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/raid1/www/Hosts/bankrupt/TCR_Public/120329.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, March 29, 2012, Vol. 16, No. 88 Headlines 2655 BUSH: Files Schedules of Assets and Liabilities 8699 BISCAYNE: $4.2MM BuilderFinancial Loan Not Avoidable 3700 ULMERTON: Voluntary Chapter 11 Case Summary ADVANCED MEDICAL: HJ & Associates Raises Going Concern Doubt AIRCASTLE LTD: S&P Rates $800-Mil. Senior Unsecured Notes 'BB+' ALC HOLDINGS: April 11 Set as Admin. Expense Claim Bar Date AMERICAN AIRLINES: USAir CEO Talks About Industry Consolidation AMN HEALTHCARE: Moody's Corrects March 22 Ratings Release APPALACHIAN OIL: May Recoup $297K of Payments to Tennessee Lottery APPALACHIAN OIL: May Recoup $213K of Payments to Virginia Lottery ARDENT MEDICAL: Moody's Issues Summary Credit Opinion ARIEL FUND: Merkin's Funds Make Another Distribution AUSTIN CONSTRUCTION: Files for Chapter 11 Bankruptcy Protection BEACON POWER: To Request Dismissal at April 11 Hearing BERNARD L. MADOFF: Customer Appeal Almost Frivolous BERNARD L. MADOFF: Trustee Appeals Dismissal of UniCredit Suit BLUE SPRINGS: Ford Dealership Case Sent Home From Delaware BRUNO'S SUPERMARKETS: Court Trims Lawsuit Over Stolen Check C. MURRELL: Case Summary & 20 Largest Unsecured Creditors CAGLE'S INC: Koch Foods to Buy Assets for $72.3MM Cash and Note CARTERS GROOVE: Colonial Williamsburg Objects to Amended Plan CENTRAL FALLS, R.I: Providence May Need Bankruptcy CENVEO INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Negative CHATSWORTH INDUSTRIAL: Creditor Seeks Dismissal or Case Conversion CHEMBULK NEW YORK: Receives Interim Protection From U.S. Suits CHRIST HOSPITAL: Hudson Wins Bidding for Jersey City Hospital CHURCH OF GOD: Case Summary & 7 Largest Unsecured Creditors CLEAN BURN: Northen Blue OK'd as Special Counsel for Trustee CLARK AND LELAND: Case Summary & 18 Largest Unsecured Creditors COLORADO ALTITUDE: Nevin Can Pursue Patent Suit COMMUNITY MEMORIAL: AmerisourceBergen Opposes Cash Use COMMUNITY MEMORIAL: Proposes to Sell to McLaren for $5-Mil. CONVERGYS CORP: S&P Puts 'BB+' Corp. Credit Rating on Watch Neg CUMBERLAND HOLDINGS: Case Summary & Largest Unsecured Creditor DELTA PETROLEUM: Court OKs Amendment to Sale Process Deadlines EASTMAN KODAK: Court Approves Flextronics Settlement EASTMAN KODAK: Apple Ordered to Turn Over Data for Patent Claims EASTMAN KODAK: Fujifilm Barred From Pursuing Patent Suit EASTMAN KODAK: Questions Distributor's Setoff Claims ELECTRIC HOLDINGS: Fitch Downgrades Issuer Default Rating to 'CC' ENDURANCE INT'L: S&P Rates $185 Million First Lien Term Loan 'B' ESP RESOURCES: MaloneBailey LLP Raises Going Concern Doubt EVERGREEN SOLAR: Devens Plant Sold to Hackman Capital FIELDS: GA Keen Realty Advisors to Market Department Stores FILENE'S BASEMENT: To Sell Intellectual Property Assets FIRST BANKS: Posts $44.1 Million Net Loss in 2011 FISH & FISHER: Coxwell Cleared From Bank Lender's Suit FLINN SPRINGS: Case Summary & 9 Largest Unsecured Creditors FNBH BANCORP: Has Restated Net Loss of $2.92-Mil. in June 30 Qtr. FNBH BANCORP: Has $3.57-Mil. Restated Loss in 9-Mos. Ended Sept 30 FOSTER WHEELER: Moody's Withdraws 'Ba1' Corporate Family Rating FRANCISCAN COMMUNITIES: Sets Orion-Led Auction for April 17 FULLER BRUSH: Loan From Victory Park Is Approved by Court FUTTER LUMBER: Dist. Court Rejects Insiders' Interlocutory Appeal GENERAL MARITIME: Reaches Plan Deal With Unsecured Creditors GETTY IMAGES: Moody's Affirms 'Ba3' Rating on Sr. Sec. Term Loan GLOBAL CLEAN: Hansen Barnett Raises Going Concern Doubt GLOBAL GEOPHYSICAL: S&P Keeps 'B+' Note Rating After $50MM Add-On GOODYEAR TIRE: Moody's Rates $1.2-Bil. Sr. Sec. Term Loan 'Ba1' GRUBB & ELLIS: BGC Has Court Approval to Buy Brokerage GRUBB & ELLIS: Brokers Want Sale Term on Commissions Clarified HANDY & HARMAN: Moody's Assigns 'B2' Corporate Family Rating HECKMANN CORP: Moody's Assigns 'B3' Corporate Family Rating HORIZON PHARMA: PricewaterhouseCoopers Raises Going Concern Doubt HOWREY LLP: Trustee Mulls Claims Against Dissolution Committee IMAGINE FULFILLMENT: Case Summary & 20 Largest Unsecured Creditors JODENE PUFF: Court Says Bankruptcy Plan Not Feasible LOS ANGELES DODGERS: Guggenheim to Acquire Club for $2 Billion LYONDELLBASELL INDUSTRIES: S&P Ups $3-Bil. Note Rating From 'BB+' MAYVILLE DIE: Precision Castparts Acquires Assets MERITAGE HOMES: Fitch Rates Proposed $250-Mil. Notes at 'BB-/RR3' MERITAGE HOMES: Moody's Rates $250-Mil. Sr. Unsecured Notes 'B1' MICROBILT CORP: Plan Outline Hearing Scheduled for April 5 MIRANT CORP: Trust May Sue Even After Creditors Are Paid in Full MONTANA ELECTRIC: Trustee Tosses Out PPL EnergyPlus Contract NEBRASKA BOOK: Gets Approval for Amended Plan Support Agreement NEPHROS INC: Rothstein Kass Raises Going Concern Doubt NEW GOLD: Moody's Assigns 'B1' Corporate Family Rating NEWPORT TELEVISION: Moody' Says Sale May Trigger Debt Provisions OLD CORKSCREW: Committee and U.S. Trustee Object to Amended Plan OPTIONABLE INC: Sherb & Co. Raises Going Concern Doubt OXBOW MACHINE: Case Summary & 20 Largest Unsecured Creditors PACER MANAGEMENT: Files for Chapter 11 to Keep Hospital PENINSULA HOSPITAL: To Close After DOH Shuts Down Laboratory PENN VIRGINIA: Moody's Lowers Corporate Family Rating to 'B2' PETTUS PROPERTIES: Lawsuit Against VFC Stays in Bankruptcy Court PETTUS PROPERTIES: Mitchell & Culp Withdraws as Counsel PHILADELPHIA NEWSPAPERS: Trust May Recoup $30K From Inserts East PHILLIPS RENTAL: Has Access to Bank's Cash Collateral Until May 18 QIMONDA RICHMOND: Citibank Fails in Bid to Dismiss Avoidance Suit QUALTEQ INC: Wants to Incur $38MM Exit Loan from Bayside Vmark RYAN INTERNATIONAL: Has Final Order to Use Cash Through July 9 RYAN INTERNATIONAL: Has 5-Member Creditors' Committee SEITEL INC: S&P Raises Corp. Credit Rating to 'B'; Outlook Stable SK FOODS: Hearing on Ch.11 Trustee's Appeals Reset to April 23 SOLYNDRA LLC: Did Not Mislead Energy Dept., CRO Report Says SPROUTS FARMERS: Moody's Confirms 'B2' CFR; Outlook Stable STOCKTON, CA: Former Bankruptcy Judge Named Mediator STOCKTON, CA: Moody's Cuts Pension Obligation Rating to 'B3' SUNSHINE HEART: Ernst & Young Raises Going Concern Doubt TAYLOR MORRISON: Moody's Assigns B1 CFR, Rates Unsec. Notes B2 TERRESTAR CORP: Wants Control of Case Through October 2012 TERRESTAR CORP: Court Rejects Bid to Stay Plan Voting THORNBURG MORTGAGE: Orrick Retention Order Vacated TITAN PHARMACEUTICALS: OUM & Co. Raises Going Concern Doubt TRANSATLANTIC PETROLEUM: KPMG LLP Raises Going Concern Doubt TRIDENT MICROSYSTEMS: Sigma Designs-Led Auction on April 2 UNITED GILSONITE: Hires EisnerAmper as Financial Advisor UNITED RETAIL: No Competing Bids, Auction Canceled US CAPITAL: Files Schedules of Assets and Liabilities UTE MESA: District Court Affirms Lis Pendens Ruling VANGUARD HEALTH: Moody's Rates $350MM Sr. Unsecured Notes 'B3' VANGUARD NATURAL: S&P Rates Corporate Credit 'B', Unsec Notes 'B-' VANTIV LLC: Moody's Upgrades Corporate Family Rating to 'Ba2' VERASUN ENERGY: Execs' Claims Subject to Sec. 502(b)(7) Cap VITRO SAB: Bondholders Can Collect From Non-Bankrupt Units W.R. GRACE: Canada Appeals District Court Plan Approval W.R. GRACE: To Release 1Q 2012 Financial Results on April 25 W.R. GRACE: Garlock Defends Plan Order Revision Plea W.R. GRACE: Garlock Fails to Stay Jan. 30 Plan Order * Fee-Only Chapter 13 Plans Not Automatically Prohibited * Redemption Right Suffices to Require Return of Auto * Moody's New U.S. Municipal Methodology Prompts Rating Reviews * Hackman Capital to Expand Equipment Platform * Great American Moves Office Space in Downtown Chicago * Recent Small-Dollar & Individual Chapter 11 Filings ********* 2655 BUSH: Files Schedules of Assets and Liabilities ---------------------------------------------------- 2655 Bush LLC filed with the Bankruptcy Court for the Southern Northern District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $15,000,000 B. Personal Property $45,351 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $8,333,866 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $4,063,252 ----------- ----------- TOTAL $15,045,351 $12,397,119 2655 Bush LLC filed for Chapter 11 (Bankr. N.D. Calif. Case No. 12-30388) on Feb. 8, 2012. Judge Thomas E. Carlson presides over the case. Michael St. James, Esq., at St. James Law, serves as the Debtor's counsel. 