs totaling $40.4 million. The plan had been approved by holders of 92 percent of the $650 million in bonds. According to Bloomberg News bankruptcy columnist Bill Rochelle, taking the judge's criticism to heart, the parties revised the plan, even more dramatically cutting creditors' recoveries. The new plan cut the debt and the interest rates to be paid after the transportation system emerges from bankruptcy. Instead of $15 million in first-tier bonds, the new plan has $10 million in bonds with a 5.5% interest rate. Previously, the interest rate was 10%. Maturity remains June 30, 2019. What was initially $19.5 million in second-tier bonds is now $3 million. The interest rate dropped from 10% to 3% initially. Rather than maturing in 2019, the new bonds won't come due until 2055. The fund set aside for unsecured creditors was doubled, to $300,000. The disclosure statement says that unsecured creditors as a result will take home 60% to 100%. The reorganized company will be required to set aside a portion of cash flow to cover capital improvements. Tim O'Reiley at Las Vegas Review-Journal reports notes the 3.9- mile line, which runs roughly parallel to the Strip a few hundred feet to the east, has continually experienced declining ridership. It has generated enough ticket sales to pay for operations but never came close to covering bond payments. About Las Vegas Monorail Las Vegas, Nevada-based Las Vegas Monorail Company, organized by the State of Nevada in 2000 as a nonprofit corporation, owns and manages the Las Vegas Monorail. The Monorail is a seven-stop, elevated train system that travels along a 3.9-mile route near the Las Vegas Strip. LVMC has contracted with Bombardier Transit Corporation to operate the Monorail. Though it benefits from its tax-exempt status due to being a nonprofit entity, LVMC claims to be the first privately-owned public transportation system in the nation to be funded solely by fares and advertising. LVMC says it receives no governmental financial support or subsidies. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-10464) on Jan. 13, 2010. Gerald M. Gordon, Esq., William M. Noall, Esq., and Gabriel A. Hamm, Esq., at Gordon Silver, assist the Company in its restructuring effort. Alvarez & Marsal North America, LLC, is the Debtor's financial advisor. Stradling Yocca Carlson & Rauth is the Debtor's special bond counsel. Jones Vargas is the Debtor's special corporate counsel. The Company disclosed $395,959,764 in assets and $769,515,450 in liabilities as of the Petition Date. In April 2010, bondholder Ambac Assurance Corp. lost in its bid to halt the bankruptcy after U.S. Bankruptcy Judge Bruce A. Markell ruled that Monorail isn't a municipality and is therefore entitled to reorganize in Chapter 11. U.S. District Judge James Mahan in Reno upheld the ruling in October 2010. LOS ANGELES DODGERS: Beaten Dodgers Fan Wins Additional Discovery ----------------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that a fan who was severely beaten outside the Los Angeles Dodgers LLC's stadium last year won additional discovery on Tuesday in his bid to prove the bankrupt team is responsible for his life-altering injuries due to lax security. At a hearing in Delaware, U.S. bankruptcy Judge Kevin Gross cleared attorneys for the fan, Brian Stow, to take additional depositions of team security and other personnel ahead of a March 21 hearing on the team's motion to disallow Mr. Stow's claim in the bankruptcy, according to Law360. 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. LTS NUTRACEUTICALS: Signs Agreement to Merge with YTB Int'l ----------------------------------------------------------- LTS Nutraceuticals, Inc. has reached an agreement in principle to merge with YTB International, Inc., a provider of e-commerce business solutions. The Company will be renamed LTS International, Inc., in conjunction with the merger, and YTB will be merged with LTS Acquisition Corp., a wholly-owned subsidiary of the Company, with YTB surviving the merger as a wholly-owned subsidiary of the Company. YTB will continue to operate as a stand alone company focusing on the sale of travel businesses as it has done for over 10 years. LTS Nutraceuticals focuses on "people helping people" by developing breakthrough nutritional products that promote positive change and lifelong transformation. The Company markets its products through multiple channels; including retail, direct sales (direct to consumer via TV, radio, Web and mail) and network or multi-level marketing. YTB offers e-commerce business solutions via personalized websites and proprietary technology and compensates its "Independent Marketing Representatives" via a direct sales commission structure. The proposed merger would result in substantial cost savings and efficiencies allowing the Company to continue its plan for growth and global expansion. The Company has commenced the process to operate in Hong Kong, Singapore, and Taiwan and will be a great resource as YTB seeks to expand its business into Asia. Consummation of the transaction is subject to customary approvals and conditions, including ratification of the Board of Directors for YTB and LTS, shareholder approval of YTB and applicable regulatory approvals. Ted Farnsworth, Chairman of the Board of LTS Nutraceuticals commented, "I am honored to have the opportunity to combine our Company with YTB. Two companies working together to individually strengthen their own products and services is a first for our industry and together could potentially have a global impact." About LTS Nutraceuticals Ft. Lauderdale, Fla.-based LTS Nutraceuticals, Inc., develops and sells high-quality nutritional products that are distributed throughout North America through a network marketing system, which is a form of direct selling. The Company reported a net loss of $2.96 million on $1.75 million of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $471,235 on $997,657 of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $3.48 million in total assets, $8.03 million in total liabilities, and a $4.55 million total stockholders' deficiency. On Nov. 10, 2011, the Company had $37,633 in cash. The current operating plan indicates that losses from operations may be incurred for all of fiscal 2011. Consequently the Company said it may not have sufficient liquidity necessary to sustain operations for the next twelve months and this raises substantial doubt that the Company will be able to continue as a going concern. MAINTENANCE AND MACHINERY: Voluntary Chapter 11 Case Summary ------------------------------------------------------------ Debtor: Maintenance and Machinery Erectors, Inc. P.O. Box 243 Mulberry, FL 33860 Bankruptcy Case No.: 12-03412 Chapter 11 Petition Date: March 9, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Judge: K. Rodney May Debtor's Counsel: Alberto F Gomez, Jr. MORSE & GOMEZ, PA 119 S. Dakota Avenue Tampa, FL 33606 Tel: (813) 301-1000 E-mail: algomez@morsegomez.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by John S. Bechtol, president. MEDIA GENERAL: Continues Negotiations on Credit Pact Amendment -------------------------------------------------------------- Media General, Inc., continues to negotiate with its lenders to reset certain covenants under its credit agreement, to amend certain other terms of the agreement and with respect to the Company's proposal to extend for a period of two years the March 2013 current maturity, with any such extension being conditioned on raising a set amount of new secured financing, a significant portion of which would be applied towards the repayment of the term loan under the credit agreement. It is expected that these negotiations will also result in a reduction to the lenders' revolving credit commitments. As these discussions are ongoing, there can be no assurance that a definitive agreement will be reached between the Company and the lenders with respect to any or all of the modifications referred to above or as to the terms of any definitive agreement that may be reached. About Media General Richmond, Virginia-based Media General Inc. (NYSE: MEG) -- http://www.mediageneral.com/-- is an independent communications company with interests in newspapers, television stations and interactive media in the United States. The Company operates in three business segments: Publishing, Broadcast and Interactive Media. The Company owns 25 daily newspapers and more than 150 other publications, as well as 23 television stations. The Company also operates more than 75 online enterprises. In March 2008, the Company completed the purchase of DealTaker.com, an online social shopping portal. The Company reported a net loss of $71.01 million on $448.47 million of total revenues for the nine months ended Sept. 25, 2011, compared with a net loss of $31.68 million on $488.23 million of total revenues for the nine months ended Sept. 26, 2010. The Company reported a net loss of $74.32 million on $616.20 million of total revenues for the 52 weeks ending Dec. 25, 2011, compared with a net loss of $22.63 million on $678.11 million of total revenues for the 52 weeks ended Dec. 26, 2010. The Company's balance sheet at Dec. 25, 2011, showed $1.08 billion in total assets, $1.05 billion in total liabilities and $33.95 million in stockholders' equity. * * * As reported by the Troubled Company Reporter on October 5, 2011, Moody's Investors Service downgraded Media General, Inc.'s (Media General) Corporate Family Rating (CFR) and senior secured bond rating to B3 from B2, and lowered the company's speculative-grade liquidity rating to SGL-4 from SGL-3. The rating actions reflect the liquidity pressure from the approaching March 2013 credit facility maturity and heightened risk of a covenant violation, as well as the operating pressure from a weaker advertising market. The rating outlook is negative. The TCR also reported on Oct. 28, 2011, that Standard & Poor's Ratings Services lowered its corporate credit on Richmond, Va.- headquartered Media General Inc. to 'CCC+' from 'B-'. "The downgrade reflects our expectation that Media General could face difficulties in maintaining covenant compliance in 2012," S&P said. MONITRONICS INT'L: Moody's Assigns 'B2' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating (CFR), a B2 Probability of Default Rating, and an SGL-3 Speculative Grade Liquidity Rating to Monitronics International, Inc. Concurrently, Moody's assigned a Ba3 rating to a new $650 million senior secured credit facility and a Caa1 rating to $460 million in new senior unsecured notes. The ratings outlook is stable. Moody's assigned the following ratings (and Loss Given Default assessments): - Corporate Family Rating, B2 - Probability of Default Rating, B2 - Speculative Grade Liquidity Rating, SGL-3 - Proposed $150 million senior secured revolver due 2017, Ba3 (LGD2, 26%) - Proposed $500 million first lien term loan due 2018, Ba3 (LGD2, 26%) - Proposed $460 million senior unsecured notes due 2020, Caa1 (LGD5, 82%) These ratings are based on a proposed new financing for Monitronics and are subject to Moody's review of final documentation. Proceeds from the new debt along with cash on the balance sheet are expected to be used to refinance existing indebtedness and pay fees and expenses. Ratings Rationale The B2 CFR reflects a significant amount of debt in Monitronics' proposed capital structure and the high level of annual spending necessary to acquire new contracts from dealers to replace revenues lost to attrition. Because of the company's growth strategy, Moody's expects free cash flow after contract purchases to be negative over the next 12-18 months, but estimates that the percentage of free cash flow to debt would be in the low-to-mid single digits should Monitronics limit contract purchases to the level that offsets revenues lost through customer attrition. The ratings are further constrained by Monitronics' modest revenue size of just over $300 million, although the company is one of the three largest players in the fragmented alarm monitoring industry with about a 3% market share. The ratings benefit from the steady and predictable revenue streams and cash generation provided by Monitronics' existing customer base. Additionally, the dealer sales model provides a partly variable cost structure with high profitability margins. The SGL-3 Speculative Grade Liquidity Rating reflects Moody's expectation that Monitronics will maintain an adequate liquidity profile over the next twelve months. Free cash flow after maintenance capital spending and contract purchases is expected to remain modestly positive. However, it is likely the company will purchase more contracts than necessary to replace lost accounts so as to continue to grow monthly revenue. Since the cash balance at closing will be minimal, Moody's expects Monitronics to draw on the proposed $150 million revolver to fund growth contracts. Nonetheless, revolver availability of at least $75 million is expected over the next four quarters. The stable outlook reflects Moody's expectation that Monitronics will grow its recurring monthly revenue in the mid-to-high single digits over the next 12-18 months, using the revolver to partly fund purchases of new customer contracts from dealers. While not expected in the near term, the ratings could be upgraded if EBIT / interest expense approaches 1.7 times and free cash flow (before growth spending) to debt is sustained above 10% while maintaining a good liquidity profile. Conversely, the ratings could be downgraded if attrition rates or dealer multiples increase materially, liquidity deteriorates, or free cash flow (before growth spending) approaches breakeven. The principal methodology used in rating Monitronics International was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Dallas, Monitronics is owned by Ascent Capital Group, Inc. (ticker: ASCMA). Monitronics provides monitored business and home security system services to more than 700,000 residential and commercial customers. MORTGAGES LTD: Judge Approves Sale to Evergreen at $7 Million ------------------------------------------------------------- Phoenix Business Journal reports that U.S. Bankruptcy Judge Randolph Haines approved on March 8, 2012, the request of ML Manager LLC fka Mortgages Ltd. to sell a vacant property -- a former bank building built in 1931 -- to Evergreen Devco for $7 million. According to Mark Winkleman, chief operating officer for ML Manager, Evergreen plans to redevelop the former Valley Trust Bank Building at Central Avenue and Monroe Street as a boutique hotel, just as the original developers envisioned. About Mortgages Ltd. Mortgages Ltd. was the subject of an involuntary Chapter 7 petition dated June 20, 2008, filed by KGM Builders Inc. -- a contractor for Grace Communities, a borrower of the company -- in the U.S. Bankruptcy Court for the District of Arizona. Central & Monroe LLC and Osborn III Partners LLC, divisions of Grace Communities, sought the appointment of an interim trustee for Mortgages Ltd. in the Chapter 7 proceeding. Mortgages Ltd. faced lawsuits filed by Grace Communities and Rightpath Limited Development Group for its alleged failure to fully fund loans. Mortgages Ltd. denied the charges. The Debtor's case was converted to a chapter 11 proceeding (Bankr. D. Ariz. Case No. 08-07465) on June 24, 2008. Judge Sarah Sharer Curley presided over the case. Carolyn Johnsen, Esq., and Bradley Stevens, Esq., at Jennings, Strouss & Salmon P.L.C., replaced Todd A. Burgess, Esq., at Greenberg Traurig LLP, as counsel to the Debtor. As of Dec. 31, 2007, the Debtor had total assets of $358,416,681 and total debts of $350,169,423. Mortgages Ltd. was reorganized pursuant to a plan that was confirmed by the Bankruptcy Court on March 20, 2009. As part of the Plan, ML Manager LLC was created to manage and operate the loans in the portfolio. The original investors for the most part transferred their interests to 49 separate Loan LLC's. A number of investors, referred to as "pass through investors" did not transfer their interests. As part of the Plan, ML Manager took out $20 million in exit financing to help keep the company afloat during the reorganization. NEW STREAM: Heading for April 23 Confirmation Hearing ----------------------------------------------------- U.S. Bankruptcy Judge Mary F. Walrath gave her blessing to New Stream Secured Capital Inc.'s disclosure statement, clearing creditors to vote on the defunct hedge fund's liquidation plan. Lance Duroni at Bankruptcy Law360 reports that Judge Walrath said at a court hearing that she would sign off on the statement after it is submitted with additional disclosures made to address the concerns of the U.S. trustee's office. Bill Rochelle, the bankruptcy columnist for Bloomberg News, recounts that New Stream went into Chapter 11 with a plan that was opposed and didn't succeed. The plan became possible after the portfolio of life insurance policies were sold and a settlement was worked out. The Bloomberg report relates that according to the disclosure statement, investors in U.S. and Cayman Island funds are anticipated to have a 7% recovery. Investors in the Bermudian funds are in line for 19%. A hearing is set to consider confirmation of the plan on April 23. About New Stream New Stream is an inter-related group of companies that collectively comprise an investment fund, headquartered in Ridgefield, Connecticut. Founded in 2002, New Stream focuses on providing non-traded private debt to the insurance, real estate and commercial finance sectors. On March 7, 2011, when New Stream was still soliciting votes on the Chapter 11 plan, certain investors filed a petition (Bankr. D. Del. Lead Case No. 11-10690) seeking to force three New Stream funds -- New Stream Secured Capital Fund (U.S.) LLC, New Stream Secured Capital Fund P1 (Cayman), Ltd. and New Stream Secured Capital Fund K1 (Cayman), Ltd. -- to Chapter 11 bankruptcy. The petitioning investors in the New Stream investment enterprise say they are collectively owed over $90 million, representing roughly 28% of the approximately $320 million owed to all U.S. and Cayman investors. The Petitioners are represented by (i) Joseph H. Huston, Jr., Esq., Maria Aprile Sawczuk, Esq., Meghan A. Cashman, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, and Beth Stern Fleming, Esq., at Stevens & Lee, P.C., in Philadelphia, Pennsylvania, and Nicholas F. Kajon, Esq., David M. Green, Esq., and Constantine Pourakis, Esq., at Stevens & Lee, P.C., in New York, (ii) Edward Toptani, Esq., at Toptani Law Offices, in New York, and (iii) John M Bradham, Esq., and David Hartheimer, Esq., at Mazzeo Song & Bradham LLP, in New York. New Stream Secured Capital, Inc., and three affiliates (New Stream Insurance, LLC, New Stream Capital, LLC, and New Stream Secured Capital, L.P.) filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 11-10753) on March 13, 2011, with a proposed prepackaged Chapter 11 plan. Kurt F. Gwynne, Esq., J. Cory Falgowski, Esq., Michael J. Venditto, Esq., and Scott M Esterbrook, Esq., at Reed Smith LLP, serve as the Debtors' bankruptcy counsel. