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/raid1/www/Hosts/bankrupt/TCR_Public/120319.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, March 19, 2012, Vol. 16, No. 78 Headlines 175 DIXON: Voluntary Chapter 11 Case Summary 24-7 FITNESS: High Interest Rate Prompts Chapter 11 Filing A. HIRSCH: Files for Chapter 11 Bankruptcy Protection AES IRONWOOD: Moody's Reviews 'B2' Rating on $226MM Sec. Bonds AES RED OAK: Moody's Affirms 'B2' Rating on $303MM Sr. Sec. Bonds ALLIANCE LAUNDRY: Moody's Rates New $350MM Credit Facility 'B1' ALTER COMMUNICATIONS: Meets With Creditors Over Ownership Plan AMBASSADORS INT'L: Judge Converts Case to Chapter 7 Liquidation AMERICAN AIRLINES: Wins Approval of McKinsey as Mgt. Consultants AMERICAN AIRLINES: Wins OK for SkyWorks as Aircraft Advisor AMERICAN AIRLINES: Rothschild Okayed as Financial Advisor AMERICAN AIRLINES: Can Tap Morgan Lewis for CBA Talks AMERICAN AIRLINES: Wins OK for Paul Hastings as Labor Counsel AMERICAN APPAREL: Incurs $39.3 Million Net Loss in 2011 AMERISTAR: Moody's Says Creative Casinos Deal Won't Move Ratings ARMSTRONG WORLD: Moody's Affirms 'B1' Corporate Family Rating ATLANTIC & PACIFIC: Suspending Filing of Reports with SEC BC FUNDING: Case Summary & 13 Largest Unsecured Creditors CAESARS ENTERTAINMENT: Incurs $666.7 Million Net Loss in 2011 CAESARS ENTERTAINMENT: Citi, et al., to Sell 22.3-Mil. Shares CAESARS ENTERTAINMENT: Files Form S-3 for $500MM Shares Offering CANO PETROLEUM: Files Sale-Based Chapter 11 Plan CHURCH AT SOUTH LAS VEGAS: $3MM Funding Pledge Cues Ch. 11 Exit CLAIRE'S STORES: Completes Offering of Add'l $100MM Senior Notes CLEAN WIND: Unusual Trading Activity Triggered Note Default CLEARWIRE CORP: Intel Has 94MM Shares; Google No Longer Has Shares CLEARWIRE CORP: To Sell Class A Common Shares for $83.5-Mil. CONVERTED ORGANICS: To Issue $550,000 New Notes to IMF & Hudson CRAWFORD FURNITURE: Judge Converts Case to Chapter 7 Liquidation CRYSTALLEX INT'L: Adopts New Shareholder Rights Plan CRYSTALLEX INT'L: Unable to File Year End Financial Statement DELPHI FINANCIAL: Moody's Issues Summary Credit Opinion DREIER LLP: Wells Fargo Agrees to Pare Secured Claims to $7.2MM DYNEGY HOLDINGS: Paul Weiss Represents Holders of $460MM Sr. Notes DYNEGY INC: Troubled and Disappointed by Examiner Report ENERGY CONVERSION: Common Stock Delisted from NASDAQ FAIRFAX FINANCIAL: Moody's Rates New Preferred Shares 'Ba2(hyb)' FLAGSTAR BANCORP: Harwood Feffer Investing Board FOOD SERVICE: Judge Freezes Owner's Assets & Appoints Receiver GAMETECH INT'L: Reports $858,000 Net Income in Jan. 29 Quarter GENERAL MARITIME: Wins 60 Days Exclusivity Extension GENTIVA HEALTH: Moody's Affirms 'B3' CFR; Outlook Stable GETTY IMAGES: Moody's Assigns 'Ba3' Rating to $275MM Term Loan GRUBB & ELLIS: Aims to Halt Arbitration in Dispute with Investor GRUBB & ELLIS: Common Stock Delisted from NYSE GRUBB & ELLIS: Committee Taps FTI Consulting as Financial Advisor GWR OPERATING: Moody's Affirms 'Caa1' Corporate Family Rating HAMPTON ROADS: Terminates Bank Sale Agreement with Carolina Bank HANMI FINANCIAL: Reports $28.1 Million Net Income in 2011 HEARTSTONE HOME: Home Buyers Alerted of Possible Bankruptcy Impact HERCULES OFFSHORE: Files Fleet Status Report as of March 15 HOMBURG INVEST: Obtains CCAA Extension Until May 31 HORIZON LINES: Notice of Change Resulting From NYSE Delisting HOST HOTELS: Fitch Rates $350 Million Senior Notes 'BB' HOUSTON AMERICAN: Updates Status of the Tamandua #1 Well HUMANA INC: Moody's Assigns '(P)Ba1' Rating to Subordinated Debt INDUSTRIAL FIREDOOR: Case Summary & 20 Largest Unsecured Creditors KRATON PERFORMANCE: Moody's Comments on Debt Issuance LEHMAN BROTHERS: Has $850MM from Neuberger Pref. Equity Interest LEHMAN BROTHERS: Terra Verde Group Purchases The Grove LEHMAN BROTHERS: Dimond Kaplan Alerts Investors of Rights LEVEL 3: Longleaf to Swap $100MM Conv. Notes for 3.7-Mil. Shares LIBBEY INC: Reports $23.6 Million Net Income in 2011 LINWOOD FURNITURE: Wins OK to Pay Employee Obligations LIQUIDMETAL TECHNOLOGIES: To Restate 2010 Financial Reports MEG ENERGY: Moody's Assigns 'Ba3' Rating to $1 Billion Revolver METALDYNE CORP: Judge Denies Asahi's Bid to Nix $175M Pension Suit METALDYNE CORP: DC Court Won't Dismiss ERISA Suit v Asahi Tec MF GLOBAL: Trustee Seeks Add'l Payouts to Former Customers MF GLOBAL: CRT Capital Affiliate to Hold Bi-Weekly Auctions MGM RESORTS: Offering $1 Billion 7.750% Senior Notes Due 2022 MGM RESORT: Fitch Rates Proposed Sr. Unsecured Notes 'B-/RR4' MGM RESORTS: Moody's Assigns 'B3' Rating to Proposed $750MM Notes MICHAEL VICK: Cuts Outstanding Debt to About $400,000 MOMENTIVE PERFORMANCE: Moody's Reiterates 'Ba3' Term Loan Rating MOUNTAIN PROVINCE: More Details of Proposed Kennady Spin-out MOMENTIVE PERFORMANCE: Plans to Seek $175 Million New Term Loans NCO GROUP: Commences $365 Million Senior Notes Tender Offers NCO GROUP: Moody's Reviews Caa1 Corp. Family Rating for Upgrade OILSANDS QUEST: Gets Court OK of $7MM Sale of Eagles Nest Asset OMNICARE INC: Moody's Confirms 'Ba3' Corporate Family Rating PENINSULA HOSPITAL: Lori Jones to Oversee Far Rockaway Facility PINNACLE AIRLINES: 3.2% Owners Alarmed Over Annual Meeting Delay PRAYER ASSEMBLY: Voluntary Chapter 11 Case Summary PROMETRIC INC: Moody's Raises Corporate Family Rating to 'Ba2' PROTEONOMIX INC: Enters Into $3.8-Mil. Securities Sale Deal RAMPART MMW: Case Summary & 20 Largest Unsecured Creditors RITE AID: $404.8 Million of 2015 Notes Validly Tendered ROTECH HEALTHCARE: Incurs $14.7 Million Net Loss in 2011 ROTHSTEIN ROSENFELDT: Bankruptcy Legal Fees Now Exceed $20-Mil. ROUNDTABLE CORP: Files for Chapter 11 Bankruptcy Protection RYERSON HOLDING: Moody's Affirms 'Caa1' CFR; Outlook Stable SEARS HOLDINGS: Incurs $3.1 Billion Net Loss in Fiscal 2012 SNOKIST GROWERS: Sale Process Extended by 45 Days SPECTRUM BRANDS: Moody's Rates $275 Million Unsecured Notes 'B3' TAVOR HOLDINGS: Foreclosure Action Prompts Bankruptcy TAYLOR BEAN: Former Finance Chief Reaches Plea Agreement TBS INTERNATIONAL: Artis Capital No Longer Owns Class A Shares TENET HEALTHCARE: CFO B. Porter Resigns to Join Fluor Corp. TETZLAFF CHIROPRACTIC: Voluntary Chapter 11 Case Summary THOMAS GROUP: Ceases Operations, To Send Contracts to Ops TRAINOR GLASS: April 10 Hearing on Bid to Use Cash Collateral TRIUS THERAPEUTICS: Incurs $18.2 Million Net Loss in 2011 TRIUS THERAPEUTICS: Files Form S-8; Registers 914,000 Shares THERMOENERGY CORP: Francis Howard Discloses 6.6% Equity Stake UNITED ENERGY: Owners Down to 451; Reports with SEC Suspended UNITED RETAIL: Inks With Creditors Deal Over Stalking Horse Bid USEC INC: Incurs $540.7 Million Net Loss in Full Year 2011 WASHINGTON MUTUAL: Seeks Court Approval of Compromise Settlement WASHINGTON MUTUAL: Sues 12 Insurers Over D&O Coverage Claims WASHINGTON MUTUAL: Signs Liquidating Trust Pact with W. Kosturos WASHINGTON MUTUAL: Deregisters Unsold Securities * Fed Says 15 of 19 Banks Have Adequate Capital in Stress Scenario * Moody's Releases Outlook Reports for Asset Management Sector * Moody's Says Sluggish Economy Hits US Life Insurers' Results * Moody's Says US Securitization Credit Risk Rising * BOND PRICING -- For Week From March 12 - 16, 2012 ********* 175 DIXON: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: 175 Dixon Avenue Realty Inc. 175 Dixon Avenue Amityville, NY 11701 Bankruptcy Case No.: 12-71470 Chapter 11 Petition Date: March 13, 2012 Court: U.S. Bankruptcy Court Eastern District of New York (Central Islip) Judge: Alan S. Trust Debtor's Counsel: Nancy L. Kourland, Esq. ROSEN & ASSOCIATES, P.C. 747 Third Avenue New York, NY 10017 Tel: (212) 223-1100 Fax: (212) 223-1102 E-mail: nkourland@rosenpc.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 Balbir K. Kandhra, president. 24-7 FITNESS: High Interest Rate Prompts Chapter 11 Filing ---------------------------------------------------------- Tyrone Richardson and Spencer Soper at The Morning Call report that John F. Brinson, owner of regional chain Lehigh Valley Racquet and 24-7 Fitness Clubs, has filed for bankruptcy protection in an attempt to save the company from a crushing debt load that has dogged the company for more than a year. According to the report, the filing cited "unmanageable interest rate" on the company's roughly $8 million mortgage. "The interest rate is too much to handle and we want to get a more reasonable rate," the report Mr. Brinson as saying. The report says the filing to restructure debt is Mr. Brinson's latest attempt to save a business. Mr. Brinson said his business suffered through the Great Recession, and despite a recent uptick in memberships, he has not been able to make mortgage payments. According to the report, in 2007, Mr. Brinson borrowed $8 million from Nova Bank in Philadelphia. He said he used $1.5 million to improve his clubs and the rest was to refinance debt. He later defaulted on the loan and in August 2010 acknowledged owing Nova Bank $7.9 million. The report relates Mr. Brinson said he has been making payments to the bank every month, but not the full amount due. He said he hopes the bankruptcy filing convinces his creditors to lower his payments so he can keep the properties and keep operating the businesses. The alternative would be for his secured lenders to foreclose on his properties to recover their losses. A. HIRSCH: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------- Thomas Grillo at Boston Business Journal reports that A. Hirsch Realty LLC, a real estate company in Boston's Mattapan neighborhood, sought Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Massachusetts. The Company estimated both its assets and debts of between $1 million and $10 million. The Company said in its petition there are at most 49 creditors. Andrew Sherman is named as the Company's manager. AES IRONWOOD: Moody's Reviews 'B2' Rating on $226MM Sec. Bonds -------------------------------------------------------------- Moody's Investors Service has placed the B2 rating of AES Ironwood, LLC's approximately $226 million of senior secured bonds under review for possible upgrade. The review is prompted by the February 27, 2012 announcement that PPL Generation, LLC, the competitive generation subsidiary of PPL Energy Supply, LLC (PPL Supply: Baa2 senior unsecured, stable) had agreed to acquire Ironwood and its operating affiliate, AES Prescott LLC, from a subsidiary of the AES Corporation (AES: Ba3 Corporate Family Rating, stable). RATINGS RATIONALE The potential for upward movement of the rating reflects Moody's view of the improved prospects for Ironwood and the bondholders that Moody's believes will come as a result of PPL's equity ownership. The project is a strategic asset for PPL that is already part of its generation portfolio, complementing its competitive asset base in PJM. As a result, Moody's believes, it is likely PPL will seek to further improve the project's operating performance, and as they have done with other strategic non- recourse projects, may provide investment capital for additional project improvements. The review for upgrade considers that the terms and structure of the financing, including the project's tolling agreement with PPL EnergyPlus LLC (PPL EnergyPlus), will generally remain unchanged, and that no additional debt will be added to the structure. Moody's recognizes that the bonds will not be assumed or guaranteed by PPL Supply; however, the review will consider the strategic nature of the asset to PPL Supply, which, in Moody's opinion, significantly mitigates concerns regarding the project's ability to pay subordinated fees under its tolling or management agreements. PPL Supply holds all PPL Corporation's competitive businesses, including PPL EnergyPlus, the marketing and trading subsidiary which currently purchases all of the Ironwood project's electric capacity and energy, and supplies all of its natural gas. PPL Supply owns or controls about 12,000 MWs of generating capacity in the United States, and its parent, PPL Corporation, owns or controls about 19,000 MWs and delivers electricity and natural gas to about 10 million customers in the United States and the United Kingdom. Total consideration for the transaction is approximately $304 million and includes a cash purchase price of $87 million and the assumption of Ironwood's approximately $226 million of secured bonds and about $8.5 million of parity loans outstanding (net of cash reserves, total project indebtedness is approximately $217 million). The transaction is subject to regulatory approval by the Federal Energy Regulatory Commission and the Federal Trade Commission (FTC) under the Hart-Scott-Rodino Act (HSR). Early clearance of HSR was granted by the FTC on March 6, 2012. Closing is expected during the second quarter of 2012. Ironwood's current B2 rating considers the stability of the project's revenues which are derived from a tolling agreement with PPL EnergyPlus. However, the rating is currently more reflective of the project's weak financial performance over a multi-year period that has resulted primarily from an aggressive heat rate guarantee incorporated in the tolling agreement along with increased operational expenses. The rating also recognizes the generally declining nature of the capacity payments that are scheduled over the remaining term of the agreement which results in debt service coverage remaining exceedingly tight leaving virtually no financial cushion for operational challenges. Although Ironwood recently took steps to address the predictability of project's cost structure by replacing its long- term parts agreement with a term warranty agreement; in Moody's opinion, debt service coverage ratios are still likely to remain around 1.0 times. The B2 rating also considers the protection for the lenders that is currently provided by a $17.4 million cash funded debt service reserve. The rating review for possible upgrade considers Ironwood's pending new ownership which, in Moody's opinion, will significantly allay the standalone financial performance concerns noted and currently reflected in the B2 rating. The review will focus on PPL's plans for the project post acquisition, including its approach to improving operating performance, funding capital expenditures and assuring liquidity for the project. If the PPL acquisition does not close, the rating could be adjusted downward, especially if the project experiences operational challenges or other unexpected cost increases resulting in debt service coverage ratios remaining significantly below 1.0 times. An erosion of the debt service reserve cushion would also likely put downward pressure on the rating. AES Ironwood is a 705 MW gas-fired combined-cycle generating facility in South Lebanon Township, Pennsylvania. The project sells all of its capacity to PPL Energy Plus, a subsidiary of PPL Corporation (Baa3 Issuer Rating, stable), pursuant to a tolling agreement expiring in 2021. PPL's payment obligations under the toll are guaranteed by its parent, PPL Energy Supply, LLC (PPL Supply: Baa2 senior unsecured, stable). AES RED OAK: Moody's Affirms 'B2' Rating on $303MM Sr. Sec. Bonds ----------------------------------------------------------------- Moody's Investors Service has affirmed the B2 rating on AES Red Oak's approximately $303 million of senior secured bonds and revised the outlook to positive from stable. The affirmation follows the February 2012 announcement that The AES Corporation (AES) had agreed to sell its interests in AES Red Oak L.L.C. and affiliates (Red Oak) to a subsidiary of Energy Capital Partners Fund II. The project company is to be renamed Red Oak Power, LLC. RATINGS RATIONALE The affirmation reflects Moody's understanding that the structure and terms of the financing, including its tolling agreement with TAQA Gen X LP, will generally remain unchanged and that no additional debt will be added to the structure. Moody's understands the commitment of AES to lend the project up to $8 million on a subordinated basis (a commitment that is currently fully drawn, and which was used primarily to fund past major outages as well as some subordinated fees) will terminate along with the forgiveness by AES of this debt upon the closing of the transaction; however, Moody's anticipates similar support will be provided, if needed, by ECP. The affirmation recognizes ECP's intention that the project's existing operating teams remain largely in-tact, and considers the experience of the EquiPower team in managing and operating similar assets. The positive outlook recognizes improvements in the project's operational performance, as evidenced by somewhat lower heat rates and higher capacity factors, which in Moody's opinion, should generally enable Red Oak to remain current on subordinated payments to its tolling counterparty. Although the need to defer some portion of management fees may continue, the positive outlook reflects Moody's view that given ECP's sizeable new investment in the project, Moody's expects liquidity support (either in the form of management fee deferrals or subordinate cash contributions) would be potentially available to Red Oak if needed. Moody's also anticipates coverage of senior debt service will remain above 1.10 times. Energy Capital Partners Fund II (ECP) is a $4.34 billion private equity fund focused on the acquisition, development and construction of North American energy infrastructure assets. Following the acquisition, ECP will own close to 5,000 MW of natural gas-fired combined cycle power generation facilities located within the PJM, New England, New York and Texas power markets. Management services will be provided by EquiPower Resources Corp, ECP's energy management platform; with the existing Red Oak plant operating team remaining in place. Consideration for the transaction includes the assumption of Red Oak's approximately $303 million of secured bonds and $13 million of parity debt service reserve loans outstanding. The transaction is subject to regulatory approval by the Federal Energy Regulatory Commission and the Federal Trade Commission (FTC) under the Hart- Scott-Rodino Act. Early clearance of HSR was granted by the FTC on March 12, 2012. ECP hopes to close the transaction by March 31, 2012. Red Oak's B2 rating is reflective of the project's relatively weak historical financial metrics that have been impacted by increased operational and capital expenditures and a continuing inability to meet the aggressive heat rate target in its tolling agreement. Although recent capital projects have resulted in meaningful efficiency rate improvements, the project's base-load heat rate remains above the target specified in its tolling agreement. Liquidity remains very limited, with any cash available after debt service currently being used to make subordinated payments to the off-taker and to pay a portion of management fees. The rating also considers that the project has seven years of merchant exposure between the expiration of the tolling agreement in 2022 and the final debt maturity in 2029. The rating could be revised upward if the project continues to demonstrate improved operational performance or achieves a reduction in expenses such that Moody'scould anticipate senior debt service coverage ratios, as calculated by Moody's, remaining around 1.15 times with the ability to fully cover subordinated expenses out of project cash flow. Downward rating pressure could develop if the project were to experience operational challenges or other unexpected cost increases such that senior debt service coverage ratios, as calculated by Moody's, could be expected to remain below 1.0 times. An erosion of the debt service reserve cushion would also likely put downward pressure on the rating. The principal methodology used in this rating was Power Generation Projects published in December 2008. AES Red Oak is an 830 megawatt (MW) gas-fired electric generating project located in Sayreville, New Jersey. The project, currently sells all of its capacity to TAQA Gen X LP, a joint venture between subsidiaries of Abu Dhabi National Energy Company and Morgan Stanley pursuant to a tolling agreement expiring in 2022. ALLIANCE LAUNDRY: Moody's Rates New $350MM Credit Facility 'B1' --------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the proposed new $350 million senior secured bank credit facility of Alliance Laundry Systems LLC, proceeds of which will be used to refinance the company's existing bank credit facility and provide a $47 million return of capital to shareholders. At the same time, Moody's affirmed the company's B2 corporate family and B3 probability of default ratings. Moody'salso raised the company's rating outlook to positive from stable. The following rating actions were taken: Corporate family rating affirmed at B2; Probability of default rating affirmed at B3; Existing senior secured revolver and term loan due 2015 and 2016, respectively, affirmed at B1(LGD2, 28%) vs. B1 (LGD2, 29%). These ratings will be withdrawn upon closing of the refinancing; Proposed new senior secured revolver and term loan due 2017 assigned a rating of B1 (LGD2, 28%) Rating outlook raised to positive from stable. RATINGS RATIONALE The change in Alliance's rating outlook to positive from stable reflects Moody's expectation that the company will continue outperforming its rating category with respect to a number of key credit metrics, as it has already demonstrated during a difficult time for the economy and the industry, and will gradually reduce its elevated adjusted debt leverage. Moody's adjusts reported debt to include an additional $12 million for operating leases, $19 million for pensions, and $262.1 million for the full amount outstanding under its ABS securitization facility. The B2 corporate family rating incorporates Moody's expectations that Alliance will continue to perform strongly with respect to cash flow generation and EBITA margins. In addition, Alliance has enhanced its liquidity as a result of extending the maturity of its bank credit facility to 2017, and it will strengthen its already healthy interest coverage by saving approximately 300 basis points vs. what it is currently paying under its existing bank credit facility. At the same time, the B2 rating considers Alliance's elevated pro forma adjusted debt leverage, as represented by 7.1x debt/EBITDA and 78.6% debt/capitalization ratios. The rating also considers an economy still struggling to gain traction, which can inhibit demand within the commercial laundry equipment business. Alliance's liquidity is supported by its new, upsized $75 million revolving credit facility, which Moody's anticipates will be used very little if at all, its robust cash flow generation, and the comfortable cushion projected under the proposed new bank credit facility. The ratings could benefit from a decline in adjusted debt leverage to below 5.5x, a resumption in healthy revenue growth, a continuation in bottom line earnings growth, ongoing strong performance in cash flow generation, EBITA interest coverage of greater than 3x, and a continuation of EBITA margins in the mid- teens -- all on a sustained basis. The outlook and/or ratings could come under pressure if adjusted debt leverage were to climb, earnings were to turn into losses, cash flow generation were to slip badly, EBITA interest coverage were to fall below 2x, and/or EBITA margins were to decline below 10%. The principal methodology used in rating Alliance Laundry Systems LLC was the Global Manufacturing 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. Alliance Laundry Systems LLC, headquartered in Ripon, Wisconsin, is a designer, manufacturer and marketer of a full line of commercial laundry equipment for sale in the US and to international customers. Its products are used in laundromats as well as in multi-housing and on-premise laundries. The Ontario Teachers Pension Plan Board indirectly acquired a majority interest in Alliance in 2005 and now owns approximately 90% of the company, while management owns the remaining 10%. Net revenues for 2011 were $458, of which 69% came from the US and Canada and 31% from other segments. ALTER COMMUNICATIONS: Meets With Creditors Over Ownership Plan -------------------------------------------------------------- Gus G. Sentementes at the Baltimore Sun reports that Alter Communications and its creditors have met behind closed doors with a bankruptcy judge in an attempt to iron out a new ownership plan. The report notes Alter proposed a plan where outside investors would take control of 80% of the company, leaving the current family owners with a 20% stake. Former publisher, H.G. Roebuck & Son Inc., Alter's largest creditor, proposed a competing plan where it would take over the Company and partner with Washington Jewish Week as a publisher. The report notes a third plan has emerged, as one of the family stakeholders of Alter proposed the formation of another investment group to take over the company. About Alter Communications Based in Baltimore, Maryland, Alter Communications publishes the Baltimore Jewish Times. Other publications include the magazine Style, with 90,000 circulation, and Chesapeake Life, with a circulation of 57,000. Alter Communications filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 10-18241) on April 14, 2010, after losing a $362,000 judgment to the printer, H.G. Roebuck & Son Inc. Alan M. Grochal, Esq., and Maria Ellena Chavez-Ruark, Esq., at Tydings and Rosenberg, in Baltimore, serve as the Debtor's bankruptcy counsel. The Debtor estimated assets and debts between $1 million and $10 million in its Chapter 11 petition. In December 2010, the Bankruptcy Court approved Alter's Chapter 11 exit plan. Roebuck appealed, saying the plan wasn't filed in good faith and that it "discriminates unfairly." In June 2011, the U.S. District Judge Court in Maryland set aside the confirmation order. Because Roebuck said it would pay more for the new stock, the District Court reversed and sent the case back to the bankruptcy court with instructions to allow the filing of competing plans. AMBASSADORS INT'L: Judge Converts Case to Chapter 7 Liquidation --------------------------------------------------------------- Jonathan Randles at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Kevin Gross converted Ambassadors International Inc.'s Chapter 11 case into a Chapter 7 on Wednesday, a move creditors said could speed up review of the debtor's claims. The move, approved by U.S. Bankruptcy Judge Kevin Gross, will give a Chapter 7 trustee the opportunity to determine which causes of action, if any, the estate may bring against the debtors as well as current and former officers, according to a brief filed by a committee of unsecured creditors assigned to Ambassadors International. About Ambassadors International Headquarters in Seattle, Washington, Ambassadors International, Inc. (NASDAQ: AMIE) -- http://www.ambassadors.com/-- operated Windstar Cruises, a three-ship fleet of luxury yachts that explore the hidden harbors and secluded coves of the world's most sought- after destinations. Carrying 148 to 312 guests, the luxurious ships of Windstar cruise to nearly 50 nations, calling at 100 ports throughout Europe, the Caribbean and the Americas. Ambassadors International Inc. and 11 affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-11002) on April 1, 2011. Kristopher M. Hansen, Esq.; Sayan Bhattacharyya, Esq.; Marianne Mortimer, Esq.; and Matthew G. Garofalo, Esq., at Stroock & Stroock & Lavan LLP, serve as the Debtors' bankruptcy counsel. Imperial Capital, LLC, is the Debtors' financial advisor. Phase Eleven Consultants, LLC, is the Debtors' claims and notice agent. The Debtors tapped Bifferato Gentilotti LLC as Delaware counsel, and Richards, Layton & Finger as bankruptcy co-counsel. The Official Committee of Unsecured Creditors tapped Kelley Drye & Warren LLP as its counsel, and Lowenstein Sandler PC as its co-counsel. The Debtors disclosed $86.4 million in total assets and $87.3 million in total debts as of Dec. 31, 2010. Under a court-approved sale, Windstar's three luxury sailing yachts were sold to Anschutz Corp. for $35 million in cash. AMERICAN AIRLINES: Wins Approval of McKinsey as Mgt. Consultants ---------------------------------------------------------------- Judge Sean Lane approved, on a final basis, AMR Corp.'s application to employ McKinsey Recovery & Transformation Services U.S., LLC, McKinsey & Company, Inc. United States, and McKinsey & Company, Inc. Japan as their management consultants, nunc pro tunc to December 12, 2011. Pursuant to an agreement with the Debtors, the services of McKinsey Recovery, McKinsey & Co. Inc., and its Japan-based office will be provided in three phases. Business plan support and adaptation services will be provided during the first two phases. During the initial phase, the firms will work with the Debtors' senior management team to evaluate their five-year business plan. The business plan will be adapted by the firms during the second phase to reflect changes in economic climate and other conditions. During the final phase, the firms will assist the Debtors in responding to inquiries from the Official Committee of Unsecured Creditors, suppliers, unions, and other third parties on specifics of the business plan. The firms will be paid on an hourly basis and will be reimbursed of their expenses. The hourly rates of the firms' professionals are: Professionals Hourly Rates ------------- ------------ Practice Leader $750-$985 Executive Vice President $650-$750 Senior Vice President $500-$650 Manager $450-$500 Senior Associate $350-$450 Associate $300-$350 Analyst $200-$300 Paraprofessional $100-$175 The Debtors also agreed to indemnify the firms for any liability that may result in connection with their employment. Seth Goldstrom, a director and practice leader at McKinsey Recovery, disclosed in court papers that the firms do not hold or represent interest adverse to the Debtors' estates. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, 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: Wins OK for SkyWorks as Aircraft Advisor ----------------------------------------------------------- The Bankruptcy Court entered a final order authorizing the employment of SkyWorks Capital, LLC, as AMR Corp.'s aircraft restructuring advisor, nunc pro tunc to the Petition Date. The company tapped the firm to provide services in connection with the restructuring of its secured debt and lease obligations with respect to its aircraft. SkyWorks will also provide other consulting services including assisting American Airlines in arranging a sale or leaseback financing, in completing transactions that involve a sale of aircraft, and in reviewing and negotiating claims with creditors. The firm will get a restructuring fee of $445,000 for each of the first 15 months during the pendency of American Airlines' bankruptcy case, and $100,000 for each month thereafter. The firm will also receive fees for its other consulting services, and reimbursed expenses. SkyWorks does not hold or represent any interest adverse to American Airlines or its estate, according to a declaration by its managing director, Matthew Landess. 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: Rothschild Okayed as Financial Advisor --------------------------------------------------------- The Bankruptcy Court approved, on a final basis, AMR Corp. and its affiliates' application to employ Rothschild Inc. as their financial advisor, nunc pro tunc to the Petition Date. Rothschild, which advised the Debtors before they sought bankruptcy protection, is expected to provide these services: (1) identifying or initiating potential restructuring transactions; (2) reviewing and analyzing the Debtors' assets and their operating and financial strategies; (3) reviewing and analyzing the Debtors' business plans and financial projections; (4) evaluating the Debtors' debt capacity in light of their projected cash flows and assisting in determining the appropriate capital structure for the Debtors; (5) assisting the Debtors and their other professionals in reviewing the terms of any proposed restructuring transaction and in evaluating alternative proposals for a restructuring transaction; (6) determining a range of values for the Debtors and any securities that they offer or propose to offer in connection with a restructuring transaction; (7) reviewing and analyzing any proposals the Debtors receive from third parties in connection with a restructuring transaction; (8) providing advice to the Debtors with respect to, and attending, meetings of their Board of Directors, creditor groups, official constituencies and other interested parties; and (9) participating in hearings and providing testimony with respect to the issues related to any proposed plan. Rothschild will be paid a monthly advisory fee of $200,000 and will be reimbursed for its expenses. The firm will also receive a sum of $15 million when either a bankruptcy plan or restructuring transaction is approved, so-called new capital fees of 1% to 3% of the amount raised, and fee credits. In court papers, David Resnick, chairman of Rothschild's Global Financing Advisory, disclosed that his firm does not hold or represent interest adverse to the Debtors or their estates, and that the firm is a "disinterested person" under Section 101(14) of the Bankruptcy Code. According to The Wall Street Journal, the Debtors paid Rothschild almost $1.6 million in advisory fees in the six months prior to their bankruptcy filing. The Journal added that a retention letter, dated Oct. 17, prompted the payment by the Debtors of a $400,000 retainer and $290,000 in fees to the firm. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, 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: Can Tap Morgan Lewis for CBA Talks ----------------------------------------------------- The Bankruptcy Court entered a final order authorizing the employment of Morgan Lewis & Bockius LLP as special counsel to AMR Corp. and its affiliates, nunc pro tunc to the Petition Date. The Debtors tapped the firm to provide services with respect to collective bargaining and other labor-related negotiations with their pilots, flight attendants and other union-represented employee groups. Morgan Lewis won't handle the preparation and presentation of any motion under Section 1113 or 1114 of the Bankruptcy Code, which will be handled by Paul Hastings LLP. The firm will also provide services with respect to labor and employment claims in arbitration and litigation involving the Debtors. The Debtors proposed to pay Morgan Lewis its hourly rates for services rendered, and reimburse the firm of its expenses. Its hourly rates range from $428 to $900 for partners; $460 to $505 for counsel; $255 to $495 for associates; and $128 to $270 for legal assistants. Thomas Reinert Jr., Esq., a member of Morgan Lewis & Bockius LLP, disclosed that the firm does not represent any adverse interest to the Debtors. Mr. Reinert may be reached at: Thomas Reinert, Jr., Esq. MORGAN LEWIS & BOCKIUS LLP 1111 Pennsylvania Avenue, NW Washington, D.C. 20004-2541 Tel: (202) 739-3000 Fax: (202) 739-3001 E-mail: treinert@morganlewis.com 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: Wins OK for Paul Hastings as Labor Counsel ------------------------------------------------------------- The Bankruptcy Court approved, on a final basis, AMR Corp. and its affiliates' application to employ Paul Hastings LLP as their special labor counsel, nunc pro tunc to the Petition Date. Judge Sean Lane ruled that Paul Hastings will not withdraw as the Debtors' counsel prior to the effective date of any Chapter 11 plan confirmed in the Chapter 11 cases without prior approval of the Court. As special labor counsel, Paul Hastings will advise the Debtors regarding litigation, labor and employment law. The firm will also assist the Debtors in objecting to and litigating any potential bankruptcy claims by employees or unions. The firm will be paid on an hourly basis for its services and will be reimbursed of its expenses. Its hourly rates range from $585 to $1,100 for partners and counsel, $345 to $790 for associates, and $50 to $460 for paraprofessionals. Scott Flicker, Esq., a member of Paul Hastings LLP disclosed in court papers that his firm does not represent any interest adverse to the Debtors or their estates. Mr. Flicker may be reached at: Scott Flicker, Esq. PAUL HASTINGS LLP 875 15th Street, N.W. Washington, D.C. 20005 Tel: (202) 551-1726 Fax: (202) 551-0126 E-mail: scottflicker@paulhastings.com 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: Incurs $39.3 Million Net Loss in 2011 ------------------------------------------------------- American Apparel, Inc., filed with the U.S. Securities and Exchange Commission a Form 10-K disclosing a net loss of $39.31 million on $547.33 million of net sales for the year ended Dec. 31, 2011, compared with a net loss of $86.31 million on $532.98 million of net sales during the prior year. The Company reported a net loss of $11.16 million on $157.57 million of net sales for the three months ended Dec. 31, 2011, compared with a net loss of $19.30 million on $143.97 million of net sales for the same period a year ago. The Company's balance sheet at Dec. 31, 2011, showed $324.72 million in total assets, $276.59 million in total liabilities and $48.13 million in total stockholders' equity. Dov Charney, Chairman and CEO of American Apparel commented, "We are pleased with our overall financial performance and significant operating improvements in 2011. This was an important transitional year for American Apparel, one in which we achieved the following significant accomplishments: * Sequential improvements in our quarterly sales that resulted in an overall increase in total net sales despite a drop in the average number of stores in our portfolio. Net sales have also been strong in the first two months this year and comparable sales thus far in March are tracking in the +10% range. We improved timely delivery of goods to our stores, we noticeably improved product quality and assortment and we began a process to improve in store presentation. * We aggressively began marketing to our imprintable wholesale customers and saw positive results. We introduced a new catalog, increased our direct marketing efforts and improved our product offering. So far in 2012 we are continuing to experience growth in the 20%+ range. * We drove improvements in our manufacturing costs. Our sewing costs are near historic lows and we have been consistently performing this way since the second quarter of 2011. * We began a process to reduce overall inventory levels and reduced our unit inventories by 7% in 2011. * We delivered improvements in our distribution capability and have begun a process to drive an additional $3 to $5 million in future annual distribution savings. * We closed 29 stores most of which were either underperforming or that did not fit our profile on a go-forward basis. This substantially completed our store rationalization program. * We improved financial controls, added key personnel in our finance and accounting group and expect to eliminate our remaining material control weakness in 2012. * Despite liquidity constraints, we invested in key processes and systems that will contribute to future sales and earnings growth. We now have RFID installed in 100 stores and continue to integrate our financial systems on a world-wide platform." A copy of the Form 10-K is available for free at: http://is.gd/me8cGS 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. AMERISTAR: Moody's Says Creative Casinos Deal Won't Move Ratings ---------------------------------------------------------------- Moody's Investors Service said Ameristar's agreement to acquire Creative Casinos, LLC has no impact on their ratings or outlook. The Troubled Company Reporter reported on April 5, 2011, that Moody's Investors Service downgraded Ameristar Casinos, Inc.'s (Ameristar) Corporate Family and Probability of Default ratings to B1 from Ba3. At the same time, Moody's assigned a Ba3 rating to the company's proposed $1.4 billion senior secured credit facilities, and a B3 to