8699 BISCAYNE: $4.2MM BuilderFinancial Loan Not Avoidable --------------------------------------------------------- Bankruptcy Judge A. Jay Cristol ruled that the mortgage under a $4.2 million construction loan is not fraudulent and cannot be avoided under applicable federal or state law because the transaction involved the exchange of reasonably equivalent value. The lawsuit is, 8699 Biscayne, LLC, v. Indigo Real Estate LLC, as assignee of WestLB AG, & WestLB AG, a Foreign Corporation, BuilderFinancial Corp., a Florida corporation; Builder Funding, LLC, a Delaware limited liability company, BFSPE, LLC, a Delaware limited liability Company, BFWEST, LLC, a Delaware limited Liability company, Adv. Proc. No. 08-01749 (Bankr. S.D. Fla.). A copy of the Court's March 22, 2012 Order granting the motion for summary judgment filed by the defendants is available at http://is.gd/6bVJs0from Leagle.com. James W. Carpenter, Esq. -- jwc@angelolaw.com -- at Angelo & Banta, P.A., represents the defendants. Miami Beach, Florida-based 8699 Biscayne, LLC, sought Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 08-22814) on Sept. 4, 2008, represented by Paul DeCailly, Esq. In its petition, the Debtor estimated $1 million to $10 million in both assets and debts. 3700 ULMERTON: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: 3700 Ulmerton Road Plaza, LLC c/o Donald H. Whittemore, Esq. Phelps Dunbar, LLP 100 S. Ashley Drive, #1900 Tampa, FL 33602 Bankruptcy Case No.: 12-04339 Chapter 11 Petition Date: March 26, 2012 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Donald H Whittemore, Esq. PHELPS DUNBAR 100 South Ashley Drive, Suite 1900 Tampa, FL 33602-5867 Tel: (813) 472-7550 E-mail: whittemd@phelps.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Clark D. East, registered agent/manager. ADVANCED MEDICAL: HJ & Associates Raises Going Concern Doubt ------------------------------------------------------------ Advanced Medical Isotope Corporation filed on March 23, 2012, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011. HJ & Associates, LLC, in Salt Lake City, Utah, expressed substantial doubt about Advanced Medical Isotope's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses, used significant cash in support of its operating activities and, based upon current operating levels, requires additional capital or significant restructuring to sustain its operation for the foreseeable future. The Company reported a net loss of $2.7 million on $393,603 of revenues for 2011, compared with a net loss of $4.1 million on $360,613 of revenues for 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.1 million in total assets, $5.9 million in total liabilities, and a shareholders' deficit of $4.8 million. A copy of the Form 10-K is available for free at: http://is.gd/Gfg6bj Kennewick, Washington-based Advanced Medical Isotope Corporation is engaged in the production and distribution of medical isotopes and medical isotope technologies. Medical isotopes are used in molecular imaging, therapy, and nuclear medicine to diagnose, manage and treat diseases. AIRCASTLE LTD: S&P Rates $800-Mil. Senior Unsecured Notes 'BB+' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' issue rating and '3' recovery rating to Aircastle Ltd.'s $800 million senior unsecured notes due 2017 and 2020. The issues are Rule 144A transactions with registration rights. "Consistent with our recovery methodology for issuers we rate in the 'BB' category, we have capped the recovery rating on this issue at '3', indicating meaningful (50%-70%) recovery for lenders in the event of a payment default. The commercial jet lessor will use note proceeds to repay outstanding debt under one of its secured term financings, with any remainder for general corporate purposes including the purchase of aircraft," S&P said. "The ratings on Stamford, Conn.-based Aircastle reflect its position as a midsize provider of aircraft operating leases and the diversity of its fleet in terms of aircraft types and location of lessees. Limiting credit quality are the company's exposure to cyclical demand for aircraft, fluctuations in lease rates and aircraft values, weak credit quality of some airline customers, and a substantial percentage of encumbered assets," S&P said. "We expect Aircastle's financial profile to remain relatively consistent through 2012, with improving lease rates and fleet additions resulting in higher earnings and cash flow. We believe incremental debt to finance fleet growth will offset this growth. We characterize Aircastle's business risk profile as 'fair,' its financial risk profile as 'significant,' and its liquidity as 'adequate,' according to our criteria," S&P said. "The corporate credit rating outlook is stable. We do not consider an upgrade likely unless the company expands substantially, improving its competitive position and fleet diversity, while maintaining its financial profile. We could lower ratings if Aircastle's capital spending became aggressive, causing debt to capital to rise to the mid-70% area and FFO to total debt to decline to less than 10% for a sustained period," S&P said. RATINGS LIST Aircastle Ltd. Corporate credit rating BB+/Stable/-- Ratings Assigned Senior unsecured $800 mil. notes due 2017 and 2020 BB+ Recovery rating 3 ALC HOLDINGS: April 11 Set as Admin. Expense Claim Bar Date ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has established April 11, 2012, as the deadline for filing a request for allowance of an administrative expense claim under Section 503(B) under the Bankruptcy Code against CLA Hold LLC, et al. Proofs of claim must be filed: if by regular mail: BMC Group, Inc. Attn: CLA Hold LLC Claims Processing P.O. Box 3020 Chanhassen, MN 55317-3020 if by messenger or overnight delivery: BMC Group, Inc. Attn: CLA Hold LLC Claims Processing 18675 Lake Drive East Chanhassen, MN 55327 About ALC Holdings Farmington Hills, Michigan-based ALC Holdings LLC dba American Laser Centers, and American Laser Skincare, provides laser hair removal treatments. The Company and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13853) on Dec. 8, 2011. Bankruptcy Judge Mary F. Walrath handles the case. Landis Rath & Cobb LLP represents the Debtors in their restructuring efforts. BMC Group Inc. serves as claims agent; SSG Capital Advisors, LLC serves as financial advisors; and Traverse, LLC serves as restructuring crisis manager. MBC Consulting and Melanie B. Cox serve as interim chief executive officer. Qorval and Eric Glassman serve as restructuring consultant. As of Oct. 31, 2011, the Debtors disclosed total assets of $80.4 million and total liabilities including $40.3 million owing on a first-lien debt, $51 million in subordinated notes, and $17.9 million is owing to trade suppliers. American Laser Centers of California LLC disclosed $20,988,454 in assets and $99,951,866 in liabilities as of the Chapter 11 