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. NSSC, Inc., estimated its assets and debts at up to $50,000. NSC estimated its assets at $100,000 to $500,000 and debts at $50,000 to $100,000. NSI estimated its assets at $100 million to $500 million and debts at $50 million to $100 million. NSSC, LP, estimated its assets and debts at $500 million to $1 billion. NSI's insurance portfolio is being sold for $184.35 million as part of the Chapter 11 plan. The aggregate indebtedness secured by the investment portfolio of NSSC is $688,412,974. NSI owes $81,573,376 to certain account classes under a Bermuda fund. The Official Committee of Unsecured Creditors proposes to hire Kurtzman Carson Consultants LLC as its communications agent; Houlihan Lokey Howard & Zukin Capital, Inc., as its financial advisor and investment banker; and Zolfo Cooper, LLC, as its forensic accountants and litigation support consultants. New Stream completed a sale of its assets on June 3. New Stream sold the portfolio of life-insurance policies to an affiliate of McKinsey & Co. for $127.5 million. There were no competing bids at auction. NORTHAMPTON GENERATING: Gets Nod to Hire Dilworth as Bond Counsel ----------------------------------------------------------------- The Hon. J. Craig Whitley of the U.S. Bankruptcy Court for the Western District of North Carolina granted Northamption Generating Company, L.P., permission to hire Dilworth Paxson LLP as special bond counsel effective as of Feb. 9, 2012. As reported by the Troubled Company Reporter on March 12, 2012, the Debtor sought to employ Dilworth Paxson to represent and advise it in matters related to the reissuance or, restructure of the Debtor's Senior Tax-Exempt Series 1994 A Bonds and Subordinated Tax-Exempt Series 1994 C Bonds. Generally, Dilworth's hourly rates range from $205 to $775 for attorneys and from $100 to $155 for paralegals. About Northampton Generating Northampton Generating Co. LP is the owner of a 112 megawatt electric generating plant in Northampton, Pennsylvania. The plant is fueled with waste products, including waste coal, fiber waste, and tires. The power is sold under a long-term agreement to an affiliate of FirstEnergy Corp. Northampton Generating filed for Chapter 11 bankruptcy (Bankr. W.D.N.C. Case No. 11-33095) on Dec. 5, 2011. Hillary B. Crabtree, Esq., and Luis Manuel Lluberas, Esq., at Moore & Van Allen PLLC, in Charlotte, N.C., serve as counsel to the Debtors. Houlihan Lokey Capital, Inc., is the financial advisor. The Debtor estimated assets and debts of up to $500 million. Debt includes $73.4 million owing on senior bonds issued through the Pennsylvania Economic Development Financing Authority. The U.S. Trustee was unable to appoint a committee. NPS PHARMACEUTICALS: Wellington Discloses 11.1% Equity Stake ------------------------------------------------------------ In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Wellington Management Company, LLP, disclosed that, as of Feb. 29, 2012, it beneficially owns 9,565,459 shares of common stock of NPS Pharmaceuticals, Inc., representing 11.11% of the shares outstanding. As reported by the TCR on Feb. 20, 2012, Wellington disclosed beneficial ownership of 6,503,986 common shares or 7.56% equity stake. A copy of the amended filing is available for free at http://is.gd/42KZQV About NPS Pharmaceuticals Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq: NPSP) -- http://www.npsp.com/-- is developing new treatment options for patients with rare gastrointestinal and endocrine disorders. NPS noted in its Form 10-K for the year ended Dec. 31, 2009, it has not been profitable since its inception in 1986. As of Dec. 31, 2009, it had an accumulated deficit of $922.7 million. "Currently, we are not a self-sustaining business and certain economic, operational and strategic factors may require us to secure additional funds." The Company though believes its existing capital resources at Dec. 31, 2009, along with the receipt of $38.4 million from the sale of its REGPARA royalty stream, should be sufficient to fund its current and planned operations through at least Jan. 1, 2011. The Company reported a net loss of $27.63 million on $75.38 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $25.04 million on $65.37 million of total revenues for the same period a year ago. The Company reported a consolidated net loss of $31.44 million on $89.41 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of $17.86 million on $84.15 million of total revenue during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $237.44 million in total assets, $276 million in total liabilities and a $38.56 million total stockholders' deficit. OPTIMUMBANK HOLDINGS: Has Not Complied with Nasdaq Bid Price Rule ----------------------------------------------------------------- As previously disclosed, OptimumBank Holdings, Inc., received a letter from The Nasdaq Stock Market indicating that the Company was not in compliance with Listing Rule 5550(a)(2) because the closing bid price per share of its common stock was below $1.00 per share for 30 consecutive business days. The Company was provided with a 180 calendar day grace period, or until March 13, 2012, to regain compliance with the Bid Price Rule. To regain compliance with the Bid Price Rule, the closing bid price of the Company's common stock must remain at $1.00 per share or more for a minimum of ten consecutive business days. To date, the Company has not complied with the Bid Price Rule. However, as previously disclosed in the Current Report, the Company can receive an additional 180-day grace period if the Company meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, except for the bid price requirement. The Company must also notify Nasdaq if its intent to cure the deficiency during the second grace period, by effecting a reverse stock split, if necessary. If the Company meets these requirements, NASDAQ will grant the Company an additional 180 calendar days to regain compliance with the Bid Price Rule. The Company believes that it meets all the requirements to receive a second 180-day grace period from NASDAQ to regain compliance with the Bid Price Rule. Due to the recent $8.6 million capital raise consummated in the fourth quarter of 2011, the Company has increased its unaudited stockholders' equity to $6,786,000 at Dec. 31, 2011, and has regained compliance with the minimum stockholders' equity requirement for initial listing on The NASDAQ Capital Market. About OptimumBank Holdings Fort Lauderdale, Fla.-based OptimumBank Holdings, Inc. is a is a one-bank holding company and owns 100% of OptimumBank, a state (Florida)-chartered commercial bank. The Bank offers a variety of community banking services to individual and corporate customers through its three banking offices located in Broward County, Florida. The Bank's wholly-owned subsidiaries are OB Real Estate Management, LLC, OB Real Estate Holdings, LLC, OB Real Estate Holdings 1503, LLC, and OB Real Estate Holdings 1695, LLC, all of which were formed in 2009. OB Real Estate Management, LLC, is primarily engaged in managing foreclosed real estate. OB Real Estate Holdings, LLC, OB Real Estate Holdings 1503, LLC, and OB Real Estate Holdings 1695, LLC, hold and dispose of foreclosed real estate. OptimumBank is currently operating under a Consent Order issued by the Federal Deposit Insurance Corporation ("FDIC") and the State of Florida Office of Financial ("OFR"), effective as of April 16, 2010. As of Sept. 30, 2010, the Bank was considered "undercapitalized" under these FDIC requirements. As an "undercapitalized" institution, the Bank is subject to restrictions on capital distributions, payment of management fees, asset growth and the acceptance, renewal or rollover of brokered and high-rate deposits. In addition, the Bank must obtain prior approval of the FDIC prior to acquiring any interest in any company or insured depository institution, establishing or acquiring any additional branch office, or engaging in any new line of business. "The Bank [OptimumBank] has experienced recent and continuing increases in nonperforming assets, declining net interest margin, increases in provisions for loan losses, continuing high levels of noninterest expenses related to the credit problems, and eroding regulatory capital which raise substantial doubt about the Bank's ability to continue as a going concern," the Company said in its Form 10-Q for the quarter ended Sept. 30, 2010. The Company's continuing high levels of nonperforming assets, declining net interest margin, continuing high levels of noninterest expenses related to the credit problems, and eroding regulatory capital raise substantial doubt about the Company's ability to continue as a going concern. Moreover, as reported by the TCR on April 20, 2011, Hacker, Johnson & Smith PA, in Fort Lauderdale, Florida, noted that the Company's operating and capital requirements, along with recurring losses raise substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $8.45 million on $8.78 million of total interest income for the year ended Dec. 31, 2010, compared with a net loss of $11.48 million on $14.00 million of total interest income during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $167.12 million in total assets, $168.83 million in total liabilities and a $1.71 million total stockholders' deficit. The Company reported a net loss of $3.7 million or $0.17 per basic share for the year ended Dec. 31, 2011, compared to a net loss of $8.5 million or $10.32 per basic share for the same period last Year. PACIFIC AVENUE: Emerges From Chapter 11 Bankruptcy Protection ------------------------------------------------------------- Kerry Singe at The Charlotte Observer reports that Pacific Avenue LLC, owners of EpiCentre, has emerged from bankruptcy protection. According to the report, the reorganization plan approved by U.S. Bankruptcy Court Judge George Hodges on March 8, 2012, allows the new owners, Blue Air 2010, to proceed with plans to invest millions in improvements. Most existing tenants will remain, with some getting new owners. The report says, as part of the EpiCentre reorganization plan, the project's unsecured creditors are set to have their claims paid in full -- a major improvement over the 10-cents-on-the-dollar plan originally proposed. The report relates the project's trustee, Elaine Rudisill, said she is continuing to look into how the EpiCentre spent its money and may seek to recover assets for the project. The report notes Ms. Rudisill had been investigating claims by Blue Air that the developers engaged in insider deals and fraudulently transferred money to avoid paying it out to creditors. But as part of a settlement reached by the developers and Blue Air, the trustee will no longer investigate those claims. Instead, Ms. Rudisill is looking into whether vendors were properly paid. The only objection came from Epic Wings LLC, the owner of Wild Wing Cafe. It objected in part because of a dispute over whether it overpaid for common-area maintenance fees, according to the report. The report says, last month, the developers made a deal with Blue Air. The developers agreed to each pay $1.5 million, which will be used to pay creditors. They also gave up ownership in the EpiCentre and the air rights to develop above the complex. About Pacific Avenue Pacific Avenue, LLC, is a North Carolina limited liability company whose principal place of business is located in Charlotte, North Carolina. Together with Pacific Avenue II, LLC, the Company owns and operates the EpiCentre, a mixed-use commercial development consisting of approximately 302,000 rentable square feet of office and retail/entertainment space, plus an underground parking deck, located at 210 E. Trade St. in the city block surrounded by the light rail line, Fourth Street, College Street, and Trade Street in uptown Charlotte, North Carolina. The companies were led by Afshin Ghazi. Pacific Avenue LLC filed for Chapter 11 bankruptcy protection (Bankr. W.D. N.C. Case No. 10-32093) on July 22, 2010. Joseph W. Grier, III, Esq., at Grier, Furr & Crisp, P.A., assists the Company in its restructuring effort. The Company estimated up to $50,000 in assets and $50 million to $100 million in debts in its bankruptcy petition. The Company's affiliate, Pacific Avenue II, filed a separate Chapter 11 petition. Linda W. Simpson, the U.S. Bankruptcy Administrator for the Western District of North Carolina, appointed six members to the official committee of unsecured creditors in the Chapter 11 case of Pacific Avenue LLC. PACIFIC MESA: Plan Consummated, Asks Court to Close Bankr. Case --------------------------------------------------------------- Pacifica Mesa Studios, LLC, asks the U.S. Bankruptcy Court for the Central District of California to close its bankruptcy case, on the grounds that its Plan of Reorganization, confirmed by order entered on July 27, 2011, has been fully consummated. Robyn B. Sokol, Esq., at Ezra Brutzkus Gubner LLP, the attorney for the Debtor, says that all distributions to creditors as set forth in the Plan have been made and the Reorganized Debtor is current with all quarterly fees required by the U.S. Trustee. At a hearing held July 5, 2011, the Plan was confirmed and the Findings of Fact, Conclusions of Law and Order Confirming Debtor's Plan of Reorganization Under Chapter 11 of the Bankruptcy Code was entered on July 27, 2011. The effective date of the Plan is Aug. 17, 2011. The Debtor made its remaining Plan distribution to class 6 creditors on Feb. 16, 2012, in accordance with the terms of the Plan and the claims objection orders. Mr. Sokol assures the Court that there are no adversary proceedings or contested matters pending or contemplated. Mr. Sokol says that the Debtor is current on all post-confirmation tax liabilities, that the Debtor has complied with all terms of the Plan, and that all funds that are expected to be necessary to satisfy distributions under the Plan were placed in a segregated account and the pro rata distribution to general unsecured creditors was made. About Pacifica Mesa Agoura Hills, California-based Pacifica Mesa Studios, LLC, dba Albuquerque Studios and ABQ Studios, is a California limited liability company that was formed for the purpose of developing and running a state-of-the art production complex in Albuquerue, New Mexico. The Debtor is owned on a 50/50 basis by members Harold Katersky and Dana Arnold. The Debtor is the largest film studio in New Mexico. The Debtor filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 10-18827) on July 20, 2010. Steven T. Gubner, Esq., at Ezra Brutzkus & Gubner, assists the Debtor in its restructuring effort. The Debtor estimated $50 million to $100 million in assets and $100 million $500 million in liabilities in its Chapter 11 petition. PARK POINTE: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------- Jeanne Millsap at Morris Daily Herald reports that Lewis Borsellino, owner and CEO of Prism Healthcare Group's two senior facilities in Morris, Illinois, has filed a Chapter 11 bankruptcy petition for Park Pointe Morris Senior Living Facility. Park Pointe is in default on its loans. The other facility is Morris Healthcare and Rehabilitation Center. According to the report, Mr. Borsellino said bankruptcy was filed only for the one center on which he had loans. He did not have loans out on the rehabilitation center. Mr. Borsellino also said the bank has given him five to six months to come up with a reorganization and refinancing plan, after which business will get back to normal. Park Pointe Morris Senior Living Facility is located at 1221 Edgewater Drive in Morris and is an independent living center that provides bath services, morning and evening care, meal escort, TLC checks, laundry, medication administration, emergency services, and social activities. It has 40 studio and 18 one-bedroom units. PEMCO WORLD AIR: Seeks May 14 Auction to Test Sun Capital Bid ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Pemco World Air Services Inc. received interim authority from the bankruptcy judge in Delaware to borrow $5 million under a revolving credit supplied by an affiliate of venture-capital investor Sun Capital Partners Inc. At a final hearing on April 4, the loan is scheduled to increase to a $6 million revolving credit and a $31.8 million term loan to pay off a pre-bankruptcy secured debt in the same amount. The report relates that Pemco filed papers asking the bankruptcy judge to set up auction and sale procedures in which a Sun affiliate will purchase the business in exchange for secured debt. If the judge goes along with the program, other bids would be due May 10, followed by an auction on May 14. The Sun affiliate is under contract to buy the business exchange for the senior secured debt and the loan financing the Chapter 11 case. About Pemco World Air Services Headquartered in Tampa, Florida Pemco World Air Services -- http://www.pemcoair.com/-- performs large jet MRO services, and has operations in Dothan, AL (military MRO and commercial modification), Cincinnati/Northern Kentucky (regional aircraft MRO), and partner operations in Asia. Pemco filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 12-10799) on 5, 2012, with a $37.8 million DIP financing and a "stalking horse" bid from an affiliate of its current owner, Sun Aviation Services, LLC. Young Conaway Stargatt & Taylor, LLP has been tapped as general bankruptcy counsel; Kirkland & Ellis LLP as special counsel for tax and employee benefits issues; AlixPartners, LLP as financial advisor; Bayshore Partners, LLC as investment banker; and Epiq Bankruptcy Solutions LLC as notice and claims agent. PETTERS CO: Ch 11 Trustee Has OK to Hire Stonehill as Consultant ---------------------------------------------------------------- Douglas A. Kelley, the Chapter 11 Trustee for Petters Company, Inc., et al., sought and obtained authorization from the U.S. Bankruptcy Court for the District of Minnesota to employ Stonehill Group, LLP, as consultant in the Chapter 11 bankruptcy cases effective Feb. 1, 2012. The Trustee sought to employ Stonehill to provide consulting services to the Trustee and counsel for the Trustee with respect to issues arising in that certain adversary proceeding commenced by the Trustee entitled Douglas A. Kelley, in his capacity as the court-appointed Chapter 11 Trustee of Petters Company, Inc., PC Funding, LLC, Thousand Lakes, LLC, and PAC Funding, LLC v. Eide Bailly LLP, Defendant, ADV. No. 12-04008, and similar or related matters which may be brought by the Trustee. Stonehill will charge in these hourly rates: Donald M. Nicholson $450 Jeffrey A. Johnston $250 Other Staff Members $125-$135 Donald M. Nicholson, Certified Public Accountant licensed in Minnesota and founding partner of Stonehill, assured the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Petters Group Based in Minnetonka, Minn., Petters Group Worldwide LLC is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Founder and chairman Tom Petters formed the company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide. Thomas Petters, the founder and former CEO of Petters Group, has been indicted and a criminal proceeding against him is proceeding in the U.S. District Court for the District of Minnesota. Petters Company, Petters Group Worldwide and eight other affiliates filed separate petitions for Chapter 11 protection (Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. In its petition, Petters Company estimated its debts at $500 million and $1 billion. Parent Petters Group Worldwide estimated its debts at not more than $50,000. Fruth, Jamison & Elsass, PLLC, represents Douglas Kelley, the duly appointed Chapter 11 Trustee of Petters Company, Inc., et al. The trustee tapped Haynes and Boone, LLP as special counsel, and Martin J. McKinley as his financial advisor. Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and 08-35198) on Oct. 6, 2008. Petters Aviation is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun Country's parent company. PETTERS CO: Court OKs Boies as Trustee's Special Counsel -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Minnesota approved the supplemental application filed by Douglas A. Kelley, the Chapter 11 Trustee for Petters Company, Inc., et al., for the appointment of Boies, Schiller & Flexner, LLP, as special counsel for the Trustee. The supplemental application filed on Feb. 29, 2012, requested that the Court authorize the appointment of BSF effective as of Aug. 15, 2011. The Trustee requested that the employment be effective retroactively to Aug. 15, 2011 as BSF had performed services beginning on that date, including legal research and analysis. BSF has performed services dating back to Feb. 25, 2011 for which no compensation is sought. As reported by the Troubled Company Reporter on Dec. 12, 2011, the Trustee already sought and obtained permission the Court to employ BSF to advise and represent the Trustee with respect to adversary proceeding no. 10-04443 entitled, Douglas A. Kelley, Trustee for Petters Company, Inc., and Petters Group Worldwide, LLC, John R. Stoebner, Trustee for Polaroid Corporation, et al., and Randall L. Seaver, Trustee for Petters Capital, LLC, Plaintiffs, vs. JPMorgan Chase & Co., JPMorgan Chase Bank, N.A., One Equity Partners LLC, Jacques A. Nasser, Lee M. Gardner, Charles F. Auster, James W. Koven, Rick A. Lazio, J. Michael Pocock, William L. Flaherty and Ira H. Parker, defendants. The Trustee stated that he desires to retain BSF as counsel to advise and represent him and believes that the best interest of the Debtors' estates will be served by retaining BSF. The applicable hourly rates of attorneys and legal staff currently expected to provide services to the Trustee are: Hourly Rate Hourly Rate as For 2011 of 1/1/12 ----------- -------------- Richard B. Drubel, Partner $722.50 $961 Kimberly Schultz, Counsel $501.50 $586.50 Matthew Henken, Associate $476 $620.50 Ethan Frechette, Associate $357 $467.50 Ann Fraser, Paralegal $136 $187 Darci Blanchard, Legal Assist. $110.50 $119 The Trustee and BSF have agreed to apply BSF's previous 2010/2011 rates to its Aug. 15 - Dec. 31, 2011 work in this case and its 2012 rates beginning January 2012. Richard B. Drubel, a partner at BSF, assured the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Petters Group Based in Minnetonka, Minn., Petters Group Worldwide LLC is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Founder and chairman Tom Petters formed the company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide. Thomas Petters, the founder and former CEO of Petters Group, has been indicted and a criminal proceeding against him is proceeding in the U.S. District Court for the District of Minnesota. Petters Company, Petters Group Worldwide and eight other affiliates filed separate petitions for Chapter 11 protection (Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. In its petition, Petters Company estimated its debts at $500 million and $1 billion. Parent Petters Group Worldwide estimated its debts at not more than $50,000. Fruth, Jamison & Elsass, PLLC, represents Douglas Kelley, the duly appointed Chapter 11 Trustee of Petters Company, Inc., et al. The trustee tapped Haynes and Boone, LLP as special counsel, and Martin J. McKinley as his financial advisor. Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and 08-35198) on Oct. 6, 2008. Petters Aviation is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun Country's parent company. PJ FINANCE: Court Expands E&Y Employment to Include Tax Svcs. ------------------------------------------------------------- PJ Finance Company, LLC, et al., sought and obtained permission from the U.S. Bankruptcy Court for the District of Delaware to expand, for the third time, the scope of employment of Ernst & Young LLP to include restructuring tax services, nunc pro tunc to March 2, 2012. EY LLP will, among other things: a. assist and advise the Debtors in developing an understanding of the tax implications of the bankruptcy plan as currently proposed, including, as needed, research and analysis of federal tax authorities, and advise on seeking any rulings from a tax authority; and including commenting on the currently proposed plan and disclosures and proposed amendments to any loan agreements or other financing arrangements of the Debtors; b. analyze federal tax return disclosures and presentation; and c. prepare a summary memorandum that includes the analysis of the federal tax issues considered and the basis for any conclusions reached about federal tax consequences and federal tax reporting matters. The Debtors and EY LLP agree that the firm's fees for the restructuring tax services won't exceed $50,000. Stuart M. Brown, Esq., at DLA Piper LLP (US), the attorney for the Debtors, assured the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Brown stated that the Debtors believe that EY LLP's expanded engagement is necessary to support confirmation and implementation of the restructuring tax efforts. The Debtors require advice regarding the tax implications of various restructuring options related to the consummation of the Debtors' First Amended Plan of Reorganization to ensure the most advantageous result for the Debtors and all interested parties. 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). QUALITY DISTRIBUTION: FMR LLC Discloses 14% Equity Stake -------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission on March 9, 2012, FMR LLC and Edward C. Johnson 3d disclosed that they beneficially own 3,351,704 shares of common stock of Quality Distribution Inc. representing 14.039% of the shares outstanding. A copy of the amended filing is available for free at http://is.gd/tGpwKH About Quality Distribution Quality Distribution, LLC, and its parent holding company, Quality Distribution, Inc., are headquartered in Tampa, Florida. The company is a transporter of bulk liquid and dry bulk chemicals. The company's 2010 revenues are approximately $686 million. Apollo Management, L.P., owns roughly 30% of the common stock of Quality Distribution, Inc. The Company reported net income of $23.43 million on $745.95 million of total operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $7.40 million on $686.59 million of total operating revenues during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $302.39 million in total assets, $408.58 million in total liabilities and a $106.18 million total shareholders' deficit. Bankruptcy Warning The Company had consolidated indebtedness and capital lease obligations, including current maturities, of $307.1 million as of Dec. 31, 2011. The Company must make regular payments under the New ABL Facility and its capital leases and semi-annual interest payments under its 2018 Notes. The New ABL Facility matures August 2016. However, the maturity date of the New ABL Facility may be accelerated if the Company defaults on its obligations. If the maturity of the New ABL Facility or such other debt is accelerated, the Company does not believe that it will have sufficient cash on hand to repay the New ABL Facility or such other debt or, unless conditions in the credit markets improve significantly, that the Company will be able to refinance the New ABL Facility or such other debt on acceptable terms, or at all. The failure to repay or refinance the New ABL Facility or such other debt at maturity will have a material adverse effect on the Company's business and financial condition, would cause substantial liquidity problems and may result in the bankruptcy of the Company or its subsidiaries. Any actual or potential bankruptcy or liquidity crisis may materially harm the Company's relationships with its customers, suppliers and independent affiliates. * * * As reported by the Troubled Company Reporter on Feb. 18, 2011, Moody's Investors Service said the $38 million public offering of 4 million shares of Quality Distribution's common stock on Feb. 9, 2011, does not affect Quality's 'Caa1' corporate family and probability of default ratings with a positive outlook. However, Moody's notes that the intended debt reduction at par from $17.5 million of the proceeds would be viewed favorably. In the Nov. 8, 2010 edition of the TCR, Standard & Poor's Ratings Services said that it has raised its corporate credit ratings on U.S.-based Quality Distribution Inc. to 'B' from 'B-'. S&P also removed the ratings from CreditWatch, where S&P had placed them with positive implications on Oct. 28, 2010, following the launch of the bond offering. The outlook is stable. "The rating action reflects the improvement in Quality Distribution's financial profile after completing its refinancing," said Standard & Poor's credit analyst Anita Ogbara. "Following the transaction, S&P expects Quality Distribution to benefit from lower interest expense, improved cash flow adequacy, and a substantial reduction in debt maturities over the next few years." RIM DEVELOPMENT: U.S. Trustee Wins Case Dismissal ------------------------------------------------- The U.S. Bankruptcy Court for the District of Kansas ordered that dismissal of Rim Development, LLC's Chapter 11. Richard A. Wieland, the United States Trustee for Region 20, sought dismissal, arguing that: a) the Debtor has filed to file an acceptable plan and disclosure statement within a reasonable time; and b) the Debtor is delinquent on its payment of the statutory fees in the amount of $9,425.14 for the third quarter of 2011. Under the Dismissal Order, the Debtor was required to pay the U.S. Trustee $10,415.89 pursuant to 28 U.S.C. Sec. 1930(a)(6) on or before Feb. 24, 2012, plus any interest that may accrue pursuant to 31 U.S.C. Sec. 3717 prior to the payment of all fees owed. Roca, Nebraska-based RIM Development, LLC, sought Chapter 11 protection (Bankr. D. Kan. Case No. 10-10132) on Jan. 22, 2010. Susan G. Saidian, Esq., at Case, Moses, Zimmerman and Martin, P.A., in Wichita, Kansas, represents the company. The Debtor scheduled $20.2 million in assets and $11.6 million in liabilities. SAINTS MEMORIAL: Moody's Reviews 'Caa1' Rating for Upgrade ---------------------------------------------------------- Moody's Investors Service has placed the Caa1 rating assigned to Saints Memorial Medical Center's debt on review for possible upgrade. The action is due to the recent execution of a merger affiliation agreement between Lowell, MA- based Saints and Lowell General Hospital (Baa1/on review for downgrade). If the transaction finalizes, the merger would likely result in Saints' outstanding debt becoming secured by revenues from a merged obligated group that would include both Lowell General Hospital and Saints. The timing of the transaction has not yet been finalized, although Moody's expects it is highly likely that closing will extend beyond Moody's typical 90-day review period. Moody's will extend the review period if necessary. The principal methodology used in this rating was Not-for-Profit Hospitals and Health Systems published in January 2008. SEAHAWK DEVELOPMENT: Files for Chapter 11 Bankruptcy Protection --------------------------------------------------------------- Seahawk Development LLC, owner of several small properties in Wilmington and Carolina Beach in North Carolina, filed for Chapter 11 bankruptcy (Bankr. E.D.N.C. Case No. 12-01817) on March 8, 2012. The firm is represented by J.M. Cook, Esq. Judge Stephani W. Humrickhouse presides over the case. According to the court docket, there's a meeting of creditors pursuant to Sec. 341 of the Bankruptcy Code on April 12, 2012, at 10:00 a.m., at Releigh 341 meeting room in North Carolina. The Debtor is required to file its schedules of assets and liabilities and statement of financial affairs by March 22, 2012. Mr. Cook can be reached at: J.M. Cook Attorney at Law 5886 Faringdon Place, Suite 100 Raleigh, NC 27609 Tel: 919 675-2411 E-mail: J.M.Cook@jmcookesq.com Proofs of claim are due on July 11, 2012, and government proofs of claim are due on Sept. 4, 2012. According to Chris Bagley, staff writer at Triangle Business Journal, Seahawk Development filed for Chapter 11 bankruptcy reorganization citing nearly $2 million in liabilities. The company listed a $1.9 million claim by BB&T bank as its main liability, along with smaller claims for property taxes and homeowner dues. Records show the company owning one residential property in Carolina Beach and four in Wilmington. The report says Seahawk's filing disclosed Thad Avent as its managing owner. SEALY CORP: H Partners Proposes to Appoint Board Representative --------------------------------------------------------------- H Partners Management, H Partners Capital and Rehan Jaffer, on March 11, 2012, sent a letter to the Board recommending that: (i) the Reporting Persons be allowed to appoint one representative to the Board; (ii) KKR's Board representation be proportionate with its ownership interest; (iii) Dean Nelson resign from the Board; (iv) two additional qualified, independent directors be appointed; (v) a representative of the Reporting Persons be appointed to the CEO search committee; (vi) the Board's nominating and corporate governance committee be recomposed; and (vii) the Board create a "Conflicts Committee". Further, the March 11 Letter states that the Reporting Persons will continue to explore all avenues to enhance the value of their investment, including, but not limited to, withholding votes from incumbent directors at the annual meeting of stockholders. As of March 12, 2012, the H Partners Management may be deemed to beneficially own 14,616,441 Shares of the Company, comprising approximately 14.5% of the outstanding Shares of the Company, based on 100,916,228 Shares outstanding as reported in the Company's Form 10-K filed on Jan. 18, 2012. A copy of the amended Schedule 13D is available for free at: http://is.gd/7ptwDh About Sealy Corp. Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) -- http://www.sealy.com/-- is the largest bedding manufacturer in the world with sales of $1.5 billion in fiscal 2008. The Company manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), including SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns & Foster(R), and Bassett(R) brands. Sealy operates 25 plants in North America, and has the largest market share and highest consumer awareness of any bedding brand on the continent. In the United States, Sealy sells its products to approximately 3,000 customers with more than 7,000 retail outlets. The Company reported a net loss of $9.88 million for the 12 months ended Nov. 27, 2011, and a net loss of $13.74 million during the prior year. The Company reported a net loss of $15.20 million for the three months ended Nov. 27, 2011. The Company's balance sheet as of Nov. 27, 2011, showed $919.19 million in total assets, $999.75 million in total liabilities, and a $80.56 million stockholders' deficit. * * * Sealy carries 'B' local and issuer credit ratings from Standard & Poor's. SEAWORLD PARKS: Moody's Lowers Corporate Family Rating to 'B1' -------------------------------------------------------------- Moody's Investors Service downgraded SeaWorld Parks and Entertainment, Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to B1 from Ba3 and its senior secured credit facility rating to Ba3 from Ba2. The downgrade follows the company's announcement that it plans to fund a $500 million dividend to its equity sponsors, led by the The Blackstone Group, from the proceeds of a $500 million add-on to its existing term loan B. The downgrade reflects the meaningful increase in leverage resulting from the transaction, increase in refinancing risk in 2016/2017, and future event risk related to use of cash flow and leverage by equity sponsor Blackstone. Moody's also assigned a Ba3 rating to the $500 million term loan B add-on and updated the loss given default assessments to reflect the revised debt mix. The rating outlook is stable. Downgrades: Issuer: SeaWorld Parks & Entertainment, Inc. Corporate Family Rating, Downgraded to B1 from Ba3 Probability of Default Rating, Downgraded to B1 from Ba3 Senior Secured Bank Credit Facility, Downgraded to Ba3, LGD3 - 40% from Ba2, LGD3 - 36% Assignments: Issuer: SeaWorld Parks & Entertainment, Inc. Senior Secured Bank Credit Facility (Term Loan B), Assigned Ba3, LGD3 - 40% (increased to $1.34 billion from $844 million) Ratings Rationale The significant size of the proposed distribution following a $100 million cash distribution to Blackstone in 2011's third quarter, and the relatively limited amount of debt reduction since Blackstone's December 2009 leveraged buyout of SeaWorld Parks' reflect an aggressive use of cash and debt. Moody's already considered the potential for cash distributions to equity holders to be high, but the magnitude of the distributions and the resulting higher leverage profile over the next several years are above the levels factored into the prior CFR. The maturity date for the add-on is the same as the existing term loan B (August 17, 2017), and this further increases the refinancing risk associated with all of SeaWorld Parks' debt maturing in 2016 and 2017. Moody's projects SeaWorld Parks will continue to generate meaningful free cash flow and the net increase in cash interest expense, factoring in the approximate $10 million proposed reduction in the annual interest expense on the mezzanine notes, is modest and manageable. Moody's expects the company will continue to utilize the bulk of its free cash flow for equity holder distributions and acquisitions, with debt reduction likely limited to required term loan amortization, an excess cash flow sweep and potentially modest discretionary pay downs. SeaWorld Parks' B1 CFR reflects the strong brands and consumer appeal of its portfolio of 10 regional and destination amusement parks, tempered by exposure to cyclical discretionary consumer spending, high debt-to-EBITDA leverage resulting from the 2009 LBO and proposed dividend distribution, and ongoing risks related to cash distributions or leveraging actions by equity sponsor Blackstone. The parks generate meaningful annual attendance (approximately 23.6 million in 2011) and benefit from high entry barriers and distinct advantages due to the differentiated animal encounters, mix of entertainment and rides, and broad demographic appeal. Amusement parks are capital intensive but Moody's anticipates SeaWorld will continue its good track record of reinvesting in the parks to compete for consumers with a wide range of entertainment alternatives, maintain the attendance base and generate free cash flow. Attendance at the parks is seasonal and vulnerable to weather, changes in fuel prices, public health issues and other disruptions that are outside of the company's control. A good liquidity position and cash flow generation provide flexibility to fund a significant ongoing capital program and rollout of major new rides and attractions in 2012/2013. The stable rating outlook reflects Moody's expectation the increased and sizable level of reinvestment since the LBO should support continued growth in attendance, revenue and EBITDA over the next 12-24 months. Based on this forecast and required debt repayment, Moody's projects debt-to-EBITDA leverage (estimated 5.5x for fiscal year 2011 incorporating Moody's standard adjustments and pro forma for the proposed transaction) will decline to approximately 5x over the next 12-24 months. Upward rating movement is unlikely due to event risks related to equity sponsor ownership. However, an upgrade could be considered if SeaWorld Parks demonstrates the willingness and ability to sustain debt-to-EBITDA leverage comfortably below 4.5x (after factoring in projected future shareholder distributions and other event risks), maintains a good liquidity profile, and generates solid and growing cash flow with good park reinvestment. Downward rating pressure could occur if cash distributions to shareholders, acquisitions or declines in attendance and earnings driven by competition, insufficient or ineffective investments or a prolonged economic downturn result in debt-to-EBITDA above 5.75x. A significant increase in interest rates, a deterioration in liquidity, more aggressive financial policies, or if Moody's anticipates the company will have difficulty refinancing its 2016- 2017 maturities are also factors that could result in a downgrade. SeaWorld Parks' ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside SeaWorld Parks' core industry and believes SeaWorld Parks' ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. SeaWorld Parks, headquartered in Orlando, Florida, owns and operates ten amusement parks located in the U.S. Properties include SeaWorld (Orlando, San Diego and San Antonio), Busch Gardens (Tampa and Williamsburg) and Sesame Place (Langhorne, PA). The Blackstone Group (Blackstone) acquired SeaWorld in December 2009 in a $2.4 billion (including fees) leveraged buyout. SeaWorld Parks' LTM 9/30/11 revenue was approximately $1.3 billion. SHRIJI PRAMUKH: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Shriji Pramukh Swami, LLC dba Quality Inn at Fort Stewart 706 East Oglethorpe Hwy Hinesville, GA 31313 Tel: (912) 876-4466 Bankruptcy Case No.: 12-40498 Chapter 11 Petition Date: March 9, 2012 Court: U.S. Bankruptcy Court Southern District of Georgia (Savannah) Debtor's Counsel: James L. Drake, Jr., Esq. JAMES L. DRAKE, JR., P.C. P.O. Box 9945 Savannah, GA 31412 Tel: (912) 790-1533 E-mail: jdrake7@bellsouth.net Scheduled Assets: $1,176,563 Scheduled Liabilities: $1,642,847 The Company did not file a list of creditors together with its petition. The petition was signed by Dipakchandra G. Patel, managing member. SHUANEY IRREVOCABLE: US Trustee Withdraws Case Dismissal Bid ------------------------------------------------------------ Donald F. Walton, the U.S. Trustee for Region 21, has withdrawn his motion to dismiss the Chapter 11 case of Shuaney Irrevocable Trust or convert it to chapter 7 after the Debtor addressed all of the issues raised in the motion. Shuaney Irrevocable Trust, in Fort Walton Beach, Florida, filed for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 11-31887) on Dec. 1, 2011. Judge William S. Shulman presides over the case. The Law Office of Mark Freund, Esq. -- loomf@comcast.net -- serves as the Debtor's counsel. The Debtor scheduled $20,996,723 in assets and $19,625,890 in debts. The petition was signed by Michael P. Spellman, Trustee. SILVER LEGACY: Owners Fail to Pay $142.8 Million Loan ----------------------------------------------------- Dow Jones' DBR Small Cap reports that the owners of Silver Legacy, a Reno, Nev., resort and casino, failed to pay its $142.8 million loan that matured March 1, according to documents filed with the U.S. Securities and Exchange Commission, and now has until March 15 to reach an agreement before the lender "exercises remedies." The owner of last month canceled a public debt offering aimed at repaying its $142.8 million loan. STARWOOD HOTELS: Moody's Lifts Sr. Unsec. Ratings From 'Ba1' ------------------------------------------------------------ Moody's Investors Service upgraded Starwood Hotels & Resorts Worldwide Inc.'s senior unsecured ratings to Baa3 from Ba1 (LGD 4, 56%). The outlook is stable. The ratings upgrade reflects the steady improvement in Starwood's operating metrics -- specifically occupancy, ADR, and RevPAR -- coupled with a material reduction in outstanding debt that has driven stronger earnings, cash flows, and credit metrics and Moody's expectation that earnings and credit metrics will continue to improve. The higher ratings also reflect Moody's view that liquidity will remain very good and that the company's financial policies will be managed in a way that maintains a strong credit profile. Ratings upgraded are: - $450 million senior unsecured 7.375% notes, due 11/15/2015 to Baa3 from Ba1 (LGD 4, 56%) - $495 million senior unsecured 6.25% notes, due 2/15/2013 to Baa3 from Ba1 (LGD 4, 56%) - $500 million senior unsecured 7.875% notes, due 10/15/2014 to Baa3 from Ba1 (LGD 4, 56%) - $400 million senior unsecured 6.75% notes, due 5/15/2018 to Baa3 from Ba1 (LGD 4, 56%) - $250 million senior unsecured 7.15% notes, due 12/01/2019 to Baa3 from Ba1 (LGD 4, 56%) Ratings to be withdrawn are: Corporate Family Rating of Ba1 Probability of Default Rating of Ba1 Speculative Liquidity Rating of SGL-2 The outlook is stable. Ratings Rationale Starwood's Baa3 senior unsecured ratings reflect its well-defined branding strategy, average scale in terms of system-wide rooms, stronger credit metrics, very good liquidity and moderate financial policy. In addition, the ratings incorporate the increase towards higher margin franchise brands and solid hotel development pipeline. However, the ratings also consider Starwood's sensitivity to economic cycles, risks related to growing and gaining appropriate distribution of new home grown brands, material international expansion and challenges in emerging markets. The stable outlook reflects Moody's expectation that continued improvement in operating metrics will drive stronger earnings, credit metrics, and liquidity over the intermediate term. The outlook also considers that as Starwood moves to a more asset light business model and sells owned hotels, that debt will be reduced at least commensurate to the loss of earnings from that wholly owned property to avoid deterioration in credit metrics. A higher ratings would require a sustained improvement in operating metrics and credit metrics with leverage on a debt/EBITDA basis of under 3.0 times, EBIT coverage of interest of over 3.75 times, and retained cash flow to net debt well in excess of 20%. A higher rating would also require a moderate financial policy and very good liquidity. Factors that could result in negative ratings pressure would include a decline in operating metrics that resulted in a sustained deterioration in credit metrics or liquidity. Specifically, Starwood's ratings could be downgraded if debt/EBITDA migrated above 3.5 times, EBIT to interest fell to around 3.0 times, or retained cash flow to net debt declined towards 15% on a sustained basis. The principal methodology used in rating Starwood Hotels & Resorts Worldwide, Inc. was the Global Lodging & Cruise Industry 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. Starwood Hotels & Resorts Worldwide, Inc. owns and operates approximately 1,076 properties in more than 100 countries. Annual net revenues are about $3.3 billion. STOCKDALE TOWER: Disclosure Statement Hearing Today --------------------------------------------------- The Bankruptcy Court in Fresno, California, will continue today, March 15, 2012 at 9:00 a.m., the hearing on the disclosure statement explaining Stockdale Tower 1 LLC's bankruptcy-exit plan. The Plan of Reorganization and Disclosure Statement are dated Feb. 6. The Plan provides that all allowed secured claims would be paid in full over five years. The Disclosure Statement did not indicate how creditors will be grouped into classes as well as estimated recoveries for each group. The Debtor believes that creditors will receive a greater dividend in its Chapter 11 case than would be available in a Chapter 7 case. If the case were converted to Chapter 7, the Debtor believes that LBUBS 2006-C6 Stockdale Office Limited Partnership would be granted relief from automatic stay and permitted to foreclose against its collateral because the amount of the LBUBS debt is the same as or exceed that value of Stockdale Tower, which the Debtor estimates is about $17,100,000. A foreclosure by LBUBS would result in it receiving the Tower as opposed to payment of its claim in full. LBUBS is managed by LNR Partners California Manager Inc. pre- bankruptcy, the Debtor defaulted on its loan to LBUBS after several tenants vacated their office space in the Tower. The Debtor believes most of its accounts receivables are uncollectible. After payment of Chapter 11 and 7 administrative expenses, the Debtor said there may not be funds left to pay the allowed secured claims in full in a Chapter 7 scenario. Currently the only assets of the estate are: -- Stockdale Tower, -- a $114,000 security deposit with PG&E, which would be subject to set off by PG&E for pre-petitioned amounts owed, -- $814,661 in accounts receivables, most of which may not be collectable, -- $32,350 in furnishing and gym equipment, and -- an impound account of $90,061 with Wachovia. The Debtor believes that it will have enough cash on hand on the Effective Date to pay all the claims and expenses that required to be paid on the date that is indicated in the Budget. The Debtor's financial projections show that it will have an estimated aggregate cash flow, after paying operating expenses, of $648,221 during the first year of the Plan and an estimated aggregate cash flow, after paying operating expenses of $1,268,012 per year thereafter, which is sufficient income to pay the annual Plan payments of $648,000 during the first year and $1,267,064 thereafter. Creditors have until March 20 to file proofs of claim in the case. The deadline for government agencies is on May 5. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/STOCKDALE_TOWER_ds.pdf About Stockdale Tower 1 Bakersfield, California-based Stockdale Tower 1 LLC owned by Terry Moreland and his wife Peggy, filed for Chapter 11 bankruptcy (Bankr. E.D. Calif. Case No. 11-62167) on Nov. 7, 2011. The Stockdale Tower was set to be sold to the highest bidder several times over the last few months in 2011, but those auctions were delayed. Judge W. Richard Lee presides over the Chapter 11 case. Scott T. Belden, Esq., and Jacob L. Eaton, Esq., at Klein, DeNatale, Goldner, Cooper, Rosenlieb & Kimball, LLP, serve as the Debtor's bankruptcy counsel. The firm disclosed $18,151,072 in assets and $17,870,212 in liabilities. STRADELLA INVESTMENTS: Chapter 11 Case Reassigned to Judge Bauer ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, in accordance with the Administrative Order 12-01 dated Feb. 9, 012, ordered that the Chapter 11 case of Stradella Investments, Inc., is reassigned from Judge Robert Kwan to Judge Catherine E. Bauer. San Juan Capistrano, California-based Stradella Investments, Inc., filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 10-23193) on Sept. 19, 2010. Timothy J. Yoo, Esq., at Levene Neale Bender Rankin & Brill LLP, assists the Debtor in its restructuring effort. The Debtor disclosed $25,000,000 in assets and $121,000,671 in liabilities in its schedules. TCF FINANCIAL: Shift in Strategy Cues Fitch to Downgrade Ratings ---------------------------------------------------------------- Fitch Ratings has downgraded the long-term and short-term Issuer Default Ratings (IDRs) for TCF Financial Corporation (TCB) and its principal banking subsidiary TCF National Bank to 'BBB+/F2' from 'A-/F1'. The Rating Outlook remains Negative. The rating action is reflective of Fitch's view that TCB's recent shift in strategy to a more national lending platform, particularly with the company's planned growth in prime and near- prime auto lending, was not commensurate with its ratings. This action does not reflect the company's recently announced balance sheet restructuring, which Fitch regards as essentially neutral from a ratings perspective. Fitch's action is mainly promoted by TCB's growing proportion of national lending products represents a less proven, and therefore, riskier operating strategy for the company. The company has expanded its equipment and inventory finance business and recently acquired an indirect national auto finance company, Gateway One Lending & Finance. Although these strategic changes give the company avenues for loan growth, TCB's track record with respect to these new product lines is still unproven, which is noteworthy given that they will become a larger proportion of the balance sheet. Over the medium term these loans could begin to approach roughly one-third of overall loans. Longer-term Fitch could expect loans from the national lending platform to comprise at least as much as 50% of the loan portfolio. As these loans both grow and season over the coming years, credit quality will bear monitoring. Fitch further notes that given this change in strategy, TCB is also exposed to a certain degree of execution risk as it moves into new markets and adds new lending products to its loan portfolio. While there could be some long-term positives to TCB's evolving loan portfolio, there are also some near-term risks to this strategy, namely a heavy reliance on some new management personnel and a continued build out of infrastructure to support these larger scale lending platforms. Should the company find execution of this strategy challenging, either from an operational or credit perspective, the current ratings could be negatively impacted. The rating action is also reflective of TCB's still growing level of non-performing assets (NPA), inclusive of troubled debt restructurings, which as a percentage of gross loans plus other real estate owned (OREO) amount to 7.48% at YE2011, up from 7.03% at 3Q'11, and 6.00% at 2Q'11. The growth in TCB's NPA ratio stems in large part from the continued rise in troubled debt restructurings (TDRs), which Fitch classifies as non-performing assets. Specifically, TCB's total TDRs now amount to $695 million at YE2011, up from $615 million at 3Q'11, and up from $458 million at 2Q'11. Fitch would note that some of this increase, particularly in 3Q'11, was due to new accounting guidance that came into effect during the quarter. Nevertheless, this level of NPAs is higher than Fitch's expectations, and inconsistent with similarly rated entities. Fitch further notes that TCB continues to experience volatility in early-stage delinquencies as well as lumpiness in non-accrual loans in its commercial real estate portfolio (CRE), which further supports the rating action. Fitch views TCB's recent balance sheet optimization transaction as mostly a neutral event to the company's ratings, as it just brings forward future interests costs, which will therefore help the company's net interest margin (NIM) to be stronger in future periods. This is notable, however, as Fitch now expects TCB's earnings to be more reliant on spread income, rather than non- interest income, which had historically been a more sizable component of earnings. The balance sheet transaction will also serve to decrease TCB's asset sensitivity, which Fitch views positively. However, it will also, at least in the short term, result in a lower tangible common equity (TCE) ratio. Given the increase in the NPA ratio detailed above, the Outlook remains Negative, as the resulting lower TCE ratio provides less of a buffer to absorb unexpected economic shocks. Should TCB's asset quality ratios improve over the near to medium term, as well as the company's TCE ratio begin to also increase, Fitch believes the Outlook could be revised to Stable. Alternatively, should the absolute level of NPAs (including TDRs) increase by half as much as the they have over the last two quarters, the ratings could come under further pressure. TCB is an $18.9 billionn bank holding company with operations in Minnesota, Illinois, Wisconsin, Michigan, Indiana, Colorado, Arizona, and South Dakota. Fitch has downgraded the following ratings: TCF Financial Corporation -- Long-term IDR to 'BBB+' from 'A-'; -- Short-term IDR to 'F2' from 'F1'; -- Viability to 'bbb+' from 'a-'. TCF National Bank -- Long-term deposits to 'A-' from 'A'; -- Long-term IDR to 'BBB+' from 'A-'; -- Subordinated debt to 'BBB' from 'BBB+'; -- Short-term IDR to 'F2' from 'F1'; -- Short-term deposits to 'F2 from 'F1'; -- Viability to 'bbb+' from 'a-'. TCF Capital I -- Preferred stock to 'BB' from 'BB+'. Fitch has affirmed the following ratings: TCF Financial Corporation -- Support at '5'; -- Support floor at 'NF'. TCF National Bank -- Support at '5'; -- Support floor at 'NF'. The Rating Outlook is Negative. TELESAT CANADA: Moody's Upgrades Corporate Family Rating to 'B1' ---------------------------------------------------------------- Moody's Investors Service rated Telesat Canada's proposed US$2.55 billion credit facilities Ba3 while also upgrading the company's corporate family rating (CFR) and probability of default rating (PDR) to B1 from B2. At the same time, the company's senior unsecured notes and senior subordinated notes were upgraded to B3 from Caa1. As well, Telesat's speculative grade liquidity rating was affirmed at SGL-3 (adequate) and the ratings outlook was revised to stable from developing. Upon the $2 billion of existing senior secured credit facilities being repaid from the proceeds of the proposed facilities, their applicable ratings will be withdrawn. Telesat has launched a financing transaction that addresses capital structure-related uncertainties stemming from a year-and- a-half long strategic alternatives assessment and pending debt maturities. A $700 million special dividend to be funded from the proceeds of the new credit facilities, along with about $200 million of cash on hand is a key feature of the transaction, which also contemplates a comprehensive refinance of the company's existing bank credit facilities and thereby addresses near-term refinance risks. While Debt-to-EBITDA will spike by approximately a full turn to 6.4x (pro forma and inclusive of Moody's standard adjustments), since Moody's expects leverage to decline back into the mid-5x range by the end of 2013 and as the capital structure uncertainties are being addressed, the company's ratings have been upgraded and the outlook stabilized The following outlines Moody's ratings and outlook actions and summarizes Telesat's current ratings: Issuer: Telesat Canada Rating Assignments: Senior Secured Credit Facility: Assigned Ba3 LGD3, 33% Rating Actions: Corporate Family Rating: Upgraded to B1 from B2 Probability of Default Rating: Upgraded to B1 from B2 Senior Unsecured Regular Bond/Debenture: Upgraded to B3 (LGD5, 83%) from Caa1 (LGD5, 83%) Senior Subordinated Bond/Debenture: Upgraded to B3 (LGD5, 93%( from Caa1 (LGD5, 94%) Speculative Grade Liquidity Rating: Unchanged at SGL-3 Outlook Actions: Outlook: Changed to Stable from Developing Ratings Rationale Telesat's B1 ratings stem from a moderately aggressive debt load, a solid business profile, and uncertainties stemming from mid-term refinance activities as wells as future investment return considerations of the company's owners. Financial leverage is somewhat elevated (pro form Debt-to-EBITDA will be 6.4x, incorporating Moody's standard adjustments,) as a consequence of a debt-financed ownership change, significant capital expenditures, and a pending $700 million special dividend. However, the company's strong business profile, featuring a stable contract- based revenue stream with a six-year equivalent revenue backlog of $5.4 billion that is booked with well-regarded customers, provides a solid positive consideration. The special dividend is part of a refinancing transaction that, in turn, results from a prolonged strategic reassessment initiated by Telesat's owners. While no dividends or share repurchases are currently planned, Moody's thinks that there is the potential of subsequent periodic strategic reassessments as ownership looks for investment returns in advance of a permanent ownership structure developing. In addition, since the proposed credit facilities containing springing maturity dates in the event that junior ranking capital is not refinanced prior to its stated maturities, the structure amplifies the impact of mid-term refinance risks. Rating Outlook Given expectations of leverage declining over the next two years back into the mid 5x range (from a pro forma starting point of 6.4x), the outlook is stable. What Could Change the Rating - Up Presuming solid industry fundamentals, good execution and solid liquidity, Telesat's rating could be considered for upgrade if Moody's expected Debt/EBITDA to be less than 5.0x with Free Cash Flow to Debt in excess of 7.5% (in both cases, on a sustained basis and incorporating Moody's standard adjustments). Since the existing private equity ownership constrains the rating, a prerequisite to an upgrade would also likely involve a stable ownership structure. What Could Change the Rating - Down Telesat's rating could be considered for downgrade if Moody's expected Debt/EBITDA to be greater than 6.0x with Free Cash Flow to Debt less than 2.5% (in both cases, on a sustained basis and incorporating Moody's standard adjustments). Poor industry fundamentals, execution or deteriorating liquidity could also cause adverse ratings actions. The principal methodology used in rating Telesat Canada was the Global Communications Infrastructure 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. THORNBURG MORTGAGE: SEC Sues Former Execs for Hiding $428MM Loss ---------------------------------------------------------------- Carolina Bolado at Bankruptcy Law360 reports that the U.S. Securities and Exchange Commission on Tuesday sued three former TMST Inc. executives for allegedly misrepresenting investors by omitting a $428 million loss in the now-bankrupt mortgage lender's 2007 annual report. 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. THORNBURG MORTGAGE: Court Approves SEC Offer of Settlement ---------------------------------------------------------- BankruptcyData.com reports that the U.S. Bankruptcy Court approved the motion filed by the U.S. Trustee assigned to the Thornburg Mortgage case for approval to submit an offer of settlement to the SEC for a consent order to be entered in anticipation of an administrative proceeding instituted, pursuant to Section 12(j) of the Securities Exchange Act of 1934, against the Company to revoke registration of its securities. The offer of settlement provides that the Company consents to an order by the SEC containing findings that the Company has failed to comply with Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-3 thereunder, while its stock was registered with the SEC. 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. TOWNSEND CORP: Exclusive Plan Filing Period Extended to April 6 --------------------------------------------------------------- Townsend Corporation and LRJC, Inc., sought and obtained an extension of their exclusive periods to file and solicit acceptances of a plan of reorganization for 90 days, to April 6, 2012 and June 5, 2012, respectively. Auto dealers Townsend Corporation, d/b/a Land Rover Jaguar Anaheim Hills, and LRJC, Inc., d/b/a Land Rover Jaguar Cerritos, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case Nos. 11-22690 and 11-22695) on Sept. 9, 2011. Todd M. Arnold, Esq., and Martin J. Brill, Esq., at Levene, Neale, Bender, Yoo & Brill, LLP, represent the Debtors. Each of the Debtors estimated $10 million to $50 million in both assets and debts. The petitions were signed by Ernest W. Townsend, IV, the president. TOWNSEND CORP: Case Reassigned to Judge Catherine E. Bauer ---------------------------------------------------------- The Chapter 11 cases of Townsend Corporation, d/b/a Land Rover Jaguar Anaheim Hills, and LRJC, Inc., d/b/a Land Rover Jaguar Cerritos, have been reassigned from Judge Robert N. Kwan to Judge Catherine E. Bauer. Auto dealers Townsend Corporation, d/b/a Land Rover Jaguar Anaheim Hills, and LRJC, Inc., d/b/a Land Rover Jaguar Cerritos, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case Nos. 11-22690 and 11-22695) on Sept. 9, 2011. Todd M. Arnold, Esq., and Martin J. Brill, Esq., at Levene, Neale, Bender, Yoo & Brill, LLP, represent the Debtors. Each of the Debtors estimated $10 million to $50 million in both assets and debts. The petitions were signed by Ernest W. Townsend, IV, the president. TRACY PRESS: JP Media Partners to Get 8% Commission From Sale ------------------------------------------------------------- Jondi Gumz at Santa Cruz Sentinel reports that Tracy Press Inc. will be paying JP Media Partners, which was hired to find a buyer for the assets, an 8% commission if the pending sale is approved. Tracy Press is proposing to sell its assets to Phoenix Publishing Co. of San Angelo, Texas, at a hearing scheduled for March 28, 2012, at 10 a.m., in Sacramento, California, before Judge Christopher Klein. According to the Sentinel, a Feb. 2 letter from H. Lee Wilcox of Phoenix Publishing offers to buy the Tracy Press assets for $758,500 in a 100% cash transaction. The buyer proposes to acquire accounts receivable, no more than 60 days past due, estimated at $90,000. According to the report, the offer is contingent on the acceptance of the buyer's letter of intent to buy the Patterson Irrigator newspaper, which is not in bankruptcy. The report says the buyer set the closing date as 30 days after the bankruptcy court announces the winning bidder, and no later than April 30. The report says Robert Matthews, president of Tracy Press Inc., submitted a letter Feb. 24 in support of the sale, saying, "After many months of trying to sell the newspaper operations, this is the highest and best offer received to date." The report relates the court previously approved the sale of the Press Banner to MainStreet Media Group, publisher of the Good Times Santa Cruz weekly and the Gilroy Dispatch, for $200,000 but the buyer did not complete the transaction. The report relates Mr. Matthews is seeking court approval to sell the Patterson Irrigator for $251,500 plus about $30,000 for accounts receivable. Mr. Matthews pointed out Mike Quinn and Elaine Quinn have an interest in fixtures, furniture, inventory and accounts receivable of the Valley Press/Scotts Valley Press. This claim for $11,809, filed in September 2010, would be paid out of the sale as would a claim filed by the IRS for $107,627. About Tracy Press Based in Tracy, California, Tracy Press, Inc., is the publisher of the weekly Tracy Press and, in Santa Cruz County, the Press- Banner. It also has published the Patterson Irrigator since 2003, but that paper's own limited liability company -- which includes a print shop -- has not filed for bankruptcy. Tracy Press filed for Chapter 11 on July 2, 2010 (Bankr. E.D. Calif. Case No. 10-37525), estimating assets of $500,001 to $1 million and debts of $1 million to $10 million. TRANS-LUX CORP: Stockholders OK Increase of Authorized Shares ------------------------------------------------------------- The Annual Meeting of Stockholders of Trans-Lux Corporation was held on March 6, 2012. At the meeting, stockholders voted to (a) increase authorized shares and reduce the par value of Common Stock, (b) remove Class A Stock from authorized capital stock, (c) remove Class B Stock from authorized capital stock and (d) remove Article Twelfth regarding super-majority voting requirements, (ii) approve the adoption of the 2012 Long-Term Incentive Plan, (iii) elect Jean-Marc Allain, George W. Schiele, Jean Firstenberg, Richard Nummi and Elliot Sloyer as directors of the Company, and (iv) ratify the retention of the independent registered public accounting firm. The Corporation previously issued Series A Convertible Preferred Stock, par value $1.00 per share, having a stated value of $20.00 per share and convertible into fifty (50) shares of the Corporation's Common Stock. Upon filing of the approved Amended and Restated Certificate of Incorporation, the provision which increases the number of shares of authorized Common Stock operates to allow an adequate amount of shares of authorized Common Stock for issuance upon conversion of the Preferred Stock. Upon such filing, the shares of Preferred Stock will be automatically converted into Common Stock. Each share of Preferred Stock will convert into fifty (50) shares of Common Stock of the Corporation. On March 6, 2012, the Company accepted the letter of resignation of Ms. Angela D. Toppi, effective immediately, as a Director of the Company. Ms. Toppi's current term would have expired in 2012. Her decision to resign was not due to any disagreement with the Company. Ms. Toppi will continue to serve as Executive Vice President, Chief Financial Officer and Assistant Secretary of the Company. Trans-Lux Corporation has entered into a new employment agreement with the Chief Executive Officer and President, Jean-Marc Allain dated as of Feb. 15, 2012. The agreement has a term of three years and provides for compensation at the annual rate of $275,000 and includes a grant of warrants to purchase 2,000,000 shares of the Company's Common Stock in accordance with the terms set forth therein. Mr. Allain is entitled to receive an annual bonus in the event that the cash flow of the Corporation meet or exceeds $1,000,000. About Trans-Lux Corporation Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a designer and manufacturer of digital signage display solutions for the financial, sports and entertainment, gaming and leasing markets. Trans-Lux reported a net loss of $7.03 million on $24.30 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $8.79 million on $28.54 million of total revenues during the prior year. The Company also reported a net loss of $5.45 million on $17.12 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $5.25 million on $18.73 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $29.73 million in total assets, $35.31 million in total liabilities, and a $5.58 million total stockholders' deficit. As reported by the TCR on April 8, 2011, UHY LLP, in Hartford, Connecticut, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant recurring losses from continuing operations and has a significant working capital deficiency. In 2009, the Company had a loss from continuing operations of $8.8 million and has a working capital deficiency of $16.0 million as of Dec. 31, 2009. Furthermore, the Company is in default of the indenture agreements governing its outstanding 9 1/2% Subordinated debentures and its 8 1/4% Limited convertible senior subordinated notes so that the trustees or holders of 25% of the outstanding Debentures and Notes have the right to demand payment immediately. TRIDENT MICROSYSTEMS: Equity Committee Proposes A&M as Advisor -------------------------------------------------------------- The Committee of Equity Security Holders of Trident Microsystems, Inc., et al., asks the Bankruptcy Court for entry of an order authorizing the employment and retention of the consulting firm Alvarez & Marsal North America, LLC, as financial advisors to the Equity Committee, effective as of February 16, 2012. The Equity Committee has decided to retain the services of A&M based upon, among other things, the Equity Committee's need to: (i) Assist in the evaluation and analysis and eventual sale of substantially all of the Debtors' business lines, (ii) monitor and evaluate the Debtors' operations, cash flows and business plans, and (iii) evaluate and monitor Debtors' efforts to reorganize and maximize the value of their estates for creditors and equity holders successfully. The Equity Committee has selected A&M because of its extensive experience and excellent reputation in providing financial advisory