its proposed $800 million senior unsecured note offering. Ameristar's Speculative Grade Liquidity rating remains unchanged at SGL-2. A stable ratings outlook was assigned. Ameristar owns and operates eight casino/hotel properties primarily serving guests from Colorado, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nebraska and Nevada. The company generates about $1.2 billion in net revenues annually. ARMSTRONG WORLD: Moody's Affirms 'B1' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service affirmed Armstrong World Industries, Inc.'s B1 Corporate Family Rating and B1 Probability Default Rating. Moody's also affirmed the B1 ratings assigned to the company's bank credit facilities, including its Term Loan B. Armstrong is proposing a $250 million add-on to Term Loan B maturing March 2018. Proceeds from the add-on term loan and about $250 million from cash on hand will be used to pay a special cash dividend to Armstrong's shareholders. The rating outlook is stable. The following ratings/assessments were affected by this action: Corporate Family Rating affirmed at B1; Probability of Default Rating affirmed at B1; $250 million Senior Secured Revolving Credit Facility due 2015 affirmed at B1 (LGD3, 42%); $250 million Senior Secured Term Loan A due 2015 affirmed at B1 (LGD3, 42%); and, $800 million (originally $550 million) Senior Secured Term Loan B due 2018 affirmed at B1 (LGD3, 42%); and, The company's speculative grade liquidity assessment remains SGL-2. RATINGS RATIONALE Armstrong's B1 Corporate Family Rating reflects its highly leveraged capital structure as the result of its aggressive financial strategy. The proposed $500 million dividend follows a previous dividend totaling about $800 million paid in December 2010. These two dividends represent almost twenty years of Armstrong's 2011 reported GAAP free cash flows. The company is financing the proposed $500 million dividend with about $250 million from cash on hand and the remaining balance of $250 million from the proceeds of new debt. This net increase in balance sheet debt will result in deterioration in key credit metrics due to higher debt service requirements. On a pro-forma basis for last twelve months through December 31, 2011, interest coverage defined as EBITA-to-interest expense will weaken to about 2.8 times from 3.2 times and debt-to-EBITDA will increase to about 4.2 times from 3.5 times at FYE11 (all ratios adjusted per Moody's standard adjustments). Despite the increase in balance sheet debt, pro forma financial metrics remain consistent with the current rating. Also, the company's operating margins are improving. Armstrong continues to benefit from the WAVE JV, a critical earnings and cash contributor. Its strong North American market position among providers of flooring to the new construction and remodeling end markets positions it to benefit from an eventual economic and construction recovery. Weakened credit metrics on a pro forma basis, and potential for future shareholder friendly activities such as share repurchases or dividends constrain the rating. Overall, Armstrong is positioned appropriately relative to its current rating, and has the financial flexibility to contend with ongoing uncertainties in its domestic and European end markets. Armstrong's SGL-2 speculative grade liquidity rating reflects Moody's view that the company will maintain a good liquidity profile over the next twelve months, despite the use of cash on hand to partially fund the $500 million dividend. Pro forma for the proposed dividend, cash on hand would be $230.6 million at December 31, 2011. Also, Armstrong should be able to maintain sufficient cash on hand remaining and revolving credit availability to support potential operating short-falls, since the company usually has negative cash flows from operations during the first quarter of its fiscal year due to working capital investments to meet seasonal demands. The stable outlook incorporates Moody's view that Armstrong's operating performance will continue to improve, resulting in credit metrics that are more supportive of the current rating. The company's good liquidity profile and the absence of any near-term maturities beyond manageable term loan amortization also support the rating. A rating upgrade is unlikely over the intermediate term as Moody's believes that Armstrong will continue to pursue shareholder friendly activities as its operating earnings continue to improve. However, if operating performance results in EBITA-to-interest expense trending towards 4.0 times and debt-to-EBITDA improving towards 3.0 times (all ratios include Moody's standard adjustments), then positive rating actions could ensue. Ongoing cash dividends commensurate with the strong equity earnings from the WAVE JV are critical to supporting an upgrade. Factors that could result in a downgrade of the ratings include operating performance below expectations or erosion in the company's financial performance due to an unexpected decline in Armstrong's end markets. EBITA-to-interest expense trending below 3.0 times or debt-to-EBITDA sustained above 4.5 times (all ratios incorporate Moody's standard adjustments) could pressure the ratings. Deterioration in the company's liquidity profile, significant shareholder return activities, such as debt-financed dividends or share repurchases, or debt-financed acquisitions may stress Armstrong's ratings too. Also, any disruption in the reported equity earnings from the WAVE JV could pressure Armstrong's operating margins, potentially resulting in negative rating actions. The principal methodology used in rating Armstrong was the Global Manufacturing Industry Methodology, published December 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Armstrong World Industries, Inc., located in Lancaster, Pennsylvania, is a global manufacturer of flooring products and ceiling systems for use primarily in the construction and renovation of residential, commercial and institutional buildings. The company also designs, manufactures and sells kitchen and bathroom cabinets for the U.S. market. Armor TPG Holdings LLC is Armstrong's largest shareholder after the Asbestos Personal Injury Settlement Trust. Revenues for the twelve months through December 31, 2011 totaled approximately $2.9 billion ATLANTIC & PACIFIC: Suspending Filing of Reports with SEC --------------------------------------------------------- The Great Atlantic & Pacific Tea Company, Inc., filed a Form 15 notifying of its suspension of its duty under Section 15(d) to file reports required by Section 13(a) of the Securities Exchange Act of 1934 with respect to its common stock, par value $1 per share and 9 3/8% Senior Quarterly Interest Bonds due Aug. 1, 2039. Pursuant to Rule 12h-3, the Company is suspending reporting because there are currently less than 300 holders of record of the common shares and Bonds. As of March 13, 2012, there was no holder of the Common Shares and Bonds. 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. The Company has successfully consummated its financial restructuring and emerged from Chapter 11 bankruptcy protection as a privately-held company. The United States Bankruptcy Court of the Southern District of New York confirmed the Company's Plan of Reorganization on Feb. 28, 2012. BC FUNDING: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------- Debtor: BC Funding, LLC D/B/A BankCard Funding 6901 Jericho Turnpike, Suite 255 Syosset, NY 11791 Bankruptcy Case No.: 12-71471 Chapter 11 Petition Date: March 13, 2012 Court: U.S. Bankruptcy Court Eastern District of New York (Central Islip) Judge: Robert E. Grossman Debtor's Counsel: Jonathan T. Koevary, Esq. OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOS 65 East 55th Street, 2nd Floor New York, NY 10022 Tel: (212) 451-2300 Fax: (212) 451-2222 E-mail: jkoevary@olshanlaw.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 13 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nyeb12-71471.pdf The petition was signed by Barry M. Sharf, CEO & manager. CAESARS ENTERTAINMENT: Incurs $666.7 Million Net Loss in 2011 ------------------------------------------------------------- Caesars Entertainment Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $666.70 million on $8.83 billion of net revenues for the year ended Dec. 31, 2011, compared with a net loss of $823.30 million on $8.81 billion of net revenues during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $28.51 billion in total assets, $27.46 billion in total liabilities, and $1.05 billion in total stockholders' equity. A copy of the Form 10-K is available for free at: http://is.gd/aAb5Z5 About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. --http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. * * * The TCR reported on Feb. 10, 2012, Moody's Investors Service placed the ratings of Caesars Entertainment Corporation's and Caesars Entertainment Operating Company's, collectively Caesars, on review for possible upgrade, including CET's Caa2 Corporate Family and Caa2 Probability of Default ratings. Moody's also assigned a B2 rating to the proposed $1.250 billion first lien note offering by Caesars Operating Escrow LLC and Caesars Escrow Corporation both wholly owned subsidiaries of CEOC. The rating on the proposed first lien note offering is subject to review of final terms and conditions. CAESARS ENTERTAINMENT: Citi, et al., to Sell 22.3-Mil. Shares ------------------------------------------------------------- Caesars Entertainment Corporation filed with the U.S. Securities and Exchange Commission a Form S-3 registration statement relating to the resale of up to an aggregate of 22,339,143 shares of the Company's common stock by California State Teachers' Retirement System, Citigroup Capital Partners II Employee Master Fund, L.P., Co-Investment Partners 2005, L.P, et al. The Company will not receive any of the proceeds from the sale of these shares by the selling stockholders. The Company has agreed to pay all expenses relating to registering the securities. The selling stockholders will pay any brokerage commissions or similar charges incurred for the sale of these shares. Because all of the shares offered under this prospectus are being offered by the selling stockholders, the Company cannot currently determine the price or prices at which the Company's shares may be sold under this prospectus. The Company's common stock is listed on the NASDAQ Global Select Market under the symbol 'CZR." On March 14, 2012, the last reported sale price of our common stock on the NASDAQ Global Select Market was $12.88. A copy of the prospectus is available for free at: http://is.gd/ibU1et About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. --http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. The Company reported a net loss of $666.70 million in 2011, and a net loss of $823.30 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $28.51 billion in total assets, $27.46 billion in total liabilities, and $1.05 billion in total stockholders' equity. * * * The TCR reported on Feb. 10, 2012, Moody's Investors Service placed the ratings of Caesars Entertainment Corporation's and Caesars Entertainment Operating Company's, collectively Caesars, on review for possible upgrade, including CET's Caa2 Corporate Family and Caa2 Probability of Default ratings. Moody's also assigned a B2 rating to the proposed $1.250 billion first lien note offering by Caesars Operating Escrow LLC and Caesars Escrow Corporation both wholly owned subsidiaries of CEOC. The rating on the proposed first lien note offering is subject to review of final terms and conditions. CAESARS ENTERTAINMENT: Files Form S-3 for $500MM Shares Offering ---------------------------------------------------------------- Caesars Entertainment Corporation filed with the U.S. Securities and Exchange Commission a Form S-3 registration statement relating to the offer and sale of the Company's common stock of up to a maximum aggregate offering price of $500,000,000. The Company's common stock is listed on the NASDAQ Global Select Market under the symbol "CZR." On March 14, 2012, the last reported sale price of the Company's common stock on the NASDAQ Global Select Market was $12.88. A copy of the prospectus is available for free at: http://is.gd/W0jbTn About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. The Company reported a net loss of $666.70 million in 2011 and a net loss of $823.30 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $28.51 billion in total assets, $27.46 billion in total liabilities, and $1.05 billion in total stockholders' equity. * * * The TCR reported on Feb. 10, 2012, Moody's Investors Service placed the ratings of Caesars Entertainment Corporation's and Caesars Entertainment Operating Company's, collectively Caesars, on review for possible upgrade, including CET's Caa2 Corporate Family and Caa2 Probability of Default ratings. Moody's also assigned a B2 rating to the proposed $1.250 billion first lien note offering by Caesars Operating Escrow LLC and Caesars Escrow Corporation both wholly owned subsidiaries of CEOC. The rating on the proposed first lien note offering is subject to review of final terms and conditions. CANO PETROLEUM: Files Sale-Based Chapter 11 Plan ------------------------------------------------ Cano Petroleum Inc. and its affiliates filed with the Bankruptcy Court a Joint Plan of Reorganization dated March 7, 2012. Prior to the Petition Date, the Debtors and NBI Services, Inc., entered into a Stock Purchase Agreement. The Chapter 11 case contemplates approval of a marketing process in which NBI would be the "stalking horse" and the Company would be permitted to solicit higher or better bids for its assets and businesses. In the absence of a higher or better bid for the Company's assets or businesses and subject to the Bankruptcy Court's approval of the Plan, all existing capital stock, including the Company's Common Stock and Series D Convertible Preferred Stock, will be cancelled, and Buyer will receive all of the outstanding capital stock of the reorganized Company, in exchange for approximately $47.5 million, which will be distributed to creditors in accordance with the Plan. The primary purpose of the Plan is to facilitate the restructuring of the Debtors pursuant to the Purchase and Sale Agreement. The Debtors have determined in the exercise of their business judgment that the effectuation of the Purchase and Sale Agreement is the best course of action given the Debtors' financial constraints. According to the Debtors, a reorganization strategy other than a sale, is not possible given the position taken by various creditors of the Debtors, the lack of availability in the credit markets, and the Debtors' inability to sustain operations given their current cash balances. The Plan is structured to enable the Debtors to facilitate a flexible transaction which is expressly subject to a process to solicit higher or better offers for the Debtors' Assets and Equity Interests. A copy of the filing is available for free at http://is.gd/0cYIfX About Cano Petroleum Cano Petroleum, Inc. (NYSE Amex: CFW) is an independent Texas- based energy producer with properties in the mid-continent region of the United States. The Company and its affiliates filed for Chapter 11 bankruptcy (Bank. N.D. Tex. Lead Case No. 12-31549) on March 7, 2012. 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. 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. CHURCH AT SOUTH LAS VEGAS: $3MM Funding Pledge Cues Ch. 11 Exit --------------------------------------------------------------- Christianity Today reports that founder and pastor Benny Perez said Church at South Las Vegas was discharged from its Chapter 11 status on March 6. According to the report, in February, Canadian businessman and philanthropist Ron Fehr, a friend of church board member Jude Fouquier, pledged to provide $3 million to help the church. The church contributed $1 million from its own funds to complete the package and pay off its mortgage lender. The report says court documents did not disclose exactly how much the bank accepted as payment for the money owed. Church at South Las Vegas -- http://www.thechurchlv.com/-- operates a church at 3051 Horizon Ridge Parkway. It filed a Chapter 11 petition (Bankr. D. Nev. Case No. 11-20839) on July 8, 2011. John P. Witucki, Esq., at Gordon Silver, in Las Vegas, Nevada, serves as counsel to the Debtor. The Debtor estimated assets and debts of up to $10 million. CLAIRE'S STORES: Completes Offering of Add'l $100MM Senior Notes ---------------------------------------------------------------- Claire's Stores, Inc., closed the offering of an additional $100 million aggregate principal amount of its 9.00% senior secured first lien notes due 2019. The additional notes were issued at 101.50% of the aggregate principal amount thereof, plus accrued interest from Feb. 28, 2012. The notes are of the same series as the $400 million aggregate principal amount of 9.00% Senior Secured First Lien Notes due 2019 issued on Feb. 28, 2012. The issuance of the additional notes completes the Company's offer and sale of an aggregate of $500 million of notes. The Company used the net proceeds of the issuance of the notes to reduce outstanding indebtedness under the Company's current credit facility. The notes are being offered only to "qualified institutional buyers" in reliance on Rule 144A under the Securities Act of 1933, as amended, and outside the United States only to non-U.S. persons in reliance on Regulation S under the Securities Act. The notes have not been and will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. About Claire's Stores Claire's Stores, Inc. -- http://www.clairestores.com/-- operates as a specialty retailer of fashion accessories and jewelry for preteens and teenagers, as well as for young adults in North America and internationally. It offers jewelry products that comprise costume jewelry, earrings, and ear piercing services; and accessories, including fashion accessories, hair ornaments, handbags, and novelty items. Based in Pembroke Pines, Florida, Claire's Stores operates under two brands: Claire's(R), which operates worldwide and Icing(R), which operates only in North America. As of Jan. 31, 2009, Claire's Stores, Inc., operated 2,969 stores in North America and Europe. Claire's Stores also operates through its subsidiary, Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint venture with AEON, Co., Ltd. The Company also franchises 198 stores in the Middle East, Turkey, Russia, South Africa, Poland and Guatemala. The Company's balance sheet at Oct. 29, 2011, showed $2.81 billion in total assets, $2.86 billion in total liabilities, and a $44.61 million stockholders' deficit. CLEAN WIND: Unusual Trading Activity Triggered Note Default ----------------------------------------------------------- Clean Wind Energy Tower, Inc. disclosed that there have been no material changes to its operations or its business affairs. The Company is not aware of any undisclosed developments that would account for the recent unusual trading activity of its shares which created downward pressure triggering the default of a Convertible Promissory Note with Hanover Holdings I, LLC. Ronald W. Pickett, President and Chief Executive Officer stated, "Ordinarily we do not comment on atypical market activity or on market rumors. However, due to the recent unusual trading activity of our stock, I would like to take this opportunity to convey to the investment community that our operations are progressing as expected. We have recently announced that the Company has made significant progress in assessing the potential of CWET's emission reduction on the worldwide carbon markets and estimating the expected revenue generation. The Company canceled 120,600,000 shares of common stock held by the 'Former Employees', which were retired to treasury stock of the Company reducing the number of outstanding shares from 329,683,408 to 209,083,408. We announced the final approval of our Unique Hydraulic System Patent that maximizes the capture and use of available wind tunnel energy. We have applied to a bureau of United States Department of the Interior for permission to lease a substantial parcel of property located in the southwestern United States, suitable for the development and construction of our first Downdraft Tower and we were recently notified by the Bureau of Reclamation that CWET may proceed with the local zoning process and site evaluations. We reported on March 9, 2012, the timely repayment of three segments of incremental project financing. We are pleased with the progress we have made on the project development aspect of our business. One of our top priorities is maximizing shareholder value and I am confident that as we head into the future, we will achieve our goals." About Clean Wind Clean Wind Energy, Inc., a wholly owned subsidiary of Clean Wind Energy Tower, Inc., has designed and is preparing to develop, and construct large "Downdraft Towers" that use benevolent, non-toxic natural elements to generate electricity and clean water economically by integrating and synthesizing numerous proven as well as emerging technologies. CLEARWIRE CORP: Intel Has 94MM Shares; Google No Longer Has Shares ------------------------------------------------------------------ Intel Corporation filed with the U.S. Securities and Exchange Commission Amendment No. 11 to Schedule 13D to disclose that on Google sold 29,411,765 shares of Class A Common Stock (which shares constituted all of the shares of Class A Common Stock previously held by Google) in a block sale on March 1, 2012, to a third party at price per share of $2.261. Accordingly, Google no longer holds any securities of Clearwire Corporation. Intel Corp. does not directly own any shares of Class A Common Stock of the Company. As of March 14, 2012, by reason of the provisions of Rule 13d-3 under the Act, Intel Corp. is deemed to beneficially own and to share voting and investment power with respect to 94,076,878 shares of Class A Common Stock that are beneficially owned as follows: * 28,432,066 shares of Class A Common Stock that are beneficially owned as follows: 25,098,733 shares of Class A Common Stock that are held of record by Intel Capital and 3,333,333 shares of Class A Common Stock that are held of record by Intel Cayman; and * 65,644,812 shares of Class A Common Stock that are beneficially owned as follows: 21,881,604 shares of Class B Common Stock and Class B Common Units that are held of record by Intel Entity A; 21,881,604 shares of Class B Common Stock and Class B Common Units that are held of record by Intel Entity B; and 21,881,604 shares of Class B Common Stock and Class B Common Units that are held of record by Intel Entity C. Each share of Class B Common Stock, together with one Class B Common Unit, is exchangeable at any time at the option of the holder, into one fully paid and nonassessable share of Class A Common Stock of the Company. In addition, by virtue of the Equityholders' Agreement entered into at the Closing, the Reporting Person may be deemed to be a member of a "group" under Section 13(d) of the Act with respect to the 94,076,878 shares of Class A Common Stock beneficially owned by the Reporting Person and the following shares which are reported separately from this Amendment No. 11, based upon the information contained in that certain Amendment No. 10 to the Statement on Schedule 13D dated March 14, 2012, filed by those persons, pursuant to which those persons have reported that they beneficially own: 627,945,914 shares of Class A Common Stock beneficially owned by the Sprint Entities, 88,504,132 shares of Class A Common Stock beneficially owned by the Comcast Entities, 34,026,470 shares of Class A Common Stock beneficially owned by Eagle River, 46,404,782 shares of Class A Common Stock beneficially owned by the TWC Entities, 34,042,970 shares of Class A Common Stock beneficially owned by Craig O. McCaw and 8,474,440 shares of Class A Common Stock beneficially owned by the BHN Entities. The Reporting Person disclaims beneficial ownership of the shares of Class A Common Stock beneficially owned by such other persons. As of March 1, 2012, Intel Corporation beneficially owns 94,076,878 shares of Class A common stock of Clearwire Corporation which represents 18.2% of the shares outstanding. A copy of the amendment is available for free at: http://is.gd/Gg1MBZ About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a provider of 4G mobile broadband network services in 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company reported a net loss of $2.30 billion in 2010 and a net loss of $1.25 billion in 2009. The Company also reported a net loss attributable to Clearwire Corporation of $480.48 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $8.76 billion in total assets, $5.15 billion in total liabilities, and $3.61 billion in total stockholders' equity. * * * As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured first- lien issue-level ratings on Bellevue, Wash.-based wireless provider Clearwire Corp. to 'CCC' from 'CCC+'. "The downgrade reflects our concerns that the company may choose to skip its $237 million of interest payments due on Dec. 1, 2011," explained Standard & Poor's credit analyst Allyn Arden. "With about $698 million of cash on the balance sheet, Clearwire has sufficient funds to pay the remaining interest expense due in 2011, although Standard & Poor's believes that it would still have to raise significant capital to maintain operations in 2012 despite the cost-reduction measures it has already achieved. If Clearwire elected to make the interest payment, we believe that it would exit 2011 with around $350 million to $400 million in cash, which assumes less than $100 million of capital expenditures and EBITDA losses. We do not believe that this cash balance will be sufficient to cover free operating cash flow (FOCF) losses and a Long-Term Evolution (LTE) wireless network overlay in 2012 and that the company will require additional funding during the year." CLEARWIRE CORP: To Sell Class A Common Shares for $83.5-Mil. ------------------------------------------------------------ Clearwire Corporation and Clearwire Communications LLC entered into securities purchase agreements with certain institutional investors, pursuant to which Clearwire will sell shares of Class A Common Stock for an aggregate price of $83.5 million and Clearwire Communications will repurchase $100.0 million in aggregate principal amount of its 8.25% exchangeable notes due 2040 for a total price equal to the Purchase Price. Clearwire intends to use the proceeds of the sale of the Class A Common Stock to contribute to Clearwire Communications to allow it to repurchase $100.0 million in aggregate principal amount of its 8.25% exchangeable notes due 2040, plus accrued but unpaid interest thereon to, but excluding, March 22, 2012, held by the institutional investors. The price per share will be determined based upon the daily volume weighted average price of the Company's Class A Common Stock on the NASDAQ Global Select Market for the five trading days commencing March 15, 2012, subject to a minimum price and a maximum price per share. The total number of shares sold will be equal to the quotient obtained by dividing the Purchase Price by the price per share, and will be between 37,964,015 and 41,760,417 shares. The shares of Class A Common Stock will be issued pursuant to an effective shelf registration statement filed with the U.S. Securities and Exchange Commission. On March 14, 2012, Clearwire announced that they had entered into a five-year wholesale agreement with Cricket Communications, Inc., With the agreement, Cricket will become the second operator signed on to leverage Clearwire's forthcoming LTE Advanced-ready network, which will provide capacity off-load services to supplement Cricket's own LTE network. About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a provider of 4G mobile broadband network services in 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company reported a net loss of $2.30 billion in 2010 and a net loss of $1.25 billion in 2009. The Company also reported a net loss attributable to Clearwire Corporation of $480.48 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $8.76 billion in total assets, $5.15 billion in total liabilities, and $3.61 billion in total stockholders' equity. * * * As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured first- lien issue-level ratings on Bellevue, Wash.-based wireless provider Clearwire Corp. to 'CCC' from 'CCC+'. "The downgrade reflects our concerns that the company may choose to skip its $237 million of interest payments due on Dec. 1, 2011," explained Standard & Poor's credit analyst Allyn Arden. "With about $698 million of cash on the balance sheet, Clearwire has sufficient funds to pay the remaining interest expense due in 2011, although Standard & Poor's believes that it would still have to raise significant capital to maintain operations in 2012 despite the cost-reduction measures it has already achieved. If Clearwire elected to make the interest payment, we believe that it would exit 2011 with around $350 million to $400 million in cash, which assumes less than $100 million of capital expenditures and EBITDA losses. We do not believe that this cash balance will be sufficient to cover free operating cash flow (FOCF) losses and a Long-Term Evolution (LTE) wireless network overlay in 2012 and that the company will require additional funding during the year." CONVERTED ORGANICS: To Issue $550,000 New Notes to IMF & Hudson --------------------------------------------------------------- In a Form 8-K dated Jan. 3, 2012, a Securities Purchase Agreement was entered into by and among Converted Organics Inc., Iroquois Master Fund, Ltd., and Iroquois Capital Opportunity Fund, Ltd. Upon the terms and subject to the Purchase Agreement, the Converted Organics agreed to sell to IMF certain notes and warrants. On March 12, 2012, the Company entered into an agreement with each of IMF and Hudson Bay Master Fund Ltd., pursuant to which the Company agreed to effect an additional closing under the Purchase Agreement in which the Company will issue the Buyers new notes having an aggregate original principal amount of $550,000 for a purchase price of $500,000, and warrants to purchase an aggregate of 2,619,048 shares of common stock at an exercise price of $0.105 per share. The New Notes are convertible into shares of the Company's common stock at a conversion price equal to the lowest of: (1) $0.105 per share; (2) the price which is 85% of the three lowest closing sale prices of the the Company's common stock during the twenty trading day period preceding the applicable conversion date; and (3) the price which is 85% of the closing sale price of the Company's common stock on the trading day preceding the applicable conversion date; provided that if the Company makes certain dilutive issuances, the Fixed Conversion Price of the New Notes will be lowered to the per share price for the dilutive issuances. The closing of the purchase of the New Notes and New Warrants occurred on March 13, 2012. Pursuant to the March Agreement, the Company also agreed with IMF to amend the definition of "Fixed Conversion Price" in each of the notes the Company issued IMF in April 2011 and January and February 2012, as well as any notes exchanged for such notes, to $0.105. On March 12, 2012, the Company entered into a Securities Purchase Agreement with Hudson, pursuant to which the Company acquired 150 shares of Series A Convertible Preferred Stock of Innovate/Protect, Inc., a privately-held Delaware corporation, for $495,000. In the March Agreement, the Company agreed to utilize the proceeds from the issuance of the New Notes to purchase the Preferred Shares. The New Notes are secured by a first priority perfected security interest in all of the assets of the Company and its subsidiaries, including, without limitation, the Preferred Shares to be acquired, and each subsidiary is a guarantor thereof. 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. CRAWFORD FURNITURE: Judge Converts Case to Chapter 7 Liquidation ---------------------------------------------------------------- Thomas Russell at Furniture Today, citing report from the Buffalo News, says U.S. Bankruptcy Judge Carl L. Bucki has approved Crawford Furniture Mfg.'s request to convert its Chapter 11 case to Chapter 7 liquidation proceeding. According to the report, the Company said it was unable to profitably reorganize its operations as part of a Chapter 11 bankruptcy proceeding. The company will sell its remaining inventory of finished furniture as well as other assets during a public sale April 12-19. Other assets include five parcels of commercial real estate, intellectual property, leftover inventory and a host of materials including lumber, fabrics, hardware, finishes, plywood and packing materials. The sale also will include machinery and equipment. The Company in October announced it was closing its five retail stores in Hamburg, Lockport, Williamsville, Amherst and Lakewood, N.Y. About Crawford Furniture Crawford Furniture Manufacturing Corp., of Jamestown, New York -- http://www.crawfordfurniture.com/-- was a leading manufacturer for more than 120 years of quality 100% solid wood furniture. Manufacturing was started in 1883 by two Swedish craftsmen and was originally known as the Swedish Furniture Manufacturing Corporation. Manufacturing specializes in the manufacture of bedroom and dining room furniture from solid wood, specifically ash, cherry, maple and oak, that is purchased within a 150-mile radius of its factory in Jamestown. Crawford Furniture Retail Outlet Inc. has operated five retail stores in western New York since 2004. Retail also operated a warehouse/delivery depot at Benderson Development Park, in Cheektowaga, New York. Crawford Furniture Manufacturing filed for Chapter 11 bankruptcy (Bankr. W.D.N.Y. Lead Case No. 11-12945) on Aug. 25, 2011. Camille W. Hill, Esq., at Bond, Schoeneck & King, PLLC, serves as the Debtors' counsel. The Debtor disclosed $8,588,970 in assets and $1,541,201 in liabilities. Retail filed a separate Chapter 11 petition on the same day. The cases are jointly administered. The U.S. Trustee appointed an official committee of unsecured creditors in the case. CRYSTALLEX INT'L: Adopts New Shareholder Rights Plan ---------------------------------------------------- Crystallex International Corporation's Board of has voted to adopt an additional shareholder rights plan. The New Rights Plan does not replace the original shareholder rights plan of the Company dated as of June 22, 2006 which is expected to expire this year. The Board adopted the New Rights Plan because the Existing Rights Plan may not adequately serve the interests of the Company due to the changed circumstances of the Company, including the ongoing dispute between the Company and the Bolivarian Republic of Venezuela which has led to the arbitration case between such entities and the filing for court protection by the Company under the Companies' Creditors Arrangement Act (Canada) ("CCAA"). The New Rights Plan is not being adopted in response to any proposal to acquire control of the Company. Under the New Rights Plan, take-over bids which meet certain requirements intended to protect the interests of all shareholders continue to be exempted from the dilutive aspects of the plan and are deemed to be "Permitted Bids". Permitted Bids must be made by way of a take- over bid circular prepared in compliance with applicable securities laws and, among other conditions, must remain open for sixty days. A copy of the New Rights Plan together with a summary thereof will be available for review under the Company's profile at http://www.sedar.com,and on the Company's Web site at http://www.crystallex.com,by March 19, 2012. Although the New Rights Plan will take effect immediately, the Company will submit the New Rights Plan for confirmation at the next meeting of shareholders; and the New Rights Plan will expire at the third annual meeting of shareholders thereafter. If the shareholders do not confirm the New Rights Plan at the next meeting of shareholders, the New Rights Plan will terminate and cease to be effective at that time. About Crystallex Crystallex International Corporation is a Canadian based mining company, with a focus on acquiring, exploring, developing and operating mining projects. Crystallex has successfully operated an open pit mine in Uruguay and developed and operated three gold mines in Venezuela. The Company's principal asset is its international claim in relation to its investment in the Las Cristinas gold project located in Bolivar State, Venezuela. On Dec. 23, 2011, announced that it obtained an order from the Ontario Superior Court of Justice (Commercial List) for protection under the Companies' Creditors Arrangement Act (Canada) (CCAA). Ernst & Young Inc. was appointed monitor under the order. Crystallex has also commenced a proceeding under Chapter 15 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware in order to ensure that relevant CCAA orders are enforced in the United States. The Bankruptcy Court has recognized Crystallex's CCAA proceeding as well as the initial order and subsequent stay extension of the Ontario Superior Court of Justice. The Company reported a net loss of US$33.7 million for the nine months ended Sept. 30, 2011, compared with a net loss of US$27.7 million for the same period in 2010. The Company reported losses from continuing operations of US$22.0 million and US$14.5 million for the nine months Sept. 30, 2011, and 2010, respectively. Following the Government of Venezuela's unilateral cancellation of the Las Cristinas Mine Operating Contract (the "MOC") on Feb. 3, 2011, the Company filed for arbitration before ICSID's Additional Facility and commenced the process of handing the Las Cristinas project back to the Government of Venezuela. The handover to the Government of Venezuela was completed on April 5, 2011, upon receipt of a certificate of delivery from the Corporacion Venezolana de Guayana (the "CVG"). As a result, the Company has determined that its operations in Venezuela should be accounted for as a discontinued operation. The Company reported losses from discontinued operations of US$11.7 million and US$13.1 million for the nine months ended Sept. 30, 2011, respectively. The Company's balance sheet at Sept. 30, 2011, showed US$19.8 million in total assets, US$115.17 million in total liabilities and a stockholders' deficit of US$95.3 million. CRYSTALLEX INT'L: Unable to File Year End Financial Statement ------------------------------------------------------------- Crystallex International Corporation disclosed that, in light of its financial circumstances, the Company will not be in a position to prepare and file annual audited financial statements and other annual disclosure documents, required by Canadian securities laws in respect of the Company's financial year ended December 31, 2011, by March 30, 2012. Consequently, following March 30, 2012, the Company will be in default of its continuous disclosure filing requirements under Canadian securities laws. The Company has commenced discussions with the Ontario Securities Commission, its principal Canadian securities regulatory authority, concerning its imminent continuous disclosure filing default. The Company expects to be in a position to provide greater clarity on this matter within the next two weeks, including whether it will be able to obtain sufficient funds to meet its continuous disclosure obligations and if not the nature of ongoing disclosure that will be provided by the Company. About Crystallex Crystallex International Corporation is a Canadian based mining company, with a focus on acquiring, exploring, developing and operating mining projects. Crystallex has successfully operated an open pit mine in Uruguay and developed and operated three gold mines in Venezuela. The Company's principal asset is its international claim in