filing. ALC Holdings LLC disclosed $14,662 in assets and $93,744,094 in liabilities. The petitions were signed by Andrew Orr, chief financial officer & VP corporate operations. Herrick, Feinstein LLP represents the Official Committee of Unsecured Creditors. The Committee tapped Ashby & Geddes, P.A. as Delaware Counsel and J.H. Cohn LLP as its financial advisor. AMERICAN AIRLINES: USAir CEO Talks About Industry Consolidation --------------------------------------------------------------- Susan Carey, writing for The Wall Street Journal, reports that US Airways CEO Doug Parker, 50, told WSJ in an interview that American Airlines' bankruptcy might provide opportunities for USAir. "If we could get our hands on better assets, we could do more things," Mr. Parker said when asked why American interesting to USAir as a potential partner. "There may be tactical opportunities that arise. When there are, we explore them," Mr. Parker said. According to Ms. Carey, Mr. Parker declined to discuss the particulars of his interest in American, but laid out his thesis on the merits of consolidation. US Airways disclosed in January that it had hired advisers to help it assess a bid for American, despite AMR's goal of emerging from Chapter 11 as a standalone entity. Mr. Parker has been a longtime advocate of consolidation. Mr. Parker told WSJ that with fewer airlines, there are fewer airline companies trying to get the same number of customers. Mr. Parker also talked about past merger attempts. When asked by WSJ why USAir lost out in past merger attempts, Mr. Parker said, "I don't think we lost out. Consolidation was necessary, and it was a strategic imperative to get the industry well. As I look back over the past five, six years, consolidation has helped us have a more viable industry. To the extent that we helped compel the mergers of Delta and Northwest and United and Continental, it made us stronger." USAir is itself a product of a 2005 merger with US Airways Group Inc. and America West Airlines. In 2006, USAir was rebuffed in its attempt to merge with Delta Air Lines. Regarding the failed hostile bid for Delta, Mr. Parker told the Journal he learned from the experience that "You need to have allies, particularly the employees. You need labor to be excited about the transactions. In other businesses, value wins. That's certainly not the case in this business." About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, 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). AMN HEALTHCARE: Moody's Corrects March 22 Ratings Release --------------------------------------------------------- Moody's Investors Service assigned Ba2 ratings to AMN Healthcare, Inc.'s proposed $250 million first lien senior secured credit facilities, affirmed the Ba3 Corporate Family Rating ("CFR"), and raised the short-term liquidity rating to SGL-2 from SGL-3. The rating outlook is stable. Actions: Issuer: AMN Healthcare Services, Inc. Corporate Family Rating, Affirmed Ba3 Probability of Default Rating, Revised to B1 from Ba3 $50 million Senior Secured Revolving Credit Facility due 2017, Assigned Ba2 LGD2 24% $200 million Senior Secured Term Loan B due 2018, Assigned Ba2 LGD2 24% Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 Outlook, Stable The assigned ratings are based on a proposed refinancing for AMN and are subject to Moody's review of final terms and conditions. Proceeds from the new credit facilities will be used to refinance existing first and second lien senior secured credit facilities and pay related fees and expenses. The ratings on the existing credit facilities are unchanged by the rating action, and expected to be withdrawn upon closing of the proposed transaction. Ratings Rationale "Completion of the proposed refinancing transaction would alleviate Moody's concerns about AMN's ability to meet the required amortization payments and covenant tests of its current credit facilities, and AMN would remain on track for credit metrics to return to levels appropriate for the rating category by the end of 2012", said Moody's analyst Ben Nelson. The proposed transaction would significantly reduce cash interest expense and required amortization payments, as compared to the existing credit facilities. The transaction does not involve a significant change in debt levels with financial leverage remaining in the mid 4 times Debt/EBITDA range (incorporating Moody's standard analytical adjustments; excluding only the preferred stock adjustment, Moody's estimates leverage near 4 times). Moody's expects a combination of improved EBITDA generation and free cash flow applied towards debt reduction will enable AMN to reduce its leverage to the 4 times range by the end of 2012. These factors, as well as the extension of debt maturities, contribute to Moody's affirmation of the Ba3 CFR. The Ba3 CFR is constrained by weak credit metrics for the rating category and Moody's expectation that the slow pace of improvement in the macroeconomic environment limit AMN's ability to return to pre-recession business levels. Moody's believes unemployment will remain elevated over the near-term and employers of healthcare professionals will have the continued ability to fill more openings with permanent hires, which in turn will limit demand for short-term staffing solutions and AMN's short-term ability to grow its business organically. The CFR acknowledges the benefits of new contract signings under managed service programs, as well as AMN's achievement of cost synergies associated with its September 2010 acquisition of Medfinders. The CFR continues to benefit from AMN's leading market position in the temporary healthcare staffing industry, diversified customer base, favorable long-term industry trends, and a good liquidity position. The revision of the short-term liquidity rating to SGL-2 from SGL- 3 acknowledges the liquidity benefits of reduced cash interest expense and required amortization payments. The SGL-2 designates Moody's view that AMN will maintain good liquidity to support its operations over the next twelve months. Moody's anticipates positive free cash flow, approximately $35-40 million of revolving credit availability after consideration for letters of credit, and good cushion under financial maintenance covenants. The stable rating outlook anticipates modest improvement in revenues and profit margins, and expectations for leverage to decline to 4 times and interest coverage well above 2 times by the end of 2012. The outlook assumes that AMN will apply free cash flow towards debt reduction to achieve these metrics, and maintain its good liquidity position. Upward rating momentum is limited over the near-term. However, Moody's could raise the rating or outlook if Moody's expects leverage to be sustained below 3 times and interest coverage to be sustained above 3 times. Conversely, the rating or outlook could be lowered if Moody's expects leverage or interest coverage sustained above 4.5 times or below 2 times, respectively. Debt- financed acquisitions, reduced cash flow generation, or the use of revolving credit to fund shareholder-friendly activities could also have negative rating implications. Headquartered in San Diego, California, AMN Healthcare Services, Inc. is a leading healthcare staffing company in the United States. The company recruits physicians, nurses, and allied health professionals, and placed them on assignments at acute care hospitals, physician practice groups, and other healthcare settings. For the year ended December 31, 2011, AMN reported revenues of approximately $887 million. The principal methodology used in rating AMN was the Global