services in chapter 11 cases such as these. The Equity Committee is familiar with the professional standing and reputation of A&M and understands and recognizes that A&M has a wealth of experience in providing financial advisory services in restructurings and reorganizations and enjoys an excellent reputation for services it has rendered in large and complex chapter 11 cases on behalf of debtors and creditors throughout the United States. A&M will provide such consulting and advisory services to the Equity Committee and its legal advisors as A&M and the Equity Committee deem appropriate and feasible in order to advise the Equity Committee in the course of these chapter 11 cases, including: (a) Assisting in the review of financial information distributed by the Debtors to the Equity Committee, its advisors and/or creditors and others, including, but not limited to, short term cash flow projections and budgets, cash receipts and disbursement analysis and analysis of various asset and liability accounts, including their intercompany matrix; (b) Assisting counsel to the Equity Committee in support of the financial elements of various Court pleadings filed throughout these proceedings; (c) Assisting with a review of the business model, operations, properties, assets and liabilities, financial condition, tax considerations, feasibility and prospects of the Debtors; (d) Assisting with a review of the Debtors' cost/benefit evaluations with respect to the assumption or rejection of executory contracts and/or unexpired leases; (e) Assisting in the review and monitoring of international operating, intercompany and cash management characteristics, in consideration of their overall impact on the liquidity position and enterprise value of the Debtors; (f) Attending meetings with the Debtors, the Debtors' creditors, the Equity Committee and any other official committees organized in these chapter 11 cases, the U.S. Trustee, other parties in interest and professionals hired by the same, as requested; (g) Assisting with a review of the Debtors' proposed key employee retention and other critical employee/retiree benefit and pension programs; (h) Assisting with the assessment of any potential avoidance actions that could result in unencumbered sources of recovery to the Equity Committee; (i) Assisting in the review and/or preparation of information and analysis necessary for the confirmation of a plan in these chapter 11 cases, including an assessment of liquidation analyses included therein; and (j) Rendering other general business consulting or other assistance as the Equity Committee or its counsel may deem necessary, consistent with the role of a financial advisor and not duplicative of services provided by other professionals in these chapter 11 cases. The terms on which the Equity Committee proposes, subject to Court approval, to retain A&M are as follows: (a) A&M will apply to the Court for allowances of compensation and reimbursement of expenses for its financial advisory support services. (b) A&M will be paid by the Company for the services of the Professionals at their customary hourly billing rates which will be subject to the following ranges: i. Managing Directors $650-850 ii. Directors $450-650 iii. Analysts/Associates $225-450 The rates and ranges will be subject to adjustment annually. (c) In addition, A&M will be reimbursed for the reasonable out-of-pocket expenses of A&M and the A&M Professionals incurred in connection with this assignment, such as travel, lodging, third party duplications, messenger and telephone charges. Reasonable out-of-pocket expenses would include any reasonable legal fees incurred for A&M's defense of its retention application and fee applications submitted in this matter, subject to Court approval. (d) In order for A&M to perform the services, it will be necessary for A&M personnel to have access to certain books, records and reports of the Debtors and to have discussions with the Debtors' personnel. (e) Because of the limitations in this proposed retention, the depth of A&M's analysis and verification of the data are limited. It is understood by the Equity Committee that A&M is not being requested to perform an audit and that A&M is entitled to rely on the accuracy and validity of the data disclosed to A&M or supplied to A&M by, or on behalf of, employees and representatives of the Debtors or the Equity Committee. (f) The Equity Committee understands that the services to be rendered may include a review and assessment or preparation of projections and other forward-looking statements and that numerous factors can affect the actual results of the Debtors' operations, which may materially and adversely differ from those projections and other forward-looking statements. (g) All advice (written or oral) provided by A&M to the Equity Committee in connection with this engagement is intended solely for the benefit and use of the Equity Committee in considering the matters to which this engagement relates. (h) From time to time A&M may utilize the services of the employees of its affiliates in the performance of services. (i) As part of the overall compensation payable to A&M, the Equity Committee has agreed to request that the Debtors indemnify and hold harmless A&M for any claims arising from, related to, or in connection with A&M's engagement and to request that this Court enter an order approving the indemnification obligation. Both the Equity Committee and A&M believe that these provisions are customary and reasonable. (j) The Debtors will have no obligation to indemnify A&M or provide contribution or reimbursement to A&M for any claim or expense that is either (i) judicially determined to have arisen primarily from A&M's bad faith, self-dealing, breach of fiduciary duty, gross negligence or willful misconduct, or (ii) for a contractual dispute in which the Debtors allege the breach of A&M's contractual obligations if the Court determines that indemnification, contribution or reimbursement would not be permissible, or (iii) settled prior to a judicial determination as to A&M's bad faith, gross negligence or willful misconduct but determined by the Court to be a claim or expense for which A&M is not entitled to receive indemnity under the terms of this Application. (k) If, before the earlier of (i) the entry of an order confirming a chapter 11 plan in these cases, and (ii) the entry of an order closing these chapter 11 cases, A&M believes that it is entitled to the payment of any amounts by the Debtors on account of the Debtors' indemnification, contribution and/or reimbursement obligations, including the advancement of defense costs, A&M must file an application therefore in this Court, and the Debtors may not pay any amounts to A&M before the entry of an order by this Court approving the payment. 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. The Official Committee of Unsecured Creditors of Trident Microsystems, Inc., et al., tapped Pachulski Stang Ziehl & Jones LLP as its counsel, and Imperial Capital, LLC, as its investment banker and financial advisor. Roberta A. DeAngelis, the U.S. Trustee for Region 3 appointed three members to the Committee of Trident Microsystems, Inc. Equity Security Holders. TRIDENT MICROSYSTEMS: Equity Committee Has Bayard as Co-Counsel --------------------------------------------------------------- The Committee of Equity Security Holders of Trident Microsystems, Inc., asks the Bankruptcy Court for authority to retain and employ Bayard, P.A., as co-counsel to the Equity Committee nunc pro tunc to Feb. 14, 2012. The services Bayard has rendered and may be required to render for the Equity Committee include, without limitation, the following: (a) providing legal advice with respect to its powers and duties as the Equity Committee; (b) assisting in the investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors, the operation of the Debtors' businesses, and any other matter relevant to these cases or to the formulation of a plan or plans of reorganization or liquidation or in connection with any potential sale of the Debtors' assets; (c) preparing on behalf of the Equity Committee necessary applications, motions, complaints, answers, orders, agreements and other legal papers; (d) reviewing, analyzing and responding to all pleadings filed by the Debtors and appearing in Court to present necessary motions, applications and pleadings and to otherwise protect the interests of the Equity Committee; (e) consulting with the Debtors, the Creditors' Committee and the United States Trustee concerning the administration of the Debtors' estates; (f) representing the Equity Committee in hearings and other judicial proceedings; (g) advising the Equity Committee on practice and procedure in the Bankruptcy Court for the District of Delaware; and (h) performing all other legal services for the Equity Committee in connection with these chapter 11 cases. The Equity Committee requests that Bayard be compensated on a hourly basis, plus reimbursement of the actual and necessary expenses that Bayard incurs, in accordance with the ordinary and customary rates which are in effect on the date the services are rendered. Bayard has advised the Equity Committee that Bayard's hourly rates range from: Directors $500 to $890 per hour Associates $310 to $485 per hour Paraprofessionals $195 to $285 per hour The primary attorneys and paralegal expected to represent the Equity Committee, and their respective hourly rates are: (a) Neil B. Glassman $890 per hour (b) Charlene Davis $750 per hour (c) Jamie Edmonson $625 per hour (d) GianClaudio Finizio $475 per hour (e) Justin Alberto $345 per hour (f) Stephanie Breckenridge (paralegal) $285 per hour 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. The Official Committee of Unsecured Creditors of Trident Microsystems, Inc., et al., tapped Pachulski Stang Ziehl & Jones LLP as its counsel, and Imperial Capital, LLC, as its investment banker and financial advisor. Roberta A. DeAngelis, the U.S. Trustee for Region 3 appointed three members to the Committee of Trident Microsystems, Inc. Equity Security Holders. TRIDENT MICROSYSTEMS: Equity Panel Has Dewey & LeBoeuf as Counsel ----------------------------------------------------------------- The committee of equity security holders in the chapter 11 case of Trident Microsystems, Inc., asks the Bankruptcy Court for entry of an order approving the retention and employment of Dewey & LeBoeuf LLP as attorneys to the Equity Committee, nunc pro tunc to Feb. 14, 2012. D&L has extensive experience in the area of corporate transactions, corporate governance, and taxation -- each of which the Equity Committee believes will be of importance in these chapter 11 cases. The Equity Committee anticipates D&L will, in connection with TMI's chapter 11 case and subject to orders of this Court, provide a range of services to the Equity Committee, pursuant to which it will perform all matters necessary to: (a) assist and advise the Equity Committee with respect to the powers and duties of the Equity Committee in TMI's chapter 11 case; (b) assist and advise the Equity Committee in its consultation with the Debtors, the Creditors Committee, and other constituents relative to the administration of the Debtors' chapter 11 cases; (c) attend meetings and negotiate with representatives of the Debtors, the Creditors Committee, and the administration officials presiding over the liquidation governed by Cayman Island law, and other potential Trident entities' insolvency proceedings around the globe; (d) assist and advise the Equity Committee in its examination and analysis of the conduct of the Debtors' affairs and their subsidiaries' affairs, and in the analysis of proposals and pleadings submitted by other parties in interest in these chapter 11 cases; (e) assist the Equity Committee in the formulation, review, analysis, and negotiation of any chapter 11 plans that may be filed and assist the Equity Committee in the formulation, review, and analysis of the disclosure statement accompanying any chapter 11 plans; (f) take all necessary action to protect and preserve the interests of the Equity Committee and equity security holders' interests in the Debtors' estates, including (i) the investigation and possible prosecution of actions on their behalf; (ii) if appropriate, negotiations concerning all litigation in which the Debtors' estates are involved; and (iii) review and analysis of claims filed against the Debtors' estates; (g) generally prepare on behalf of the Equity Committee all necessary motions, applications, answers, orders, reports, and papers in support of positions taken by the Equity Committee; and (h) appear, as appropriate, before this Court, the appellate courts, and the U.S. Trustee, and protect the interests of the Equity Committee before those courts and before the U.S. Trustee. The Equity Committee requests that D&L be compensated in the amount of its normal hourly rates times the hours expended, and reimbursement of its disbursements at cost. If retained, D&L will charge the following rates: (a) the hourly rates for partners range from $775 per hour to $1,200 per hour, based upon a variety of factors, including seniority and distinction and expertise in one's field; (b) the hourly rates for "of counsel" range from $760 per hour to $900 per hour; (c) the hourly rates for associates range from $395 per hour to $675 per hour, based upon year of graduation from law school; and (d) the hourly rates for paraprofessionals range from $200 per hour to $295 per hour. The professionals at D&L currently expected to have primary responsibility for providing services to the Equity Committee in these chapter 11 cases, their position, and their hourly are as follows: Martin J. Bienenstock $1,000 Robert M. Finkel $995 Timothy Q. Karcher $875 Vincent Indelicato $580 Maja Zerjal $395 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. The Official Committee of Unsecured Creditors of Trident Microsystems, Inc., et al., tapped Pachulski Stang Ziehl & Jones LLP as its counsel, and Imperial Capital, LLC, as its investment banker and financial advisor. Roberta A. DeAngelis, the U.S. Trustee for Region 3 appointed three members to the Committee of Trident Microsystems, Inc. Equity Security Holders. TRIDENT MICROSYSTEMS: Equity Panel Has Quinn as Conflicts Counsel ----------------------------------------------------------------- The Committee of Equity Security Holders of Trident Microsystems, Inc., asks the Court for entry of an order authorizing the Equity Committee to retain and employ Quinn Emanuel Urquhart & Sullivan, LLP, nunc pro tunc to March 2, 2012, as conflicts counsel. The Equity Committee seeks to retain Quinn Emanuel for a narrowly- tailored scope of engagement: solely to represent the Equity Committee in matters potentially adverse to NXP B.V. and NXP Semiconductors Netherlands B.V. NXP is purportedly the largest shareholder of Trident Microsystems Inc. (TMI), the largest unsecured creditor of Trident Microsystems Far East (TMFE), the entity that appointed four of the nine directors sitting on the Debtors' board of directors within one year prior to the Petition Date, and TMFE's largest vendor. The Equity Committee's lead bankruptcy counsel represents NXP in matters unrelated to the Debtor's chapter 11 cases. Thus, the Equity Committee submits, out of an abundance of caution, that it is necessary and appropriate to employ and retain Quinn Emanuel to solely render the following services each as appropriate and as directed by the Equity Committee: (a) undertaking an investigation of potential claims the Debtors may have against NXP, including taking discovery pursuant to Bankruptcy Rule 2004; (b) evaluating and discussing the findings of such investigation with the Equity Committee; (c) engaging in any discussions of consensual resolution of such potential claims with the Debtors, NXP, the Creditors' Committee, and other parties-in-interest; (d) seeking to obtain derivative standing to prosecute any such claims; (e) prosecuting any such claims for the benefit of TMI's estate; and (f) other services for which it would be most economical and efficient for Quinn Emanuel to provide to the Equity Committee. Compensation will be payable to Quinn Emanuel on an hourly basis, plus reimbursement of actual, necessary expenses and other charges incurred by the Firm. As is the case with respect to rates charged in non-bankruptcy matters of this type, Quinn Emanuel's rates are subject to periodic adjustment to reflect economic and other market conditions. Currently, hourly rates range from: Partners $810 to $955 Attorneys $350 to $900 Legal assistants $290 to $350 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. The Official Committee of Unsecured Creditors of Trident Microsystems, Inc., et al., tapped Pachulski Stang Ziehl & Jones LLP as its counsel, and Imperial Capital, LLC, as its investment banker and financial advisor. Roberta A. DeAngelis, the U.S. Trustee for Region 3 appointed three members to the Committee of Trident Microsystems, Inc. Equity Security Holders. TTM MB PARK: Court Rejects Capmark's Bid for SARE Declaration ------------------------------------------------------------- Bankruptcy Judge Margaret A. Mahoney denied Capmark Bank's motion for a determination that TTM MB Park, LLC, is subject to the single asset real estate provisions of 11 U.S.C. Sec. 362(d)(3), saying the bank failed to meet its burden of proof that the Debtor's properties satisfy the definition of single asset real estate codified at 11 U.S.C. Sec. 101(51B). TTM MB Park, LLC, which partially owns and operates two apartment complexes, filed for Chapter 11 bankruptcy (Bankr. S.D. Ala. Case No. 12-00174) on Jan. 12, 2012. The complexes are located roughly 3.3 miles from one another but share several relevant commonalities of ownership, financing, and management. Capmark argues that the two properties constitute a SARE because they are linked by a common purpose -- owning and operating rental real estate for profit. The