relation to its investment in the Las Cristinas gold project located in Bolivar State, Venezuela. On Dec. 23, 2011, announced that it obtained an order from the Ontario Superior Court of Justice (Commercial List) for protection under the Companies' Creditors Arrangement Act (Canada) (CCAA). Ernst & Young Inc. was appointed monitor under the order. Crystallex has also commenced a proceeding under Chapter 15 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware in order to ensure that relevant CCAA orders are enforced in the United States. The Bankruptcy Court has recognized Crystallex's CCAA proceeding as well as the initial order and subsequent stay extension of the Ontario Superior Court of Justice. The Company reported a net loss of US$33.7 million for the nine months ended Sept. 30, 2011, compared with a net loss of US$27.7 million for the same period in 2010. The Company reported losses from continuing operations of US$22.0 million and US$14.5 million for the nine months Sept. 30, 2011, and 2010, respectively. Following the Government of Venezuela's unilateral cancellation of the Las Cristinas Mine Operating Contract (the "MOC") on Feb. 3, 2011, the Company filed for arbitration before ICSID's Additional Facility and commenced the process of handing the Las Cristinas project back to the Government of Venezuela. The handover to the Government of Venezuela was completed on April 5, 2011, upon receipt of a certificate of delivery from the Corporacion Venezolana de Guayana (the "CVG"). As a result, the Company has determined that its operations in Venezuela should be accounted for as a discontinued operation. The Company reported losses from discontinued operations of US$11.7 million and US$13.1 million for the nine months ended Sept. 30, 2011, respectively. The Company's balance sheet at Sept. 30, 2011, showed US$19.8 million in total assets, US$115.17 million in total liabilities and a stockholders' deficit of US$95.3 million. DELPHI FINANCIAL: Moody's Issues Summary Credit Opinion ------------------------------------------------------- Moody's Investors Service issued a summary credit opinion on Delphi Financial Group, Inc., and includes certain regulatory disclosures regarding its ratings. This release does not constitute any change in Moody's ratings or rating rationale for Delphi Financial Group, Inc. and its affiliates. Moody's current ratings on Delphi Financial Group, Inc. and its affiliates are: Senior Unsecured (domestic currency) ratings of Baa3, on review for upgrade Junior Subordinate (domestic currency) ratings of Ba1(hyb), on review for upgrade Senior Unsecured Shelf (domestic currency) ratings of (P)Baa3, on review for upgrade Senior Subordinate Shelf (domestic currency) ratings of (P)Ba1, on review for upgrade Junior Subordinate Shelf (domestic currency) ratings of (P)Ba1, on review for upgrade Preferred Shelf (domestic currency) ratings of (P)Ba2, on review for upgrade Preferred shelf -- PS2 (domestic currency) ratings of (P)Ba2, on review for upgrade Delphi Funding L.L.C. BACKED Preferred Shelf (domestic currency) ratings of (P)Ba1, on review for upgrade RATINGS RATIONALE Delphi Financial Group, Inc. (Delphi; NYSE: DFG), senior debt rated Baa3 (rating on review for possible upgrade), is a financial services holding company that offers both life and excess worker's compensation insurance through its U.S. insurance subsidiaries. The company also provides absence management services and other integrated employee benefit programs through its wholly-owned subsidiary, Matrix Absence Management, Inc. (Matrix, unrated). Delphi's current ratings reflect the established position of its primary life insurance company, Reliance Standard Life Insurance Company (RSL, A3 for insurance financial strength (IFS), rating on review for possible upgrade), in the small-to-medium size case group employee benefits market, as well as Delphi's ownership of Safety National Casualty Corporation (Safety National, A3 for IFS, rating on review for possible upgrade), an excess worker's compensation insurer for self-insured employers. Partially offsetting these strengths is the company's modest market presence in group employee benefits, limited diversification among insurance products and distribution, and the potential earnings volatility associated with its excess workers compensation line. Delphi announced on December 21, 2011 a proposed transaction by which all of its outstanding stock is to be acquired by Tokio Marine Holdings, Inc. (Tokio Marine; ultimate parent of Tokio Marine & Nichido Fire Insurance Co., Ltd, Aa3 IFS rating stable outlook) in the second quarter of 2012. The acquisition would provide Delphi and its subsidiaries the benefits of being part of the larger Tokio Marine group with its greater financial resources and stronger credit profile. Delphi's Baa3 senior debt rating is three notches lower than the IFS rating of RSL, which is typical for US-based insurance groups. Adjusted financial leverage at the company was at 26.4% as of December 31, 2010, a level consistent with Moody's expectations. Moody's expects leverage to be maintained at about the same level at year-end 2011. Liquidity at Delphi is strong in the form of sizeable readily available liquid assets and the maintenance of a bank credit facility, which was recently increased to $205 million. Rating Outlook On December 21, 2011, Moody's placed on review for possible upgrade the ratings of Delphi Financial Group, Inc. (Delphi - NYSE: DFG; senior debt at Baa3) and its wholly-owned operating companies: Reliance Standard Life Insurance Company (Reliance Standard, insurance finance strength (IFS) rating at A3) and Safety National Casualty Corporation (Safety National, IFS rating at A3). The rating action follows the announcement by Tokio Marine Holdings, Inc. (ultimate parent of Tokio Marine & Nichido Fire Insurance Co., Ltd, Aa3 IFS stable outlook) of its proposed acquisition of all the outstanding stock of Delphi for $2.7 billion in cash in a transaction scheduled to close in the second of 2012, subject to regulatory and shareholder approvals. What to watch for - Effect of protracted high unemployment on group sales and workers' compensation claims - Performance of non-agency RMBS investment concentration What Could Change the Rating - Up The following would place upward pressure on the company's ratings: - The completion of the Tokio Marine transaction and explicit/implicit support from the acquirer - Upgrade of the financial strength rating of life operating company, Reliance Standard Life Insurance Company, and/or property-casualty operating company, Safety National Casualty Corp. - Sustained financial leverage below 30% as well as adequate cash coverage (around 5x) and holding company liquidity (at least 1x annual interest and 18 months' maturities) What Could Change the Rating - Down Given the rating is on review for possible upgrade, it is unlikely the rating will downgraded in the near term. However, the following could potentially lead to the ratings being confirmed at their current rating level: - The Tokio Marine transaction does not proceed as planned; support is modest; plans for integrating Delphi are limited, - Delphi's financial performance weakens The methodologies used in these ratings were Moody's Global Rating Methodology for Life Insurers published in May 2010 and Moody's Global Rating Methodology for Property and Casualty Insurers published in May 2010. DREIER LLP: Wells Fargo Agrees to Pare Secured Claims to $7.2MM --------------------------------------------------------------- Sindhu Sundar at Bankruptcy Law360 reports that Wells Fargo Bank NA on Wednesday agreed to whittle $29.8 million in secured claims against Dreier LLP down to $7.2 million to settle claims from the law firm's liquidation trustee that the bank's predecessor had enabled the Ponzi scheme that toppled the firm and put its founder behind bars. In a motion filed in New York bankruptcy court, Dreier LLP s Chapter 11 trustee Sheila Gowan said that Wachovia Bank NA, which merged with Wells Fargo in 2008, would agree to chop its secured claims to $7.2 million, according to Law360. About Marc Dreier and Dreier LLP Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On Dec. 8, 2008, the U.S. Securities and Exchange Commission filed a suit, alleging that Mr. Dreier made fraudulent offers and sales of securities in several cities, selling fake promissory notes to hedge and other private investment funds. The SEC asserted that Mr. Dreier also distributed phony financial statements and audit opinions, and recruited accomplices in connection with that scheme. Mr. Dreier, currently in prison, was charged by the U.S. government for conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No. 09-cr-00085). Dreier LLP sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, was tapped as counsel. The Debtor estimated assets of $100 million to $500 million, and debts between $10 million and $50 million in its Chapter 11 petition. Sheila M. Gowan, a partner with Diamond McCarthy, was appointed Chapter 11 trustee for the Dreier law firm. Ms. Gowan is represented by Jason Porter, Esq., at Diamond McCarthy LLP. Wachovia Bank National Association, the Dreier LLP Chapter 11 trustee, and Steven J. Reisman as post-confirmation representative of the bankruptcy estate of 360networks (USA) Inc. signed a petition that put Mr. Dreier into bankruptcy under Chapter 7 on Jan. 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier, 60, pleaded guilty to fraud and other charges in May 2009. The scheme to sell $700 million in fake notes unraveled in late 2008. Mr. Dreier is serving a 20-year sentence in a federal prison in Minneapolis. DYNEGY HOLDINGS: Paul Weiss Represents Holders of $460MM Sr. Notes ------------------------------------------------------------------ Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, Andrew Rosenberg, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, disclosed that his firm represents certain noteholders in the Chapter 11 cases of Dynegy Holdings Inc. and its affiliated debtors. The bondholders and the value of notes held as of Feb. 7, 2012, are: -- Chicago-based AEGON USA Investment Management, LLC, which holds $70.1 million of senior notes; -- New York-based Avenue Capital Group and various affiliated funds, which hold $185.5 million of senior notes; -- New York-based Caspian Capital L.P., and various affiliated funds, which hold $73.1 million of senior notes; -- Boston-based Loomis, Sayles & Company, L.P., which holds $91 million of subordinated notes; and $131.7 million of senior notes. The noteholders assert claims or manage accounts that hold claims against the estates arising from the purchase of senior notes issued by Dynegy Holdings, and subordinated notes issued by NGC Corporation Capital Trust I, according to the court filing. Paul Weiss may be reached at: Andrew S. Rosenberg, Esq. Alice Belisle Eaton, Esq. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, NY 10019-6064 Tel: (212) 373-3000 Fax: (212) 757-3990 E-mail: arosenberg@paulweiss.com aeaton@paulweiss.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 INC: Troubled and Disappointed by Examiner Report -------------------------------------------------------- Dynegy Inc. has filed a response to the examiner's report with the United States Bankruptcy Court for the Southern District of New York, Poughkeepsie Division. In connection with the filing of the response, the Company noted that the Examiner's Report is not evidence, is non-binding and is not the conclusion of any court. "Dynegy is both troubled and disappointed by the Examiner's Report as we continue to believe our restructuring activities benefited all stakeholders and were conducted in the proper manner," commented Robert C. Flexon, Dynegy President and Chief Executive Officer. The Examiner conducted a 60 day review of the Company's pre- petition restructuring transactions and concluded that many of the elements of the Company's strategy, including the ring-fencing of CoalCo and GasCo and related financings, were proper. The Examiner's criticism was directed exclusively at a single transaction: the transfer of CoalCo from Dynegy Gas Investments, a debt-free, wholly-owned subsidiary of Dynegy Holdings (DH), to Dynegy Inc. (DI) in exchange for a $1.25 billion Undertaking on September 1, 2011. Dynegy disagrees with this criticism for numerous reasons detailed in its response, including these: -- The Examiner's Report improperly assumes insolvency. The conclusions reached by the Examiner are dependent on a determination that DH was insolvent at the time of the transactions. Notably, however, the Examiner did not actually determine whether DH was insolvent. Instead, the Report assumed insolvency and ignored critical evidence to the contrary. In fact, the Company's Directors fully believed that DH was solvent at the time of the transfer of CoalCo. The consolidated Company at that time had over $1 billion in liquidity, approximately $570 million in equity market capitalization, financial forecasts demonstrating the Company's ability to meet its liabilities for the foreseeable future, the ability to raise additional capital through new credit lines and asset sales, and no significant debt maturities until 2015. -- The Examiner's conclusion of a fraudulent transfer is incorrect. The documents and other evidence regarding the CoalCo transfer demonstrate that there was no intent to hinder or delay creditors. To the contrary, the transaction was done in support of an exchange offer intended to reduce DH's debt for the benefit of DH creditors while offering a more secured investment for those creditors who participated in the exchange. Once the tender had failed, the Company quickly entered into a Restructuring Support Agreement with DH creditors that effectively would unwind the CoalCo transfer and provide DH creditors a more secured interest in both CoalCo and GasCo. In addition, the transfer of CoalCo was based upon a valuation of CoalCo performed by an independent third party expert. -- The Report's conclusions regarding fiduciary duties are incorrect and contrary to precedent. For a number of reasons, including the Directors' belief that DH was solvent, the fiduciary duties of DI Directors and DH Managers were for the benefit of shareholders, not creditors. A fundamental principle of Delaware corporate law is that a board of directors cannot be second- guessed on the conduct of corporate affairs if they exercised proper business judgment. The looming debt default of the Senior Credit Facility as of Sept. 30, 2011 would have precluded the Company from continuing in business absent the refinancing that occurred in August 2011. In addition, the Company had to confront its overleveraged situation, a significant turnover of officers and directors over the first half of 2011, and business complexities, including adverse swings in energy prices, all of which required thoughtful and immediate action which the Board carried out. The Directors used their best business judgment and retained internationally recognized advisers, including White & Case and Lazard, to determine the right course of action that preserved value for the Company's stakeholders and ensured it was done in the proper manner. -- The Report's conclusions depend on an inconsistent application of legal analysis. Critical to the conclusion that DI Directors breached their fiduciary duties, is the position that DI, DH, and Dynegy Gas Investments should all be treated as a single entity instead of treating each entity as a separate company. If this approach had been consistently applied there could legally be no fraudulent transfer of CoalCo, since, in essence, DI would have transferred the coal business to itself. Additionally, there could be no breach of fiduciary duties at the DH level because it would be disregarded in this legal analysis. While the Company strongly disagrees with all of these findings, it believes that the Examiner should have at least been consistent in the approach taken in his legal analysis. The Company strongly disagrees with the conclusions reached in the Examiner's Report and believes that it is flawed for the reasons detailed in the Company's response. However, it remains committed to working with all creditor groups to reach a consensual restructuring agreement that is beneficial to all stakeholders. Dynegy will continue to provide updates as the restructuring progresses. Court documents, including the Company's full response to the Examiner's Report, are available on the docket section of DH's reorganization Web site, http://dm.epiq11.com/dynegyholdingsllc 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 Nov. 16, 2011. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) ENERGY CONVERSION: Common Stock Delisted from NASDAQ ---------------------------------------------------- The NASDAQ Stock Market delisted the common stock of Energy Conversion Devices, Inc. The Company's common stock was suspended on Feb. 24, 2012, and has not traded on NASDAQ since that time. NASDAQ filed a Form 25 with the Securities and Exchange Commission to complete the delisting. The delisting becomes effective 10 days after the Form 25 is filed. The Company's common stock is currently trading on the Pink OTC Markets under the symbol "ENERQ." However, the Company can give no assurance that trading in its common stock will continue on the Pink Sheets or any other securities exchange or quotation medium. 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. FAIRFAX FINANCIAL: Moody's Rates New Preferred Shares 'Ba2(hyb)' ---------------------------------------------------------------- Moody's Investors Service has assigned a Ba2(hyb) rating to the C$200 million Series K Rate Reset Preferred Shares to be issued by Fairfax Financial Holdings Limited (Fairfax; TSX:FFH; Baa3 senior unsecured debt/stable outlook). The size of the issue may be increased to C$250 million at the underwriters' option. Proceeds from this issuance are expected to repay C$86 million of bonds maturing in April 2012 and the balance will supplement the holding company's liquid resources. The outlook for the rating is stable. RATING RATIONALE Fairfax's debt ratings are based on the company's diversified revenue stream by product and geography, a strong market position within Canadian property & casualty insurance, a high level of cash and marketable securities at the parent-company level, and a liquid investment portfolio. Several credit challenges remain significant to Fairfax's rating including weak operating earnings (excluding realized gains), historical volatility of loss reserves particularly at its run-off operations, exposure to catastrophe risk, and a high level of common stock investments (though a substantial portion of equities are currently hedged). The debt ratings also reflect the collective insurance financial strength ratings of the Fairfax group of companies and the debt outstanding at intermediate holding companies, which results in structural subordination at the ultimate holding company. This structural subordination is mitigated by both the diversification of businesses and by the commitment to maintain significant levels of cash at the parent company. According to William Burn, Moody's lead analyst for Fairfax, "Fairfax has a long history of maintaining significant liquid resources at the holding company (in excess of C$1 billion) and is well positioned to further increase capital at its insurance subsidiaries if pricing conditions continue to improve. The incremental financial leverage associated with the offering is within the tolerances for the company's financial leverage profile." Moody's notes that the Series K Preferred Shares are perpetual, cumulative and are redeemable by Fairfax after five years. The Series K Preferred Shares will receive some equity credit from Moody's for the purpose of financial leverage calculation, based on their subordination, interest deferral characteristics and lack of a stated maturity. The following factors could lead to an upgrade of the ratings: adjusted financial leverage consistently less than 30% and earnings coverage (excluding realized gains/losses) consistently above 4x; reduction in risk at Fairfax's runoff operations; aggregate combined ratios consistently less than 100%; and an upgrade of the stand-alone credit profile of the company's lead operating P&C and/or reinsurance companies. Factors that could lead to a downgrade of the ratings include: substantial reduction of holding company liquidity to less than C$750 million (or less than 3x total fixed charges); adjusted financial leverage consistently above 35% and earnings coverage (excluding realized gains/losses) consistently less than 2x; significant adverse reserve development at Fairfax's run-off or ongoing operating subsidiaries (greater than 2% of net reserves); and/or a downgrade of the stand-alone credit profile of the company's lead operating P&C and/or reinsurance companies. Moody's also maintains the following ratings on Fairfax Financial Holdings Limited: Senior Unsecured (domestic and foreign currency) ratings of Baa3 Senior Unsecured Shelf (foreign currency) ratings of (P)Baa3 Subordinate Shelf (foreign currency) ratings of (P)Ba1 Preferred Shelf (foreign currency) ratings of (P)Ba2 Preferred Shelf -- PS2 (foreign currency) ratings of (P)Ba2 Fairfax is an insurance and financial services holding company that offers P&C insurance products through its reinsurance and insurance operating subsidiaries. Fairfax has four primary operating companies: Odyssey Re Holdings Corporation (A3 insurance financial strength (IFS) rating of Odyssey Reinsurance Company, positive outlook); Crum & Forster Holdings Corp (principal insurance subsidiaries Baa1 IFS rating, stable); Zenith National Insurance Corporation (A3 IFS rating of Zenith Insurance Company, stable), and Northbridge Financial Corp. (not rated). Fairfax also has a sizable runoff business including TIG Insurance Company, and UK-based RiverStone Insurance (both not rated). The company also engages in internal reinsurance activities, primarily through its CRC Insurance Limited and Wentworth subsidiaries (not rated), depending on the pricing environment. The methodologies used in this rating were Moody's Global Rating Methodology for Property and Casualty Insurers published in May 2010, Moody's Global Rating Methodology for Reinsurers published in December 2011, and Moody's Guidelines for Rating Insurance Hybrid Securities and Subordinated Debt published in January 2010. FLAGSTAR BANCORP: Harwood Feffer Investing Board ------------------------------------------------ B Harwood Feffer LLP is investigating potential claims against the board of directors of Flagstar Bancorp, Inc. concerning whether the board has breached its fiduciary duties to shareholders. On Feb. 24, 2012, the U.S. Department of Justice filed a complaint in the United States District Court for the Southern District of New York, Case No. 12-cv-01392, against the Company alleging that for over a decade Flagstar had been improperly approving thousands of residential home mortgage loans for government insurance. Specifically, the DOJ alleges that the Company: (i) used unauthorized staff employees in the loan approval process; (ii) paid substantial incentive awards to these unauthorized employees for exceeding certain quotas; (iii) permitted underwriters to submit false certifications to the Federal Housing Administration ("FHA") and the U.S. Department of Housing and Urban Development ("HUD"); and (iv) misled FHA and HUD by certifying that the loans had been fully underwritten by properly registered and sufficiently experienced underwriters when they had not. The DOJ further alleges that as a result of the foregoing, thousands of loans were approved for government insurance that did not qualify for insurance and when the loans defaulted, HUD was forced to cover the losses. As a result, Flagstar has become the focus of costly public and legal scrutiny. The Company reached a settlement with the DOJ on Feb. 24, 2012, the same day the complaint was filed, under which Flagstar must pay $15 million in thirty days and up to an additional $117.8 million if it meets certain criteria. In addition, Flagstar is required to repay $266.7 million that it received as part of the Troubled Asset Relief Program. Our investigation concerns whether the Flagstar board of directors has breached its fiduciary duties to shareholders, grossly mismanaged the Company, and/or committed abuses of control in connection with the foregoing. If you own Flagstar shares and wish to discuss this matter with us, or have any questions concerning your rights and interests with regard to this matter, please contact: FOOD SERVICE: Judge Freezes Owner's Assets & Appoints Receiver -------------------------------------------------------------- Various business of John W. Beakley, a Lubbock, Texas-based account, are subject to bankruptcy or receivership proceedings commenced earlier this month after Mr. Beakley was accused in a lawsuit of securities fraud. Walt Nelt at Avalanche-Journal reports that a federal judge has froze all of Mr. Beakley's assets and named Fernando M. Bustos as receiver to take control of Mr. Beakley's businesses, after a family allowed Mr. Beakley to manage as much as $10 million and then sued the accountant alleging securities fraud. The report says attorneys for Samuel K. Douglass and his sons, Mark, Timothy and Scott, filed the suit and asked for orders immediately freezing assets and naming a receiver, because they believed Mr. Beakley's business structure was in imminent danger of collapsing from the threat of federal tax liens and unpaid franchise fees to American Dairy Queen. According to the report, the lawsuit accuses Mr. Beakley, owner of the Beakley & Associates accounting firm, of mismanaging the family's money by placing it all into businesses he controlled and then drawing it out to enrich himself and family members through a variety of management fees and insider loans. The report notes the suit also contends Mr. Beakley jeopardized their capital by not paying federal payroll taxes, fast-food restaurant franchise fees and real estate rents. The complaint was filed in U.S. District Court in Lubbock March 1 and named 122 defendants mostly business entities as well as seven people. Hours after the suit was filed, the business entities overseeing Mr. Beakley's 85 Dairy Queen franchises in West Texas, New Mexico and Oklahoma filed Chapter 11 reorganization petitions with the U.S. Bankruptcy Court for the Eastern District of Texas. Because businesses in bankruptcy are protected from most litigation, they were removed from the receivership. The major business entities are: * Roundtable Corp. -- The business controls 85 Dairy Queen corporations Mr. Beakley controls. One of three entities to file Chapter 11 bankruptcy petitions, it was removed from the Douglass lawsuit by District Judge Sam R. Cummings. That portion of the suit could be re-opened after the bankruptcy is resolved. * Food Service Management -- A corporation related to Roundtable and the Dairy Queen holdings. It was the subject of a separate Chapter 11 filing. * Concert Management -- According to court documents, it is also a Dairy Queen-related business that at one time owned more than 30 locations. * I-27 Powersports -- Lubbock-based business that sells motorcycles and all-terrain vehicles. * I-27 Marine -- Lubbock-based boat dealership. * Ranchland Hills Golf Club and Ranchland Hills Country Club -- A golf and real estate venture in Midland. * MMPK Restaurants and Mama Mia Pizza Kitchen -- A defunct restaurant in Levelland. According to court documents, Mr. Beakley was holding on to the real estate with plans to re-open it as a Dairy Queen. * Tierra de Tejas Development -- a residential developer building neighborhoods in San Benito and Harlingen. The report, citing court documents, says the suit included a December 2010 financial statement in which Mr. Beakley estimated his net worth at more than $16 million. According to the report U.S. District Judge Sam R. Cummings agreed and sealed the suit, rather than giving Mr. Beakley notice his businesses were facing receivership. Federal civil procedure rules allow a judge to temporarily seal that kind of order if the plaintiff brings evidence that advance notice to the defendant could further reduce the asset value. Based in Dallas, Texa, Food Service Holdings Ltd aka Dairy Queen filed for Chapter 11 bankruptcy protection on March 1, 2012 (Bankr. E.D. Tex. Case No. 12-40510). Mark A. Weisbart, Esq., at The Law Offices of Mark A. Weisbart, represents the Debtor. The Debtor listed assets of less than $50,000, and estimated debts of between $1 million and $10 million. GAMETECH INT'L: Reports $858,000 Net Income in Jan. 29 Quarter -------------------------------------------------------------- GameTech International, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $858,000 on $8.25 million of net revenues for the 13-week period ended Jan. 29, 2012, compared with a net loss of $288,000 on $10.10 million of net revenues for the 13-week period ended Jan. 30, 2011. The Company's balance sheet at Jan. 29, 2012, showed $27.22 million in total assets, $22.88 million in total liabilities, all current, and $4.34 million in stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/0NvHCS About GameTech International Based in Reno, Nevada, GameTech develops and manufactures gaming entertainment products and systems. GameTech holds a significant position in the North American bingo market with its interactive electronic bingo systems, portable and fixed-based gaming units, and complete hall management modules. It also holds a significant position in select North American VLT markets, primarily Montana, Louisiana, and South Dakota, where it offers video lottery terminals and related gaming equipment and software. It also offers Class III slot machines and server-based gaming systems. The Company reported a net loss of $20.4 million on $35.2 million of revenue for the 52 weeks ended Oct. 31, 2010, compared with a net loss of $10.5 million on $47.8 million of revenue for the 52 weeks ended Nov. 1, 2009. Piercy Bowler Taylor & Kern, in Las Vegas, Nevada, expressed substantial doubt about GameTech International, Inc.'s ability to continue as a going concern. The independent auditors noted that the Company has suffered reoccurring losses from operations and has been unable to extend the maturity of its debt, or raise additional capital necessary to execute its business plan. GENERAL MARITIME: Wins 60 Days Exclusivity Extension ---------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that General Maritime Corp. is nearing agreement with unsecured creditors and large bondholders on a consensual Chapter 11 plan, an attorney for the Company said at a hearing Thursday, where it gained more time to exclusively file a plan. Law360 relates that U.S. Bankruptcy Judge Martin Glenn granted the debtor's motion to extend the exclusivity period by 60 days, during which time only it can file a Chapter 11 plan as it solicits further support and works out differences with the other parties. About General Maritime New York-based General Maritime Corporation, through its subsidiaries, provides international transportation services of seaborne crude oil and petroleum products. The Company's fleet is comprised of VLCC, Suezmax, Aframax, Panamax and product carrier vessels. The fleet consisted of 30 owned vessels and three chartered vessels. The company generates substantially all of its revenues by chartering its fleet to third-party customers. The largest customers include major international oil companies, oil producers, and oil traders such as BP, Chevron Corporation, CITGO Petroleum Corp., ConocoPhillips, Exxon Mobil Corporation, Hess Corporation, Lukoil Oil Company, Stena AB, and Trafigura. General Maritime and 56 subsidiaries filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-15285) on Nov. 17, 2011. Douglas Mannal, Esq., and Adam C. Rogoff, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, serve as counsel to the Debtors. Moelis & Company is the financial advisor. Garden City Group Inc. is the claims and notice agent. Prepetition, General Maritime reached agreements with its key senior lenders, including its bank group, led by Nordea Bank Finland plc, New York Branch as administrative agent, as well as affiliates of Oaktree Capital Management, L.P., on the terms of a restructuring. Under terms of the agreements, Oaktree will provide a $175 million new equity investment in General Maritime and convert its prepetition secured debt to equity. In conjunction with the filing, General Maritime has received a commitment for up to $100 million in new DIP financing from a group of lenders led by Nordea as administrative agent. Counsel for Nordea, as the DIP Agent and the Senior Agent, are Thomas E. Lauria, Esq., and Scott Greissman, Esq., at White & Case LLP. Counsel for Oaktree Capital Management, the Junior Agent, are Edward Sassower, Esq., and Brian Schartz, Esq., at Kirkland & Ellis, LLP. The Official Committee of Unsecured Creditors appointed in the case has retained lawyers at Jones Day as Chapter 11 counsel. Jones Day previously represented an ad hoc group of holders of the 12% Senior Notes due 2017 issued by General Maritime Corp. This representation began Sept. 20, 2011, and concluded Nov. 29, 2011, with the agreement of all members of the Noteholders Committee. The Creditors Committee also tapped Lowenstein Sandler PC as special conflicts counsel. The Noteholders Committee consisted of Capital Research and Management Company, J.P. Morgan Investment Management, Inc., J.P. Morgan Securities LLC, Stone Harbor Investment Partners LP and Third Avenue Focused Credit Fund. The Creditors Committee is comprised of Bank of New York Mellon Corporate Trust, Stone Harbor Investment Partners, Delos Investment Management, and Ultramar Agencia Maritima Ltda. The Company filed a proposed Chapter 11 plan on Jan. 31, 2012, to implement an agreement reached prepetition with affiliates of Oaktree Capital Management LP, the leader of a group of lenders on three credits totaling more than $1 billion. The Oaktree group is to invest $175 million while converting secured debt to equity. The Plan contemplates a $61.25 million rights offering where holders of general unsecured claims will have the opportunity to purchase up to 17.5% of the new equity of the reorganized Company. The hearing to consider approval of the Plan by the Bankruptcy Court is scheduled to commence on April 25, 2012. GENTIVA HEALTH: Moody's Affirms 'B3' CFR; Outlook Stable -------------------------------------------------------- Moody's Investors Service changed Gentiva Health Services, Inc.'s rating outlook to stable from negative and affirmed its B3 Corporate Family rating and Probability of Default ratings, its B1 senior secured credit facilities ratings and its Caa2 senior unsecured notes rating. The change in outlook to stable incorporates Gentiva's recent amendment to its Credit Agreement mitigating the company's risk of covenant default which previously seemed likely during 2012. The stable outlook also recognizes the absence of more severe reimbursement rate cuts over the near term. The Speculative Liquidity Rating was raised to SGL-3 from SGL-4 primarily as result of the improvement in covenant cushion over the next 12 to 15 months. The following ratings have been affirmed: Corporate Family Rating at B3; Probability of Default Rating at B3. $110 million senior secured revolver due 2015 at B1 (LGD3, 31%) $163 million senior secured term loan A due 2015 to B1 (LGD3, 31%) $540 million senior secured term loan B due 2016 to B1 (LGD3, 31%) $325 million unsecured notes due 2018 to Caa2 (LGD5, 85%) The following rating has been raised: The Speculative Liquidity Rating to SGL-3 from SGL- 4 The rating outlook is stable. RATINGS RATIONALE The B3 Corporate Family rating reflects constraints on Gentiva's revenues and profitability -- including Medicare reimbursement and costs associated with new regulatory requirements -- while leverage remains elevated following the Odyssey acquisition. The rating incorporates the company's very sizable exposure to Medicare and other government programs at around 90% of total revenues. Gentiva's credit metrics are also weak as a result of significant margin pressure that is difficult to offset completely with restructuring measures. Moody's expectation is for leverage to remain above 5 times debt-to-EBITDA as EBITDA deteriorates with anticipated rate cuts. (Moody's assumes Medicare rate cuts for home health of 2.39% in 2012 and 2% company-wide in 2013 alongside other costly issues including regulatory scrutiny.) In addition, lower free cash flow going forward has contributed to an erosion of value which leaves Moody's concerned about the very limited equity cushion in Gentiva's capital structure. In Moody's view, both the home healthcare and hospice sector will remain vulnerable to scrutiny and future revenue pressure from Medicare, in part due to ongoing concerns regarding fraud and abuse as well as the key role this sector will play in regard to the sizable aging US population. However, the rating also recognizes Gentiva's favorable scale, geographic diversity and market leadership in both home health and hospice, a still relatively fragmented market. Gentiva has about 4% and 6% market share in home health and hospice, respectively, and is likely to be a consolidator should its financial performance strengthen. The rating further considers the good long-term fundamentals in the hospice and home health industries which Moody's believes will continue to support volume growth. While debt-to-EBITDA leverage is expected to remain high, the rating incorporates Moody's view that the company will focus on deleveraging and cost control over the next several years. Notably, Gentiva's cash balance is good with well over $100 million likely despite $50 million in debt repayment in 2012. Moody's could downgrade the ratings if Gentiva's liquidity were to weaken again. Moody's could also lower the rating if the company cannot maintain positive free cash flow or if leverage were to continue substantially worsen and, more specifically, exceed 6 times debt-to-EBITDA. Moody's would also review the ratings if the reimbursement or regulatory environment were to worsen. If there were more certainty in regard Gentiva's financial performance outlook, profit margins were expected to improve following the company's restructuring efforts and liquidity remained sufficient, Moody's could upgrade the Corporate Family rating. Positive free cash flow would also need to be sustainable alongside debt-to-EBITDA leverage in the 5 times range. The principal methodology used in rating Gentiva Health Services, Inc. was the Global Healthcare Service Providers 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. GETTY IMAGES: Moody's Assigns 'Ba3' Rating to $275MM Term Loan -------------------------------------------------------------- Moody's Investor Services assigned a Ba3 rating and LGD3 -- 32% assessment to Getty Images, Inc.'s proposed incremental $275 million 1st lien senior secured term loan. Proceeds from the new debt facility along with more than $100 million of balance sheet cash will be used to fund a special dividend of approximately $380 million. Moody's also affirmed the Ba3 Corporate Family Rating (CFR), B1 Probability-of-Default Rating (PDR) and the Ba3, LGD3 -- 32% ratings on the company's 1st lien senior secured revolver due 2015 and the existing 1st lien senior secured term loan B due 2016. Assignments: Issuer: Getty Images, Inc. NEW Incremental $275 Million 1st Lien Senior Secured Term Loan due November 2015: Assigned Ba3, LGD3 -- 32% Unchanged: Issuer: Getty Images, Inc. Corporate Family Rating: Affirmed Ba3 Probability of Default Rating: Affirmed B1 $100 Million 1st Lien Senior Secured Revolver due November 2015: Affirmed Ba3, LGD3 -- 32% Existing 1st Lien Senior Secured Term Loan B due November 2016 ($1,245 million outstanding): Affirmed Ba3, LGD3 -- 32% RATINGS RATIONALE The Ba3 corporate family rating incorporates the proposed increase in debt balances by $275 million to partially fund its planned dividend. The new incremental term loan results in moderately high debt-to-EBITDA leverage of 4.3x (including Moody's standard adjustments) estimated for LTM ended March 31, 2012, compared to 3.5x pre-dividend, with free cash flow-to-debt ratios falling to 10.5% over the rating horizon from 13.5% in FY2011. Liquidity is also reduced given the reduction in cash balances of more than $100 million. Moody's notes that in the absence of acquisitions or distributions, debt-to-EBITDA ratios could improve by 0.5x over the next 12 months as free cash flow is applied to reduce debt balances. Ratings incorporate Moody's expectations for a mild recession in Europe (the EMEA regions account for 38% of revenues) and weaker demand for advertising related imagery products in this region in combination with continued economic recovery in the U.S. (the Americas account for 51% of revenues). Ratings are constrained by Getty Images' track record for increasing term loan balances to fund dividends as well as the potential for debt financed acquisitions. Moody's believes event risk is high based on the company's shareholder-friendly financial policies, acquisitive nature, and eventual decision by Hellman & Friedman to pursue an exit strategy (original LBO closed in July 2008). Consequently, leverage could rise above current levels over the rating horizon. Ratings are supported by Getty Images' leading market position in the stock imagery market, geographic diversification of its customer base, stable EBITDA margins, and free cash flow generation. The company's ratings also consider the mature stage of its traditional higher quality creative stills business, the increasing supply of lower priced digital imagery, as well as potential threats from existing and new competitors or technologies. Although Getty Images is a leader in its field and is strong in the higher end segment, Moody's believes barriers to entry are lower for the price sensitive segments. Increased demand for the company's lower priced imagery products historically offset weakness in the traditional segment; however, there are risks related to the potential for increased competition, especially in the stock imagery segment. Getty Images' video and music businesses provide some revenue diversification away from still photography; however, their combined sales represent less than 11% of total revenues. Accordingly, Moody's believes it is important that Getty Images reduce debt balances to increase financial flexibility to make the necessary investments in its products and services to retain its leading position in photography especially in a scenario of increasing competition globally. The stable outlook reflects Moody's expectation that demand for Getty Images' lower priced imagery products and other services will largely offset mature demand for the company's traditional imagery business. Moody's also believes Getty Images' consolidated revenues will modestly increase in 2012 tracking Moody's expectations for low to mid single-digit GDP growth through the end of 2012 in the U.S. and slightly negative GDP growth in Europe, and that free cash flow will be applied to reduce term loan balances. The stable outlook also reflects Moody's expectation that debt-to-EBITDA leverage ratios will decrease below current levels allowing for continued tuck-in acquisitions funded from excess cash or short term revolver advances. The outlook does not incorporate additional significant dividends or sizable debt financed acquisitions over the rating horizon. Moody's assumes liquidity will remain good despite some use of cash or temporary revolver advances to fund potential tuck-in acquisitions. Ratings could be downgraded if overall performance were to deteriorate due to increased competition or weak demand resulting in declining revenues, erosion in EBITDA margins or reduced cushion to financial covenants. Another leveraging event, including sizable debt financed acquisitions, distributions or share repurchases resulting in debt-to-EBITDA ratios rising above 4.50x (including Moody's standard adjustments) could lead to a downgrade. While unlikely due to the company's shareholder- friendly policies demonstrated by the proposed $380 million dividend, as well as the $504 million dividend at the end of 2010, ratings could be considered for an upgrade if debt-to-EBITDA leverage ratios were to be sustained below historical levels. Management would need to provide assurances that operating and financial policies would be consistent with the higher rating. The principal methodology used in rating Getty Images, Inc was the Global Business & Consumer Service Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Getty Images, Inc. is a leading creator and distributor of still imagery, video and multimedia products, as well as a recognized provider of other forms of premium digital content, including music. The company provides stock images, music, video and other digital content through several web sites, most notably gettyimages.com, istockphoto.com, jupiterimages.com, and thinkstock.com. Getty Images is a portfolio company of Hellman & Friedman LLC as a result of the 2008 acquisition in a transaction valued at $2.4 billion. Another major shareholder is a trust representing certain Getty family members. Revenues totaled approximately $945 million through the 12 months ended December 2011. The company is headquartered in Seattle, Washington. GRUBB & ELLIS: Aims to Halt Arbitration in Dispute with Investor ---------------------------------------------------------------- American Bankruptcy Institute reports that Grubb & Ellis Co. is trying to dodge an approaching arbitration hearing over a $25 million dispute with investors who are upset over real-estate bets they made through the real-estate brokerage firm's securities division. 