Business and 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. APPALACHIAN OIL: May Recoup $297K of Payments to Tennessee Lottery ------------------------------------------------------------------ Bankruptcy Judge Marcia Phillips Parsons granted, in part, and denied, in part, cross-motions for summary judgment filed in the lawsuit, Appalachian Oil Company, Inc., v. Tennessee Education Lottery Corporation, Adv. Proc. No. 10-5067 (Bankr. E.D. Tenn.). The Debtor commenced the action pursuant to 11 U.S.C. Sections 547(b) and 550(a) to avoid and recover certain alleged preferential transfers totaling $526,790 made by APPCO to Tennessee Lottery. TEL contends that the transfers constituted trust funds and therefore were not property of the debtor, a necessary element of Sec. 547(b). APPCO opposes the motion and contends, to the contrary, that it is entitled to partial summary judgment on its claim because the transfers were property of the debtor. The Court ruled that six of the payments totaling $229,155 made by APPCO to TEL between Nov. 13, 2008, and Dec. 16, 2008, were trust fund property rather than property of the debtor. Accordingly, TEL is entitled to summary judgment in its favor as to APPCO's claim that these payments represent avoidable preferences under Sec. 547(b). Regarding two wired payments made by APPCO to TEL on Jan. 9, 2009, and Jan. 12, 2009, in the amounts of $50,000 and $247,634 respectively, the Court ruled that the payments were property of APPCO. Therefore, APPCO is granted partial summary judgment on these claims, and TEL's motion for summary judgment is denied. A copy of the Court's March 23, 2012 Memorandum is available at http://is.gd/YvHHknfrom Leagle.com. About Appalachian Oil Appalachian Oil sought Chapter 11 protection (Bankr. Case E.D. Tenn. No. 09-50259) on Feb. 9, 2009, estimating assets and debts of $10 million to $50 million. APPCO operated roughly 57 convenience stores in Tennessee, Virginia, and Kentucky, selling petroleum products, groceries, cigarettes, other miscellaneous items, and lottery tickets issued by the particular state in which the store was located. The Company's creditors with the biggest unsecured claims were BP Plc's Amoco/BP, owed $2.41 million, and fuel distributor Crescent Oil Co., owed $1.6 million. In December 2010, the Court confirmed Appalachian Oil's Second Amended Plan of Liquidation. APPALACHIAN OIL: May Recoup $213K of Payments to Virginia Lottery ----------------------------------------------------------------- Bankruptcy Judge Marcia Phillips Parsons granted, in part, and denied, in part, cross-motions for summary judgment filed in the case, Appalachian Oil Company, Inc., v. Virginia State Lottery Department, Adv. Proc. No. 10-5064 (Bankr. E.D. Tenn.). The Debtor commenced the lawsuit pursuant to 11 U.S.C. Sections 547(b) and 550(a) to avoid and recover certain alleged preferential transfers totaling $485,227 made by APPCO to the Virginia State Lottery Department. Virginia Lottery contends that the transfers constituted trust funds and therefore were not property of the debtor, a necessary element of Sec. 547(b). APPCO opposes the motion and contends, to the contrary, that it is entitled to partial summary judgment on its claim that the transfers were property of the debtor. The Court held that eight of the electronic funds transfer payments totaling $271,987 made by APPCO to Virginia Lottery during the 90 days prior to APPCO's bankruptcy filing were trust fund property rather than property of the debtor. Accordingly, Virginia Lottery is entitled to summary judgment in its favor as to APPCO's claim that the payments represent avoidable preferences under Sec. 547(b). Regarding five wired payments totaling $213,182 made by APPCO to Virginia Lottery, the Court ruled that the payments were property of APPCO. Therefore, APPCO is granted partial summary judgment on these claims, and Virginia Lottery's motion for summary judgment is denied. A copy of the Court's March 23, 2012 Memorandum is available at http://is.gd/zrx4unfrom Leagle.com. About Appalachian Oil Appalachian Oil sought Chapter 11 protection (Bankr. Case E.D. Tenn. No. 09-50259) on Feb. 9, 2009, estimating assets and debts of $10 million to $50 million. APPCO operated roughly 57 convenience stores in Tennessee, Virginia, and Kentucky, selling petroleum products, groceries, cigarettes, other miscellaneous items, and lottery tickets issued by the particular state in which the store was located. The Company's creditors with the biggest unsecured claims were BP Plc's Amoco/BP, owed $2.41 million, and fuel distributor Crescent Oil Co., owed $1.6 million. In December 2010, the Court confirmed Appalachian Oil's Second Amended Plan of Liquidation. ARDENT MEDICAL: Moody's Issues Summary Credit Opinion ----------------------------------------------------- Moody's Investors Service issued a summary credit opinion on Ardent Medical Services, Inc. and includes certain regulatory disclosures regarding its ratings. The release does not constitute any change in Moody's ratings or rating rationale for Ardent Medical Services, Inc. Moody's current ratings on Ardent Medical Services, Inc. are: Long Term Corporate Family Ratings of B2 Probability of Default rating of B2 Senior Secured Bank Credit Facility (domestic currency) ratings of B1; LGD3 -- 40 Ratings Rationale Ardent's B2 Corporate Family Rating reflects Moody's belief that the company's presence in only two markets and a meaningful contribution of revenue from the health plan in New Mexico represents significant concentration risk. Further, Moody's expects that Ardent will actively pursue acquisitions in order to gain scale and diversification. However, the rating also reflects Moody's belief that the company will see benefits in its existing markets from recently completed acquisitions. Given the considerable concentration risk, Moody's would need to see the company's metrics strongly positioned at levels usually expected of higher rated companies prior to a rating upgrade. For example, Moody's would expect the company to maintain leverage below 4.5 times before considering an upgrade. If operating results deteriorate, either through market specific pressures or industry challenges such that the company is expected to sustain negative free cash flow, Moody's could downgrade the rating. Additionally, if Ardent were to significantly increase leverage to complete a debt-financed acquisition, Moody's could downgrade the ratings. The principal methodology used in rating Ardent Medical 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. ARIEL FUND: Merkin's Funds Make Another Distribution ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Ariel and Gabriel funds operated by Ezra Merkin will make an additional distribution of $226 million in the next week, bringing total distributions to almost $400 million. The cases are Cuomo v. Merkin, 450879/2009; and Schwartz v. Merkin, 651516/2010, New York State Supreme Court (Manhattan.) About Ariel Fund Ariel Fund Limited, Ascot Partners, L.P., and Gabriel Capital, L.P., were feeder funds for Bernard L. Madoff Investment Securities Inc. In May 2009, financier J. Ezra Merkin ceded to New York Attorney General Andrew Cuomo's demands that he step down as manager of the hedge funds and place them into receivership, following the collapse of Madoff's investment firm. Jacob Ezra Merkin (born 1954) was a close business associate of Bernard Madoff, and is alleged to have played a significant part in the Madoff fraud. AUSTIN CONSTRUCTION: Files for Chapter 11 Bankruptcy Protection --------------------------------------------------------------- Chris