bank also points out that the properties are the result of a single plan of financing. They are subject to a single mortgage and a single absolute assignment of leases and rents. Further, the apartment complexes do not have a separate legal identity beyond their respective trade names. The bank also argues that the properties share the same ownership structure. The Debtor's 40% interest in the two properties is the result of a single tenant-in-common agreement with two co- borrowers. Likewise, the debtor and co-borrowers entered into a management agreement providing for the properties' collective management. Moreover, both the tenant-in-common agreement and the management agreement refer to the properties as the "Property." Capmark also argues that the Debtor referred to the properties singularly as the "Property" in an underlying state court suit as well. Capmark further argues that properties do not have to be adjacent or contiguous in order to be a "single project" SARE. Rather, it asserts that the proximity of the properties to one another is merely a factor to be considered in determining whether a single project exists. In contrast, the Debtor contends that the apartment complexes do not constitute a SARE. The Debtor asserts that a physical nexus between separate parcels of property is a necessary characteristic in a "single project" SARE. The Debtor also argues that the apartment complexes are assessed separately for tax purposes and are subject to individualized promissory notes. Moreover, the Debtor highlights that the apartment complexes maintain separate books and records, employ different employees, and the tenants of the two complexes do not share rights and privileges at both complexes. A copy of the Court's March 12 Order is available at http://is.gd/PY64fBfrom Leagle.com. W. Alexander Grey Jr., Esq., and Lawrence B. Voit, Esq., at Silver, Voit & Thompson, serves as the Debtor's counsel. In its petition, the Debtor estimated under $50,000 in assets and $10 million to $50 million in debts. The petition was signed by Todd Martin, manager. U.S. STEEL: S&P Rates $400-Mil. Senior Unsecured Notes at 'BB' -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' issue-level rating (same as the corporate credit rating) to United States Steel Corp.'s (U.S. Steel) proposed $400 million senior unsecured notes due 2022. "The recovery rating is '3', indicating our expectation for a meaningful (50% to 70%) recovery in the event of a payment default. The notes are being issued under the company's shelf registration for well-known and seasoned issuers filed on Feb. 24, 2010," S&P said. "The notes will be senior unsecured obligations and rank equally with all of U.S. Steel's existing and future unsecured and unsubordinated indebtedness. The company intends to use the proceeds from this offering to redeem its $300 million 5.65% senior notes due 2013 and for general corporate purposes," S&P said. "The rating on Pittsburgh-based U.S. Steel reflects our assessment of the company's business risk profile as 'fair' and financial risk profile as 'aggressive' (as our criteria define the terms). In our view, the integrated steel producer has capital-intensive operations, is exposed to highly cyclical and competitive markets, and has a high degree of operating leverage. Its financial risk profile reflects relatively high levels of book debt and significant underfunded postretirement benefit obligations. Our ratings on the company also reflect its strong liquidity, good scope and breadth of product and operations, and the benefits of its backward integration into iron ore and coke production," S&P said. "We expect that, as the U.S. economy continues to slowly expand, U.S. Steel's credit measures will gradually improve to levels we consider more in line with the 'BB' rating, given the company's fair business risk profile. For the rating, we expect adjusted debt to EBITDA to be below 4.5x and adjusted funds from operations (FFO) to total debt about 20%. In 2011, we estimate that these measures, pro forma for the disposal of its Serbian operation, were 5.1x and below 15%. We expect U.S. Steel to generate adjusted EBITDA of $1.7 billion to $1.9 billion in 2012, with adjusted leverage about 4x and adjusted FFO to total debt of 15% to 20% and would also expect continued economic growth to lead to further improvement in 2013. The rating also reflects our view of the company's strong liquidity, which should be sufficient to fund increased working capital needs as business expands and as capital spending levels increase for strategic projects," S&P said. Rating List United States Steel Corp. Corporate Credit Rating BB/Stable/-- New Rating United States Steel Corp. $400 mil sr unsec notes due 2022 BB Recovery Rating 3 UNI-PIXEL INC: Signs Agreement with Carestream Tollcoating ---------------------------------------------------------- UniPixel, Inc., has signed an agreement with Carestream Tollcoating for the manufacture and distribution of UniPixel's Diamond Guard protective cover films. Carestream Tollcoating is a premium provider of high-precision contract coating services and optical grade PET film, specializing in the application of aqueous and solvent coatings on flexible substrates for imaging, printed electronics, display, electronic component, nanotechnology, battery, and a variety of other flexible advanced material markets. Its global logistics network, with supply chain management and distribution capabilities in 56 countries offers worldwide end-to-end service from high precision coating through post-manufacturing. "Our new partnership with a worldwide industry leader like Carestream Tollcoating affirms Diamond Guard films tremendous market potential," said UniPixel CEO Reed Killion. "Leveraging proven intellectual and manufacturing assets, Carestream Tollcoating brings more than 100 years of industry-leading innovation, as well as valuable knowledge and problem-solving expertise in solutions preparation, film manufacturing, converting and packaging." "Carestream Tollcoating is the ideal partner to bring this product line to the global market. Several dozen major electronic OEMs and ODMs are currently evaluating and testing Diamond Guard film using product produced both in-house and during the Carestream Tollcoating certification production runs," continued Reed. "Some evaluations have advanced to the submission of purchase orders for test piloting purposes, and we are focusing on production level shipments." With certification completed, Carestream Tollcoating can offer production capacity of more than 100 million square feet a year. Diamond Guard film is based on UniPixel proprietary resins and Carestream Tollcoating's manufacturing, coating and converting. "UniPixel's Diamond Guard Film is a truly amazing product line, particularly Diamond Guard Hard Coat, one of the hardest coatings available on a flexible film," commented Rick Daniels, General Manager of the Carestream Advanced Materials and Carestream Tollcoating divisions. "We are honored to partner with UniPixel's innovative engineering team to bring it to market. Our legacy of process sophistication is a natural fit for UniPixel's production requirements. Combined with our exceptional quality PET film and global distribution capabilities, we are able to provide significant value as a trusted partner throughout Diamond Guard's entire product supply chain and go-to-market process." About Uni-Pixel Inc. The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL) -- http://www.unipixel.com/-- is a production stage company delivering its Clearly Superior(TM) Performance Engineered Films to the Lighting & Display, Solar and Flexible Electronics market segments. The Company reported a net loss of $8.57 million in 2011 and a net loss of $3.82 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $8.38 million in total assets, $87,468 in total liabilities and $8.30 million in total shareholders' equity. UNITED RETAIL: Creditors Oppose Versa Credit Bid ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the creditors' committee for United Retail Group Inc. arranged a court hearing March 15 where they will ask the bankruptcy judge to preclude an affiliate of Versa Capital Management LLC from buying the company with debt acquired from the owner Redcats USA Inc. or affiliates. According to the report, the committee contends that the Redcats secured claim available for use in a credit bid is "vastly overstated." After deducting for obligations that were repaid or that should be offset under a tax agreement, the committee contends there is no Redcats secured claim usable in buying the company. March 23 Auction As reported in the Feb. 29, 2012 edition of the Troubled Company Reporter, the U.S. Bankruptcy Court in Manhattan has approved procedures to test whether there's a better offer to buy United Retail Group Inc.'s assets and business than the bid worked out prepetition with an affiliate of Versa Capital Management. Interested parties are required to submit initial bids by March 15 and their official bids by March 20. If qualified bids are received, an auction will be held March 23. The hearing to approve the sale is set for April 3. Absent higher and better offers, Versa will purchase the business in exchange for the loan financing the Chapter 11 case as much as $15 million, a $2 million to wind-up the bankruptcy, carve out $500,000 for unsecured creditors, and an additional $11.1 million to cover expenses of the Chapter 11 case along with priority claims that must be paid in full. In addition Versa will pay as much as $2.2 million owing to supplier Redcats Asia Ltd., an affiliate of the owner. Finally, Versa will assume as much as $4.7 million in other debt. 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. 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. VILLAGE RESORTS: Taps Worsek & Vihon as Real Estate & Tax Counsel ----------------------------------------------------------------- Village Resorts, Inc., et al., seek permission from the Bankruptcy Court to employ Worsek & Vihon LLP as special counsel. The Debtors own several parcels of real property commonly known as 4500 West Touhy Avenue, 4560 West Touhy Avenue, and 7350 North Lincoln Avenue in Lincolnwood, Illinois. Worsek & Vihon will render legal advice with respect to the reduction of property taxes for the Properties to enhance the Properties' value and render legal advice and perform other legal services related to real estate tax assessments. Worsek & Vihon will charge for its legal services on a contingency fee basis, pursuant to the fees contained in the retention agreement. Robert S. Vihon will be the principal attorney who will represent the Debtors. To the best of the Debtors' knowledge, Worsek & Vihon has not represented any of their creditors or any other parties-in- interest, or their respective attorneys, in any matter relating to the Debtors or their estates. Village Resorts, Inc., aka Purple Hotel, filed for Chapter 11 bankruptcy (Bank. N.D. Ill. Case No. 11-50965) on Dec. 21, 2011. The Debtor estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. Kun Chae Bae, signed the petition as president. VILLAGE RESORTS: Has Until April 24 to File Chapter 11 Plan ----------------------------------------------------------- The Bankruptcy Court has set April 24, 2012, as Village Resorts, Inc., et al's deadline to file a Plan and Disclosure Statement. The Court sets the Bankruptcy Case for a report on the status of the Plan and Disclosure Statement on May 10, 2012, at 10:30 a.m. Status hearing originally set on the Plan and Disclosure Statement for March 26, 2012, at 10:30 a.m. was stricken. Village Resorts, Inc., aka Purple Hotel, filed for Chapter 11 bankruptcy (Bank. N.D. Ill. Case No. 11-50965) on Dec. 21, 2011. The Debtor estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. Kun Chae Bae, signed the petition as president. VIRGIN ISLANDS: S&P Cuts Rating on Elec. System Bonds to 'BB+' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Virgin Islands Water and Power Authority's (WAPA) electric system subordinate lien revenue bonds to 'BB+' from 'BBB-'. The outlook is negative. "At the same time, Standard & Poor's revised its outlook on the system's senior lien revenue bonds to negative from stable. Standard & Poor's also affirmed its 'BBB-' rating on those bonds," S&P said. "The downgrade pertains to $57 million of series 2007A subordinate-lien bonds outstanding and the authority's proposed subordinate-lien bonds, series 2012B and 2012C ($40 million), which we initially rated 'BBB-' in January. We expect the 2012A (senior-lien), 2012B, and 2012C (subordinate-lien) bonds to price in March. Net electric system revenues secure the bonds," S&P said. "The downgrade and outlook revision reflect our view of a weakened economic outlook that follows the announcement of the closure of HOVENSA LLC's oil refinery that, while not a system customer, generated substantial revenues for the U.S. Virgin Island (USVI) government. We believe the closure could have consequences for the electric system's finances," said Standard & Poor's credit analyst Peter Murphy. "The oil refinery was also the long-time supplier to the system. Due to the increase in subordinate-lien debt, and the increasing gap between management's forecast debt service coverage levels of the senior lien bonds and the junior lien bonds, we believe a one- notch downgrade of the subordinate-lien bonds is now warranted," Mr. Murphy added. The ratings reflect S&P's assessment of the factors, which it views as credit weaknesses: * "High dependence on a single fuel type (oil), which we believe results in volatile electric rates and vulnerability to high prices, including current conditions," S&P said. * High leverage, due in part to a $40 million deficit financing linked to high oil prices the past three years that reduced debt service coverage (DSC) levels. * A low cash position, which would improve under the proposed debt restructuring, although recent payments of amounts owed from the USVI government has improved liquidity somewhat. "Modest levels of available bank lines of credit are also part of management's plan to mitigate this position; and A limited economy based on tourism, with below-average income levels and heightened concern given the system's high rates and global economic conditions, and which we expect the job losses at the refinery in 2012 will affect negatively. The negative outlook reflects our view that the economic impact of the HOVENSA refinery closure will exacerbate economic and financial problems for the USVI government during our two-year outlook horizon. Given the authority's exposure to oil costs and high unrecovered fuel cost balance and weakened financial condition, if costs increase significantly or if high electric rates reduce demand and collections significantly, we could lower the ratings. If management completes its proposed restructuring and planned rate increases, and WAPA can balance operating expenses with operating revenues and improve liquidity, we could revise the outlook to stable," S&P said. WARNER SPRINGS: Seeks Court Approval to Pay Creditors ----------------------------------------------------- Thor Kamban Biberman at The Daily Transcript reports that the Warner Springs Ranchowners Association, dba Warner Springs Ranch Resort, has filed a motion with the bankruptcy court to facilitate payments to creditors who may not have been paid for months. The motion was made after the Company filed its bankruptcy petition. According to the report, the Company filed for Chapter 11 bankruptcy protection March 1 after an effort to sell it to a local tribe for $20.5 million collapsed. The report relates the Company's bucolic property in east San Diego County, California, comprised of 250 casitas, an 18-hole golf course, 15 tennis courts, two Olympic-sized swimming pools, a spa, an equestrian center, an airstrip, two restaurants and natural hot springs. The Pala Band of Mission Indians, which wants to buy the property, appears to be the largest creditor, with $206,832 owed in pre-sale expenses, the report says. The report notes creditors John and Lisa Gubler, who once tried to stop the sale by filing a lawsuit, are owed $70,000, and Travelers Insurance is owed $47,890. The resort has been closed since January, when it was supposed to be sold to the Pala Band. The report says the sale, which reportedly more than two-thirds of the ranch association's stakeholders approved, was thwarted by one of the fractionalized owners -- William Francis, who argued that selling the property would violate his contract. Mr. Francis filed a lawsuit in Superior Court for injunctive relief on Jan. 17 -- the day the escrow was expected to close on the property. According to the report, David Gee, president of the homeowners association, said selling the property to the Pala Band "would be an elegant solution." The report notes Mr. Francis alleges the Warner Springs board failed to garner the two-thirds of owners necessary to permit the sale. Only 1,200 fractionalized memberships (similar to a timeshare) out of a possible 2,000 undivided interests (UDIs) have sold, and 800 of these were themselves half interests that had been combined to make the necessary total. Based in Warner Springs, California, Warner Springs Ranchowners Association dba Warner Springs Ranch filed for Chapter 11 protection on March 1, 2012 (Bankr. S.D. Calif. Case No. 12-03031). Judge Louise DeCarl Adler presides over the case. Daniel Silva, Esq., and Jeffrey D. Cawdrey, Esq., at Gordon & Rees LLP, represent the Debtor. The Debtor estimated assets of between $10 million and $50 million, and debts of between $1 million and $10 million. WASHINGTON MUTUAL: Files Response to Confirmation Order Objection ----------------------------------------------------------------- BankruptcyData.com reports that Washington Mutual filed with the U.S. Bankruptcy Court a response to the motion of George M. Dodson, Kaye R. Dodson, Mike Peters, Mark Evans, Michael Rozenfeld, Ganesan Jayaraman, Glenn Gardipee and Florin Matache (collectively, the PIERS claimants), individual holders of PIERS claims, for reconsideration of the Court's Feb. 24, 2012 order confirming the Company's Seventh Amended Joint Plan. The response asserts, "The Reconsideration Request regurgitates issues that already have been raised in these Chapter 11 Cases and dispensed with by the Court, without providing any justification as to why the Court should reevaluate its prior rulings on these issues. The Reconsideration Request does not assert that there has been any intervening change in controlling law. Likewise, the Reconsideration Request fails to assert that new evidence has become available. Moreover, the Reconsideration Request fails to present any clear error of law or any evidence that reconsideration is necessary to prevent manifest injustice." As reported in the Troubled Company Reporter on Feb. 20, 2012, Washington Mutual, Inc. disclosed that Judge Mary Walrath of the United States Bankruptcy Court for the District of Delaware has approved its reorganization plan, thus concluding the three and one-half year-old bankruptcy. Weil, Gotshal & Manges has represented WaMu since it first filed for chapter 11 protection in September 2008. Under the reorganization plan, WaMu will establish a liquidating trust to make distributions to parties-in-interest on account of their allowed claims, which are expected to total more than $7 billion. In addition, the plan includes significant recoveries for creditors and distribution of substantially all of the stock in the reorganized company to current equity holders. It will become effective after the court enters a written order reflecting this ruling and other conditions have been satisfied. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York, and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. Records filed Jan. 24, 2012, say that Washington Mutual Inc., former owner of the biggest U.S. bank to fail, has spent $232.8 million on bankruptcy professionals since filing its Chapter 11 case in September 2008. WAVE2WAVE COMMUNICATIONS: Status Conference Set for April 16 ------------------------------------------------------------ The Bankruptcy Court has scheduled a Status Conference hearing in the Chapter 11 case of Wave2Wave Communications, Inc., and its affiliates for April 16, 2012, at 2:00 p.m. at DHS - Courtroom 3B, in Newark, New Jersey. Wave2Wave Communications Inc., a provider of voice and data services to businesses, filed for bankruptcy (Bankr. D. N.J. Case No. 12-13896) on Feb. 17, 2012. Wave2Wave, which estimated up to $100 million assets and debts, says it sought Chapter 11 protection, after access provider Verizon Communications Inc. threatened to cut off its service. Affiliates RNK Inc. and RNK VA LLC also filed petitions. Wave2Wave was founded in 1999. Judge Donald H. Steckroth presides over the case. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., serves as the Debtors' counsel. The petition was signed by Steven Asman, president and chairman of the Debtors' board. WAVE2WAVE COMMUNICATIONS: Files 20 Largest Unsec. Creditors' List ----------------------------------------------------------------- Wave2Wave Communications, Inc., has filed with the Court a list of creditors holding 20 largest unsecured claims, disclosing: Creditor Amount of claim -------- --------------- Verizon $2,684,322 Attn: William Cummings 204 Second Avenue New York, NY 10003 Mintz, Levin, Cohn, Ferris, $735,111 Glovsky & Popeo, P.C. Attn: Ivan Blumenthal 666 Third Avenue New York, NY 10017 Command Financial Press $660,398 75 Varick Street New York, NY 10013 Abovenet $360,122 Attn: Billing Department 360 Hamilton Avenue White Plains, NY 10601 Global Crossing $309,000 12010 Sunset Hills Road Reston, VA 20190 AT & T $247,000 Attn: Amy Kriuautkrfaemer 722 N Broadway, Floor 7 Milwaukee, WI 53202 Level 3 $216,751 Salesforce.com $178,500 Fiondella, Milone & $163,530 LaSaracina LLP Verizon Business $122,395 Fox Rothschild LLP $120,031 Sidera Networks (RCN) $105,147 IPC Westcom $104,933 Winncom Technologies Corp. $100,026 MSNW Continental $75,460 Associates, LLC Lexent Metro/ Lightower $64,250 Alteva $63,465 Arthur Cox $52,431 Transbeam $50,622 Blank Rome LLP $42,451 WESTERN MOHEGAN: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Western Mohegan Tribe & Nation of New York 10 Tamarack Road, Route 52 P.O. Box 309 Greenfield Park, NY 12435 Bankruptcy Case No.: 12-09292 Chapter 11 Petition Date: March 9, 2012 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Susan Pierson Sonderby Debtor's Counsel: William J Factor, Esq. THE LAW OFFICE OF WILLIAM J. FACTOR, LTD 1363 Shermer Road, Suite 224 Northbrook, IL 60062 Tel: (847) 239-7248 Fax: (847) 574-8233 E-mail: wfactor@wfactorlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its nine largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ilnb12-09292.pdf The petition was signed by Ronald A. Roberts, chief. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- BGA LLC 12-09277 03/09/12 WINTER PARK: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Winter Park Station, LLC 35 Ivy Street Denver, CO 80220 Bankruptcy Case No.: 12-14307 Chapter 11 Petition Date: March 9, 2012 Court: U.S. Bankruptcy Court District of Colorado (Denver) Judge: Sidney B. Brooks Debtor's Counsel: Arthur Lindquist-Kleissler, Esq. LINDQUIST-KLEISSLER & COMPANY 950 S. Cherry Street, Suite 510 Denver, CO 80246 Tel: (303) 691-9774 Fax: (303) 756-8982 E-mail: Arthuralklaw@gmail.com Scheduled Assets: $4,655,170 Scheduled Liabilities: $2,288,000 The Company's list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by Bowen Wellington Banbury, manager. Affiliates that filed separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Bowen Wellington Bradbury 09-31477 10/02/09 Lana P. Banbury 12-10369 01/10/12 WOODBURY DEVELOPMENT: Creditors' Proofs of Claim Due May 4 ---------------------------------------------------------- Creditors of Woodbury Development LLC are required to file their proofs of claim not later than May 4, 2012. Government Proofs of Claim are due by July 7, 2012. 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. * Inherited IRA is Exempt Asset in Later Bankruptcy ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in New Orleans is the first circuit court to rule that an inherited individual retirement account is an exempt asset in bankruptcy. In Chilton v. Moser (In re Chilton), 11-40377, U.S. Court of Appeals for the Fifth Circuit (New Orleans), Circuit Judge Carl E. Stewart concluded that exempting an inherited IRA is in accord with the "plain meaning" of the statutes. * Moody's Updates US Not-for-Profit Healthcare Rating Methodology ----------------------------------------------------------------- Moody's Investors Service has released an updated methodology for US not-for-profit healthcare issuers that includes a new scorecard to enhance the transparency and clarity of its approach to evaluating the credit quality of hospitals and health systems. Moody's rates 533 hospitals and health systems with $181 billion in outstanding debt. "The scorecard replaces a prior matrix that provided measureable and descriptive characteristics by broad rating category for each of five key factors," said Moody's Analyst Daniel Steingart, author of the report. Mr. Steingart said the scorecard helps market participants determine a rating based on audited and other easily sourced data, as well as non-quantitative factors. Non-quantifiable factors such as management, governance, debt structure and legal covenants are explicitly incorporated into the rating. The quantitative factors include market position, operating performance, and balance sheet and capital plan. "The methodology is a reference tool that helps investors, borrowers, and other interested market participants understand how key characteristics drive and influence rating outcomes," said Mr. Steingart. "It also describes the ratios that we generally apply to hospitals and that are major drivers of hospital ratings." However, he cautioned, it does not include an exhaustive discussion of all factors and ratios that might be considered relevant in determining an individual hospital's unique credit attributes. "Moody's analysis considers such sector-specific factors as payer mix, federal regulatory reform and reimbursement trends" said Mr. Steingart. "It also covers credit factors that are common across many public finance sectors, including governance, operating profitability, and balance sheet strength." The document replaces a prior methodology for the sector that was issued by the rating agency in 2008. The report, "US Not-for-Profit Healthcare Rating Methodology," is available at moodys.com. * Moody's Says Calif. Emissions Standards May Hit Local Refiners ---------------------------------------------------------------- California's moves to introduce new standards for reducing greenhouse gas emissions over the next several years will disadvantage refiners with operations in the state, says a new special comment by Moody's Investors Service. The refining and marketing (R&M) companies Tesoro, Alon USA, Phillips 66 and Valero are particularly exposed to the gradual implementation of the new environmental rules through 2020, says Moody's. California's Global Warming Solutions Act -- also known as AB 32 -- aims to reduce Californian greenhouse gas emissions to 1990 levels by 2020. A number of large oil companies, particularly Chevron, also have significant refinery capacity in California. But the size and breadth of the integrated energy companies offer some insulation from the new rules. "California's increasingly stringent environmental regulations will challenge refiners over the next decade, increasing operating costs and negatively impacting refined product demand," said Gretchen French, Moody's Vice President -- Senior Analyst and author of the report. "These new rules will reduce cash flow that could be used for debt repayment or strategic growth and could discourage refiners from investing in California." Under AB 32, which became law in 2006, the California Air Resources Board in 2013 will begin enforcing a statewide cap on greenhouse gas emissions. A cap-and-trade program and the Low Carbon Fuel Standard would give California some of the strictest air-quality and emissions laws in the US, notes Moody's. While Moody's does not expect the new rules to affect the ratings for Tesoro, Alon, Phillips 66 or Valero over the near- to medium term, the new standards could limit credit accretion. "Well diversified companies with high financial flexibility and strong liquidity will shoulder the new burdens and weaker demand most easily," Ms. French said. "Refiners with efficient cost structures and high distillate yields will retain the greatest advantage." * February Commercial Bankruptcy Filings Show Slight Uptick ----------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that the number of companies seeking bankruptcy protection in February rose slightly from the prior month, but commercial filings are still tracking about 16% below the same period last year. * Junk Bond Defaults Hold Steady in February at 2% -------------------------------------------------- Moody's Investors Service said in a report the worldwide default rate on junk-rated debt held steady in February at 2%. In the U.S., the junk default rate was 2.2%, also unchanged from the month before. One year ago, the global default rate was 2.8%, Moody's said. In the U.S., it was 3.1% a year ago. There were only two defaults on rated debt in February, one in the U.S. and the other in Brazil. With a default rate above 5%, consumer services was the industry most prone to default. In second place is advertising, printing and publishing, with a default rate of more than 4%. Moody's predicts the global junk default rate will rise to 2.6% by the year's end. * Thompson & Knight Adds M. Blumenthal as Partner ------------------------------------------------- The law firm of Thompson & Knight LLP as added Michael Blumenthal as a Partner and Vivian Arias and Noam Greenberg as Associates in the Firm's New York office, where they will serve clients in complex business transactions and restructuring and bankruptcy matters. All three attorneys previously were with Crowell & Moring LLP in New York. "Together with the recent additions of Bill O'Connor and Evelyn Seeler, these moves represent a significant commitment to the capital markets sector in addition to further enhancing our ability to serve real estate and financial institutions through our New York office," says Emily Parker, managing partner for Thompson & Knight. In a 35-year legal career, Mr. Blumenthal has represented institutions, publicly traded companies, and individuals in a number of high-profile matters involving insolvency and creditors' rights. He also brings extensive experience in commercial real estate, representing corporations and entrepreneurs in the financial restructuring, and reorganization and acquisitions of office buildings, shopping centers, and hospitality projects throughout the country. Mr. Blumenthal's knowledge extends across a wide swath of other industries, including the telecommunications, retail, manufacturing, and information and technology sectors. "This is a tremendous opportunity for me and these two outstanding young attorneys to join mature and thriving real estate restructuring, capital markets and bankruptcy groups at Thompson & Knight, and help further establish a major presence for the Firm on the East Coast," says Mr. Blumenthal. A member of the New York State Bar Association, American Bar Association, American Bankruptcy Institute, and the Turnaround Management Association, Mr. Blumenthal is a regular author and speaker on bankruptcy and restructuring issues. He earned his undergraduate degree with honors from the State University of New York at Albany before securing his law degree from the University of Miami School of Law. Ms. Arias represents financial institutions and special servicers in creditors' rights litigation, insolvency and bankruptcy proceedings, as well as loan restructurings and workouts and other commercial disputes in federal and state courts. She received her undergraduate degree from the University of Miami and earned her law degree from Fordham University School of Law. She is a member of the National Hispanic Bar Association, Association for the Bar of the City of New York, New York State Bar Association, and American Bankruptcy Institute. Mr. Greenberg represents clients, including banks, private equity funds, REITs and special servicers, in all aspects of commercial real estate and real estate finance, including acquisitions and dispositions, loan originations, commercial leasing, loan restructurings, and workouts. He earned his undergraduate degree from Yeshiva University before graduating from Columbia University School of Law. He is a member of the American Bar Association and the New York State Bar Association. About Thompson & Knight Established in 1887, Thompson & Knight is a full-service firm providing legal solutions to public and private companies, governments, and individuals in all areas, including real estate, commercial and tort litigation, finance, banking, securities, mergers and acquisitions, taxation, intellectual property, corporate governance, creditors' rights, labor, white collar defense, and environmental matters, among others. Thompson & Knight has approximately 330 attorneys with offices in Texas and New York and international offices and associations in the Americas, North Africa, and Europe. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Ali Farmand Bankr. C.D. Calif. Case No. 12-12069 Chapter 11 Petition filed March 2, 2012 In re Ruperto Rojas Bankr. C.D. Calif. Case No. 12-17702 Chapter 11 Petition filed March 2, 2012 In re Maureen Millett Bankr. N.D. Calif. Case No. 12-30687 Chapter 11 Petition filed March 2, 2012 In re Donna Crook Bankr. N.D. Ga. Case No. 12-10625 Chapter 11 Petition filed March 2, 2012 In Ray Gunnin Bankr. N.D. Ga. Case No. 12-20836 Chapter 11 Petition filed March 2, 2012 In re Sangria's Cafe, Inc. dba Sangria's Mexican Cafe aka Sangria's Mexican Cafe, Inc. aka Sangria's aka Sangria's Mexican Restaurant aka Sangria's Cafe Bankr. N.D. Ga. Case No. 12-55600 Chapter 11 Petition filed March 2, 2012 See http://bankrupt.com/misc/ganb12-55600.pdf represented by: Jerry A. Daniels, Esq. Jerry A. Daniels, LLC E-mail: jerry@danielstaylor.com In re Syed Ali Bankr. D. Nev. Case No. 12-12388 Chapter 11 Petition filed March 2, 2012 In re Jason Curtis Outdoor Services, Inc. Bankr. D. N.H. Case No. 12-10691 Chapter 11 Petition filed March 2, 2012 See http://bankrupt.com/misc/nhb12-10691.pdf represented by: Eleanor Wm Dahar, Esq. E-mail: edahar@att.net In re North Walnut Associates, LLC Bankr. D. N.J. Case No. 12-15403 Chapter 11 Petition filed March 2, 2012 See http://bankrupt.com/misc/njb12-15403.pdf represented by: Nicholas S. Herron, Esq. Seymour Wasserstrum E-mail: mylawyer7@aol.com In re John Eagan Bankr. W.D. N.C. Case No. 12-30525 Chapter 11 Petition filed March 2, 2012 In re Filencio Valentin Garay Bankr. D. Puerto Rico Case No. 12-01629 Chapter 11 Petition filed March 2, 2012 In re Concert Management, Ltd. Bankr. E.D. Texas Case No. 12-40519 Chapter 11 Petition filed March 2, 2012 See http://bankrupt.com/misc/txeb12-40519.pdf represented by: Mark A. Weisbart, Esq. The Law Offices of Mark A. Weisbart E-mail: weisbartm@earthlink.net In re Mountain Edge LLC Bankr. D. N.M. Case No. 12-10835 Chapter 11 Petition filed March 3, 2012 See http://bankrupt.com/misc/nmb12-10835.pdf represented by: Charles E. Hawthorne, Esq. E-mail: chuck@charlesehawthorne.com In re Hale Moku LLC Bankr. C.D. Calif. Case No. 12-18574 Chapter 11 Petition filed March 9, 2012 Filed pro se ********* 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, Ivy B. Magdadaro, 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. 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