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: Common Stock Delisted from NYSE ---------------------------------------------- The New York Stock Exchange LLC filed with the U.S. Securities and Exchange Commission a Form 25 notifying the Commission of the removal from listing or registration of Grubb & Ellis Co.'s common stock on the Exchange. 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 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-10685) on Feb. 21, 2012, to sell almost all its assets to BGC Partners Inc., absent higher and better offers. 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: Committee Taps FTI Consulting as Financial Advisor ---------------------------------------------------------------- BankruptcyData.com reports that Grubb & Ellis' official committee of unsecured creditors filed with the U.S. Bankruptcy Court a motion to retain FTI Consulting (Contact: Samuel E. Star) as financial advisor at these hourly rates: senior managing director at $780 to $895, director/managing director at $560 to $745, consultant/senior consultant at $280 to $530 and administrative/paraprofessional at $115 to $230. 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. GWR OPERATING: Moody's Affirms 'Caa1' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service affirmed the ratings of GWR Operating Partnership, L.L.L.P.'s (GWR) , including its Caa1 Corporate Family Rating (CFR) and Probability of Default Rating (PDR) and the B3 rating for its $230 million guaranteed first mortgage notes due 2017. In addition, Moody's changed GWR's outlook to developing from stable, which was prompted by the announcement of Great Wolf Resorts Inc. (the parent company of GWR) that it entered into a definitive merger agreement with an affiliate of Apollo Global Management, LLC. RATINGS RATIONALE The change in outlook to developing reflects the uncertainty at this time in regards to the timing, ultimate terms and conditions, and the final mix between debt and equity of the transaction if the sale of GWR were actually consummated. The affirmation of the Caa1 CFR reflects GWR's high leverage and weak interest coverage, as well as its modest scale, limited diversification, and high operating leverage given its fixed cost base. The ratings are supported by the company's solid brand recognition, good asset value relative to the first mortgage notes, and adequate liquidity. Ratings affirmed are: Corporate Family Rating at Caa1 Probability of Default Rating at Caa1 $230 million guaranteed first mortgage notes due 2017 at B3 (LGD 3, 33%) Speculative Grade Liquidity Rating rated SGL-3 Factors that could result in a downgrade include a prolonged or more severe decline in operating performance, a slower than expected ramp-up of newer properties, an increase in financial leverage due to a buyout or acquisition, or any event that causes the company's overall probability of default to increase. Factors that could result in a higher rating would include a sustained improvement in operating performance, successful ramp-up of newer properties, and a material and sustained improvement in debt protection measures. Specifically, an upgrade would require debt to EBITDA of under 7.0 times and EBITDA minus capital expenditures to gross interest well above 1.1 times on a sustained basis. The principal methodology used in rating GWR Operating Partnership was the Global Lodging & Cruise Industry Rating 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. GWR Operating Partnership, L.L.L.P.'s (GWR) is a wholly owned subsidiary of Great Wolf Resorts, Inc., (Great Wolf) which owns, operates, and/or manages hotel resort properties specializing in in-door water parks. Annual revenues are approximately $300 million. HAMPTON ROADS: Terminates Bank Sale Agreement with Carolina Bank ---------------------------------------------------------------- Hampton Roads Bankshares, Inc., the holding company for The Bank of Hampton Roads and Shore Bank, announced the mutual termination of an agreement dated July 14, 2011, between BHR and The East Carolina Bank, the wholly-owned subsidiary of ECB Bancorp. Inc., under which ECB was to purchase all deposits and selected assets associated with seven Gateway Bank branches in North Carolina. The branches included in the agreement were Preston Corners, Plymouth, Roper, Chapel Hill, Falls of Neuse, Lake Boone and Wilmington. BHR has initiated a process to seek an alternative buyer or buyers for the Preston Corners, Chapel Hill, Falls of Neuse, Lake Boone and Wilmington branches. In the interim, these branches will maintain full operations. Under the terms of the original agreement with ECB, BHR planned to close the Roper branch and consolidate its accounts into the Plymouth branch. BHR has received regulatory approval from the Federal Reserve Bank of Richmond to proceed with this branch consolidation and expects to complete the account transfers and close the Roper branch by April 13, 2012. With the termination of the agreement with ECB, BHR plans to retain ownership of the Plymouth branch. About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and fifteen ATMs. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company said in its Form 10-Q for the Sept. 30, 2010 quarter that due to its financial results, the substantial uncertainty throughout the U.S. banking industry, and the Written Agreement the Company and BOHR have entered into, doubts existed regarding the Company's ability to continue as a going concern through the second quarter of 2010. However, management believes this concern has been mitigated by the initial closing of the Private Placement that occurred on Sept. 30, 2010. The 2010 results did not include a going concern qualification from Yount Hyde. The Company's balance sheet at Sept. 30, 2011, showed $2.43 billion in total assets, $2.30 billion in total liabilities, and $135.67 million in total shareholders' equity. The Company reported a net loss of $98 million on $100.79 million in interest income for the year ended Dec. 31, 2011, compared with a net loss of $210.35 million on $122.19 million in interest income during the prior year. HANMI FINANCIAL: Reports $28.1 Million Net Income in 2011 --------------------------------------------------------- Hanmi Financial Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing net income of $28.14 million on $128.80 million of total interest and dividend income for the year ended Dec. 31, 2011, compared with a net loss of $88.01 million on $144.51 million of total interest and dividend income during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $2.74 billion in total assets, $2.45 billion in total liabilities and $285.61 million in total stockholders' equity. Going Concern At Dec. 31, 2011, the Bank had a tangible stockholders' equity to total tangible assets ratio of 12.48 percent. Accordingly, the Company is in compliance with the Final Order. Pursuant to the Written Agreement, the Company is also required to increase, and is required to maintain, sufficient capital at the Company and at the Bank that is satisfactory to the Federal Reserve Bank. Should the Company's asset quality erode and require significant additional provision for credit losses, resulting in consistent net operating losses at the Bank, the Company's capital levels will decline and the Company will need to raise capital to satisfy its agreements with the regulators and any future regulatory orders or agreements the Company may be subject to. The Bank is subject to additional regulatory oversight as a result of a formal regulatory enforcement action issued by the Federal Reserve Bank and the California Department of Financial Institutions. On Nov. 2, 2009, the members of the Board of Directors of the Bank consented to the issuance of the Final Order from the California Department Financial Institutions. On the same date, the Company and the Bank entered into the Written Agreement with the Federal Reserve Bank. Under the terms of the Final Order and the Written Agreement, the Bank is required to implement certain corrective and remedial measures under strict time frames. A copy of the Form 10-K is available for free at: http://is.gd/qGZK0e About Hanmi Financial Headquartered in Los Angeles, California, Hanmi Financial Corp. (Nasdaq: HAFC) -- http://www.hanmi.com/-- is the holding company for Hanmi Bank, a state chartered bank with headquarters located at 3660 Wilshire Boulevard, Penthouse Suite A, in Los Angeles. Hanmi Bank provides services to the multi-ethnic communities of California, with 27 full-service offices in Los Angeles, Orange, San Bernardino, San Francisco, Santa Clara and San Diego counties, and a loan production office in Washington State. HEARTSTONE HOME: Home Buyers Alerted of Possible Bankruptcy Impact ------------------------------------------------------------------ Cindy Gonzalez at Omaha World-Herald reports that more than 8,000 people have been notified by court officials that they could be affected by the debt and Chapter 11 bankruptcy case of HearthStone Homes. Most of those alerted purchased a HearthStone home in the last decade that might still be covered by a warranty. Others are vendors and firms owed money by the 40-year-old volume homebuilder. Ms. Gonzalez, citing court documents, also reports that HearthStone Home's biggest debt is a $17.5 million overdue loan with Wells Fargo Bank. Next is Christensen Lumber for about $975,000, and WP Plumbing for about $320,000. The report says, about 300 construction liens have been filed by vendors in Douglas County, Nebraska. An additional 200 have been filed in Sarpy County, Nebraska, since Dec. 24. Hearthstone Homes, Inc., filed a Chapter 11 petition in Omaha, Nebraska (Bankr. D. Neb. Case No. 12-80348) on Feb. 24, 2012. ketv.com reported that HearthStone Homes filed for Chapter 11 bankruptcy protection after a deal to sell the company fell through. Hearthstone Homes' principal business activities have been the purchase, development and sale of residential real property for 40 years. Chief Judge Thomas L. Saladino presides over the case. The Debtor is represented by Robert F. Craig, P.C. Hearthstone estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. Wells Fargo N.A., the primary lender, is represented by lawyers at Croker Huck Kasher DeWitt Anderson & Gonderinger LLC. HERCULES OFFSHORE: Files Fleet Status Report as of March 15 ----------------------------------------------------------- Hercules Offshore, Inc., on March 15, 2012, posted on its Web site at www.herculesoffshore.com a report entitled "Hercules Offshore Fleet Status Report". The Fleet Status Report includes the Hercules Offshore Rig Fleet Status (as of March 15, 2012), which contains information for each of the Company's drilling rigs, including contract dayrate and duration. The Fleet Status Report also includes the Hercules Offshore Liftboat Fleet Status Report, which contains information by liftboat class for February 2012, including revenue per day and operating days. The Fleet Status Report is available for free at http://is.gd/Cwd3iI About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. The Company reported a net loss of $76.12 million in 2011, a net loss of $134.59 million in 2010, and a net loss of $91.73 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $2 billion in total assets, $1.09 billion in total liabilities, and $908.55 million in stockholders' equity. * * * The Troubled Company Reporter said on Nov. 17, 2010, Moody's Investors Service downgraded the Corporate Family Rating of Hercules Offshore Inc. and the Probability of Default Rating to Caa1 from B2. Moody's also downgraded Hercules' 10.5% senior secured notes due 2017, its senior secured revolving credit facility due 2012, and its senior secured term loan B due 2013, all to Caa1 with LGD3, 45%. The outlook remains negative. "The inability of Hercules to generate meaningful free cash flow despite limited reinvestment in its aging fleet of rigs is cause for concern," commented Stuart Miller, Moody's Senior Analyst. "Without a significant de-leveraging of its balance sheet, Hercules is following a path that could lead to financial hardship at the first sign of a market softening." Hercules' Caa1 CFR rating reflects its highly leveraged balance sheet and limited ability to generate free cash flow. The Caa1 rating on the senior secured notes reflects their pari passu secured position in Hercules' capital structure relative to the senior secured credit facilities. As reported by the TCR on Jan. 23, 2012, Standard & Poor's Ratings Services revised its outlook on Houston-based Hercules Offshore Inc. to stable from negative and affirmed its 'B-' corporate credit rating on the company. "The rating on the company's senior secured credit facility remains 'B-' (the same as the corporate credit rating on the company) with a recovery rating of '3', indicating our expectation of a meaningful (50% to 70%) recovery in the event of payment default," S&P said. "Our ratings on Hercules reflect its participation in the highly volatile and competitive shallow-water drilling and marine services segments of the oil and gas industry. The ratings also incorporate our expectation that day rates and utilization for the company's jack-up rigs in the U.S. Gulf of Mexico will remain robust throughout 2012. Moreover, we expect the company's domestic offshore operations will provide the majority of EBITDA generation in 2012, since its international offshore segment will perform more weakly compared with 2011 due to lower contract renewal day rates reflecting current market conditions. The ratings also incorporate the company's geographic and product diversification (provided by the its liftboat segments) and adequate liquidity, as well as the risks associated with the Securities and Exchange Commission's investigation into possible violations of securities law, including possible violations of the Foreign Corrupt Practices Act. The company is also the subject of a review by the U.S. Department of Justice (DOJ)," S&P said. HOMBURG INVEST: Obtains CCAA Extension Until May 31 --------------------------------------------------- Homburg Invest Inc. obtained an order from the Superior Court under the Canadian Companies' Creditors Arrangement Act ("CCAA") further extending the CCAA protection granted to Homburg Invest and certain of its affiliates on Sept. 9, 2011 and as extended on Oct. 7, 2011 and Dec. 8, 2011. The extension will be in effect until May 31, 2012, at which time the matter will be reviewed by the Court. The order received will give Homburg Invest additional time to further develop a restructuring plan for the benefit of all stakeholders, including its creditors and bondholders. The CCAA process is carried out under the supervision of the Superior Court, which appointed SamsonBelair/Deloitte & Touche Inc. as independent monitor to oversee proceedings (the "Monitor"). The Monitor provides oversight of Homburg Invest's business and assists the Company in preparing its restructuring plan. All Courts applications and orders as well as a copy of the Monitor's reports are posted by the Monitor on its website at the following address: http://www.deloitte.com/ca/homburg-invest. The Monitor's contact information is also available on its website. As previously announced, Homburg Invest launched a website with additional information about the CCAA process on September 12. The address of the website is: www.homburginvestinformation.ca or www.homburginvestinformatie.nl/ There is also a toll-free information line that Dutch residents may call to receive additional information about the CCAA process. The toll-free number for this information line is: 0800 023 0323. About Homburg Invest Homburg Invest Inc. owns and develops a diversified portfolio of quality commercial real estate including office, retail, industrial and development properties throughout Canada, Europe and the United States. Homburg Invest Inc. and certain of its subsidiaries in September 2011 applied to a Canadian Court for protection under the Companies' Creditors Arrangement Act. Deloitte & Touche LLP is the proposed Court-appointed monitor that will oversee the proceeding under the CCAA. HORIZON LINES: Notice of Change Resulting From NYSE Delisting ------------------------------------------------------------- Horizon Lines, Inc., notified holders of its 6.00% Series A Convertible Senior Secured Notes due 2017 and its 6.00% Series B Mandatorily Convertible Senior Secured Notes due 2017 that a Fundamental Change occurred on March 11, 2012, as a result of its shares of common stock ceasing to be listed on the New York Stock Exchange. In accordance with Section 14.08 of the Indenture governing the Convertible Notes, dated Oct. 5, 2011, the Conversion Rate will not be increased by additional shares of common stock of the Company in connection with this Fundamental Change. About Horizon Lines Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the nation's leading domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. The Company provides express trans-Pacific service between the U.S. West Coast and the ports of Ningbo and Shanghai in China, manages a domestic and overseas service partner network and provides integrated, reliable and cost competitive logistics solutions. The Company's balance sheet at Sept. 25, 2011, showed $677.4 million in total assets, $801.7 million in total liabilities, and a stockholders' deficit of $124.3 million. Ernst & Young LLP, in Charlotte, North Carolina, expressed substantial doubt Horizon Lines' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 26, 2010. The independent auditors noted that there is uncertainty that Horizon Lines will remain in compliance with certain debt covenants throughout 2011 and will be able to cure the acceleration clause contained in the convertible notes. "The Company believes the Oct. 5, 2011 refinancing transactions more fully described in Note 18 to these financial statements have resolved the concern as to compliance with debt covenants throughout the remainder of 2011," the Company said in the filing. "In addition, the Company believes it will be in compliance with its debt covenants through 2012." Refinancing The Company was not in compliance with the maximum senior secured leverage ratio and the minimum interest coverage ratio under its Senior Credit Facility at the close of its third fiscal quarter ended Sept. 25, 2011. Non-compliance with these financial covenants constituted an event of default, which could have resulted in acceleration of the maturity. None of the indebtedness under the Senior Credit Facility or Notes was accelerated prior to the completion of a comprehensive refinancing on Oct. 5, 2011. The Senior Credit Facility and 99.3% of the 4.25% Convertible Senior Notes were repaid as part of the refinancing. In addition, as a result of the completion of the refinancing, the short-term obligations under the Senior Credit Facility, the Notes and the Bridge Loan have been classified as long-term debt. As a result of the efforts to refinance the Company's debt and the 2011 amendments to the Senior Credit Facility, the Company paid $17.3 million in financing costs and recorded a loss on modification of debt of $0.6 million during 2011. * * * As reported by the TCR on Aug. 26, 2011, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Horizon Lines Inc. to 'SD' from 'CCC'. The rating action on Horizon Lines follow the company's decision to defer the interest payment on its $330 million senior convertible notes due August 2012, exercising the 30-day grace period. "Under our criteria, we view failure to make an interest payment within five business days after the due date for payment a default, regardless of the length of the grace period contained in an indenture," said Standard & Poor's credit analyst Funmi Afonja. HOST HOTELS: Fitch Rates $350 Million Senior Notes 'BB' ------------------------------------------------------- Fitch Ratings assigns a 'BB' rating to the $350 million aggregate principal amount 5.25% private placement senior notes due 2022 priced by Host Hotels & Resorts, L.P., the sole general partner of Host Hotels & Resorts, Inc. (NYSE: HST). The offering is expected to close on March 22, 2012. The net proceeds of the offering of approximately $344 million will be used to repay the $113 million principal amount outstanding of the 7.5% mortgage secured by the JW Marriott in Washington, D.C.; and to redeem $250 million of its 6.875% series S senior notes due 2014. Fitch currently rates the company as follows: Host Hotels & Resorts, Inc. -- Issuer Default Rating (IDR) 'BB'. Host Hotels & Resorts, L.P. -- IDR 'BB'; -- Bank credit facility 'BB'; -- Senior notes 'BB'; -- Exchangeable senior debentures 'BB'. The Rating Outlook is Stable. In Fitch's view, Host's credit metrics will remain appropriate for the 'BB' rating through the economic cycle. The rating reflects the continued solid recovery in lodging demand trends, despite the global macroeconomic risk environment. Fitch expects industry- wide U.S. revenue per available room (RevPAR) to increase 4%-5% in 2012, with Host growing in line with the industry average. Lodging demand will be supported by low U.S. supply growth of less than 1% in 2012-2013, well below the long-term historical average of 2.1%. Fitch expects Host's lodging portfolio to continue to improve in 2012. Fitch anticipates that Host's leverage will decline and fixed charge coverage will continue to increase as sector-wide operating fundamentals remain strong but remain at levels consistent with the 'BB' rating. RevPAR and related food and beverage revenue growth, along with incremental EBITDA from stabilized property acquisitions in 2011 should also help grow EBITDA. The rating takes into consideration credit concerns including the potential that economic weakness could jeopardize RevPAR growth potential and the implicit volatility of lodging earnings. Host's recurring operating EBITDA has not yet recovered from the comparable RevPAR declines of 19.9% in 2009 despite growth of 5.8% in 2010 and 6.1% in 2011; it remains about 25% below 2008 levels. Leverage has improved to 5.0 times (x) for 2011 as compared to 5.4x for 2010. Fitch expects leverage to decline to between 4.5x and 3.5x in 2012 and 2013, after rising to 5.6x in 2009 from 3.6x in 2007. In a more adverse case than currently anticipated by Fitch, leverage could rise above 6.0x over the next 12-to-24 months, which would be consistent with a rating lower than 'BB'. Fitch defines leverage as net debt to recurring operating EBITDA. Fitch projects that Host's fixed charge coverage ratio, which declined to 1.7x in 2009 from 2.6x in 2008 and rose to 1.9x in 2011, to improve to between 2.5x and 3.0x in 2012 and 2013 due to favorable fundamentals and reduced interest expense on the senior notes due 2022. In a more adverse case than anticipated by Fitch, coverage could decline below 2.0x over the next 12-to-24 months, which would be commensurate with a rating lower than 'BB'. Fitch defines fixed charge coverage as recurring operating EBITDA less renewal and replacement capital expenditures, divided by cash interest expense and capitalized interest. Host's liquidity position is solid and is expected to remain so. For the period Jan. 1, 2012 to Dec. 31, 2013, Host's sources of liquidity (cash, availability under its revolving credit facility, and projected retained cash flows from operating activities after dividends and distributions and adjusting for the company's increased dividend) exceed uses of liquidity (debt maturities and amortization, pro forma for the repayment of the $113 million JW Marriott DC mortgage due 2013, and projected renewal and replacement capital expenditures) by 1.9x, which is appropriate for the rating. Fitch estimates that Host would have a breakeven liquidity ratio even if its retained cash flow is minimal. Host has a manageable near-term debt maturity schedule with less than 12% of total debt maturing through 2013. However, 2014 and 2015 debt maturities are 15% and 20% of total debt per year, respectively. During 2009, management took steps to raise various sources of capital, which improved Host's financial position. Fitch expects the company to continue to methodically address upcoming maturities. Company management prudently accessed the capital markets in November 2011 to issue $300 million 6% series Y senior notes to pre-fund the maturing $388 million 2027 debentures expected to be put to the company on April 15, 2012. Host maintains a high-quality, geographically dispersed hotel portfolio of 121 consolidated properties across 26 U.S. states, Australia, Brazil, Canada, Chile, Mexico, and New Zealand, of which 107 are unencumbered from mortgage debt. This portfolio provides significant financial flexibility and geographically diverse cashflow streams, which Fitch views positively. The company has added hotels in Australia, New Zealand and Brazil over the last two years, further diversifying its international presence. Host's luxury and upscale platform includes brands such as Marriott (54% of 2011 revenues), Westin (10%), Hyatt (9%), Sheraton (8%), and Ritz-Carlton (8%). Fitch anticipates that Host will outperform other lodging price points as they have demonstrated more upside than lower price points. Host continues to expand the portfolio through acquisitions. In January 2011, Host announced the $313 million purchase of the New York Helmsley Hotel that will be converted into a Westin by mid- 2012 and in February 2011 announced the $570 million purchase of the Manchester Grand Hyatt San Diego Hotel. With acquisitions, the company's unencumbered asset base has grown to 107 assets as of Dec. 31, 2011 from 102 assets the year prior. The company's unencumbered asset base provides further funding flexibility, which Fitch views positively. Based on a range of EBITDA multiples, unencumbered asset coverage of unsecured debt ranges from 2.4x to 3.2x, with a midpoint of 2.8x which Fitch views as strong for the 'BB' rating level. The Stable Outlook centers on Fitch's expectation that Host's credit profile will remain appropriate for the 'BB' rating through economic cycles, barring any significant changes in the company's capital structure. The Stable Outlook reflects the quality of Host's portfolio and unencumbered asset coverage that provides good downside protection to bondholders. Further, Host continues to access various sources of capital and maintains a solid liquidity profile. The following factors may result in positive momentum in the ratings and/or Rating Outlook: -- Sustained comparable RevPAR growth beyond Fitch's current forecast of positive 4% to 5% in 2012 and 2013; -- Net debt to recurring operating EBITDA sustaining below 4.0x through economic cycles (leverage was 5.0x for 2011); -- Fixed charge coverage sustaining above 2.5x through economic cycles (coverage was 1.9x in 2011). The following factors may result in negative momentum on the ratings and/or Rating Outlook: -- Net debt to recurring operating EBITDA sustaining above 5.0x; -- Fixed charge coverage sustaining below 1.5x; -- A base case liquidity coverage ratio sustaining below 1.0x (for Jan. 1, 2012 to Dec. 31, 2013, base case pro forma liquidity coverage was 1.9x). Headquartered in Bethesda, Maryland, Host Hotels & Resorts, Inc., is a lodging real estate investment trust focused on luxury and upper-upscale hotels. As of Feb. 22, 2012, the company owned 105 properties in the United States and 16 international properties located in Australia, Brazil, Canada, Chile, Mexico, and New Zealand totaling, approximately 65,000 rooms. The company also held non-controlling interests in joint ventures that own 13 hotels in Europe with approximately 4,200 rooms and another JV that will own a total of seven hotels totaling approximately 1,750 rooms. HOUSTON AMERICAN: Updates Status of the Tamandua #1 Well -------------------------------------------------------- Houston American Energy Corp provided an update on the status of the Tamandua #1 well and addressed the Company's status in light of various unfounded rumors. Regarding the Tamandua #1 sidetrack well, the Company anticipates that it will be able to announce the test results of the C-9 and C-7 formations in a matter of days as soon as the information is available. Regarding rumors currently circulating on message boards, John Terwilliger, Chairman and CEO of the Company, stated "There is a great deal of speculation and misinformation currently posted on message boards regarding our company. Specifically, I would note that we believe that we have more than adequate cash on hand to fund our portion of anticipated costs of testing and completion of the Tamandua #1 sidetrack well and carrying on with our business plan. Further, statements that we are on the verge of bankruptcy are wholly unfounded. We have no debt on our books and have, what we believe to be, a valuable portfolio of prospects. We remain optimistic about our CPO 4 prospect and other prospects in our portfolio." About Houston American Energy Corp Based in Houston, Texas, Houston American Energy Corp -- http://www.houstonamericanenergy.com/-- is an independent energy company with interests in oil and natural gas wells and prospects. The Company's business strategy includes a property mix of producing and non-producing assets with a focus on Colombia, Texas and Louisiana. Additional information can be accessed by reviewing our Form 10-K and other periodic reports filed with the Securities and Exchange Commission. HUMANA INC: Moody's Assigns '(P)Ba1' Rating to Subordinated Debt ---------------------------------------------------------------- Moody's Investors Service has assigned provisional debt ratings (senior debt at (P)Baa3) to Humana Inc.'s new shelf registration statement. The outlook on the ratings is stable. Humana maintains its shelf registration statement for general corporate purposes, including repayment or refinancing of debt, the financing of possible acquisitions or business expansion, or the repurchase of its common stock. Moody's said that the new shelf replaces Humana's previous shelf registration statement filed in March 2009. RATINGS RATIONALE Moody's said Humana's Baa3 senior unsecured debt rating and the A3 insurance financial strength ratings for Humana Insurance Company (HIC) and Humana Medical Plan, Inc. (HMP), are based on the combination of a historically consistent financial profile, highlighted by solid capital adequacy, stable earnings margins, and a moderate financial leverage ratio, together with a significant market position as a result of over 8.5 million medical members in 23 states and Puerto Rico. However, the company's risk profile is increased as a result of having a significant portion of its earnings and revenue dependent on its Medicare Advantage (MA) business. The rating agency stated that the ratings could be upgraded if EBITDA margins are sustained above 6%, if Humana's consolidated risk-based capital (RBC) ratio is maintained at or above 200% of company action level (CAL), if annual organic membership grows by at least 3% balanced between commercial and Medicare Advantage products, and if there is a more balanced distribution between Medicare and Commercial premiums. However, if annual medical membership declines by 25% or more, if adjusted financial leverage increases above 40%, if Medicare premiums account for over 70% of total premiums and fees, if there is a decrease in the consolidated RBC ratio below 150% of CAL, or if there is a loss or impairment of a major Medicare contract, Moody's said that the ratings may be downgraded. Moody's has assigned provisional debt ratings with a stable outlook to securities that may be issued under Humana's shelf registration statement as follows: Humana Inc. -- provisional senior unsecured debt at (P)Baa3; provisional subordinated debt at (P)Ba1; provisional preferred stock at (P)Ba2. Humana Inc., headquartered in Louisville, Kentucky, is a health care company serving almost 8.6 million medical members (excluding 2.5 million Standalone PDP members) as of December 31, 2011. For the year ending 2011, the company reported total revenues of approximately $36.8 billion with shareholders' equity as of December 31, 2011 of approximately $8.1 billion. INDUSTRIAL FIREDOOR: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Industrial Firedoor & Hardware Supply aka Industrial Firedoor Industrial Firedoor & Hardware 29 Grove Street South Hackensack, NJ 07606 Bankruptcy Case No.: 12-16471 Chapter 11 Petition Date: March 13, 2012 Court: U.S. Bankruptcy Court District of New Jersey (Newark) Judge: Rosemary Gambardella Debtor's Counsel: Robert A. Drexel, Esq. ROBERT A. DREXEL, ATTORNEY AT LAW Court Plaza South 21 Main Street East Wing, 3rd Floor Hackensack, NJ 07601 Tel: (201) 487-6000 Fax: (201) 487-1301 E-mail: robert@rdrexel.com Scheduled Assets: $293,239 Scheduled Liabilities: $1,011,957 The Company?s list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb12-16471.pdf The petition was signed by Steven Braverman, president. KRATON PERFORMANCE: Moody's Comments on Debt Issuance ----------------------------------------------------- Kraton Performance Polymers Inc. (Kraton -- Corporate Family Rating Ba3 -- Stable outlook) subsidiary Kraton Polymers LLC issued $100 million of new debt on March 15. The new notes represent a further issuance of the existing 6.75% Senior Notes due 2019, for a total of $350 million upon completion of the issuance. Proceeds from the $100 million issuance will be used for general corporate purposes which may include funding of the proposed joint venture with Formosa Petrochemical Corporation. The joint venture is planning to develop a 30 kiloton HSBC manufacturing facility in Taiwan. The new notes constitute an addition to an existing facility and do not impact the rating, however there are modest adjustments to the LGD assessments outlined below. The outlook is stable. Ratings List Kraton Performance Polymers, Inc. Corporate Family Rating, -- Ba3 Probability of Default Rating -- Ba3 Speculative Grade Liquidity Rating -- SGL2 Kraton Polymers LLC Gtd. Senior Secured Revolver due 2016 to Ba1, LGD2, 20% from Ba1, LGD2, 25% Gtd. Senior Secured Term Loan due 2016 to Ba1, LGD2, 20% from Ba1, LGD2, 25% Gtd. Senior Unsecured Notes due 2019 to B1, LGD5, 74% from B1, LGD5, 77% (Kraton Polymers Capital Corporation is a co-issuer of the notes) Outlook is Stable RATINGS RATIONALE The principal methodology used in rating Kraton was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Kraton Performance Polymers, Inc., (Kraton) headquartered in Houston, Texas, is a global producer of styrenic block copolymers (SBCs), which are synthetic elastomers used in industrial and consumer applications to impart favorable product characteristics such as flexibility, resilience, strength, durability and processability. Major end uses for Kraton's products include personal care products, packaging and films, IR Latex, adhesives, sealants, coatings, and compounds. Kraton also makes products that serve the paving and roofing industries. The company generated revenues of $1.4 billion for the fiscal year ending December 31, 2011. LEHMAN BROTHERS: Has $850MM from Neuberger Pref. Equity Interest ---------------------------------------------------------------- Lehman Brothers Holdings Inc. received $850 million from Neuberger Berman Group LLC in connection with the retirement of its entire outstanding preferred equity holding in Neuberger Berman. The funds will be available as anticipated for unsecured creditors when Lehman makes its initial distribution, scheduled for April 17, 2012. Lehman has disclosed previously that, when completed, its monetization of Neuberger Berman holdings will generate approximately $1.5 billion in aggregate proceeds -- almost double what would have been generated by a competing offer received post- bankruptcy in 2008. Combined with prior proceeds, LBHI has now received over $1 billion since completing this transaction, which represents the Lehman estate's largest monetization to date. At the Dec. 14, 2011 hearing before the United States Bankruptcy Court for the Southern District of New York, the transaction was described as a significant achievement for Lehman and a significant benefit for their creditors as well as illustrative of the strategy that the debtors have employed throughout these cases to enhance the Lehman estate's asset values. William J. Fox, serving as CFO of Lehman since February 2009 and as a director of Neuberger Berman representing Lehman's interest in Neuberger Berman, said: "This preferred share redemption is another important milestone in our continuing efforts to achieve maximum returns from our Neuberger Berman holdings. Importantly, this transaction provides an immediate and significant recovery to Lehman's creditors, and we expect to provide additional value to creditors as Neuberger Berman moves toward 100% employee ownership over the next few years." Neuberger Berman, established in 1939 and independent for most of its history, expects to utilize excess cash flow and additional employee investments over the coming 4-5 years to retire the Estate's remaining minority common interest in Neuberger Berman. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Terra Verde Group Purchases The Grove ------------------------------------------------------ The Terra Verde Group -- a real estate investment company focused on opportunistic and distressed assets -- disclosed the purchase of The Grove, a property south of Nashville, Tenn., that was formerly known as Laurel Cove. The property was part of the portfolio of Bermuda-based Lehman Re assets and was a casualty of the Lehman Brothers bankruptcy, the largest bankruptcy in U.S. history. The Grove is a partially completed residential community that began construction at the end of the last real estate cycle and was purchased from the Lehman bankruptcy trustee. Although initial invested capital was approximately $100 million, TVG purchased the property for $11.25 million and anticipates investing an additional $15 million in the property over the next two years, which will create more than 200 jobs during this same timeframe. Over the life of the project, The Grove is estimated to represent a communitywide investment of more than $750 million. "Considering recent trends in the real estate market, and the diversity of the economy in middle Tennessee, we certainly anticipate that we will continue to build on our record of success through our investment at The Grove," said Craig Martin, a Terra Verde partner. "The beauty of the property, the quality of the surrounding community and the strength of middle Tennessee's economy made this a solid opportunity that fits nicely with Terra Verde Group's ongoing strategy to bring distressed properties back to life," said Mark Enderle, a partner at Terre Verde Group. TVG is a seasoned real estate development company with a strong track record of successful asset purchases, including the previously closed transaction of more than 400 lots in Southern California out of the LandSource Communities Development bankruptcy and the recapitalization of The Ritz Carlton Residences at Dove Mountain near Tucson, Ariz. TVG was also the "stalking horse" bidder on the SunCal-Lehman Brothers bankruptcy in three California developments with total prior capital investment in excess of $400 million and sold at auction for $71 million. About Terra Verde Terra Verde Group, LLC, -- http://www.tvgllc.com/-- is a real estate investment firm focused on the purchase of opportunistic and distressed industrial, commercial and residential real estate assets. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Dimond Kaplan Alerts Investors of Rights --------------------------------------------------------- The national securities law firm of Dimond Kaplan & Rothstein, P.A alerts Lehman Brothers structured notes investors of their rights to file claims to recover investment losses. Lehman Brothers emerged from bankruptcy on March 6, 2012 and is expected to begin making distributions to creditors on April 17, 2012. Those creditors include investors in Lehman Brothers "100% Principal Protection," "Partial Protection," "Step-Up Callable," "Return Optimization," and "Absolute Return Barrier" notes. Many of these investors purchased the Lehman structured products from UBS. Unfortunately, bankruptcy distributions likely will return only about 20% of investors' investment losses. For many investors, the only way to recover the remaining 80% of their investments losses is through a FINRA arbitration claim. A distribution from the Lehman Brothers bankruptcy would not eliminate the right to file a FINRA arbitration claim to recover the remaining 80% of investors' losses. To date, many investors already have recovered money through FINRA arbitration claims against UBS and other banks and brokerage firms that sold Lehman structured products. Importantly, investors only have a limited amount of time to file a FINRA arbitration claim. If that time expires, investors who fail to file a timely claim could be prohibited from pursuing a claim to recover their remaining Lehman losses. Dimond Kaplan & Rothstein, P.A. has successfully represented numerous investors who lost money in Lehman Principal Protection Notes and other Lehman structured products. The law firm maintains offices in New York, Los Angeles, Miami, and West Palm Beach and we represent investors throughout the United States and Latin America. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEVEL 3: Longleaf to Swap $100MM Conv. Notes for 3.7-Mil. Shares ---------------------------------------------------------------- Level 3 Communications, Inc., has entered into an exchange agreement for its 15% Convertible Senior Notes due 2013 with Longleaf Partners Fund, a series of the Longleaf Partners Fund Trust, for which Southeastern Asset Management acts as investment adviser. Pursuant to the agreement, Longleaf Partners has agreed to exchange $100,062,000 aggregate principal amount of Level 3's outstanding 15% Convertible Senior Notes due 2013 for the 3,705,996 shares of Level 3's common stock into which the notes are convertible and currently deemed to be beneficially owned by Southeastern, plus an additional 1,741,133 shares for a total of 5,447,129 shares. The consideration is based on the market price for these notes plus a customary inducement premium and includes a payment for accrued and unpaid interest from Jan.15, 2012, through March 15, 2012, of approximately $2,500,000. This transaction does not include the payment by the company of any cash. In connection with the exchange transaction and effective upon closing, Level 3 and Southeastern will amend their existing Standstill Agreement to increase the maximum number of shares of Level 3 common stock that Southeastern is permitted to beneficially own during the term of the Standstill Agreement up to 49,840,000 shares from 46,000,000 shares. This amendment will permit Southeastern on behalf of its advisory clients to purchase approximately 4 million additional shares of the Company's common stock in the open market. Following the closing of the exchange transaction, $171,976,000 aggregate principal amount of the 15% Convertible Senior Notes due 2013 will remain outstanding. The 15% Convertible Senior Notes due 2013 are not callable prior to maturity in June 2013. "We believe that this transaction is positive for our company, as it represents another step in delevering the company's balance sheet, reduces our cash interest expense by approximately $15 million on an annualized basis, and allows Southeastern Asset Management, on behalf of its advisory clients, to purchase additional shares on the open market," said Sunit S. Patel, chief financial officer of Level 3. The closing of the exchange is subject to customary closing conditions. The shares of common stock to be issued under this agreement are exempt from registration pursuant to Section 3(a)(9) under the Securities Act of 1933, as amended. Level 3 will amend its Stockholder Rights Plan effective upon closing to exempt Southeastern from the Rights Plan, so long as Southeastern acquires any additional Level 3 shares in accordance with the Standstill Agreement. About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. The Company reported a net loss of $756 million in 2011, a net loss of $622 million in 2010, and a net loss of $618 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $13.18 billion in total assets, $11.99 billion in total liabilities, and $1.19 billion in total stockholders' equity. * * * Level 3 Communications carries a 'Caa1' corporate family rating, and 'Caa2' probability of default rating, with negative outlook from Moody's, a 'B-' issuer default rating from Fitch, and 'B-' long term issuer credit ratings from Standard & Poor's. LIBBEY INC: Reports $23.6 Million Net Income in 2011 ---------------------------------------------------- Libbey Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing net income of $23.64 million on $819.45 million of total revenues for the year ended Dec. 31, 2011, compared with net income of $70.08 million on $801.58 million of total revenues during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $790.15 million in total assets, $762.37 million in total liabilities and $27.78 million in total shareholders' equity. A copy of the Form 10-K is available for free at: http://is.gd/OADVVj About Libbey Inc. Based in Toledo, Ohio, since 1888, Libbey, Inc., operates glass tableware manufacturing plants in the United States in Louisiana and Ohio, as well as in Mexico, China, Portugal and the Netherlands. Libbey supplies tabletop products to foodservice, retail, industrial and business-to-business customers in over 100 countries. * * * On Oct. 28, 2009, Libbey restructured a portion of its debt by exchanging the old 16% Senior Subordinated Secured Payment-in- Kind Notes due December 2011 of subsidiary Libbey Glass Inc., having an outstanding principal amount as of October 28, 2009, of $160.9 million for (i) $80.4 million principal amount of new Senior Subordinated Secured Payment-in-Kind Notes due 2021 of Libbey Glass, and (ii) 933,145 shares of common stock and warrants exercisable for 3,466,856 shares of common stock of Libbey Inc. On Feb. 8, 2010, Libbey used the proceeds of a $400.0 million debt offering of 10.0% Senior Secured Notes due 2015 of Libbey Glass Inc., as well as cash on hand, to (i) repurchase the $306.0 million then outstanding Floating Rate Senior Secured Notes due 2011 of Libbey Glass, (ii) repay the $80.4 million New PIK Notes and (iii) pay related fees and expenses. Concurrent with the closing of the offering of the Senior Secured Notes, Libbey entered into an amended and restated $110 million Asset Based Loan facility which, among other terms, extended the maturity date to 2014. As reported by the TCR on Aug. 9, 2011, Standard & Poor's Ratings Services raised its corporate and senior secured debt ratings on Toledo, Ohio-based Libbey Inc. to 'B+' from 'B'. The rating outlook is stable. "The upgrade and stable outlook reflect our belief that Libbey will sustain its improved profitability and credit measures and maintain its adequate liquidity position," said Standard & Poor's credit analyst Rick Joy. This concludes the Troubled Company Reporter's coverage of Libbey's Inc. until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. LINWOOD FURNITURE: Wins OK to Pay Employee Obligations ------------------------------------------------------ Karen M. Koenig at Woodworking Network reports that an order from the U.S. Bankruptcy Court for the Middle District of North Carolina filed on March 8 designates Linwood CEO Michael Mebane to act on behalf of the corporation. Motions also were granted for Linwood to continue paying its employees and for continuation of utility service. The report relates Mr. Mebane said the bankruptcy filing should not affect the Company's 80 full-time employees or the production of its residential furniture or hospitality lines. Based in Linwood, North Carolina, Linwood Furniture LLC manufactures furniture for Bob Timberlake collections and others. The Company filed for Chapter 11 protection on March 5, 2012 (Bankr. M.D. N.C. Case No. 12-50319). Judge Catharine R. Aron presides over the case. John Paul H. Cournoyer, Esq., and John A. Northen, Esq., at Northen Blue LLP, represent the Debtor. The Debtor disclosed assets of $3,655,896, and liabilities of $6,894,292. LIQUIDMETAL TECHNOLOGIES: To Restate 2010 Financial Reports ----------------------------------------------------------- The Audit Committee of the Board of Directors of Liquidmetal Technologies, Inc., in consultation with the Company's independent registered public accounting firm, determined that the Company will restate its financial statements for the year ended 2010 as reported on the Company's annual report on Form 10-K for the year ended Dec. 31, 2010, and for the corresponding interim periods in fiscal 2011 for which the Company filed reports on Form 10-Q. Accordingly, the Company's prior financial statements for those periods should no longer be relied upon. Specifically, the Audit Committee, in consultation with the Company's independent registered public accounting firm, determined that certain of the Company's stock purchase warrants related to preferred stock issuances were not properly recorded in accordance with the Derivative and Hedging Topic of the FASB Accounting Standards Codification Topic 815, which became effective for the Company on July 1, 2009. Therefore, the Company intends to restate its consolidated financial statements as of and for the year ended Dec. 31, 2010, as well as the interim periods in fiscal 2011, by way of footnote disclosure in the Company's forthcoming Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2011. All of the restatement adjustments are non-cash in nature and not related to the Company's operations. About Liquidmetal Technologies Based in Rancho Santa Margarita, Calif., Liquidmetal Technologies, Inc. and its subsidiaries are in the business of developing, manufacturing, and marketing products made from amorphous alloys. Liquidmetal Technologies markets and sells Liquidmetal(R) alloy industrial coatings and also manufactures, markets and sells products and components from bulk Liquidmetal alloys that can be incorporated into the finished goods of its customers across a variety of industries. The Company also partners with third- party licensees and distributors to develop and commercialize Liquidmetal alloy products. The Company classifies operations into two reportable segments: Liquidmetal alloy industrial coatings and bulk Liquidmetal alloys. Choi, Kim & Park LLP, in Los Angeles, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The Company has experienced losses from continuing operations during the last three fiscal years and has an accumulated deficit of $165,879 as of Dec. 31, 2010. Net cash provided by continuing operations for the year ended Dec. 31, 2010 was $10,080. At Dec. 31, 2010, working capital deficit was $14,180. As of Dec. 31, 2010, the Company's principal source of liquidity is $5,049 of cash and $1,731 of trade accounts receivable. The Company's restated statement of operations reflects a net loss of $4.69 million on $30.27 million of revenue for the year ended Dec. 31, 2010, compared with net income of $251,000 on $16.94 million of revenue during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $10.50 million in total assets, $25.72 million in total liabilities and a $15.22 million total shareholders' deficiency. MEG ENERGY: Moody's Assigns 'Ba3' Rating to $1 Billion Revolver --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to MEG Energy Corp.'s US$1 billion senior secured revolver and affirmed the B1 Corporate Family Rating (CFR) and Probability of Default Rating (PDR), the Ba3 US$1 billion senior secured term loan rating and the B3 US$750 million senior unsecured notes rating. The revolver is being increased from US$500 million and extended a year to 2017 and this will bolster the company's liquidity. The Speculative Grade Liquidity rating of SGL-1 is unchanged. The rating outlook is stable. Downgrades: Issuer: MEG Energy Corp. Senior Secured Bank Credit Facility, Downgraded to 34 - LGD3, LGD3, 34% from 32 - LGD3, LGD3, 32% Senior Unsecured Regular Bond/Debenture, Downgraded to LGD5, 87% from LGD5, 86% Assignments: Issuer: MEG Energy Corp. Senior Secured Bank Credit Facility, Assigned a range of 34 - LGD3 to Ba3 Senior Secured Bank Credit Facility, Assigned a range of 34 - LGD3 to Ba3 Withdrawals: Issuer: MEG Energy Corp. Senior Secured Bank Credit Facility, Withdrawn, previously rated Ba3, LGD3, 32% Senior Secured Bank Credit Facility, Withdrawn, previously rated Ba3, LGD3, 32% RATINGS RATIONALE MEG's B1 CFR reflects its production of approximately 25,000 barrels per day (bbls/day) of bitumen and favorable steam oil ratio (SOR) of approximately 2.4, as well as the company's significant cash position, which along with cash flow should enable MEG to substantially construct and commission Phase 2B of the Christina Lake oil sands property, a 33,000 barrels per day expansion. (All production and reserves figures are net of royalties.) Phase 2B has an estimated capital cost of C$1.4 billion, of which about C$700 million has been spent through 2011. The rating also considers MEG's substantial reserves and land position in key productive areas of the Athabasca Oil Sands region, as well as 50% ownership of the Access pipeline. However, the rating also reflects a high debt level, the execution risk of constructing and ramping up Phase 2B to targeted levels through 2014, MEG's relatively small production base, and exposure to light/heavy differentials. The SGL-1 speculative grade liquidity rating reflects MEG's very good liquidity. At December 31, 2011 MEG had C$1.6 billion of cash and short term investments on hand. With an undrawn $1 billion revolver, which matures in 2017, MEG will have ample liquidity to cover 2012 negative free cash flow of about C$1 billion as it moves toward completion of Phase 2B. MEG has no financial covenants and reasonable sources of alternate liquidity if it chose to sell or joint venture its oil sands properties. The stable outlook considers MEG's successful achievement of production in excess of design capacity at Phases 1 and 2, its large cash position and 100% ownership of a large base of long- lived bitumen reserves. The rating could be considered for upgrade if Phases 1 and 2 continue to produce in the range of 25,000 bbls/day and Phase 2B advances toward targeted production at anticipated costs and timeline. The ratings could be downgraded if it becomes apparent that MEG is unable to maintain current production levels, if the operating economics of production deteriorate materially, or if Phase 2B construction runs considerably over budget or requires significant additional debt to complete. MEG is a Calgary, Alberta based publicly-held oil sands operating and project development company. METALDYNE CORP: Judge Denies Asahi's Bid to Nix $175M Pension Suit ------------------------------------------------------------------ Amanda Bransford at Bankruptcy Law360 reports that U.S. District Judge Amy Berman Jackson on Wednesday dealt a major blow to Asahi Tec Corp., parent of Metaldyne Corp., saying a $175 million lawsuit over Metaldyne's pension obligations could go forward because the court had jurisdiction to hear the matter. Judge Jackson denied Asahi's motion to dismiss for lack of jurisdiction, saying the court could exercise specific jurisdiction over the foreign corporation because Asahi had purposefully directed activity towards the U.S. when it acquired Metaldyne in 2007, according to Law360. About Metaldyne Corp. Metaldyne Corp. was a global designer and supplier of metal based components, assemblies and modules for transportation related powertrain applications including engine, transmission/transfer case, driveline, and noise and vibration control products to the motor vehicle industry. Metaldyne and its affiliates filed for Chapter 11 protection on May 27, 2009 (Bankr. S.D.N.Y. Case No. 09-13412). The filing did not include the company's non-U.S. entities or operations. Richard H. Engman, Esq., at Jones Day represented the Debtors in their restructuring. Judy A. O'Neill, Esq., at Foley & Lardner LLP served as conflicts counsel; Lazard Freres & Co. LLC and AlixPartners LLP as financial advisors; and BMC Group Inc. as claims agent. A committee of Metaldyne creditors was represented by Mark D. Silverschotz, Esq., and Kurt F. Gwynne, Esq., at Reed Smith LLP, and the committee tapped Huron Consulting Services, LLC, as its financial advisor. For the fiscal year ended March 29, 2009, the company recorded annual revenues of approximately US$1.32 billion. As of March 29, 2009, utilizing book values, the Company had assets of US$977 million and liabilities of $927 million. Judge Glenn approved the sale of substantially all assets to Carlyle Group in November 2009 for roughly $496.5 million, and confirmed the Debtors' liquidating chapter 11 plan on Feb. 23, 2010. Under the terms of the confirmed liquidation plan, Oldco M Distribution Trust is the post-confirmation entity charged with prosecuting all claim objections and distributing all plan assets pursuant to the terms of the plan. The Trust is represented by Kimberly E.C. Lawson, Esq., at Reed Smith LLP, in Wilmington, Del. METALDYNE CORP: DC Court Won't Dismiss ERISA Suit v Asahi Tec ------------------------------------------------------------- The U.S. District Court in Washington D.C. denied the request of Asahi Tec Corporation to dismiss a lawsuit filed by the Pension Benefit Guaranty Corporation over the Japanese firm's acquisition of Metaldyne Corp. The PBGC sued Asahi Tec under Title IV of the Employee Retirement Income Security Act of 1974. In 2007, Asahi Tec acquired U.S.-based company, Metaldyne Corporation. The complaint alleges that as a result of the acquisition, Asahi Tec became a "controlled group" member of Metaldyne and is therefore liable for the termination of Metaldyne's Pension Plan and for termination premiums. Asahi Tec moved to dismiss under Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction, arguing that the Court cannot exercise general or specific jurisdiction over the foreign corporation for the acts of its U.S. subsidiary. The Court, however, held that the PBGC has made a prima facie showing that Asahi Tec purposefully directed activity towards the United States in connection with the acquisition of Metaldyne and the attendant assumption of controlled group pension liability, and that the claims in the complaint arise directly out of that specific conduct. Therefore, the Court can exercise specific jurisdiction over Asahi Tec. The case is Pension Benefit Guaranty Corporation, Plaintiff, v. Asahi Tec Corporation, Defendant, Civil Action No. 10-1936 (D. D.C.). A copy of District Judge Amy Berman Jackson's Memorandum Opinion dated March 14, 2012, is available at http://is.gd/yF5g5r from Leagle.com. Asahi Tec established a wholly owned subsidiary in the United States and agreed to pay Metaldyne shareholders more than $200 million for their interest in Metaldyne stock. Asahi Tec approximated that the total consideration for the acquisition, including the refinancing of Metaldyne's debt, was $1.2 billion. The Pension Benefit Guaranty Corporation is represented by: James H. Boykin, III, Esq. Daniel S. Lubell, Esq. Derek J. T. Adler, Esq. HUGHES HUBBARD & REED LLP Tel: (202) 721-4751 Fax: (202) 721-4646 E-mail: boykin@hugheshubbard.com lubell@hugheshubbard.com adler@hugheshubbard.com Asahi Tec is represented by: Robert N. Eccles, Esq. Theresa S. Gee, Esq. Joanna L. Nairn, Esq. Scott T. Nonaka, Esq. O'MELVENY & MYERS LLP 1625 Eye Street, NW Washington, D.C. 20006 Tel: 202-383-5363 E-mail: beccles@omm.com jnairn@omm.com About Metaldyne Corp. Metaldyne Corp. was a global designer and supplier of metal based components, assemblies and modules for transportation related powertrain applications including engine, transmission/transfer case, driveline, and noise and vibration control products to the motor vehicle industry. Metaldyne and its affiliates filed for Chapter 11 protection on May 27, 2009 (Bankr. S.D.N.Y. Case No. 09-13412). The filing did not include the company's non-U.S. entities or operations. Richard H. Engman, Esq., at Jones Day represented the Debtors in their restructuring. Judy A. O'Neill, Esq., at Foley & Lardner LLP served as conflicts counsel; Lazard Freres & Co. LLC and AlixPartners LLP as financial advisors; and BMC Group Inc. as claims agent. A committee of Metaldyne creditors was represented by Mark D. Silverschotz, Esq., and Kurt F. Gwynne, Esq., at Reed Smith LLP, and the committee tapped Huron Consulting Services, LLC, as its financial advisor. For the fiscal year ended March 29, 2009, the company recorded annual revenues of approximately US$1.32 billion. As of March 29, 2009, utilizing book values, the Company had assets of US$977 million and liabilities of $927 million. Judge Glenn approved the sale of substantially all assets to Carlyle Group in November 2009 for roughly $496.5 million, and confirmed the Debtors' liquidating chapter 11 plan on Feb. 23, 2010. Under the terms of the confirmed liquidation plan, Oldco M Distribution Trust is the post-confirmation entity charged with prosecuting all claim objections and distributing all plan assets pursuant to the terms of the plan. The Trust is represented by Kimberly E.C. Lawson, Esq., at Reed Smith LLP, in Wilmington, Del. MF GLOBAL: Trustee Seeks Add'l Payouts to Former Customers ---------------------------------------------------------- James W. Giddens, the Trustee for the liquidation of MF Global Inc., filed a motion with the United States Bankruptcy Court for the Southern District of New York seeking authority for additional distributions to former MF Global Inc. commodities futures customers who traded on US exchanges, and for a first distribution to former MF Global Inc. commodities futures customers who traded on foreign exchanges. The Trustee is seeking authority for a distribution of up to approximately $600 million of customer property held as segregated by MF Global Inc. for its former commodities futures customers who traded on US exchanges (4d funds); up to approximately $50 million of customer property associated with commodity transactions in foreign markets (30.7 funds); and up to approximately $35 million of customer property to a domestic delivery class, which the Trustee has identified as consisting of physical customer property that has been or will be reduced to cash in any manner. So far, commodities customers have received approximately 72% of their 4d funds. Because the Trustee has recovered only a small portion of 30.7 funds to date, customers have yet to receive any distribution of 30.7 funds. The timing of the requested distributions is not currently known. The Court has to first approve the request and, if approved, the distributions would not be in bulk. The distributions would be made as part of the claims process and would occur on a rolling basis to individual commodities customers who filed claims by the January 31, 2012, deadline and have received and agreed to the Trustee's determination of their claims. "We believe that requesting an additional distribution is prudent and appropriate at this time and is consistent with our goal of returning as much customer property as possible, as quickly as possible, in a manner that is fair to all customers and that is consistent with the law," said Giddens. "We will also continue our efforts to recover additional assets for the former customers of MF Global Inc. in an efficient manner." The Trustee is required by the law to distribute customer property on a pro rata basis by class of customer property, and this distribution would take into account the three previous bulk transfers to former commodities customers, which were based on the unaudited books and records of MF Global Inc. While many claims have already been determined, the claims process is still underway and it is possible not all claimants will agree with the Trustee's determination. In addition, the Trustee anticipates he will likely have disputes with MF Global UK Limited and other affiliated MF Global companies that have filed claims against the MF Global Inc. estate. Until disputed claims are resolved, it will not be possible to determine the precise percentage of former commodities customers' finalized claims that will be distributed through this proposed distribution, but the Trustee expects that the three bulk transfers to date plus this distribution will lead to commodities customers receiving: Over 80% of each finalized claim for US commodities customers who traded on US exchanges; Over 80% of each finalized claim for delivery funds; Less than 10% of each finalized claim for US commodities customers who traded on foreign exchanges. This distribution would still allow the Trustee to maintain a proper reserve of funds for each class of customer property, including a reserve of approximately $700 million for 4d funds, approximately $40 million for 30.7 funds, and approximately $10 million for delivery funds. The Trustee is required by law to hold an appropriate reserve until disputed claims against the estate are either resolved through negotiation or by the Court. The Trustee has already distributed approximately $3.9 billion to former MF Global Inc. retail commodities customers who traded on US exchanges via three bulk transfers: Within days of the bankruptcy, the Trustee received court approval for the transfer of 10,000 commodities customer accounts with three million open positions, along with approximately $1.5 billion in collateral associated with those positions at the time of the bankruptcy. These open positions had a notional value of $100 billion. A serious disruption in markets was avoided by the transfer. A transfer of 60% of the cash attributable to approximately 15,000 customer commodity accounts with cash only in the accounts, totaling approximately $500 million, was completed in November. In December and January, a third transfer occurred that moved approximately $2 billion to restore 72% of US segregated customer property to all former MF Global Inc. retail commodities customers with US futures positions. At this time, the Trustee has mailed letters of determination to a majority of former MF Global Inc. commodities customers who submitted claims to the Trustee by the Jan. 31, 2012, deadline. Claims continue to be reviewed, and the Trustee will continue to issue determinations to claimants on a rolling basis. The determination letter will acknowledge the claim and provide a determination as to whether the claim has been allowed, denied, reclassified, or is subject to further reconciliation or information requests. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It was the largest bankruptcy filing in 2011. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on Dec. 19, 2011. MF Global Holdings USA Inc., doing business as Farr Whitlock Dixon & Co. Inc., and Man Group USA Inc., filed a Chapter 11 petition on March 2, 2012. Holdings USA provided administrative services to MF Ltd. and its domestic subsidiaries. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. Louis J. Freeh has been named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Trustee ha tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel; and (h) authorizing the Committee to retain and employ (i) Dewey & LeBoeuf LLP, as the Committee's counsel; and (ii) Capstone Advisory Group LLC as financial advisor. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: CRT Capital Affiliate to Hold Bi-Weekly Auctions ----------------------------------------------------------- CRT Special Investments LLC, an affiliate of CRT Capital Group LLC it will hold twice weekly auctions for MF Global Trade Claims. CRT is a Stamford-based broker-dealer that has serviced institutional customers for more than 20 years CRT Special Investments, which provides research and information on trade claim opportunities to customers and investors, will give holders of 4d, 30.7 or securities account claims the opportunity to auction their claims for the highest price, with a minimum equal to what is currently being offered by other market participants. "There are a number of firms offering to buy claims, but none have so far provided a transparent, fair mechanism to offer customers both attractive liquidity and the highest possible return," said Joe Sarachek, Managing Director of CRT Special Investments. "By offering twice weekly auctions, we are able to leverage our industry leading expertise and in-depth understanding of the MF Global bankruptcy process for the benefit of customers." CRT Special Investments, which was one of the first market participants involved in trading MF Global claims, has the expertise and knowledge of the market to not only offer liquidity to customers looking to sell, but also to structure loans and settlements for those customers who do not yet wish to sell their claims. About CRT Special Investments CRT Special Investments LLC, which is an affiliate of CRT Capital Group LLC, help clients identify alternative investment opportunities that have the potential to earn enhanced returns with a focus on identifying, structuring and executing bankruptcy- related investment opportunities, including preference, administrative and unsecured trade claims, DIP financings, exit financing and other structured products. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It was the largest bankruptcy filing in 2011. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on Dec. 19, 2011. MF Global Holdings USA Inc., doing business as Farr Whitlock Dixon & Co. Inc., and Man Group USA Inc., filed a Chapter 11 petition on March 2, 2012. Holdings USA provided administrative services to MF Ltd. and its domestic subsidiaries. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. Louis J. Freeh has been named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Trustee ha tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel; and (h) authorizing the Committee to retain and employ (i) Dewey & LeBoeuf LLP, as the Committee's counsel; and (ii) Capstone Advisory Group LLC as financial advisor. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MGM RESORTS: Offering $1 Billion 7.750% Senior Notes Due 2022 ------------------------------------------------------------- MGM Resorts International filed with the U.S. Securities and Exchange Commission a free writing prospectus offering an aggregate of $1 billion of 7.750% Senior Notes due 2022. The Notes will mature on March 15, 2022. Joint Book-Running Managers of the offering are Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., J.P. Morgan Securities LLC, and Wells Fargo Securities, LLC. The co-managers are: BNP Paribas Securities Corp. SMBC Nikko Capital Markets Limited Citigroup Global Markets Inc. Deutsche Bank Securities Inc. RBS Securities Inc. Morgan Stanley & Co. LLC UBS Securities LLC Commerz Markets LLC Scotia Capital (USA) Inc. A copy of the prospectus is available for free at: http://is.gd/noHlbN About MGM Resorts MGM Resorts International (NYSE: MGM) -- http://www.mgmresorts.com/-- has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, Illinois and Macau. The Company reported net income of $3.23 billion in 2011 and a net loss of $1.43 billion in 2010. The Company's balance sheet at Dec. 31, 2011, showed $27.76 billion in total assets, $17.88 billion in total liabilities and $9.88 billion in total stockholders' equity. Bankruptcy Warning Any default under the senior credit facility or the indentures governing the Company's other debt could adversely affect its growth, its financial condition, its results of operations and its ability to make payments on its debt, and could force the Company to seek protection under the bankruptcy laws. * * * As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on MGM Resorts International to 'B-' from 'CCC+'. "The rating upgrade reflects MGM's solid performance thus far in 2011, and our expectation that MGM will continue benefitting from improving performance trends on the Las Vegas Strip, particularly on the lodging side of the business," said Standard & Poor's credit analyst Ben Bubeck. "MGM maintains weak credit measures, including operating lease-adjusted debt to wholly owned EBITDA of over 11x and EBITDA coverage of interest of just 1.0x. Still, we believe recent strong performance trends are reducing refinancing risk in the company's intermediate- term debt maturities, and expect credit measures to continue to gradually improve modestly in 2012." In the Nov. 21, 2011, edition of the TCR, Moody's Investors Service upgraded MGM Resorts International's Corporate Family and Probability of Default ratings to B2, its senior secured rating to Ba2, and its senior unsecured notes to B3. MGM has an SGL-3 Speculative Grade. The B2 rating reflects Moody's view that continued earnings improvement at MGM's 51% owned Macau joint venture increases the likelihood of a dividend distribution that would help improve the company's liquidity profile. The B2 Corporate Family Rating also reflects Moody's view that positive lodging trends in Las Vegas will continue through 2012 and will help improve MGM's leverage and coverage metrics modestly. MGM RESORT: Fitch Rates Proposed Sr. Unsecured Notes 'B-/RR4' ------------------------------------------------------------- Fitch Ratings assigns a 'B-/RR4' rating to MGM Resort International's (MGM) proposed senior unsecured notes due 2022. The Rating Outlook is Stable, and Fitch will consider positive rating action, likely in the form of an Outlook revision, in upcoming quarters. The transaction follows February's amend and extend transaction, which extended $1.8 billion in credit facility commitments until February 2015. The proceeds from the notes will repay a portion of the $965 million that is owed to the term loan lenders as of March 14, 2014 that did not extend as part of the February 2012 amend and extend transaction. Fitch views the proposed transaction favorably as it further addresses MGM's steep maturity schedule. Combined with the recently announced Macau dividends ($204 million in proceeds) and $836 million in proceeds from the notes issued in January, the transaction should address all maturities through 2013 and at least the bulk of the amount outstanding on the non-extended facility coming due in February 2014. Additional potential sources include $188 million in the Borgata divestiture trust, future Macau dividends and free cash flow (FCF) generated by the domestic group. Fitch expects the domestic group to generate between $50 million - $150 million per year in FCF over the next two years. Free cash flow prospects of the domestic group has improved with the reduced pricing on the extended $1.8 billion portion of the credit facility, with the LIBOR floor being reduced by 100 basis points and potential to improve pricing by providing the extended bank group with additional collateral. Also the pricing on the refinancing notes issued thus far, particularly on the 8.625% notes issued in January, has been better than what Fitch assumed in its prior base case scenario. Any upcoming decision by Fitch to revise the Outlook to Positive would hinge on the Las Vegas recovery remaining undisturbed and MGM Macau trends remaining solid following the LVS' Cotai Central Phase I opening in second-quarter 2012. However, Fitch believes that financial and strategic policies are likely to become more aggressive with the recent improvement in the credit profile, which could constrain the positive rating momentum. An Outlook revision to Positive would mean there is a good likelihood that Fitch would upgrade MGM's Issuer Default Rating (IDR) to 'B' from 'B-' over a 12-24 month horizon from the time of the revision. Over this horizon MGM's project plans in Cotai and Massachusetts should become more firm, and Fitch's base case projects MGM's FCF profile (including Macau dividends) will improve further, thus providing the domestic group with meaningful capacity to deleverage. An upgrade in the near term (6-12 months) is unlikely due to MGM's still uncomfortably high leverage. The domestic credit group's leverage as of Dec. 31, 2011 is 10.6 times (x). With Macau consolidated (minus minority interest) and giving credit for distributions from unconsolidated entities (mostly Grand Victoria in Elgin) leverage is more manageable but still high relative to a 'B' category IDR at 8.8x. MGM's FCF profile, while expected to improve, remains weak and is susceptible to a reversal in current trends. Fitch currently rates MGM as follows: -- IDR 'B-'; -- Senior secured notes due 2013, 2014, 2017, and 2020 'BB-/RR1'; -- Senior credit facility 'B/RR3'; -- Senior unsecured notes 'B-/RR4'; -- Convertible senior notes due 2015 'B-/RR4'; -- Senior subordinated notes 'CC/RR6'. MGM RESORTS: Moody's Assigns 'B3' Rating to Proposed $750MM Notes ----------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to MGM Resorts International's proposed $750 million senior unsecured notes due 2022. Moody's affirmed the company's B2 Corporate Family and Probability of Default ratings, Ba2 senior secured ratings, B3 senior unsecured ratings, and Caa1 senior subordinated ratings. MGM has an SGL-3 Speculative Grade Liquidity rating and a stable rating outlook. "MGM's proposed note offering is another positive step towards refinancing its considerable debt maturities in the next two years," stated Peggy Holloway, Vice President and Senior Credit Officer. MGM intends to use the net proceeds from the proposed offering to repay a portion of the $965 million senior bank credit facility debt due in 2014. Ratings assigned: MGM Resorts International Proposed approximate $750 million senior unsecured notes due 2022 at B3 (LGD 5, 70%) Senior unsecured shelf at (P)B3 Senior subordinated shelf at (P)Caa1 Subordinated shelf at (P)Caa1 Rating affirmed and LGD assessments revised where applicable: MGM Resorts International Corporate Family Rating at B2 Probability of Default Rating at B2 Senior secured notes at Ba2 (LGD 2, 14%) Senior unsecured notes at B3 (LGD 5, 70% from LGD 4, 69%) Speculative Grade Liquidity at SGL-3 Mandalay Resort Group Senior unsecured notes at B3 (LGD 5, 70% from LGD 4, 69%) Senior subordinated notes at Caa1 (LGD 6, 96%) RATINGS RATIONALE The affirmation of MGM's B2 Corporate Family Rating reflects Moody's view that positive lodging trends in Las Vegas will continue through 2012 which will help improve MGM's leverage and coverage metrics, albeit modestly. Additionally, the company's declaration of a $400 million dividend ($204 million to MGM) from its 51% owned Macau joint venture due to be paid shortly will also improve the company's liquidity profile. The ratings also consider MGM's recent bank amendment that resulted in about 50% of its $3.5 billion senior credit facility being extended one year from 2014 to 2015. Despite MGM's success at improving its debt maturity profile, the B2 Corporate Family Rating acknowledges that approximately $1.9 billion of the company's debt still matures in the next two years -- approximately $535 million in 2012 and $1.35 billion (including a $750 million secured bond) in 2013. Also of concern is the company's high leverage and thin interest coverage. Debt/EBITDA for the 12-month period ended December 31, 2011 (excluding the Macau joint venture) was 11 times and EBITDA coverage of interest was only slightly above one time. Additionally, a significant portion of MGM's revenue and earnings comes from only one gaming market -- the Las Vegas Strip. The stable rating outlook reflects Moody's view that MGM will continue to execute transactions that will improve its liquidity profile. Additionally, Moody's expects rising visitation to the Las Vegas Strip will improve MGM's earnings and improve the company's debt/EBITDA (excluding the Macau joint venture) to below 10 times by year-end 2012. Given MGM's high leverage, Moody's does not expect upward rating momentum. However, MGM's ratings could be raised if the Las Vegas Strip's recovery gains greater momentum -- particularly sustained growth in gaming revenue, and if the company can improve its debt maturity profile. The ratings could be downgraded if improving operating conditions in Las Vegas stall or MGM is unable to further improve its liquidity profile. MGM Resorts International owns and operates 14 wholly-owned properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. MGM has a 51% interest in MGM Grand Macau, a hotel- casino resort in Macau S.A.R. and a 50% interest in CityCenter, a multi-use resort in Las Vegas, Nevada. MGM generates annual net revenue of approximately $7.0 billion on a consolidated basis and approximately $6.2 billion excluding Macau. MICHAEL VICK: Cuts Outstanding Debt to About $400,000 ----------------------------------------------------- TMZ.com notes Michael Vick already reduced his outstanding debt to less than $400,000. The outstanding debt is owed to Bank of America -- related to one of his properties -- BMW financial services, and the tax collector. Michael Dwayne Vick is a professional American football quarterback for the Philadelphia Eagles of the National Football League. He previously played for the Atlanta Falcons for six seasons before serving 18 months of a 23-month sentence in prison for his involvement in an illegal dog fighting ring. In April 2007, Mr. Vick was implicated in an extensive and unlawful interstate dogfighting ring that operated over a period of five years. He pleaded guilty and was sentenced to 23 months in federal prison. With loss of his NFL salary and product endorsement deals, combined with previous financial mismanagement, Mr. Vick filed for Chapter 11 bankruptcy in July 2008. Mr. Vick filed a Chapter 11 petition on July 7, 2008 (Bankr. E.D. Va. Case No. 08-50775). Dennis T. Lewandowski, Esq., and Paul K. Campsen, Esq., at Kaufman & Canoles, P.C., represent the Debtor in his restructuring efforts. Mr. Vick listed assets of $10 million to $50 million. Mr. Vick was released from prison to home confinement on May 20, 2009. On July 27 2009, NFL Commissioner Roger Goodell conditionally reinstated Mr. Vick. Mr. Vick in August 2008 won confirmation of a proposed Chapter 11 plan that proposes to give up a portion of his future income over six years. The plan assumed that he's reinstated by the National Football League and signs a new contract in order to repay unsecured creditors owed in excess of $19 million. MOMENTIVE PERFORMANCE: Moody's Reiterates 'Ba3' Term Loan Rating ---------------------------------------------------------------- Moody's Investors Service reiterated its Ba3 rating on the guaranteed senior secured first lien term loan due May 5, 2015 of Momentive Performance Materials Inc. (MPM). Proceeds from the $175 million expansion to the term loan will be used to fund the repayment of the remaining guaranteed senior secured first lien term loans due December 4, 2013. The new debt will be issued pursuant to the accordion provisions of the existing senior secured credit facilities which will mature on May 5, 2015. Moody's also adjusted the LGD assessments on the outstanding debt as a result of modest changes to the company's debt balances over the past year. The company's outlook is stable. "While credit metrics are extremely weak, similar to 2009, the lack of meaningful debt maturities or liquidity issues keeps the Corporate Family Rating out of the Caa category"," stated John Rogers, Senior Vice President at Moody's. "However, if the company fails to return reported EBITDA back to the $100 million per quarter level by the end of 2012, Moody'swould likely lower its ratings." RATINGS RATIONALE The B3 Corporate Family Rating (CFR) remains constrained by MPM's elevated leverage and very weak credit metrics, which outweigh its strong business profile and improving maturity schedule. Fiscal year 2011 results that were more disappointing than anticipated, due to the softening demand combined with high raw materials prices. This caused both earnings and cash flow to decline significantly from levels generated in 2010. At year-end 2011, Net Debt/EBITDA was over 9.0x and Retained Cash Flow/Net Debt was below 5%. The aforementioned ratios reflect Moody's Global Standard Adjustments, which include the capitalization of pensions and operating leases, as well as MPM's HoldCo PIK debt ($689 million at year end 2011). MPM's liquidity is supported by the company's cash balance of $203 million, $258 million availability under the revolver, and the expectation for positive free cash flow generation over the next four quarters. Maturities of long term debt will become a greater concern by the end of 2013; maturities are $216 million in 2014, and $971 million in 2015. The stable outlook reflects the improved maturity schedule and good liquidity position, as well as the expectation that earnings and cash flow will return to more respectable levels over the next two to three quarters. Moody's expects that continued soft demand in the first half of 2012 will weaken performance such that unadjusted EBITDA will remain near $300 million on an LTM basis. If unadjusted EBITDA should fall below $300 million on a sustainable basis, Moody's would likely lower the company's CFR. Additionally, if the company's cash and revolver availability falls, or appears likely to fall, below $200 million for a sustained period, Moody's would also consider lowering the rating. Moody's continues to look for additional steps in addressing upcoming maturities through 2015 as well as progress toward refinancing the HoldCo debt (at December 31, 2011, this PIK debt had a value of $689 million and is accreting at 11% per year). Ratings List: Momentive Performance Materials Inc. Corporate Family Rating at B3 Probability of Default Rating at B3 Speculative grade liquidity rating at SGL-2 Guaranteed senior secured term loan due 2013 at Ba3 (LGD2, 13%) from Ba3 (LGD2, 12%)* Guaranteed senior secured revolver due 2014 at Ba3 (LGD2, 13%) from Ba3 (LGD2, 12%) Guaranteed senior secured term loan due 2015 at Ba3 (LGD2, 13%) from Ba3 (LGD2, 12%) Guaranteed senior secured 2nd lien notes due 2014 to B3 (LGD4, 52%) from B2 (LGD3, 35%) Guaranteed senior unsecured notes due 2021 to Caa1 (LGD4, 58%) from Caa1 (LGD4, 58%) Senior subordinated notes due 2016 to Caa2 (LGD5, 84%) from Caa2 (LGD5, 85%) *: These ratings will be withdrawn upon successful completion of this transaction. Momentive Performance Materials Inc., headquartered in Albany, New York, is the second largest producer of silicones and silicone derivatives worldwide. The company has two divisions: silicones (which accounted for roughly 90% of revenues) and quartz. Revenues were roughly $2.6 billion for the year ending December 31, 2011. MOUNTAIN PROVINCE: More Details of Proposed Kennady Spin-out ------------------------------------------------------------ Mountain Province Diamonds Inc. announced further details on the proposed spin-out of the Company's 100 percent-controlled Kennady North diamond project into a newly-incorporated company Kennady Diamonds Inc. The proposed spin-out will occur through a plan of arrangement and will be subject to regulatory and court approval, as well as shareholder approval at a special meeting currently planned for April 25, 2012. The Company has taken steps, subject to court approval, to set the record date for notice of and voting at the special meeting as March 23, 2012. Upon completion of the transfer of the Kennady North property and working capital in the amount of C$3M to Kennady Diamonds, Mountain Province intends to distribute 100 percent of the shares of Kennady Diamonds to Mountain Province shareholders on the basis of one Kennady Diamond share for every five shares of Mountain Province held by shareholders. Patrick Evans, President and CEO, commented, "The proposed spin- out of Kennady North is intended to deliver greater value to Mountain Province shareholders by unlocking the value of this highly prospective diamond project. The transaction will also enable Mountain Province to focus on its flagship Gahcho Kue JV with De Beers while Kennady Diamonds focuses on advancing the 123 square-kilometer Kennady North Project." About Mountain Province Headquartered in Toronto, Canada, Mountain Province Diamonds Inc. (TSX: MPV, NYSE AMEX: MDM) -- http://www.mountainprovince.com/-- is a Canadian resource company in the process of permitting and developing a diamond deposit (the "Gahcho Kue Project" located in the Northwest Territories of Canada. The Company's primary asset is its 49% interest in the Gahcho Kue Project. The Company also reported a net loss of C$6.68 million for the nine months ended Sept. 30, 2011, compared with a net loss of C$7.39 million for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed C$69.93 million in total assets, C$7.51 million in total liabilities, and C$62.42 million in total shareholders' equity. * * * In its Management's Discussion and Analysis of the Company's interim consolidated financial statements for the three months ended June 30, 2010, the Company said its ability to continue as a going concern and to realize the carrying value of its assets and discharge its liabilities is dependent on the discovery of economically recoverable mineral reserves, the ability of the Company to obtain necessary financing to fund its operations, and the future production or proceeds from developed properties. However, the Company adds that there is no certainty that the Company will be able to obtain financing to fund its operations. As a result, the Company says, there is substantial doubt as to its ability to continue as a going concern. MOMENTIVE PERFORMANCE: Plans to Seek $175 Million New Term Loans ---------------------------------------------------------------- Momentive Performance Materials Inc. intends to seek commitments for up to $175 million of new senior secured term loans pursuant to the accordion provisions of its senior secured credit facilities. The new term loans are expected to have a maturity date of May 5, 2015, and the net cash proceeds of the new term loans will be used to repay existing term loans maturing Dec. 4, 2013, under its senior secured credit facilities. The proposed issuance of new senior secured debt and related transactions are subject to market and other conditions, and may not occur as described or at all. About Momentive Performance Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. The Company had a net loss of $140 million on $2.63 billion of net sales in 2011, following a a net loss of $63 million on $2.58 billion of net sales in 2010. Net loss in 2009 was $42 million. The Company's balance sheet at Dec. 31, 2011, showed $3.16 billion in total assets, $3.90 billion in total liabilities and a $736 million total deficit. * * * Momentive carries a 'B3' corporate family and probability of default ratings from Moody's Investors Service. "The impact of softening demand and high raw material prices has disrupted the trajectory of improving fundamentals, and will result in an acceleration of cost reduction activities," stated John Rogers, Senior Vice President at Moody's, in November 2011, when Moody's affirmed the ratings. Moody's said, the B3 CFR continues to be constrained by MPM's elevated leverage and weak credit metrics, which outweigh its strong business profile and improved maturity schedule. As a result of the softening demand and high raw materials prices, the 2011 operating performance will underperform that of 2010 and will challenge credit metrics more than previously expected. MPM's good liquidity is supported by the company's cash balance of $250 million and the expectation for positive free cash flow generation over the next four quarters. Maturities of long term debt will become a greater concern by the end of 2012; maturities are $215 million in 2013, $300 million in 2014, and $840 million in 2015. NCO GROUP: Commences $365 Million Senior Notes Tender Offers ------------------------------------------------------------ NCO Group, Inc., has commenced two cash tender offers and consent solicitations for any and all of its $200,000,000 aggregate principal amount of 11.875% Senior Subordinated Notes due 2014 and $165,000,000 aggregate principal amount of Floating Rate Senior Notes due 2013. Each Offer will expire at 12:01 a.m., New York City time, on April 11, 2012, unless extended. Concurrently with the commencement of the Offers, the Company is seeking to obtain debt financing to refinance substantially all of its outstanding indebtedness, consisting of a new senior secured first lien term loan and revolving credit facility and a new secured second lien credit facility. Holders who validly tender their Notes and provide their consents to the proposed amendments to the indentures governing the Notes prior to the consent payment deadline of 5:00 p.m., New York City time, on March 27, 2012, unless extended by the Company in its sole discretion, will receive $1,035.94 per $1,000 principal amount of the 2014 Notes and $1,002.50 per $1,000 principal amount of the 2013 Notes, plus any accrued and unpaid interest on the Notes up to, but not including, the payment date for such Notes. The primary purpose of the Consent Solicitations and the proposed amendments to the indentures governing the Notes is to eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the indentures governing the Notes. Adoption of the proposed amendments could have adverse consequences upon non-tendering holders of the Notes because Notes that remain outstanding after consummation of the applicable Offer will not be entitled to the benefits of the restrictive covenants or event of default and related provisions that are eliminated by the adoption of such amendments. Holders who validly tender their Notes after the Consent Deadline, but on or prior to the Expiration Date, will receive $1,025.94 per $1,000 principal amount of the 2014 Notes and $992.50 per $1,000 principal amount of the 2013 Notes, plus, in each case, any accrued and unpaid interest on the Notes up to, but not including, the payment date for those Notes. Holders of Notes tendered after the Consent Deadline will not receive a consent payment. With respect to each series of Notes, following receipt of the consent of the holders of at least a majority in aggregate principal amount of those series of Notes and the Company's acceptance for payment of those Notes, the Company will execute the applicable supplemental indenture effecting the proposed amendments. The Company has engaged Barclays Capital Inc. as Dealer Manager and Solicitation Agent for the Offer. Persons with questions regarding the Offer should contact Barclays Capital Inc. at (212) 528-7581 (Call Collect) or (800) 438-3242 (Toll Free). Requests for copies of the Offer to Purchase or other tender offer materials may be directed to D.F. King & Company, Inc., the Tender Agent and Information Agent, at (800) 714-3313. About NCO Group Inc. Based in Horsham, Pennsylvania, NCO is a global provider of business process outsourcing services, primarily focused on accounts receivable management and customer relationship management. NCO has over 25,000 full and part-time employees who provide services through a global network of over 100 offices. The company is a portfolio company of One Equity Partners and reported revenues of about $1.2 billion for the twelve month period ended Sept. 30, 2007. The Company also reported a net loss of $104.49 million on $1.15 billion of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $73.45 million on $1.18 billion of total revenues for the same period during the prior year. The Company reported a net loss of $155.71 million in 2010, compared with a net loss of $88.14 million in 2009. The Company's balance sheet at Sept. 30, 2011, showed $1.12 billion in total assets, $1.14 billion in total liabilities, and a $17.89 million total stockholders' deficit. * * * In December 2011, Standard & Poor's Ratings Services affirmed its 'CCC+' issuer credit rating on NCO Group Inc. and removed the rating from CreditWatch with positive implications. "The rating action follows NCO's recent announcement that it is not proceeding with the previously proposed $300 million notes offering that it planned to use, in conjunction with a proposed $870 million new senior secured credit facility, to repay its existing debt and to help finance its merger with APAC Customer Services Inc.," said Standard & Poor's credit analyst Kevin Cole. Concurrent with the closing of the debt offerings, it was planning to change its name to Expert Global Solutions Inc. NCO GROUP: Moody's Reviews Caa1 Corp. Family Rating for Upgrade --------------------------------------------------------------- Moody's Investors Service placed the Caa1 Corporate Family and Probability of Default Ratings of NCO Group, Inc. under review for upgrade. Concurrently, Moody's assigned a Ba3 rating to a proposed $795 million first lien credit facility and a B3 rating to a proposed $200 million second lien term loan. All ratings on NCO's existing debt instruments were affirmed. Proceeds from the new term loans, along with cash on the balance sheet and up to $30 million to be drawn on the new revolver, will be used to refinance the existing debt in NCO's capital structure. At the same time, NCO plans to merge with APAC Customer Services, Inc. ("APAC"), also a portfolio company of One Equity Partners ("OEP"). Upon consummation of the merger, NCO Group will be renamed Expert Global Solutions, Inc. If the transaction closes on terms consistent with those proposed, the Corporate Family and Probability of Default Ratings will be upgraded to B2 from Caa1. The existing debt instrument ratings of NCO will be withdrawn and the rating outlook will be changed to stable. The following ratings were placed under review for upgrade: Corporate Family Rating, Caa1 Probability of Default Rating, Caa1 The following ratings (and Loss Given Default Assessments) were assigned: $120 million first lien revolver due 2017, Ba3 (LGD3, 30%) $675 million first lien term loan due 2018, Ba3 (LGD3, 30%) $200 million second lien term loan due 2018, B3 (LGD5, 76%) Ratings affirmed - to be withdrawn upon closing of the transaction: $67.5 million senior secured revolving credit facility due December 2012, B2 (LGD2, 26%) $460 million senior secured term loan due May 2013, B2 (LGD2, 26%) $165 million senior unsecured floating rate notes due November 2013, Caa2 (LGD5, 73%) $200 million senior subordinated notes due November 2014, Caa3 (LGD6, 91%) Speculative Grade Liquidity Rating, SGL-4 RATINGS RATIONALE The anticipated upgrade in NCO's Corporate Family Rating to B2 from Caa1 post-close reflects the combined company's improved debt maturity profile, greater scale in the more stable Customer Relationship Management segment, and lower financial leverage resulting from the contribution of APAC's estimated $52 million in EBITDA (pre-synergies) with relatively modest incremental debt of $158 million (at the holding company). OEP contributed about $300 million of equity towards the purchase of APAC. The expected B2 CFR reflects integration risks associated with the merger, highly competitive industry conditions, and pro forma financial leverage of about 5.6 times (including a $158 million holding company note) before consideration of merger-related cost synergies. The inclusion of management's targeted $30 million in annualized cost synergies would reduce pro forma financial leverage to about 5.0 times. The ratings are further constrained by Moody's expectations that the environment for the collection of delinquent accounts receivable will remain difficult, as many consumers struggle with high unemployment, lack of wage growth and constrained access to credit. The principal methodology used in rating Expert Global Solutions was the Global Business & Consumer Service Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Based in Horsham, Pennsylvania, NCO Group, Inc., is a global provider of business process outsourcing services, primarily focused on accounts receivable management and customer relationship management solutions to a variety of sectors including financial services, telecommunications, healthcare, retail, technology, education and government agencies. NCO is a portfolio company of One Equity Partners. For the twelve months ended September 30, 2011, the company reported revenue of approximately $1.5 billion. OILSANDS QUEST: Gets Court OK of $7MM Sale of Eagles Nest Asset --------------------------------------------------------------- Oilsands Quest Inc. has received approval from the Alberta Court of Queen's Bench for the sale of the Company's non-core Eagles Nest asset to Cavalier Energy Inc., an unrelated third party, for CDN$7.005 million. As previously announced, Oilsands Quest reopened the sale process for its Eagles Nest asset as FAMA Capital Ltd. defaulted on an earlier Purchase and Sale Agreement. The Company has signed a new Purchase and Sale Agreement with Cavalier and the transaction, subject to normal closing conditions, is expected to close on or before March 23, 2012. Oilsands Quest continues to operate under the protection of the Companies' Creditors Arrangement Act (Canada) with the assistance of a Court-appointed monitor. The Company's common shares remain halted from trading until either a delisting occurs or until the NYSE permits the resumption of trading. About Oilsands Quest Oilsands Quest Inc. -- http://www.oilsandsquest.com/-- is exploring and developing oil sands permits and licences, located in Saskatchewan and Alberta, and developing Saskatchewan's first commercial oil sands discovery. OMNICARE INC: Moody's Confirms 'Ba3' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service confirmed Omnicare, Inc.'s debt ratings (Ba3 CFR) with a stable outlook. This concludes Moody's rating review that was commenced on August 23, 2011. Moody's confirmation and stable outlook are based on Moody's expectation that the termination of Omnicare's bid for PharMerica and prospects of stable to improving profits in spite of reimbursement pressures should enable the company to deleverage over the next 12-18 months. "Recent stabilization in bed losses and generic drug conversions should enable Omnicare to offset negative effects of reimbursement changes over the next 12-18 months," said Diana Lee, a Moody's Senior Credit Officer. Further, Omnicare's cash flow generation should be sufficient to fund moderate-sized acquisitions and buyback activity. Ratings confirmed with a stable outlook: Omnicare, Inc. Corporate Family Rating at Ba3 Probability of Default Rating at Ba3 Unsecured Term Loan A at Baa3, LGD2, 15% Unsecured Revolver at Baa3, LGD2, 15% Senior Subordinated Notes at Ba3, LGD4, 53% Convertible Senior Notes at B2, LGD5, 84% Subordinate Shelf Rating of (P)Ba3 Omnicare Capital Trust I Backed PIERS Trust Preferreds at B2, LGD6, 94% Omnicare Capital Trust II Backed PIERS Trust Preferreds at B2, LGD6, 94% RATINGS RATIONALE Omnicare's Ba3 CFR reflects its leading position in the long term care pharmacy space but also moderately high leverage. Because of uncertainty associated with the reimbursement environment for long-term care pharmacy operators, the ratings assume that Omnicare will continue to deleverage. The Federal Trade Commission's (FTC's) filing of an administrative complaint against Omnicare, blocking its bid for PharMerica, and Omnicare's subsequent decision to drop its bid lessens the likelihood that the company will take on incremental debt in the near term. In recent quarters, the company has demonstrated better bed retention rates, easing concerns regarding competitive pressures. Although Moody's believes that cuts to nursing home rates will affect pricing, these and other reimbursement changes (including AMP rates and MACs for generic drugs) should be offset by increased profits from generic drug conversions, organic bed growth and an expanding specialty care business. The stable outlook reflects Moody's belief that Omnicare will not engage in large debt-financed transactions, post-PharMerica, and that operating improvements will offset negative effects of reimbursement changes, resulting in solid cash flow generation. Over the outlook period, retained cash flow to debt is expected to remain in the 12-14% range and the company is expected to deleverage such that debt/EBITDA approaches 3.75 times. For fiscal year 2011, debt/EBITDA was about 4.1 times, down from 4.3 times at year end 2010. The ratings could be downgraded if there are material negative reimbursement changes or if the company engages in large debt financed acquisitions. Retained cash flow to debt that is below the low-to-mid teens level or debt/EBITDA sustained above 3.75 times could support a downgrade. The ratings could be upgraded if Omnicare is able to demonstrate a conservative approach to growth, sustained bed retention rates, better profitability and greater diversification beyond long term care pharmacy services. Retained cash flow to debt approaching 20% and debt/EBITDA sustained below 2.5 times could help support an upgrade. The principal methodology used in this rating was Global Distribution and Supply Chain Services published in November 2011. Omnicare, Inc. (OCR), headquartered in Covington, Kentucky, is a provider of institutional pharmacy services to the long term care sector. PENINSULA HOSPITAL: Lori Jones to Oversee Far Rockaway Facility --------------------------------------------------------------- Irving DeJohn at New York Daily News reports that the U.S. Trustee's office appointed Lori Lapin Jones to take over operations at Peninsula Hospital's Far Rockaway facility as the hospital tries to recover from flunking a state inspection last month. Violations included three units of expired plasma in the blood bank and employees not wearing gloves while handling samples. According to the report, the move terminates the retainer with Abrams Fensterman, the law firm that represented Peninsula during its Chapter 11 bankruptcy reorganization. "She was a good appointment," the report quotes Howard Fensterman, the former attorney for Peninsula, as saying. "She's a knowledgable bankruptcy attorney with some experience in health." The report notes the hospital was forced to temporarily lay off more than 240 employees in an effort to save money. About Peninsula Hospital Wayne S. Dodakian, Vinod Sinha, and Shannon Gerardi filed an involuntary Chapter 11 bankruptcy protection against Peninsula Hospital Center -- http://www.peninsulahospital.org/-- (Bankr. E.D.N.Y. Case No. 11-47056) on Aug. 16, 2011. Judge Elizabeth S. Stong presides over the case. Marilyn Cowhey Macron, Esq., at Macron & Cowhey, represents the petitioners. Peninsula Hospital Center and Peninsula General Nursing Home Corp., employed Alvarez & Marsal Healthcare Industry Group, LLC, as financial advisors. The Hospital employed Abrams Fensterman, et al., as their attorneys. Nixon Peabody served as their special counsel; GCG, Inc., serves as claims and noticing agent. Judge Stong appointed Daniel T. McMurray at Focus Management Group as patient care ombudsman. Neubert, Pepe & Monteith P.C. serves as PCO's counsel. Richard J. McCord, Esq., was appointed by the Court as examiner in the Debtors' cases. His task was to conduct an investigation of the Debtors' relationship and transactions with Revival Home Health Care, Revival Acquisitions Group LLC, Revival Funding Co. LLC, and any affiliates. Certilman Balin, & Hyman, LLP, which counts Mr. McCord as one of the firm's members, served as counsel for the Examiner. CBIZ Accounting, Tax & Advisory of New York, LLC and CBIZ, Inc., serve as financial advisors for the Official Committee of Unsecured Creditors. Robert M. Hirsh, Esq., at Arent Fox LLP, in New York, N.Y., represents the Committee as counsel. PINNACLE AIRLINES: 3.2% Owners Alarmed Over Annual Meeting Delay ---------------------------------------------------------------- As disclosed previously in an initial Form 13D, Wayne King; Meson Capital Partners, LP; Meson Capital Partners, LLC; Ryan J. Morris; Gregory J. Gerst; Gerst Capital Partners, LP; and Gerst Capital, LLC, currently seek to engage Pinnacle Airlines Corp.'s board of directors in discussions concerning the low level of share ownership by board members, director compensation levels, capital spending, and corporate governance. Messrs. King and Morris disclosed their proposal that the board allow the immediate appointment of new stockholder designated directors, with full voting rights, to (1) act as stockholder designated representatives, and (2) promptly begin the formation of an equity committee in the event of a Chapter 11 filing. On Feb. 17, 2012, Messrs. King and Morris met with Donald Breeding, Chairman of the Board and Susan Coughlin, Director and Head of the Nominating and Corporate Governance Committee to discuss the merits of their proposal for new stockholder-designated directors and to inform the Company that formal notification of King, et al.' nominees for directors would be forthcoming. By letter of Feb. 29, 2012, to Messrs. King and Morris, the Company disclosed its intention to indefinitely delay the Company's annual meeting, previously anticipated to occur in May 2012, and opted not to address the proposal for new stockholder- designated directors on the basis of timing. By press release also dated Feb. 29, 2012, the Company publicly disclosed its intention to indefinitely delay the annual meeting. By letter of March 1, 2012, to the Company, Messrs. King and Morris expressed their dismay at the Company's decision to delay the annual meeting, called on the Company to promptly schedule the meeting, and reiterated the proposal for the appointment of new stockholder-designated directors. The Company responded to the letter of March 1, 2012, citing timing concerns related to the proposal as the basis for their inaction. On each of March 5, 2012, and March 6, 2012, Mr. Morris left Mr. Breeding a voicemail seeking a phone call to clarify the definition of 'timing concerns' and informed him that he would interpret a lack of response to his phone call as a 'loud and clear rejection' of the proposal for new stockholder designated directors and would file a press release to that effect on March 6, 2012. On March 7, 2012, Messrs. King and Morris issued a press release again reiterating their proposal for the appointment of new-stockholder-designated directors and calling on the Company to immediately set a date for the 2012 annual meeting of stockholders. As of March 12, 2012, the Company has not yet scheduled the annual meeting. King et al., are alarmed by the Company's decision to delay the annual stockholder meeting and its failure to adequately respond to the proposal for the appointment of new stockholder-designated directors. For these reasons King, et al., have agreed to work closely together to consult with recognized experts on corporate governance and the proxy advisory process. King, et al., strongly believe that the proposal for stockholder-designated directors would establish a stronger alignment between the interests of the board of directors and stockholders. King et al., disclosed that, as of March 6, 2012, they beneficially own 618,664 shares of common stock of Pinnacle Airlines representing 3.2% of the shares outstanding. A copy of the amended Schedule 13D is available for free at: http://is.gd/T4s0Mk About Pinnacle Airlines Corp. Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. The Company reported $8.81 million on $938.05 million of total operating revenue for the nine months ended Sept. 30, 2011, compared with net income of $17.02 million on $729.13 million of total operating revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. PRAYER ASSEMBLY: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Prayer Assembly Church of God In Christ 442 East El Segundo Boulevard Los Angeles, CA 90061 Bankruptcy Case No.: 12-18948 Chapter 11 Petition Date: March 13, 2012 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Richard M. Neiter Debtor's Counsel: Charles Shamash, Esq. CACERES & SHAMASH, LLP 8200 Wilshire Boulevard, Suite 400 Beverly Hills, CA 90211 Tel: (310) 205-3400 Fax: (310) 878-8308 E-mail: cs@locs.