Bagley, staff writer at Triangle Business Journal, reports that Austin Construction & Development LLC has filed for Chapter 11 bankruptcy reorganization after much of its tenant base followed Campbell University Law School to Raleigh in 2009. According to the report, the company listed $2.4 million in assets and $1.7 million in liabilities in its March 23 petition, which was filed in U.S. Bankruptcy Court for the Eastern District of North Carolina. The report relates Austin's bankruptcy attorney, Richard Sparkman, Esq., said the Company owns two groups of townhomes totaling 36 units. The buildings lost a large number of tenants after the law school's departure. Mr. Sparkman said they've since filled back up but not quickly enough to stop New Century Bank from filing a notice of default in January and suing the company and its two co-owners in Harnett County Superior Court last month. According to the report, Austin owes about $1.6 million on the townhomes, according to the filing, which also lists a handful of smaller-scale creditors. The filing values the company's two properties at about $2.2 million and suggests that they're on track to generate revenue in the range of $250,000 this year. Angier-based Austin Construction & Development LLC owns two groups of townhomes in Buies Creek, North Carolina. BEACON POWER: To Request Dismissal at April 11 Hearing ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Beacon Power Corp., lacking enough cash for approval of even a liquidating Chapter 11 plan, wants the bankruptcy judge in Delaware to dismiss the bankruptcy at a hearing on April 11. According to the report, with the sale of the assets completed and the U.S. Energy Department repaid a loan to finance the Chapter 11 effort, Beacon is left with $1.85 million in cash to cover $6.75 million in professional fees and about $1.1 million in other costs of the reorganization that would have to be paid in full before even a liquidating Chapter 11 plan could be confirmed. In addition, there are $257,000 in tax claims and $3.5 million in pre-bankruptcy unsecured claims. At the hearing in April, Beacon wants the court to dismiss the Chapter 11 case and decide how the remaining cash should be parceled out. About Beacon Power Beacon Power Corporation, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-13450) on Oct. 30, 2011, in Delaware. Brown Rudnick and Potter Anderson & Corroon serve as the Debtors' counsel. Beacon disclosed assets of $72 million and debt totaling $47 million, including a $39.1 million loan guaranteed by the U.S. Energy Department. Beacon built a $69 million facility with 20 megawatts of balancing capacity in Stephentown, New York, funded mostly by the DoE loan. The Debtors tapped Miller Wachman, LLP as auditors, Pluritas, LLC as intellectual property advisors, CRG Partners Group LLC as financial advisors. Beacon Power is the second cleantech company which has been backed by the U.S. Department of Energy via loan guarantees to fail this year. The first was Solyndra, which declared Chapter 11 bankruptcy on Sept. 6, 2011. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed four unsecured creditors to serve on the Official Committee of Unsecured Creditors of Beacon Power. Affiliates that simultaneously sought Chapter 11 protection are Stephentown Holding LLC (Bankr. D. Del. Case No. 11-13451) and Stephentown Regulation Services LLC (Bankr. D. Del. Case No. 11-13452). Beacon Power in February received authorization from the Bankruptcy Court in Delaware to sell the business to Rockland Capital LLC. The buyer is paying $30.5 million, including a note for $25 million and $5.5 million in cash. In addition, The Woodlands, Texas-based Rockland is giving the U.S. Energy Department $6.6 million in guarantees and undertakings to provide funding. BERNARD L. MADOFF: Customer Appeal Almost Frivolous --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that customers of Bernard L. Madoff Investment Securities Inc. moved a step closer to receiving $8.6 billion in distributions when a federal district judge ruled that an appeal trying to block final approval of a $7.2 billion settlement "borders on the frivolous." The report recounts that the estate of the late Jeffrey M. Picower agreed to forfeit $2.2 billion to the U.S. government and pay $5 billion to Irving Picard, the Madoff trustee. After the settlement was approved in U.S. Bankruptcy Court, two customers appealed to U.S. District Judge John G. Koeltl, who denied the appeal March 26 in a 49-page opinion. According to the report, one of the creditors taking the appeal was Adele Fox, who claims she represents a class of 3,000 customers wanting part of Picower's $7.2 billion settlement even though they took out more than they invested and received profits representing money stolen from other customers. To Fox's argument that the settlement was insufficient, Judge Koeltl said the appeal was almost frivolous because the $7.2 billion was 100 percent of the net withdrawals from Picower's account. On March 26, Fox lost on her appeal from the $5 billion portion of the settlement going to the Madoff trustee. An appeal is already pending in the U.S. Court of Appeals in Manhattan from the portion of the settlement in which $2.2 billion was forfeited to the U.S. government. The $2.2 billion also will go to creditors once appeals are finished. Judge Koeltl said the bankruptcy judge was "plainly correct" when he halted lawsuits the customers filed in Florida against Picower. Given how the customers' lawsuits were "virtually identical" to the Madoff trustee's complaint against Picower, Judge Koeltl said the customers' suit violated the so-called automatic stay in bankruptcy because they were bringing claims "that belonged to the trustee on behalf of all" Madoff creditors. Judge Koeltl said the customers had no right to a lawsuit on their own because every Madoff customer was harmed "in the same way." Mr. Rochelle notes that the appeals are preventing Picard from distributing $6.44 billion from the $9.07 billion he collected or has agreements to collect. The appeal from Picower's forfeiture is holding up distribution of another $2.2 billion. In addition, distributions will be held back until the U.S. Supreme Court rules on a request by customers to appeal from a ruling that customers don't have claims for false profits. The appeal was Fox v. Picard (In re Madoff), 10-4652, U.S. District Court, Southern District of New York (Manhattan). The Wall Street Journal's Chad Bray reports that Helen Davis Chaitman, a lawyer for the investors challenging the settlement, said they would appeal to the Second Circuit. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of Feb. 17, 2012 and in the 38 months since his appointment, the SIPA Trustee has recovered or entered into agreements to recover more than $9 billion, representing roughly 52% of the roughly $17.3 billion in principal estimated to have been lost in the Ponzi scheme by BLMIS customers who filed claims. The recoveries exceed prior restitution efforts related to Ponzi schemes both in terms of dollar value and percentage of stolen funds recovered. Pro rata distributions from the Customer Fund to BLMIS customers whose claims have been allowed by the SIPA Trustee totaled $325.7 million. Mr. Picard has filed 1,000 lawsuits seeking $100 billion from banks such as HSBC Holdings Plc and JPMorgan Chase & Co. The trustee has seen more than $28 billion of his claims tossed by district judges. BERNARD L. MADOFF: Trustee Appeals Dismissal of UniCredit Suit -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee liquidating Bernard L. Madoff Investment Securities Inc. is appealing a district court's February dismissal of most of a $59 billion lawsuit against UniCredit SpA and subsidiary UniCredit Bank Austria AG. According to the report, the Madoff trustee, who asked a U.S. Appeals Court to review the UniCredit ruling, may know as soon as April 16 whether the U.S. Supreme Court will hear an appeal by customers on the question of how customer claims should be calculated. The report recounts that in the UniCredit suit, the Madoff trustee contended that Bank Medici AG and Sonja Kohn, its founder, worked with Madoff going back at least until the mid-1980s. UniCredit and its affiliates took part in the scheme by funneling money into the Madoff firm through feeder funds, according to the complaint. The report notes that the U.S. Court of Appeals for the Second Circuit ruled in August that Madoff customer claims are limited to the amount of cash invested less the amount taken out. Fictional profits must be ignored, the appeals court in Manhattan said. The justices of the Supreme Court are scheduled to decide whether to allow an appeal at a conference on April 13. Whether the justices will hear the appeal may be announced as early as April 16. The UniCredit case in district court is Picard v. Kohn, 11-1181, U.S. District Court, Southern District of New York (Manhattan). The Wilpon appeal to the Supreme Court is Sterling Equities Associates v. Picard, 11-968, U.S. Supreme Court. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of Feb. 17, 2012 and in the 38 months since his appointment, the SIPA Trustee has recovered or entered into agreements to recover more than $9 billion, representing roughly 52% of the roughly $17.3 billion in principal estimated to have been lost in the Ponzi scheme by BLMIS customers who filed claims. The recoveries exceed prior restitution efforts related to Ponzi schemes both in terms of dollar value and percentage of stolen funds recovered. Pro rata distributions from the Customer Fund to BLMIS customers whose claims have been allowed by the SIPA Trustee totaled $325.7 million. Mr. Picard has filed 1,000 lawsuits seeking $100 billion from banks such as HSBC Holdings Plc and JPMorgan Chase & Co. The trustee has seen more than $28 billion of his claims tossed by district judges. BLUE SPRINGS: Ford Dealership Case Sent Home From Delaware ---------------------------------------------------------- U.S. Bankruptcy Judge Mary F. Walrath in Delaware promptly granted an oral request by a customer to transfer the Chapter 11 case of debtor Blue Springs Ford Sales Inc. to Missouri. Blue Springs Ford Sales, Inc., filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-10982) on March 21, 2012. A jury verdict assessing actual damages of $171,500 and punitive damages in the amount of $1.75 million (54 times the actual damages) prompted the Chapter 11 filing. The judgment was on account of a suit filed by a customer in Circuit Court of Jackson County, Missouri, under a variety of legal claims, including, but not limited to, the Debtor's alleged failure to adequately disclose a full detailed vehicle history report in connection with a sale of a used Ford. The lawyer for the customer with the judgment made an oral motion in court March 23 to transfer the case closer to home, Michael Tamburini, Esq., at Polsinelli Shughart PC, lawyer for the dealership, said in an interview, according to Bloomberg bankruptcy columnist Bill Rochelle. Judge Walrath entered March 28 an order transferring the case to the U.S. Bankruptcy Court for the Western District of Missouri. Aviva Gat, writing for The Deal Pipeline, reports that Michael M. Tamburini, Esq., of Polsinelli Shughart PC, counsel of Blue Springs said BSFS is incorporated in Delaware but that all of its assets and operations take place around Kansas City, Mo., leading Judge Walrath to determine that venue would be better equipped for BSFS's bankruptcy. While the Debtor argued against the transfer during the hearing, BSFS will not challenge the court's ruling, the Deal report quotes Mr. Tamburini as saying. Mr. Tamburini said he was unsure exactly when the transfer will take effect. The dealership needed bankruptcy relief because it was unable to post a bond required for appealing the judgment. Steve Everly at the Kansas City Star reports that the Blue Springs Ford listed just over $2.1 million owed the company's 20 largest creditors. Most of it, $2,058,000, is to Michael and Kimberly von David, who sued Blue Springs Ford after discovering their Ford Ranger pickup purchased from the dealership was a rebuilt wreck, which they said was not disclosed when they bought the vehicle. Their trial was in 2010, and the dealership appealed the verdict. The appeal is pending. "They have been threatening (to file for bankruptcy) since just after the trial," the Kansas City Star report quotes Bernard Brown, an attorney for the von Davids, as saying. The report relates Bob Balderston, president and owner of Blue Springs Ford, said he was forced to file for bankruptcy after being unable to settle the lawsuit, which involved a $14,000 vehicle. He said he was confident the judgment would be reversed or reduced considerably. Blue Springs Ford -- http://www.bluespringsford.com/-- is a Ford dealer, serving Blue Springs in Missouri. Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, serves as bankruptcy counsel. Donlin Recano is the claims and notice agent. BRUNO'S SUPERMARKETS: Court Trims Lawsuit Over Stolen Check ----------------------------------------------------------- At the behest of Bruno's Supermarkets LLC, now known as BFW Liquidation LLC, Bankruptcy Judge Benjamin Cohen dismissed portions of a lawsuit commenced by a lady who complained that a Bruno's outlet accepted and negotiated her stolen check, and charged her for the transaction. The plaintiff said someone who had stolen checks from her in 2008, used one of those checks at Bruno's store on Montclair Road in Birmingham, Alabama, on Nov. 19, 2008. The plaintiff said the person who presented the check also presented a drivers license for identification, "that was different from the plaintiff's driver's license." Still, Bruno's accepted the check, which was later dishonored and returned for insufficient funds. According to the plaintiff, Bruno's referred to Certegy Payment Recovery Services, Inc. for collection, which then contacted the plaintiff. Bruno's also reported the bad check to various credit reporting agencies, thus besmirching her credit rating. Bruno's in March 2009 swore out a warrant for her arrest. She contends that this warrant caused her arrest on Nov. 18, 2009, even though, according to her, she had notified Bruno's, through its, "principal check verification service, Certegy check services" that the check had been stolen from her and she was not the one who negotiated it. The criminal charges against the plaintiff were dismissed on Dec. 12, 2009. The plaintiff sued Bruno's for damages from her experience. The plaintiff also sued Southern Family Markets, formally know as Southern Family Markets Acquisition II LLC, which acquired some of Bruno's assets including 31 retail grocery stores. Southern was later dropped from the suit. The case is Tiffany Austin, v. BFW Liquidation, LLC, Adv. Proc. No. 11-00007 (Bankr. N.D. Ala.). A copy of the Court's March 26, 2012 Memorandum Opinion is available at http://is.gd/S8CxYhfrom Leagle.com. About Bruno's Supermarkets Bruno's Supermarkets LLC -- now known as BFW Liquidation, LLC -- was a privately held company headquartered in Birmingham, Alabama. It was the parent company of the Bruno's, Food World, and FoodMax grocery store chains, which includes 23 Bruno's, 41 Food World, and 2 FoodMax locations in Alabama and the Florida panhandle. Founded in 1933, Bruno's operated as an independent company since 2007 after undergoing several transitions and changes in ownership starting in 1995. Bruno's filed for Chapter 11 relief on Feb. 5, 2009 (Bankr. N.D. Ala. Case No. 09-00634). At that time, it was owned by Dallas-based Lone Star Funds. Burr & Forman LLP served as the Debtor's lead counsel. Najjar Denaburg, P.C., served as the Debtor's conflicts counsel. Greenberg Traurig, LLP, acted as the official committee of unsecured creditors' counsel. Alvarez & Marsal served as the Debtor's restructuring advisor. Bruno's estimated between $100 million and $500 million each in assets and debts in its Chapter 11 petition. During the 2009 bankruptcy, Bruno's sold 56 of its stores to C&S Wholesale Grocers Inc., for $45.8 million. C. MURRELL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: C. Murrell Business Consultants, Inc. 600 Laurel Hill Lane Catonsville, MD 21228 Bankruptcy Case No.: 12-15664 Chapter 11 Petition Date: March 26, 2012 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: Nancy V. Alquist Debtor's Counsel: Jason E. Miles, Esq. THE LAW OFFICE 19 E. Fayette Street, Suite 401 Baltimore, MD 21202 Tel: (410) 727-0406 E-mail: jem3472@gmail.com Scheduled Assets: $2,013,152 Scheduled Liabilities: $1,450,771 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mdb12-15664.pdf The petition was signed by Cephus M. Murrell. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Cephus M. Murrell 12-15270 03/21/12 CAGLE'S INC: Koch Foods to Buy Assets for $72.3MM Cash and Note --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Cagle's Inc. is seeking approval of a sale process where an affiliate of Koch Foods Inc. will make the initial bid at an auction on May 10. Under the proposed rules, interested parties must submit initial bids by May 4 to qualify for the auction. A sale hearing will be held May 11, a day after the auction. According to the report, absent higher and better offers, the Debtor intends to sell the assets to the affiliate of Koch, a chicken processor based in Park Ridge, Illinois, for $37 million plus the value of inventory and accounts receivable, less accounts payable to be assumed. Cagle's said that the net addition to the purchase price is about $35.3 million. The Koch affiliate will pay $55 million when the sale is completed, with the remainder in a two-year note at 8% interest. There will be no payments on the note until February 2013. About Cagle's Cagle's Farms (NYSE: CGL.A) -- http://www.cagles.net/-- engages in the production, marketing, and distribution of fresh and frozen poultry products in the United States. Cagle's Inc. and its wholly owned subsidiary Cagle's Farms filed on Oct. 19, 2011, voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 11-80202 and 11-80203). Paul K. Ferdinands, Esq., at King & Spalding, in Atlanta, Georgia, serves as counsel. FTI Consulting, Inc., serves as the Debtors' financial advisors. Kurtzman Carson LLC serves as their claims, noticing, and balloting agent. In its schedules, Cagle's Inc. disclosed $81,998,077 in assets and $55,304,599 in liabilities as of the Petition Date. The Official Committee of Unsecured Creditors is represented by McKenna Long & Aldridge LLP and Lowenstein Sandler as counsel. J.H. Cohn LLP serves as its financial advisors. No trustee or examiner has been appointed in the Debtors' bankruptcy cases. CARTERS GROOVE: Colonial Williamsburg Objects to Amended Plan ------------------------------------------------------------- The Colonial Williamsburg Foundation asks the U.S. Bankruptcy Court for the Eastern District of Virginia to deny Carter's Grove LLC's Second Amended Plan of Reorganization. CWF explains that the Debtor's Plan fails to satisfy the requirements for confirmation because (i) it is not feasible as required by Section 1129 (11); (ii) it does not satisfy the best interest of creditors test as required by Section 1129(a)(7); (iii) it violates Section 1129 (a)(9)(D) because it pays general unsecured creditors on more favorable terms than secured tax claims; (iv) it is not fair and equitable as required by Section 1129(b)(1) and (b)(2); and the injunctive provisions of the Plan may bar CWF from pursuing its claims against Mr. Minor on his personal guarantee without any legitimate basis for such a provision. As reported in the Troubled Company Reporter on March 2, 2012, according to the Disclosure Statement dated Feb. 10, 2012, the Debtor is solvent and the Plan provides for all allowed claims to be paid in full. Under the Plan, Halsey Minor, the sole member of the Minor Trust, will fund the continued maintenance and operating expenses of the Debtor through the closing of the sale of Carter's Grove, the payments to creditors that hold allowed priority claims, allowed priority tax claims, and allowed general unsecured claims pursuant to the terms and conditions set forth in the plan. The Minor Trust, the sole member of the Debtor, will retain its interest in the Debtor. The Debtor obtained a recent appraisal that estimates the fair market value of its sole asset -- Carter's Grove -- at $15.8 million, which is substantially more than the approximate $7.3 million in claims asserted against the Debtor. A full-text copy of the Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/CARTERS_GROVE_ds_2ndamendedplan.pdf About Carter's Grove San Francisco, California-based Carter's Grove, LLC, owns the historic Williamsburg, Virginia-area mansion named Carter's Grove. Halsey M. Minor owns the Company and bought the Carter's Grove mansion for $15.3 million in 2007, at the height of the real estate bubble. Carter's Grove filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 11-30554) on Feb. 14, 2011. Debra I. Grassgreen, Esq., and John W. Lucas, Esq., at Pachulski, Stang, Ziehl, and Jones LLP, San Francisco, Calif.; Robert S. Westermann, Esq., and Sheila deLa Cruz, Esq., at Hirschler Fleischer, P.C., in Richmond, Va., serve as the Debtor's bankruptcy counsel. Conway MacKenzie, Inc., serves as financial restructuring advisors to assist it during the Chapter 11 case, and perform other consulting services necessary to the Debtor's continuing operations. In its schedules, the Debtor disclosed $21,156,417 in assets and $12,490,476 in liabilities. On Aug. 1, 2011, the U.S. Bankruptcy Court for the Northern District of California approved the transfer of the Chapter 11 case of Carter's Grove, LLC to the Bankruptcy Court for the Eastern District of Virginia, Newport News Division. CENTRAL FALLS, R.I: Providence May Need Bankruptcy ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the receiver for Central Falls, Rhode Island, said that Providence, the state's capital, will probably need to file municipal bankruptcy. Central Falls is already in bankruptcy. Central Falls is a city in Providence County, Rhode Island. The population was 18,928 at the 2000 census. Central Falls is the smallest and most densely populated city in Rhode Island. Central Falls sought bankruptcy protection under Chapter 9 of the U.S. Bankruptcy Code (Bankr. D. R.I. Case No. 11-13105) on Aug. 1, 2011. The Chapter 9 filing was made after former Rhode Island Supreme Court Judge Robert Flanders, who serves as state-appointed receiver for the city, was unable to negotiate significant concessions from unions representing police officers, firefighters and other city workers. The city grappled with an $80 million unfunded pension and retiree health benefit liability that is nearly quadruple its annual budget of $17 million. Judge Robert Flanders succeeded the role from retired Superior Court Associate Justice Mark A. Pfeiffer, who was appointed in July 2010. The Central Falls receivership, the state's first, has left the mayor and council without any power to govern. Judge Frank Bailey presides over the Chapter 9 case. Theodore Orson, Esq., at Orson and Brusini Ltd., serves as bankruptcy counsel to the receiver. The receiver is negotiating new contracts with unions representing city workers. The receiver filed a proposed debt adjustment plan for the city in September. It won't affect bondholders. CENVEO INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Stamford, Conn.