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Company?s list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by Virgil Wilson, vice president. PROMETRIC INC: Moody's Raises Corporate Family Rating to 'Ba2' -------------------------------------------------------------- Moody's Investors Service upgraded Prometric Inc.'s corporate family rating to Ba2 from Ba3 and affirmed the Ba3 probability of default rating. Moody's also assigned a Ba1 rating to the company's proposed senior secured credit agreement, consisting of a $10 million revolving credit facility and a $165 million term loan, both due 2017. The ratings outlook remains stable. The ratings upgrade reflects continued improvements in Prometric's operating performance, material debt reduction through internal cash flow, and Moody's expectation that this will continue. The ratings upgrade also reflects strong pro forma interest coverage metrics, owing to an expected reduction in interest rates. Proceeds from the proposed credit facility will primarily be used to refinance existing bank debt and the subordinated seller notes. Ratings assigned: Proposed $10 million senior secured revolving credit facility due 2017 at Ba1 (LGD2, 23%) Proposed $165 million senior secured term loan due 2017 at Ba1 (LGD2, 23%) Rating upgraded: Corporate family rating to Ba2 from Ba3 Rating affirmed: Probability of default rating at Ba3 Ratings to be withdrawn at transaction closing: Senior secured revolving credit facility due 2012 at Baa3 (LGD2, 16%) Senior secured term loan due 2013 at Baa3 (LGD2, 16%) RATINGS RATIONALE Adjusted for the proposed financing, Moody's estimates pro forma leverage is 2.2 times for the fiscal-year ended December 31, 2011 (including Moody's standard adjustments). Moody's expects leverage to decline below 2.0 times near-term based on organic revenue and earnings growth combined with debt reduction. The proposed transaction reinforces Moody's view that Prometric is committed to conservative financial policy as there are no dividends as part of the proposed financing. That said, the proposed credit agreement does allow the flexibility for dividends from free cash flow (subject to certain conditions). Prometric's Ba2 CFR is supported by its moderate pro forma leverage, strong interest coverage metrics, and solid free cash flow generation that has accommodated substantial debt reduction. The rating also considers the company's expanding operating margins and a very good liquidity profile, supported by a meaningful unrestricted cash balance and expectations for free cash flow generation. However, the rating remains constrained by the company's moderate scale with revenues less than $500 million, its niche focus, and reliance on relatively large contracts. The stable outlook reflects Moody's expectation that Prometric will moderately grow its revenue and earnings and largely apply free cash flow to debt reduction. The stable outlook also builds in some tolerance for dividends to the extent they do not materially weaken the company's liquidity profile. While an upgrade is unlikely in the near term given Prometric's moderate scale, in the event the company substantially increases its revenue and customer base while maintaining strong debt protection metrics, the ratings could experience positive pressure. If the loss of a material contract and/or erosion in margins pressures Prometric's operating performance such that debt to EBITDA is sustained above 2.5, this could pressure the ratings. A material debt-financed acquisition or dividend could also have negative rating implications. The ratings are subject to Moody's receipt and review of final documentation. Headquartered in Baltimore, Maryland, Prometric Inc. is a provider of technology-based assessment solutions including test development and delivery for government entities, professional organizations, academic institutions, corporations and information technology clients. PROTEONOMIX INC: Enters Into $3.8-Mil. Securities Sale Deal ----------------------------------------------------------- Proteonomix, Inc., on March 5, 2012, entered into a Securities Purchase Agreement providing for the issuance and sale of an aggregate of approximately 3,804 shares of the Company's Series E Convertible Preferred Stock, with each Preferred Share initially convertible into approximately 235 shares of the Company's Common Stock and three series of warrants, the Series A Warrants, the Series B Warrants and the Series C Warrants, to purchase up to an aggregate of 2,685,873 shares of the Company's Common Stock, for proceeds to the Company of $3.8 million. After deducting for fees and expenses, the aggregate net proceeds from the sale of the Preferred Shares and Warrants are expected to be approximately $3.5 million. Pursuant to the terms of the Securities Purchase Agreement, each Purchaser has been issued a Series A Warrant, a Series B Warrant and a Series C Warrant, each to purchase up to a number of shares of the Company's Common Stock equal to 100% of the Conversion Shares underlying the Preferred Shares issued to such Purchaser pursuant to the Securities Purchase Agreement. The Series A Warrants have an exercise price of $4.25 per share, are exercisable immediately upon issuance and have a term of exercise equal to five years. The Series B Warrants have an exercise price of $4.25 per share, are exercisable immediately upon issuance and have a term of exercise one year and two weeks. The Series C Warrants have an exercise price of $4.25 per share, vest and are exercisable ratably commencing on the exercise of the Series B Warrants held by each Purchaser and have a term of exercise equal to five years. On March 5, 2012, in connection with the closing of the private placement, the Company and the Purchasers entered into a Registration Rights Agreement. Under the Registration Rights Agreement, the Company is required to file a registration statement within 7 days following the filing date of the Company's Form 10-K for the year ended Dec. 31, 2011, but in no event later than April 16, 2012. The failure on the part of the Company to meet the filing deadlines and other requirements set forth in the Registration Rights Agreement may subject the Company to payment of certain monetary penalties. Rodman & Renshaw, LLC, acted as the exclusive placement agent for the private placement. Pursuant to the terms of a Placement Agent Agreement entered into by the Registrant and Rodman on Feb. 15, 2012, the Company has agreed (a) to pay to Rodman the placement agent fee equal to 7% of the aggregate gross proceeds raised in the private placement, (b) to issue to Rodman warrants to purchase 62,670 shares of the Company's Common Stock, and (c) to reimburse Rodman for certain expenses. Employment Agreements * Steven Byle. On March 2, 2012, the Company entered into an agreement with its Chief Technical Officer, Steven Byle, who is also a director of the Registrant, whereby the Company has agreed to pay Mr. Byle an initial salary of $150,000 per annum in bi- weekly installments. Mr. Byle will also be entitled to an increase to $200,000 per annum at such time as Proteonomix has been capitalized to an equaling or exceeding $3,000,000 whether it be in equity, debt or joint venture funding with an additional increase to $250,000 per annum at such time as Proteonomix has been capitalized to an extent equaling or exceeding $5,000,000 whether it be in equity, debt or joint venture funding. A final increase to $300,000 per annum in the event that Proteonomix will meet the $5,000,000 capitalization requirement and where the Company shares are trading on any major national or international stock exchange. In addition, the Company will reimburse the Mr. Byle on a monthly basis, all medical costs for his family including insurance and deductibles until accepted in a plan equal to his present coverage. Mr. Byle will be eligible to participate in such life, health, and disability insurance, pension, deferred compensation and incentive plans, options and awards, performance bonuses and other benefits as Proteonomix extends to its executives. Mr. Byle is also entitled to four weeks of vacation during each calendar year. The Agreement also requires the Company to maintain D&O Insurance covering Mr. Byle in his duties under this agreement. Mr. Byle shall also be reimbursed for all reasonable travel, entertainment and other expenses incurred or paid by him in connection with, or related to, the performance of his duties. Such compensation and benefits will accrue to him until such time as Company has sufficient cash reserves or cash flow to pay without harm to the business. * Roger Fidler. Also on March 2, 2012, the Company entered into an agreement with Roger Fidler, a director and General Counsel to the Company. The Company agrees to reimburse Mr. Fidler for all reasonable travel, entertainment and other expenses incurred or paid by him in connection with, or related to, the performance of his duties, responsibilities or services under this Agreement, upon presentation by Mr. Fidler of documentation, expense statements, vouchers, or such other supporting information as the Company may reasonably request. Until such time as the Company has obtained 3,000,000 dollars in financing, Mr. Fidler's relationship with the Company will be that of an independent contractor and not that of an employee. Upon receipt by the Company of three million dollars in financing of Cash or cash equivalent, then Mr. Fidler will receive $10,000 a month as an employee of the Company. At that time Mr. Fidler will be entitled to all benefits provided to any or all of the senior executives of the Company. When the total amount of financing obtained by the Company after the date of this Agreement will reach $5,000,000, then employee salary will be increased to $20,000 per month. When the salary is increased to said $20,000 per month, then the employee will use his best efforts consistent with Rules of Professional Responsibility to reduce the amount of legal work Consultant is performing for his then existing clients will the goal to devote a minimum of 35 hours per week to the business of the Company in the position as General Counsel. A copy of the Form 8-K is available for free at: http://is.gd/w0V545 About Proteonomix Proteonomix, Inc. (OTC BB: PROT) -- http://www.proteonomix.com/-- is a biotechnology company focused on developing therapeutics based upon the use of human cells and their derivatives. The Company reported a net loss applicable to common shares of $973,532 on $18,994 of sales for the nine months ended Sept. 30, 2011, compared with a net loss applicable to common shares of $2.32 million on $68,972 of sales for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $3.37 million in total assets, $6.93 million in total liabilities, and a $3.55 million total stockholders' deficit. As reported in the TCR on April 1, 2011, KBL, LLP, in New York, expressed substantial doubt about Proteonomix, Inc.'s ability to continue as a going concern, following the Company's 2010 results. The independent auditor noted that the Company has sustained significant operating losses and is currently in default of its debt instrument and needs to obtain additional financing or restructure its current obligations. RAMPART MMW: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Rampart MMW, Inc. 9112 Camp Bowie W., Suite 405 Fort Worth, TX 76116-6099 Bankruptcy Case No.: 12-03510- Chapter 11 Petition Date: March 13, 2012 Court: U.S. Bankruptcy Court Southern District of California (San Diego) Debtor's Counsel: Monica Montgomery, Esq. LAW OFFICE OF MONICA L. MONTGOMERY 2667 Camino Del Rio South, Suite 301-12 San Diego, CA 92108 Tel: (619) 255-1204 Fax: (619) 269-5810 E-mail: mlmontgomerylaw@gmail.com Scheduled Assets: $4,970,460 Scheduled Liabilities: $12,996,530 The Company?s list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/casb12-03510.pdf The petition was signed by Lawrence M. Day, managing member. RITE AID: $404.8 Million of 2015 Notes Validly Tendered ------------------------------------------------------- Rite Aid Corporation's previously announced cash tender offer for any and all of its outstanding 8.625% senior notes due 2015 expired at midnight, Eastern Time, on March 13, 2012. As of the Expiration Date, approximately $404.8 million aggregate principal amount of the 2015 Notes had been validly tendered and not validly withdrawn, representing approximately 88.2% of the outstanding 2015 Notes. All those 2015 Notes had been validly tendered on or prior to the consent payment deadline, which was midnight, Eastern Time, on Feb. 24, 2012, and were accepted for purchase on Feb. 27, 2012. The remaining $54.2 million aggregate principal amount of the 2015 Notes were called for redemption on March 28, 2012, and were satisfied and discharged by the Company on March 14, 2012. About Rite Aid Corp. Drugstore chain Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, has more than 4,700 stores in 31 states and the District of Columbia and fiscal 2010 annual revenues of $25.7 billion. For the 39-week period ended Nov. 26, 2011, the Company reported a net loss of $207.32 million on $18.97 billion of revenue, compared with a net loss of $349.73 million on $18.75 billion of revenue for the 39-week period ended Nov. 27, 2010. The Company's balance sheet at Nov. 26, 2011, showed $7.55 billion in total assets, $9.96 billion in total liabilities and a $2.40 billion total stockholders' deficit. * * * In February 2012, S&P affirmed Rite Aid's 'B-' corporate credit rating. During that time, Moody's Investors Service also affirmed its Caa2 Corporate Family Rating, Caa2 Probability of Default Rating, and SGL-3 Speculative Grade Liquidity rating. "The ratings reflect our expectation that Camp Hill, Pa.-based retail drugstore chain Rite Aid Corp.'s financial risk profile will remain 'highly leveraged', despite improving sales trends, due to its significant debt," said Standard & Poor's credit analyst Ana Lai. Moody's said, Rite Aid's Caa2 Corporate Family Rating reflects its weak credit metrics and unsustainable capital structure with debt to EBITDA of 8.8 times and EBITA to interest expense of 0.8 times. Although Moody's believes that Rite Aid earnings will benefit from Walgreen's dispute with Express Scripts as well as from the strong generic pipeline, Moody's anticipates that lower reimbursement rates will offset some of this positive earnings pressure. Thus, Moody's forecasts that Rite Aid's credit metrics will remain weak. In addition, Rite Aid faces a tradeoff between the need to address its sizable 2014 and 2015 debt maturities against the likelihood that any refinancing will be at a higher interest rate. Should Rite Aid successfully refinance its 2014 and 2015 debt maturities, its borrowing costs will likely increase further weakening Rite Aid's interest coverage. Consequently, Moody's is concerned that Rite Aid may choose to voluntarily restructure its debt over the medium term. ROTECH HEALTHCARE: Incurs $14.7 Million Net Loss in 2011 -------------------------------------------------------- Rotech Healthcare Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $14.76 million on $483.79 million of net revenues in 2011, a net loss of $4.20 million on $496.42 million of net revenues in 2010, and a net loss of $21.08 million $479.86 million of net revenues in 2009. The Company reported a net loss of $8.40 million on $117 million of net revenues for the three months ended Dec. 31, 2011, compared with a net loss of $3.60 million on $123.80 million of net revenues for the same period a year ago. The Company's balance sheet at Dec. 31, 2011, showed $277.04 million in total assets, $571.21 million in total liabilities, $3.01 million in Series A convertible redeemable preferred stock, and a $297.18 million total stockholders' deficiency. "While we are pleased with overall patient growth and expense control, nevertheless our fourth quarter 2011 financial results were negatively impacted by contractual and bad debt adjustment levels of $6.0 million higher than planned," said Philip Carter, President and Chief Executive Officer. "We are making efforts to reduce these higher than normal adjustment levels but such efforts may not result in any material reductions until the second quarter of 2012," Mr. Carter added. A copy of the Form 10-K is available for free at: http://is.gd/rh8xI3 About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. * * * In October 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Rotech Healthcare to 'B-' from 'CCC'. The outlook is positive. In the March 22, 2011, edition of the TCR, Standard & Poor's Ratings Services said that it raised its corporate credit rating to 'B' from 'B-' on Orlando, Fla.-based Rotech Healthcare Inc., following the completion of the company's $290 million second-lien senior secured notes offering. "The ratings on Rotech Healthcare Inc. reflect the company's weak business risk profile, incorporating Rotech's exposure to Medicare reimbursement reductions for its products and services," said Standard & Poor's credit analyst Jesse Juliano. The rating also reflects the company's highly leveraged financial risk profile. As previously reported by the TCR on Jan. 13, 2012, Moody's Investors Service lowered Rotech Healthcare Inc.'s Corporate Family rating ("CFR") to B3 from B2 as a consequence of weakening liquidity and worse than expected operating performance in 2011 alongside only modest expectations for improvement in 2012. The downgrade to B3 incorporates Moody's concerns regarding the decline in Rotech's cash balance due to significant working capital usage during 2011 and lower than expected growth in EBITDA. ROTHSTEIN ROSENFELDT: Bankruptcy Legal Fees Now Exceed $20-Mil. --------------------------------------------------------------- Paul Brinkmann, reporter at South Florida Business Journal, reports that legal and accounting fees in the bankruptcy of Scott Rothstein's former law firm, Rothstein Rosenfeldt Adler, are surpassing $20 million, while recovery for victims in the case nears $100 million. The report notes the bankruptcy estate has also engineered settlement payments, including $30 million to the family of auto dealer Ed Morse. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. ROUNDTABLE CORP: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------------- Dallas, Texas-based Roundtable Corporation, a franchisee of Dairy Queen restaurants, was placed in Chapter 11 bankruptcy protection by its owner John W. Beakley earlier this month after Mr. Beakley was sued for securities fraud and his assets were placed in receivership. Reportnews relates Mark A. Weisbart, Mr. Beakley's Dallas bankruptcy attorney, has challenged a move by receiver Fernando M. Bustos to install himself as the sole officer and director of Roundtable Corp. Walt Nelt at Avalanche-Journal reports that a federal judge froze all of Mr. Beakley's assets and named Mr. Bustos as receiver to take control of Mr. Beakley's businesses, after a family allowed Mr. Beakley to manage as much as $10 million and then sued the accountant alleging securities fraud. According to Avalanche- Journal, attorneys for Samuel K. Douglass and his sons, Mark, Timothy and Scott, filed the suit and asked for orders immediately freezing assets and naming a receiver, because they believed Mr. Beakley's business structure was in imminent danger of collapsing from the threat of federal tax liens and unpaid franchise fees to American Dairy Queen. Avalanche-Journal reports that the lawsuit accuses Mr. Beakley, owner of the Beakley & Associates accounting firm, of mismanaging the family's money by placing it all into businesses he controlled and then drawing it out to enrich himself and family members through a variety of management fees and insider loans. The report notes the suit also contends Mr. Beakley jeopardized their capital by not paying federal payroll taxes, fast-food restaurant franchise fees and real estate rents. The complaint was filed in U.S. District Court in Lubbock March 1 and named 122 defendants mostly business entities as well as seven people. Hours after the suit was filed, the business entities overseeing Mr. Beakley's 85 Dairy Queen franchises in West Texas, New Mexico and Oklahoma filed Chapter 11 reorganization petitions with the U.S. Bankruptcy Court for the Eastern District of Texas. Because businesses in bankruptcy are protected from most litigation, they were removed from the receivership. The major business entities are: * Roundtable Corp. -- The business controls 85 Dairy Queen corporations Mr. Beakley controls. One of three entities to file Chapter 11 bankruptcy petitions, it was removed from the Douglass lawsuit by District Judge Sam R. Cummings. That portion of the suit could be re-opened after the bankruptcy is resolved. * Food Service Management -- A corporation related to Roundtable and the Dairy Queen holdings. It was the subject of a separate Chapter 11 filing. * Concert Management -- According to court documents, it is also a Dairy Queen-related business that at one time owned more than 30 locations. * I-27 Powersports -- Lubbock-based business that sells motorcycles and all-terrain vehicles. * I-27 Marine -- Lubbock-based boat dealership. * Ranchland Hills Golf Club and Ranchland Hills Country Club -- A golf and real estate venture in Midland. * MMPK Restaurants and Mama Mia Pizza Kitchen -- A defunct restaurant in Levelland. According to court documents, Mr. Beakley was holding on to the real estate with plans to re-open it as a Dairy Queen. * Tierra de Tejas Development -- a residential developer building neighborhoods in San Benito and Harlingen. Roundtable filed for Chapter 11 protection on March 2, 2012 (Bankr. E.D. Tex. Case No. 12-40512). Judge Brenda T. Rhoades presides over the case. The Law Offices of Mark A. Weisbart represents Roundtable. The Debtor listed assets of less than $50,000, and debts of between $1 million and $10 million. Food Service Holdings Ltd., aka Dairy Queen, filed for Chapter 11 bankruptcy protection on March 1, 2012 (Bankr. E.D. Tex. Case No. 12-40510). The Law Offices of Mark A. Weisbart also represents the Company. The petition listed assets of less than $50,000, and estimated debts of between $1 million and $10 million. RYERSON HOLDING: Moody's Affirms 'Caa1' CFR; Outlook Stable ----------------------------------------------------------- Moody's Investors Services revised the outlook for Ryerson Holding Corporation to stable from negative. At the same time, Moody's affirmed the Caa1 corporate family rating and probability of default rating, Caa3 rating on Ryerson Holding's 14.5% senior discount notes due 2015, and the Caa1 rating on Ryerson Inc.'s 12% senior secured notes due 2015 and floating senior secured notes due 2014. RATINGS RATIONALE The change in rating outlook to stable acknowledges the improving trends evident in the company's performance and metrics. The outlook also reflects Moody's view that demand conditions in the company's end markets will continue to be relatively stable or gradually improve during 2012, which should allow Ryerson to, at a minimum, maintain or further improve its current operating performance and metrics, while sustaining sufficient liquidity. Although Moody's expects conditions in the steel industry to show improvement in the first half of 2012, Moody's believes that conditions could weaken somewhat in the second half. Nevertheless, Moody's anticipates overall year-on-year improvement. Ryerson's Caa1 corporate family rating (CFR) reflects the company's high, although improving leverage, low profit margins compared to other rated metal service centers, and the cyclicality and competitiveness of the metals distribution industry. The ratings positively reflect the company's size and scale, geographic, product and customer diversification, modest capex spending, adequate liquidity, and the countercyclical nature of its working capital investment, which is a source of cash during economic downturns. Ryerson's performance may have the potential to improve as a result of the company's reorganization plan and strategic efforts to enhance its profitability, which include shifting towards higher margin products, generating a larger proportion of transactional versus contractual business, various cost control initiatives, and further decentralization of operations. However, such change, if successful, would not transpire imminently, but would rather occur gradually, over a longer time horizon. Ryerson's outlook or ratings could be positively impacted by a marked and sustainable improvement in operating margins and material debt reduction while maintaining effective working capital management and adequate liquidity. The rating is constrained by the company's leverage, and could favorably be impacted should the company sustain debt-to-EBITDA below 7.0x and (EBITDA less capital expenditures)/debt of at least 1.5x. Ryerson's outlook or ratings may be lowered if metal markets and macroeconomic conditions experience a material weakening, leverage as measured by the debt/EBITDA ratio rises above 10.0x or (EBITDA less capital expenditures)/debt is less than 0.75x. The outlook or ratings could also be negatively impacted by an erosion of Ryerson's liquidity, debt-financed acquisitions, or further shareholder distributions. The principal methodology used in rating Ryerson Holding Corporation was the Global Distribution & Supply Chain Services Industry Methodology published in November 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. Ryerson Holding Corporation, through its subsidiary Ryerson Inc., is the second largest metals service center company in North America, with approximately 100 locations in the U.S., Canada, and Mexico, seven locations in China and one location in Brazil. Ryerson provides a full line of carbon, stainless and alloy steels and aluminum, and a limited line of nickel and red metals. It has over 40,000 customers and sells to a broad mix of end markets. Ryerson is owned primarily by Platinum Equity. In 2011 the company generated $4.7 billion in net sales. SEARS HOLDINGS: Incurs $3.1 Billion Net Loss in Fiscal 2012 ----------------------------------------------------------- Sears Holdings Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $3.14 billion on $41.56 million of merchandise sales and services in 2011, compared with net income of $150 million on $42.66 billion of merchandise sales and services in 2010. The Company's balance sheet at Jan. 28, 2012, showed $21.38 billion in total assets, $17.04 billion in total liabilities, and $4.34 billion in total equity. A copy of the Form 10-K is available for free at: http://is.gd/KSutqX About Sears Holdings Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- is the nation's fourth largest broadline retailer with more than 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a 94% stake in Sears Canada and an 80.1% stake in Orchard Supply Hardware. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. Kmart completed its merger with Sears on March 24, 2005. Negative Outlook Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Ill.-based Sears Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with negative implications on Dec. 28, 2011. We are also lowering the short-term and commercial paper rating to 'C' from 'B-2'. The rating outlook is negative," S&P said. "The corporate credit rating reflects our projection that Sears' EBITDA will be negative in 2012, given our expectations for continued sales and margin pressure," said Standard & Poor's credit analyst Ana Lai. She added, "We further expect that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses." Moody's Investors Service in January 2012 lowered Sears Holdings Family and Probability of Default Ratings to B3 from B1. The outlook remains negative. At the same time Moody's affirmed Sears' Speculative Grade Liquidity Rating at SGL-2. The rating action reflects Moody's expectations that Sears will report a significant operating loss in fiscal 2011. Moody's added that the rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers. SNOKIST GROWERS: Sale Process Extended by 45 Days ------------------------------------------------- Mai Hoang, writing for Yakima Herald-Republic, reports that the U.S. Bankruptcy Court granted a 45-day extension in the bidding process for the assets of Snokist Growers on Friday, giving Salem, Oregon-based Truitt Brothers Inc. additional time to secure financing for its nearly $42.5 million offer. According to the report, Snokist will need to submit a new bid process by March 26. Ms. Hoang previously reported that that Truitt Brothers suffered a setback on March 12, 2012, when it was unable to secure financing. Obtaining financing was one of several requirements Truitt Brothers had to fulfill in order to secure its bid. Truitt Brothers' bid would pay off much of Snokist's debt and enable the firm to relocate its pear-canning operations from Salem to the Snokist facilities in Yakima. In a status update filed with the court, Snokist attorney Roger Bailey, Esq., said the large bid amount made it difficult for Truitt Brothers to secure financing within the required time period. Qualified bids were originally due March 14 and the Bankruptcy Court was slated to consider the offers on March 16. According to the report, the only official bid came from San Francisco-based Del Monte Corp., which submitted a joint offer of about $42.5 million with Lodi, Calif., food processor Pacific Coast Producers. The report says Judge Frank Kurtz made his decision to extend the process after listening to more than five hours of testimony. Judge Kurtz said both offers were legitimate, but ultimately the Del Monte offer was "less favorable" than that of Truitt Brothers. The report notes attorneys for Del Monte argued Friday that accepting its bid would enable a quick resolution for creditors as it was an all-cash offer with no contingencies. Giving Truitt Brothers additional time to secure financing would generate more costs for the bankruptcy and Snokist's operations, leaving creditors worse off, Del Monte attorney Todd A. Feinsmith said during the hearing. Mr. Feinsmith -- feinsmitht@pepperlaw.com -- is with Pepper Hamilton. The report notes Truitt Brothers' attorney Kevin O'Rourke argued the company's offer includes items that the Del Monte bid does not, including plans to continue operating Snokist facilities (the company wants to move its pear canning operations from Salem to Yakima), the acquisition of unexpired leases and funds for unsecured creditors, namely Snokist growers. Del Monte's offer, Mr. O'Rourke claims, does not include plans to pay unsecured creditors and may not even be enough to pay secured creditors in full. The report says secured creditors, including Rabo AgriFinance and KeyBank, however, backed Del Monte, as a cash offer would ensure payment sooner. The report notes unsecured creditors supported the Truitt Brothers offer. According to the report, Del Monte attorney's Mr. Feinsmith said during the hearing that it was unclear whether the company would be interested in holding such a position or what the bid's status would be after 45 days. About Snokist Growers Headquartered in Yakima, Washington Snokist Growers -- http://www.snokist.com/-- is a century-old cooperative of fruit growers. Snokist provides fresh and processed pears, apples, cherries, plums, and nectarines. Snokist Growers filed for Chapter 11 bankruptcy (Bankr. E.D. Wash. Case No. 11-05868) on Dec. 7, 2011, with plans to liquidate after sales couldn't recover from allegations that it violated food- safety rules. Judge Frank L. Kurtz presides over the case. Lawyers at Bailey & Busey LLC serve as the Debtor's counsel. In its petition, the Debtor scheduled $69,567,846 in assets and $73,392,906 in liabilities. The petition was signed by Jim Davis, president. Counsel for lender Rabo AgriFinance, as agent for itself and KeyBank, is James Ray Streinz, Esq. -- rays@mcewengisvold.com -- at McEwen Gisvold, LLP. Counsel for KeyBank National Association is Bruce W. Leaverton, Esq., at Lane Powell, P.C., in Seattle. Robert D. Miller Jr., the United States Trustee for Region 14, appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Snokist Growers. The Committee is represented by Metiner G. Kimel, Esq., at Kimel Law Offices. Keybank is represented by Bruce W. Leaverton, Esq., and Tereza Simonyan, Esq., at Lane Powell PC SPECTRUM BRANDS: Moody's Rates $275 Million Unsecured Notes 'B3' ---------------------------------------------------------------- Moody's Investors Service rated Spectrum Brands $275 million senior unsecured notes B3. Proceeds from the notes will be used to refinance the 12% subordinated notes. All ratings, including the B1 Corporate Family Rating, were affirmed. The outlook remains stable. The 12% subordinated notes will be withdrawn upon close. "We think this refinancing is beneficial to the credit profile of Spectrum as it will save them about $13 million a year of interest," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. "We think Spectrum will initiate up to a $40 million dividend later in the year, as permitted in its credit agreements," noted Cassidy. "We think this will be driven by its largest shareholder, Harbinger Group, and will be funded from free cash flow, but it will reduce the amount available to pay down debt." The following rating was assigned: $275 million senior unsecured notes at B3 (LGD5, 89%); The following ratings were affirmed/LGD assessments revised: Corporate Family Rating at B1; Probability of Default Rating at B1; $950 million senior secured notes at B1 (LGD3, 46% from 48%); $750 million senior secured term loan ($535 million outstanding) at B1 (LGD3, 46% from 48%); Senior subordinated notes due 2013 at B3 (LGD 5, 89% from 91%); Speculative grade liquidity rating at SGL 2. RATINGS RATIONALE The B1 Corporate Family Rating reflects Spectrum's high, albeit decreasing, financial leverage at almost 4.5 times and its modest size with revenues around $3 billion. The highly competitive industry that Spectrum operates in competing against bigger and better capitalized companies also constrains the rating. Spectrum's ratings benefit from its good product diversification with products ranging from personal care items, to pet food and small appliances. The shareholder oriented propensity of its largest shareholder, Harbinger Group, is reflected in the rating. The rating also reflects the general stability in performance during the recession and Moody's expectation that credit metrics will continue improving in the near to mid-term. Spectrum's good liquidity profile is also reflected in the rating as is its increasing international penetration. Having around 20% of its business in Europe is a risk as many European countries are dealing with economic uncertainty. The stable outlook reflects Moody's belief that Spectrum's top line in fiscal 2012 will grow around 3% and its earnings will continue improving. Additional debt repayment and credit metric improvement are considered in the outlook. Moody's expectation of Spectrum initiating up to a $40 million dividend payment is consistent with a stable outlook. The rating is unlikely to be upgraded until there is additional clarity about Harbinger Group. Once some of the uncertainty resides, the rating could be upgraded if the company consitently improves its earnings and pays down debt. Key credit metrics necessary for an upgrade would be debt/EBITDA sustained well below 4 times (currently 4.3 times on a proforma basis) and EBITA margins in the mid teens. For the debt/ EBITDA upgrade threshold to be met, EBITDA needs to increase by about $50 million or debt needs to decrease by around $200 million. The two biggest risks that could result in a downgrade are aggressive capital structure moves by Harbinger Group and excessively high raw material costs that cannot be passed through to retailers. Key credit metrics driving a downgrade are debt/EBITDA consistently over 5.5 times and mid single digit operating margins (currently in the low teens). In order for debt/EBITDA to rise above 5.5 times, EBITDA would need to decrease by about $100 million or debt increase by approximately $500 million. Headquartered in Madison, Wisconsin, Spectrum Brands, Inc., is a global consumer products company with a diverse product portfolio including consumer batteries, lawn and garden, electric shaving and grooming, and household insect control. Sales for the twelve months ended January 1, 2012 approximated $3.2 billion. TAVOR HOLDINGS: Foreclosure Action Prompts Bankruptcy ----------------------------------------------------- Paul Brinkmann, reporter at South Florida Business Journal, relates Tavor Holdings LLC has filed for Chapter 11 bankruptcy following a July foreclosure action by one of its lenders and a plan in August to sell half of its golf course. The company estimated both assets and debts of between $1 million and $10 million. "Our intention is to restructure our arrangements with creditors and maximize the value of the property for future sale," the report quotes Craig Pugatch, Tavor Holdings' bankruptcy attorney, as saying. "We believe that the value of the property will ultimately result in substantial, if not full, payment to creditors." According to the report, lender Textron Financial Corp. in July filed a foreclosure lawsuit against Tavor Holdings, which owns the 233-acre, 36-hole golf course and its clubhouse at 200 Bonaventure Blvd. The complaint referenced a $6.3 million mortgage, but the default was triggered by unpaid real estate taxes. In August, Tavor Holdings signed a letter of intent to sell the west half of the golf course to an undisclosed homebuilder that planned to build 125 homes there. The report says the plan was for Tavor Holdings to use some of the proceeds from that sale to purchase the mortgage from Textron at a prenegotiated discount. Tavor's general manager Keith Clougherty said the company put money into escrow for the property tax payments while challenging Broward County's assessed value of the property. The report notes the bankruptcy petition was signed by manager Mordechai Boaziz. Tavor Holdings LLC owns the Bonaventure Country Club in Weston, Florida. TAYLOR BEAN: Former Finance Chief Reaches Plea Agreement -------------------------------------------------------- American Bankruptcy Institute reports that Taylor, Bean & Whitaker Mortgage Corp.'s former finance chief reached a plea agreement with federal prosecutors, almost a year after the company's chairman was found guilty of running a $3 billion fraud. About Taylor Bean Taylor, Bean & Whitaker Mortgage Corp. grew from a small Ocala- based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009. Taylor Bean filed the Chapter 11 petition three weeks after federal investigators searched its offices. The day following the search, the Federal Housing Administration, Ginnie Mae and Freddie Mac prohibited the company from issuing new mortgages and terminated servicing rights. Taylor Bean estimated more than $1 billion in both assets and liabilities in its bankruptcy petition Lee Farkas, the former chairman, was sentenced in June to 30 years in federal prison after being convicted on 14 counts of conspiracy and bank, wire and securities fraud in what prosecutors said was a $3 billion scheme involving fake mortgage assets. Jeffrey W. Kelly, Esq., and J. David Dantzler, Jr., Esq., at Troutman Sanders LLP, in Atlanta, Ga., and Russel M. Blain, Esq., and Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Fla., represent the Debtors. Paul Steven Singerman, Esq., and Arthur J. Spector, Esq., at Berger Singerman PA, in Miami, Fla., represent the Committee. BMC Group, Inc., serves as the claims and noticing agent. TBS INTERNATIONAL: Artis Capital No Longer Owns Class A Shares -------------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Artis Capital Management, L.P., disclosed that, as of Feb. 7, 2012, it does not beneficially own any Class A Ordinary Shares of TBS International PLC. Artis Capital, as reported by the TCR on Feb. 14, 2012, previously disclosed beneficial ownership of 1,142,457 Class A shares. A copy of the amended filing is available for free at http://is.gd/RtSI5I About TBS International TBS International plc, TBS Shipping Services Inc. and its various subsidiaries and affiliates -- http://www.tbsship.com/-- filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-22224) on Feb. 6, 2012. TBS provides ocean transportation services that offer worldwide shipping solutions to a diverse client base of industrial shippers in more than 20 countries to over 300 customers. Through a 41-vessel fleet of multipurpose tweendeckers and handysize and handymax dry bulk carriers, TBS, in conjunction with a network of affiliated service companies, offers (a) liner, parcel and bulk transportation services and (b) time charter services. TBS's global headquarters, located in Yonkers, New York, oversees all major corporate and operational decision-making, including in connection with drydocking of vessels and other capital expenditures, fleet positioning, and cargo arrangements with third parties, including major vendors and customers. As of the Petition Date, TBS has roughly 140 employees worldwide, the vast majority of whom work in the corporate headquarters. For the year ended Dec. 31, 2011, TBS's consolidated net revenue was roughly $369.7 million. Its consolidated debt is roughly $220 million. TBS filed together with the petition its Joint Prepackaged Plan of Reorganization dated Jan. 31, 2012. As of the Petition Date, the Debtors have received overwhelming acceptance of the Plan from all voting classes. If confirmed, the Plan will implement an agreed restructuring of the Debtors' obligations to their prepetition secured lenders, provide for the payment of all general unsecured claims in full, and effect the cancellation of existing equity interests at the parent holding company levels and the issuance of new equity interests to certain of the Debtors' lenders and key management. To implement this restructuring, the Debtors have obtained commitments to provide $42.8 million in debtor-in- possession financing and an equivalent amount of exit financing. The Debtors are requesting a hearing to confirm the Plan within 35 days of the Petition Date. Judge Robert D. Drain presides over the case. Michael A. Rosenthal, Esq., and Matthew K. Kelsey, Esq., at Gibson, Dunn & Crutcher LLP, serve as the Debtors' counsel. The Debtors' investment banker is Lazard Freres & Co. LLC, the financial advisor is AlixPartners LLP. Cardillo & Corbett serves as special maritime and corporate counsel, Garden City Group serves as administrative agent and Gibson, Dunn & Crutcher as counsel. The petition was signed by Ferdinand V. Lepere, executive vice president and chief financial officer. TBS disclosed US$143 million in assets and US$220 million in debt. No official committee has yet been appointed by the Office of the United States Trustee. TENET HEALTHCARE: CFO B. Porter Resigns to Join Fluor Corp. ----------------------------------------------------------- Biggs C. Porter, Tenet Healthcare Corporation's chief financial officer since June 2006, will resign effective March 30 to become chief financial officer of Fluor Corporation. On an interim basis and in addition to his current duties, Tenet's President and CEO, Trevor Fetter, will act as the company's chief financial officer. "We want to thank Biggs for his impressive contributions to Tenet's financial performance over the past six years during critical and challenging times in our economy and industry," said Trevor Fetter, president and chief executive officer. "During his tenure, we grew same hospital revenues by 23.1%, adjusted EBITDA by 81.5%, and launched our Conifer Health Solutions business. Looking ahead, I am confident we will find an exceptionally qualified person to fill the role of CFO and we are fortunate to have a strong finance team to support our company's strategic growth plans." About Tenet Healthcare Dallas, Texas-based Tenet Healthcare Corporation (NYSE: THC) -- http://www.tenethealth.com/-- is a health care services company whose subsidiaries and affiliates own and operate acute care hospitals, ambulatory surgery centers and diagnostic imaging centers. The Company reported net income of $94 million on $8.85 billion of net operating revenues for the year ended Dec. 31, 2011, compared with net income of $1.15 billion on $8.46 billion of net operating revenues during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $8.46 billion in total assets, $6.95 billion in total liabilities, $16 million in redeemable non-controlling interests in equity of consolidated subsidiaries, and $1.49 billion in total equity. * * * Standard & Poor's Ratings Services said November 2011 the corporate credit rating on Tenet is 'B' and the outlook is stable. "The rating reflects our view of the company's weak business risk as the benefits of a fairly sizable portfolio of 49 hospitals are undercut by uncertain reimbursement, significant uncompensated care, weak patient volume trends and concentration in certain markets, many of which are competitive. We view Tenet's financial risk profile as aggressive, even though there has been a recent reduction in debt to EBITDA to 4.5x. This has contributed to the generation of free cash flow since last year. (For the latest complete corporate credit rating rationale, see Standard & Poor's research report on Tenet published July 20, 2011 on Ratings Direct)," S&P related. Moody's Investors Service said in November 2011 that Tenet's 'B2' Corporate Family Rating remains constrained by Moody's expectation of modest free cash flow generation and continued high geographic concentration. Furthermore, industry challenges like high bad debt expense, weak volume trends and changes in mix as commercial volumes decline, will likely challenge organic growth. However, the rating also incorporates Moody's expectation that the company will continue to see improvements in operating performance, driven by cost savings initiatives and benefits from capital investment. TETZLAFF CHIROPRACTIC: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Tetzlaff Chiropractic, Inc. dba Whitmore Chiropractic 2531 E. Whitmore Avenue, Suite L-1 Ceres, CA 95307 Bankruptcy Case No.: 12-90687 Chapter 11 Petition Date: March 13, 2012 Court: U.S. Bankruptcy Court Eastern District of California (Modesto) Judge: Ronald H. Sargis Debtor's Counsel: David C. Johnston, Esq. JOHNSTON & JOHNSTON LAW CORP. 627 13th Street, Suite E Modesto, CA 95354 Tel: (209) 579-1150 Estimated Assets: $0 to $50,000 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 Stephen P. Tetzlaff, D.C., president. THOMAS GROUP: Ceases Operations, To Send Contracts to Ops --------------------------------------------------------- Thomas Group, Inc. ceased business operations. In order to best preserve the value of the Company's assets for the benefit of its creditors and stockholders, on March 5, 2012, the Company entered into an Agreement to License Intangible Property with Ops Rules Partners, LLC, pursuant to which the Company agreed to use its best efforts to transfer all existing client contracts and existing proposals for services as well as to license certain selected confidential information and materials to Ops until Dec. 31, 2013, in exchange for a royalty on revenue received by Ops as a result of such contracts and proposals as well as its use of such information and materials. Further, in order to maximize the opportunity for Ops to generate revenue from the materials and information and thus to pay applicable royalties to the Company, the agreement with Ops authorized it to hire certain employees of the Company, including Mr. Michael N. Romeri, who resigned his positions as President and Chief Executive Officer and as a director of the Company on March 5, 2012 and now serves as Managing Partner of Ops. Mr. Romeri and the other Company employees who resigned to join Ops Rules Partners did not receive any severance payments from the Company. The Company has terminated its remaining employees. The Company has for some time tried to generate new revenue while also pursuing additional funding as well as other strategic alternatives. The Company has not been able to generate the needed additional revenue and has not found a viable strategic alternative. Given the Company's financial position and prospects, particularly in light of its low available cash balance, a recent lawsuit alleging breach of an equipment lease, and the Company's other outstanding liabilities, the Board of Directors of the Company determined that it was in the best interest of the Company, its creditors and stockholders to cease operations. The Agreement with Ops did not include trade names, trademarks, websites or other tangible and intangible assets of the Company. The Company now is winding down its operations and the Board of Directors has authorized filing bankruptcy under Chapter 7 of the U.S. Bankruptcy Code, if necessary. As previously publicly disclosed, the Company filed a Form 15 with the Securities and Exchange Commission on January 3, 2012, to deregister its common stock under Section 12(g) of the Securities Exchange Act of 1934. TRAINOR GLASS: April 10 Hearing on Bid to Use Cash Collateral ------------------------------------------------------------- Trainor Glass Company is seeking the immediate entry of an interim order and, after further notice and a hearing, the entry of a final order authorizing the Debtor to (a) use the cash collateral in which First Midwest Bank holds an interest; (b) obtain postpetition credit through debtor in possession financing from First Midwest; and (c) provide and grant liens, security interests, superpriority claims and other adequate protection and relief to First Midwest. First Midwest has agreed to permit the Debtor to use Cash Collateral and DIP Financing solely in accordance with a budget. The Debtor intends to use Cash Collateral and, to the extent needed, the DIP Financing to pay for the costs of (a) preservation and orderly liquidation of Debtor's assets, and (b) administration of the Debtor's chapter 11 case, including attorneys' fees, consultant's fees and U.S. Trustee's fees. The parties have agreed upon an initial budget for nine weeks. First Midwest has also agreed to allow the Debtor to use a portion of its Cash Collateral to pay for the pre-petition wages due Debtor's former non-insider employees, to the extent entitled to priority under section 507(a)(4) of the Bankruptcy Code, and related payroll obligations in an amount not to exceed $494,000. As of the Petition Date, the Debtor owes the Bank not less than $34,059,905. Substantially all of the Debtor's assets are encumbered by First Midwest's liens. Under the DIP facility, the maximum principal amount of Postpetition Debt outstanding will not at any time exceed $300,000. The DIP Loan will incur 9% per annum. First Midwest has agreed to a Carveout of its collateral of the amounts set forth in the Budget for all U.S. Trustee fees and the fees and expenses awarded by the Court to Arnstein & Lehr LLP, the Debtor's bankruptcy counsel, High Ridge Partners, Inc., the Debtor's consultant, and any professionals authorized by the Bankruptcy Court to be retained by the Committee, if one is appointed in this case. Counsel for First Midwest Bank is: Geoffrey S. Goodman, Esq. FOLEY & LARDNER LLP 321 N. Clark Street, Suite 2800 Chicago, IL 60610 Fax: 312-832-4700 E-mail: ggoodman@foley.com Penny Stacey at the USGlass News Network, citing court documents, reports that a hearing on Trainor Glass' request to use cash collateral has been continued to April 10. The hearing originally was scheduled for March 15. About Trainor Glass Trainor Glass Company, doing business as Trainor Modular Walls, Trainor Solar, and Trainor Florida, filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 12-09458) on March 9, 2012. The Hon. Carol A. Doyle oversees the case. David A. Golin, Esq., Michael L. Gesas, Esq., and Kevin H. Morse, Esq., at Arnstein & Lehr LLP, serve as the Debtor's counsel. The Debtor estimated both assets and debts of between $50 million and $100 million. Trainor was founded in 1953 by Robert J. Trainor Sr. to pursue a residential glass business in Chicago, Illinois. Trainor's business model was focused on quality fabrication, design, engineering, and installation of glass products and framing systems in virtually every architectural application, including (a) new construction, (b) green-building solutions, (c) building rehabilitation, (d) storefronts and entrances, (e) tenant interiors, and (f) custom-specialty work. TRIUS THERAPEUTICS: Incurs $18.2 Million Net Loss in 2011 --------------------------------------------------------- Trius Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $18.25 million on $41.01 million of total revenues in 2011, following a net loss of $23.86 million on $8.03 million of total revenues in 2010. Net loss in 2009 was $22.68 million. The Company's balance sheet at Dec. 31, 2011, showed $68.12 million in total assets, $18.23 million in total liabilities, all current, and $49.89 million in total stockholders' equity. A copy of the Form 10-K is available for free at: http://is.gd/ldvEYs About Trius Therapeutics San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) -- http://www.triusrx.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of innovative antibiotics for serious, life-threatening infections. The Company's first product candidate, torezolid phosphate, is an IV and orally administered second generation oxazolidinone being developed for the treatment of serious gram-positive infections, including those caused by MRSA. In addition to the company's torezolid phosphate clinical program, it is currently conducting two preclinical programs using its proprietary discovery platform to develop antibiotics to treat infections caused by gram-negative bacteria. In the Form 10-K for the year ended Dec. 31, 2011, the Company said it has incurred losses since its inception and it anticipates that it will continue to incur losses for the foreseeable future. As of December 31, 2011, the Company had an accumulated deficit of $95.4 million. The Company has funded, and plan to continue to fund, its operations from the sale of securities, through research funding and from collaboration and license payments, including payments under the Bayer collaboration. However, the Company has generated no revenues from product sales to date. TRIUS THERAPEUTICS: Files Form S-8; Registers 914,000 Shares ------------------------------------------------------------ Trius Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission a Form S-8 registering a total of $914,000 shares of common stock issuable under the Company's 2010 Equity Incentive Plan and Amended and Restated 2010 Non-Employee Directors' Stock Option Plan. The proposed maximum aggregate offering price is $4.52 million. A copy of the Form S-8 is available for free at http://is.gd/CobFRB About Trius Therapeutics San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) -- http://www.triusrx.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of innovative antibiotics for serious, life-threatening infections. The Company's first product candidate, torezolid phosphate, is an IV and orally administered second generation oxazolidinone being developed for the treatment of serious gram-positive infections, including those caused by MRSA. In addition to the company's torezolid phosphate clinical program, it is currently conducting two preclinical programs using its proprietary discovery platform to develop antibiotics to treat infections caused by gram-negative bacteria. In the Form 10-K for the year ended Dec. 31, 2011, the Company said it has incurred losses since its inception and it anticipates that it will continue to incur losses for the foreseeable future. As of December 31, 2011, the Company had an accumulated deficit of $95.4 million. The Company has funded, and plan to continue to fund, its operations from the sale of securities, through research funding and from collaboration and license payments, including payments under the Bayer collaboration. However, the Company has generated no revenues from product sales to date. The Company reported a net loss of $18.25 million on $41.01 million of total revenues in 2011, a net loss of $23.86 million on $8.03 million of total revenues in 2010, and a net loss of $22.68 million on $5.01 million of total revenues in 2009. The Company's balance sheet at Dec. 31, 2011, showed $68.12 million in total assets, $18.23 million in total liabilities, all current, and $49.89 million in total stockholders' equity. THERMOENERGY CORP: Francis Howard Discloses 6.6% Equity Stake ------------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Francis Howard disclosed that, as of Jan. 10, 2012, he beneficially owns 6,000,000 shares of common stock of ThermoEnergy Corporation, which represents 6.6% of the shares outstanding. A copy of the filing is available for free at http://is.gd/TJHQAu About ThermoEnergy Corporation Little Rock, Ark.-based ThermoEnergy Corporation is a clean technologies company engaged in the worldwide development of advanced municipal and industrial wastewater treatment systems and carbon reducing clean energy technologies. As reported by the TCR on April 7, 2011, Kemp & Company, a Professional Association, in Little Rock, Arkansas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred net losses since inception and will require substantial capital to continue commercialization of the Company's technologies and to fund the Companies liabilities. The Company reported a net loss of $9.85 million on $2.87 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $12.98 million on $4.01 million of revenue during the prior year. The Company also reported a net loss of $11.87 million on $3.57 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $8.49 million on $2.05 million of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $4.27 million in total assets, $11.09 million in total liabilities and a $6.81 million total stockholders' deficiency. UNITED ENERGY: Owners Down to 451; Reports with SEC Suspended ------------------------------------------------------------- United Energy Corp. filed a Form 15 notifying of its suspension of its duty under Section 15(d) to file reports required by Section 13(a) of the Securities Exchange Act of 1934 with respect to its common stock, par value $.01 per share. Pursuant to Rule 12g-4, the Company is suspending reporting because there are currently less than 500 holders of record of the common shares. There were only 451 holders of the common shares as of March 13, 2012. About United Energy United Energy Corp. -- http://www.unitedenergycorp.net/-- develops and distributes environmentally friendly specialty chemical products with applications in several industries and markets. Through its wholly owned subsidiary, Green Globe Industries, Inc., the Company provides the U.S. military with a variety of solvents, paint strippers and cleaners under its trade name "Qualchem." The Company is headquartered in Secaucus, New Jersey. The Company's balance sheet at Sept. 30, 2010, showed $1.02 million in total assets, $1.08 million in total liabilities, all current, and a stockholders' deficit of $69,308. As reported in the Troubled Company Reporter on July 20, 2010, Jewett, Schwartz, Wolfe & Associates, in Hollywood, Fla., expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has operating and liquidity concerns, and has incurred net losses of $23.55 million as of March 31, 2010. UNITED RETAIL: Inks With Creditors Deal Over Stalking Horse Bid --------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that United Retail Group Inc. on Thursday reached a handshake deal with unsecured creditors to end their challenge of would-be buyer Versa Capital Management LLC's possible $12.5 million credit bid on the debtor in a New York bankruptcy court. According to Law360, the official committee of unsecured creditors had filed the adversary complaint Monday, saying the $12.5 million figure was in fact an unsecured claim that is subject to taxes and other restrictions that reduce the allowable recovery amount to zero. As reported in the Troubled Company Reporter on March 15, 2012, 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. 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. USEC INC: Incurs $540.7 Million Net Loss in Full Year 2011 ---------------------------------------------------------- USEC Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $540.70 million on $1.67 billion of total revenue for the year ended Dec. 31, 2011, compared with net income of $7.50 million on $2.03 billion of total revenue during the prior year. The Company reported a net loss of $496 million on $462.40 million of total revenue for the three months ended Dec. 31, 2011, compared with net income of $9 million on $666.40 million of total revenue for the same period a year ago. The Company's balance sheet at Dec. 31, 2011, showed $3.54 billion in total assets, $2.79 billion in total liabilities and $752.40 million in total stockholders' equity. "Throughout 2011, USEC worked diligently to overcome a number of significant challenges facing the Company," said John K. Welch, USEC president and chief executive officer. "Despite the lack of a conditional commitment for a loan guarantee, DOE's proposal to share costs in a two-year research, development and demonstration program reflects the importance the U.S. government places on having a source of domestic uranium enrichment." A copy of the Form 10-K is available for free at: http://is.gd/3oferq About USEC Inc. Headquartered in Bethesda, Maryland, USEC Inc. (NYSE: USU) -- http://www.usec.com/-- supplies enriched uranium fuel for commercial nuclear power plants. * * * USEC Inc. carries 'Caa1' corporate and probability of default ratings, with "developing" outlook, from Moody's, and 'CCC+' long term foreign issuer credit rating and 'CCC-' long term local issuer credit rating, with outlook "developing", from Standard & Poor's. In May 2010, S&P said that its rating and outlook on USEC Inc. are not affected by the announcement that Toshiba Corp. and Babcock & Wilcox Investment Co., an affiliate of The Babcock & Wilcox Co., have signed a definitive investment agreement for $200 million with USEC. WASHINGTON MUTUAL: Seeks Court Approval of Compromise Settlement ---------------------------------------------------------------- BankruptcyData.com reports that Washington Mutual Inc. filed with the U.S. Bankruptcy Court a motion to approve a compromise, under Rule 9019, by and among Washington Mutual, JPMorgan Chase Bank and U.S. Bank National Association resolving an adversary proceeding and related proofs of claim. BankruptcyData.com relates that the motion explains, "As a result of entering into the Stipulation, WMI's estate will not avoid incurring any additional expenses of litigating the Union Bank Action and Union Bank Claims in court. Moreover, the Stipulation provides for, among other things, the monetization of the assets of the HFA Trusts and conversion of such assets into cash for the benefit of WMI's estate, ensuring that such funds are readily available for distribution to WMI's creditors." The Court scheduled an April 17, 2012 hearing to consider the motion. 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. WASHINGTON MUTUAL: Sues 12 Insurers Over D&O Coverage Claims ------------------------------------------------------------ Steven Melendez at Bankruptcy Law360 reports that Washington Mutual Inc. sued XL Specialty Insurance Co. and 11 other insurers Thursday for coverage of claims against WaMu directors and officers over an allegedly improper $500 million transfer to a bank subsidiary shortly before WaMu's 2008 Chapter 11 filing. 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. WASHINGTON MUTUAL: Signs Liquidating Trust Pact with W. Kosturos ---------------------------------------------------------------- Washington Mutual, Inc., and the Company's wholly-owned subsidiary, WMI Investment Corp., entered into a liquidating trust agreement with William C. Kosturos, as the liquidating trustee, and CSC Trust Company of Delaware, as the Delaware resident trustee. As previously disclosed, William C. Kosturos is also the Chief Restructuring Officer of the Company, and is the President & Chief Operating Officer of Investment. The Agreement provides for the creation of a liquidating trust that will have an initial term of three years, subject to extension for up to an additional three years with the approval of the United States Bankruptcy Court for the District of Delaware. On or shortly after the effective date of the Plan, certain of the Debtors' assets will be transferred to the WMI Liquidating Trust pursuant to the Plan for the benefit of certain holders of claims against, or equity interests in, the Debtors. Those claim and equity interest holders will be issued beneficial interests in the WMI Liquidating Trust in exchange for their claims against, or equity interests in, the Debtors. The Agreement provides that the Liquidating Trust Interests are not transferable except by will, intestate succession or operation of law. Pursuant to the Agreement, the Liquidating Trustee will be responsible for liquidating, converting to cash and distributing the Liquidating Trust Assets to the Liquidating Trust Beneficiaries in accordance with the terms of the Agreement. The WMI Liquidating Trust will not continue, nor engage in at any time, the conduct of any trade or business other than the liquidation and distribution of the Liquidating Trust Assets, and is intended to qualify as a "liquidating trust" for federal income tax purposes. The proceeds that are obtained from the liquidation of the Liquidating Trust Assets will be distributed to the Liquidating Trust Beneficiaries in accordance with the distribution procedures and priorities set forth in the Agreement. These distribution procedures include a reserve mechanism to allow for the resolution of claims that are disputed, in whole or in part, as of the Effective Date and the issuance of Liquidating Trust Interests and Runoff Notes in respect thereof if and when those claims are allowed. The Trust Agreement also provides for the establishment of a subcommittee of the Trust Advisory Board which will oversee the prosecution of certain claims and the defense of Junior Disputed Claims. The majority of the Liquidating Trust Assets is expected to consist of tax refunds and accumulated interest on those refunds, cash held in the Liquidating Trust Claims Reserve, and Runoff Notes. A copy of the Liquidating Trust Agreement is available at: http://is.gd/GbwfwT 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. WASHINGTON MUTUAL: Deregisters Unsold Securities ------------------------------------------------ Washington Mutual, Inc., filed with the U.S. Securities and Exchange Commission post-effective amendments to its registration statements deregister all securities registered but not sold. On Feb. 23, 2012, the Bankruptcy Court entered an order confirming the Debtors' Seventh Amended Joint Plan of Reorganization. As contemplated by the Plan, all existing securities and agreements evidencing an equity interest of the Debtors will be cancelled as of the effective date of the Plan. 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. Washington Mutual, Inc. disclosed that Judge Mary Walrath at a hearing Feb. 17 said she will approve WaMu's reorganization plan, thus concluding the three and one-half year-old bankruptcy. The Plan is based on a global settlement intended to remove almost all opposition to the reorganization and remedy defects the judge identified in September. The plan is designed to distribute $7 billion. Under the reorganization plan, WaMu will establish a liquidating trust to make distributions to parties-in-interest on account of their allowed claims. * Fed Says 15 of 19 Banks Have Adequate Capital in Stress Scenario ------------------------------------------------------------------ American Bankruptcy Institute reports that the Federal Reserve said that 15 of the 19 largest U.S. banks could maintain adequate capital levels even in a recession scenario in which they continue paying dividends and buy back stock. * Moody's Releases Outlook Reports for Asset Management Sector -------------------------------------------------------------- In four new industry outlooks, Moody's Investors Service reviews 2011 and provides its outlook for asset managers, money market funds, leveraged closed-end funds and bond funds. The rating agency maintains a stable outlook on asset managers, money market funds and closed-end funds, and has changed the outlook on bond funds to negative. Asset Managers Asset managers remained resilient in 2011. Firms controlled discretionary spending in the face of fluctuations in assets under management, fees and client flows, which helped support their margins, as did their conservative approach to liquidity and leverage management. Nevertheless, Moody's expects 2012 to be another volatile year for asset managers, with depressed global growth and economic uncertainty continuing to weigh on results. "Disappointing returns and relatively high fees on actively managed products are causing investors to reconsider their allocations," says Vice President Neal Epstein. "Well-diversified managers that can field alternative and passive products will have competitive advantages in the year ahead." He notes also that mergers and acquisitions could provide credit positive opportunities in this sector. Money Market Funds Money market funds weathered tough conditions last year and are expected to face challenging conditions again in 2012. Challenges include credit and market risks, a shrinking supply of eligible securities, historically low interest rates and the prospect of regulatory reform that may transform the sector into a floating- NAV product and/or impose capital requirements. "In 2012 high levels of liquidity, reduced exposure to European banks and increased investment in US government and Aaa-rated European government issues, as well as shorter maturities and active portfolio management should in most cases continue to mitigate money fund credit and market risks," says Senior Vice President Henry Shilling. "These factors support our stable outlook for money funds generally, and for prime and tax-free funds in particular." But these investment vehicles are not entirely insulated from rapidly changing market conditions, Shilling notes. Thus in the current environment Moody's continues to closely monitor portfolios to assess their risk profiles, liquidity positions and fund flows for unusual redemption activity, as well as managers' risk mitigation efforts. Closed-End Funds For leveraged closed-end funds, asset coverage improved in 2011 as leverage remained constant and asset values strengthened. Municipal assets were up on average 10.5% and overall defaults remained low due to higher revenues amid fiscal restraint on the part of local and state governments. Municipal bonds also benefited from low long-term interest rates. ARPS refinancing picked up in the latter half of the year, with new instruments gaining acceptance as refinancing alternatives. "Fundamentals show positive trends," says analyst Deven Kapoor. "Equity cushions have improved to near or above pre-crisis levels, IPO activity continues and the refinancing of ARPS has accelerated." Kapoor notes however that challenges do remain, these relating mainly to the form and the structure of leverage, which have changed dramatically over the past four years. Bond Funds The outlook on bond funds is negative due to deteriorating fundamental credit conditions. "Bond funds' creditworthiness will come under pressure from the weakening macro environment and deteriorating sovereign and bank creditworthiness," says Vice President Vanessa Robert. "And prices are likely to remain volatile as a confluence of risk factors, including the changing economic outlook, political developments and deteriorating credit quality, causes swings in market sentiment." In 2011, bond funds benefited from another year of capital inflows and rising assets under management in 2011. Increased market volatility in the second half of the year saw investors seeking safer credits, and continuing low interest rates boosted demand. In 2012, assets under management are expected to remain solid, with continued investment in fixed-income investments amid global economic uncertainties and accommodative monetary policies. The reports are titled "Asset Management Sector: 2012 Outlook and 2011 Review," "Money Market Funds: 2012 Outlook and 2011 Review," "Closed-End Funds: 2012 Outlook and 2011 Review" and "Bond Funds: 2012 Outlook and 2011 Review," and are available on moodys.com. * Moody's Says Sluggish Economy Hits US Life Insurers' Results -------------------------------------------------------------- Most publicly traded US life insurers reported modestly higher operating earnings in the fourth quarter of 2011 than in the same period a year ago, Moody's Investors Service says in a new report. Net income, however, was down slightly on the same comparison, though on a full-year basis the industry posted gains on both measures. "The sluggish economy, high equity market volatility and low interest rates continued to constrain life insurers' earnings in 2011," says Vice President and co-author of the report Ann Perry, "and we expect these macro factors to continue to affect their results this year." Without the income generated by two large acquisitions, she notes, operating earnings would have been flat in the final quarter of 2011. Credit impairments continued to decline in 2011, to $5.2 billion from $5.5 billion in 2010. Excluding outlier Aflac, industry impairments as a percentage of cash and invested assets declined even further, to 17 basis points from 29 basis points in 2010. That result is in line with expectations, Perry says, noting that US life insurers' impairments on their European investments are expected to be modest, given their limited exposure to troubled banks and sovereigns. Although variable annuity sales were up 19% for the full-year 2011, they too were down in aggregate in the fourth quarter, with only two firms reporting increases. "Volatility in the equity markets likely is dampening customer appetite," Perry says, "while most companies continue to de-risk these products by increasing prices and reducing benefits, in so doing making them less attractive to customers." And while fixed annuity sales grew 13% in 2011, nearly all of this growth was due to AIG's return to the market, particularly in the first half of the year. In the second half the effect of low interest rates was again apparent, with sales declining by 17% in the fourth quarter over the third. Aggregate individual life sales rose 9% in 2011, showing strong quarter-over-quarter growth, though some of this may have been driven by agents' expectations of price increases in 2012. US life insurers' capitalization remained strong last year, though down slightly on 2010 levels. "We expect risk-based capital ratios to continue to decline as companies seek to improve returns though dividend increases and share buybacks," Perry says. "And provided declines are gradual and sufficient capital is on hand to handle a more stressful economic scenario, these actions are unlikely to affect firms' ratings." The report is titled "US Life Insurers' Q4 2011 Results Mixed; Low Interest Rates Continue to Pressure Industry" and is available on moodys.com. * Moody's Says US Securitization Credit Risk Rising --------------------------------------------------- Relaxed underwriting standards, more complex structures and the entrance of new untested market participants have led to an increase in credit risk for US securitizations, according to a new report from Moody's Investors Service. While the riskiness of securitizations is still low compared to the level it reached in what is now generally considered the bubble years of 2006 and 2007, the signs of credit easing in originations are evident in a number of asset classes that have traditionally backed securitizations: autos, credit cards, and commercial and residential property. "While this increased risk is not unusual for this phase of the credit cycle, investor protections built into transactions must keep pace with these developments," says Moody's Managing Director Claire Robinson. "In some instances, that increased risk has not been adequately mitigated to support the high credit ratings that securitization sponsors desire." Another sign of a relaxation from the extremely tight credit conditions that prevailed in the years following the crisis is the appearance in the structured market of new non-investment grade issuers, new non-prime asset classes, and new financial backers. "These developments indicate that a more robust securitization market is emerging, with investors more willing to fund non- traditional assets and issuers," says Moody's Robinson. "Not all of these transactions will merit top Moody's ratings, however. We expect that we may assign more low to mid-investment-grade ratings to these non-traditional transactions." If inadequately mitigated, some structural features that have appeared in securitizations since 2009 also represent increased risk to investors. "Some of the smaller, less well capitalized entities lack the ability to honor the representations and warranties protections investors rely upon," adds Moody's Robinson. "Others lack a record of providing solid servicing, or they lack comprehensive reporting procedures and back-up plans, all of which protect investors in the event of originator or servicer bankruptcy." * BOND PRICING -- For Week From March 12 - 16, 2012 --------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- AMBAC INC 9.375 8/1/2011 14.200 AMBAC INC 9.500 2/15/2021 15.610 AMBAC INC 7.500 5/1/2023 14.130 AMBAC INC 6.150 2/7/2087 1.020 AES EASTERN ENER 9.000 1/2/2017 22.500 AGY HOLDING COR 11.000 11/15/2014 35.000 AHERN RENTALS 9.250 8/15/2013 56.000 AMER GENL FIN 4.000 4/15/2012 97.000 AMR CORP 9.000 8/1/2012 40.000 AM AIRLN PT TRST 10.180 1/2/2013 67.875 AM AIRLN PT TRST 9.730 9/29/2014 30.750 AMR CORP 6.250 10/15/2014 40.500 AM AIRLN PT TRST 7.379 5/23/2016 31.000 AMR CORP 10.290 3/8/2021 19.100 AMR CORP 10.000 4/15/2021 23.000 AMERICAN ORIENT 5.000 7/15/2015 45.059 AQUILEX HOLDINGS 11.125 12/15/2016 40.000 MCDONNELL DOUG 9.750 4/1/2012 100.320 BROADVIEW NETWRK 11.375 9/1/2012 88.050 BRY-CALL04/12 8.250 11/1/2016 103.900 CVA-CALL03/12 1.000 2/1/2027 99.750 DELTA AIR 1992B1 9.375 9/11/2017 26.625 DELTA AIR 1993A1 9.875 4/30/2049 20.500 DIRECTBUY HLDG 12.000 2/1/2017 23.000 DELTA PETROLEUM 3.750 5/1/2037 60.000 DUNE ENERGY INC 10.500 6/1/2012 93.000 EASTMAN KODAK CO 7.250 11/15/2013 29.000 EASTMAN KODAK CO 7.000 4/1/2017 28.125 EASTMAN KODAK CO 9.950 7/1/2018 29.200 ENERGY CONVERS 3.000 6/15/2013 51.500 EVERGREEN SOLAR 13.000 4/15/2015 50.000 FIRST METRO 6.900 1/15/2019 15.000 FIBERTOWER CORP 9.000 11/15/2012 21.100 GLB AVTN HLDG IN 14.000 8/15/2013 30.000 GMX RESOURCES 5.000 2/1/2013 67.460 GMX RESOURCES 5.000 2/1/2013 65.250 GLOBALSTAR INC 5.750 4/1/2028 55.500 HAWKER BEECHCRAF 8.500 4/1/2015 15.000 HAWKER BEECHCRAF 9.750 4/1/2017 7.600 ELEC DATA SYSTEM 3.875 7/15/2023 93.060 HORIZON LINES 6.000 4/15/2017 30.000 KELLWOOD CO 7.625 10/15/2017 30.704 LEHMAN BROS HLDG 6.000 7/19/2012 27.600 LEHMAN BROS HLDG 5.000 1/22/2013 26.680 LEHMAN BROS HLDG 5.625 1/24/2013 28.938 LEHMAN BROS HLDG 5.100 1/28/2013 25.630 LEHMAN BROS HLDG 5.000 2/11/2013 26.700 LEHMAN BROS HLDG 4.800 2/27/2013 26.000 LEHMAN BROS HLDG 4.700 3/6/2013 26.500 LEHMAN BROS HLDG 5.000 3/27/2013 26.010 LEHMAN BROS HLDG 5.750 5/17/2013 28.875 LEHMAN BROS HLDG 0.450 12/27/2013 27.375 LEHMAN BROS HLDG 5.250 1/30/2014 27.625 LEHMAN BROS HLDG 4.800 3/13/2014 29.000 LEHMAN BROS HLDG 5.000 8/3/2014 25.500 LEHMAN BROS HLDG 6.200 9/26/2014 29.375 LEHMAN BROS HLDG 5.150 2/4/2015 25.500 LEHMAN BROS HLDG 5.250 2/11/2015 27.000 LEHMAN BROS HLDG 8.800 3/1/2015 26.028 LEHMAN BROS HLDG 8.500 8/1/2015 26.550 LEHMAN BROS HLDG 5.000 8/5/2015 25.630 LEHMAN BROS HLDG 7.000 12/18/2015 27.000 LEHMAN BROS HLDG 5.500 4/4/2016 29.125 LEHMAN BROS HLDG 8.920 2/16/2017 26.000 LEHMAN BROS HLDG 5.875 11/15/2017 26.000 LEHMAN BROS HLDG 8.050 1/15/2019 26.025 LEHMAN BROS HLDG 11.000 6/22/2022 26.000 LEHMAN BROS HLDG 11.000 7/18/2022 26.500 LEHMAN BROS HLDG 11.500 9/26/2022 25.750 LEHMAN BROS HLDG 18.000 7/14/2023 26.250 LEHMAN BROS INC 7.500 8/1/2026 3.000 LEHMAN BROS HLDG 11.000 3/17/2028 26.510 LIFECARE HOLDING 9.250 8/15/2013 65.000 MASHANTUCKET PEQ 8.500 11/15/2015 5.025 MF GLOBAL HLDGS 6.250 8/8/2016 35.500 MF GLOBAL LTD 9.000 6/20/2038 34.250 M/I HOMES INC 6.875 4/1/2012 99.000 MANNKIND CORP 3.750 12/15/2013 55.625 NEBRASKA BOOK CO 8.625 3/15/2012 1.500 PMI GROUP INC 6.000 9/15/2016 24.100 PENSON WORLDWIDE 8.000 6/1/2014 38.379 POWERWAVE TECH 3.875 10/1/2027 39.444 POWERWAVE TECH 3.875 10/1/2027 41.500 RAD-CALL03/12 8.625 3/1/2015 102.160 REDDY ICE CORP 13.250 11/1/2015 48.410 REAL MEX RESTAUR 14.000 1/1/2013 46.000 RESIDENTIAL CAP 6.500 6/1/2012 99.719 RESIDENTIAL CAP 8.500 4/17/2013 58.000 RESIDENTIAL CAP 6.875 6/30/2015 40.250 THORNBURG MTG 8.000 5/15/2013 10.030 THQ INC 5.000 8/15/2014 49.250 TOUSA INC 9.000 7/1/2010 12.967 TOUSA INC 9.000 7/1/2010 12.250 TRAVELPORT LLC 11.875 9/1/2016 36.625 TRAVELPORT LLC 11.875 9/1/2016 39.250 TIMES MIRROR CO 7.250 3/1/2013 42.500 MOHEGAN GAMING 8.000 4/1/2012 95.500 TEXAS COMP/TCEH 7.000 3/15/2013 35.100 TEXAS COMP/TCEH 10.250 11/1/2015 23.500 TEXAS COMP/TCEH 10.250 11/1/2015 25.000 TEXAS COMP/TCEH 10.250 11/1/2015 25.267 TEXAS COMP/TCEH 15.000 4/1/2021 41.000 WASH MUT BANK FA 5.650 8/15/2014 0.500 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, 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. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***