-based diversified printing company Cenveo Inc. to negative from stable. "We also affirmed our ratings on the company, including the 'B' corporate credit rating," S&P said. "The outlook revision reflects the potential for a downgrade, should the company maintain sizable debt maturities in December 2013 as this date approaches," said Standard & Poor's credit analyst Tulip Lim. "Earlier this month, the company launched a $450 million senior unsecured note transaction, with the intention of partly funding tender offers for its 7.875% notes due 2013 ($271 million outstanding), its 10.5% notes due 2016 ($23 million outstanding), and its 8.375% notes due 2014 ($165 million outstanding), as well as related fees and expenses. The offering has been downsized to $225 million. In addition, the company now plans on issuing up to $86.25 million of convertible notes. Cenveo still intends to use the proceeds of the revised offerings to fund tender offers for the 2013, 2016, and 2014 notes. However, the company will now only pay down $120 million of the notes due 2013, leaving $151 million maturing in 2013," S&P said. "The corporate credit rating on Cenveo reflects Standard & Poor's expectation that the company's leverage will remain high and coverage will remain weak. For these reasons, we consider Cenveo's financial profile 'highly leveraged'. We view the company's business risk profile as 'weak'because of Cenveo's participation in the highly competitive and cyclical printing markets," S&P said. "We expect ongoing pricing pressure from industry overcapacity and limited scope for margin improvement," added Ms. Lim, "and over the near term, we expect this will result in minimal organic revenue and EBITDA growth." "Our outlook is negative, reflecting the potential for a downgrade as the maturity date of its notes due December 2013 approaches, should the company continue to have a substantial balance under these notes. We could consider lowering the rating if the balance of the notes due 2013 remains meaningful, the company's margin of compliance declines to 10%, discretionary cash flow were to contract to less than $50 million, and we become increasingly convinced that the company's cash flow generation and liquid resources may be insufficient to meet its 2013 obligations," S&P said. "We could revise the outlook back to stable, should Cenveo reduce its 2013 debt maturities below $100 million by early 2013, and we are confident that the company will generate enough cash flow and have enough revolving credit facility capacity to meet this obligation, while maintaining a margin of compliance healthily above 10%," S&P said. CHATSWORTH INDUSTRIAL: Creditor Seeks Dismissal or Case Conversion ------------------------------------------------------------------ Chatsworth Industrial Park, LP's secured creditor CSFB 2003-C4 Nordhoff Limited Partnership filed a motion with the U.S. Bankruptcy Court seeking dismissal or, in the alternative, conversion to Chapter 7 of the Debtor's Chapter 11 case. The motion is based on the grounds that the Debtor has failed to comply with the Court's order and the Debtor's failure to comply with the cash collateral order has caused substantial harm to the Secured Creditor. The Secured Creditor notes that the Debtor's estate is solvent. There is sufficient equity in the Property to pay all secured and unsecured creditors in full with interest. The Debtor filed its petition over two years ago, and notwithstanding the ability to pay creditors promptly in full and with interest, the Debtor has wasted the creditor's time and money proposing three different plans that were not confirmable in the Secured Creditor's view. Now, the Debtor has failed to make more than seven cash collateral payments to the Secured Creditor as required under the Order entered on Feb. 26, 2010. During this time period, the Debtor continued to make payments to its insiders, including a property management fee to its principal and a maintenance fee to the principal's son. The Debtor's failure to comply with its obligations under the cash collateral order has resulted in the depletion of the property tax escrow account. Another property tax payment is due on April 10, 2012 in the amount of $50,248.68 and there are no funds in the property tax escrow account for this payment. The failure to make cash collateral payments has also resulted in an increase in the total interest due to the Secured Creditor, thereby reducing the equity cushion available to the Secured Creditor and it further appears that the Debtor has made payments in excess of amounts authorized in the cash collateral order. CSFB 2003-C4 Nordhoff is informed that the Debtor intends to propose yet another plan with different terms, this one to "cure" the default owed to the Secured Creditor. CSFB 2003-C4 Nordhoff does not believe that the Debtor should be given yet another bite at the apple; however, regardless of the Debtor's intention to file any such amended plan, the Debtor's disregard of the Court's order concerning cash collateral and the bankruptcy code should not be tolerated. Hearing on the CSFB 2003-C4 Nordhoff's motion is set for April 12, 2012 at 9:30 a.m. About Chatsworth Industrial Tarzana, California-based Chatsworth Industrial Park, LP, owns and operates five adjacent industrial properties in Chatsworth, California. It filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 09-27368) on Dec. 23, 2009. Judge Maureen Tighe presides over the case. Caceres & Shamash, LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated assets at $10 million to $50 million and $1 million to $10 million in debts. CHEMBULK NEW YORK: Receives Interim Protection From U.S. Suits -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that PT Berlian Laju Tanker Tbk received temporary protection from creditor suits in the U.S. on March 23. The U.S. Bankruptcy Court's order prevents creditors from seizing vessels when they visit U.S. ports. According to the report, the company will next ask the U.S. court to rule that Singapore is home to the main bankruptcy proceeding. If the bankruptcy judge agrees and finds that procedures abroad adequately protect creditors, lawsuits in the U.S. will be permanently halted and creditors will be required to hash out disputes, file claims, and receive distributions from the court in Singapore. About Chembulk New York Singapore-based PT Berlian Laju Tanker Tbk filed Chapter 15 bankruptcy petitions in New York for subsidiaries (Bankr. S.D.N.Y. Lead Case No. 12-11007) on March 14, 2012, to prevent creditors from seizing the company's vessels when they call on U.S. ports. Cosimo Borrelli, recently appointed vice president for restructuring for PT Berlian, signed the Chapter 15 petitions for Chembulk New York Pte Ltd and 12 other entities. The Berlian group operates 72 vessels, of which 50 are owned. In January, the Berlian Group violated covenants under a $685 million loan agreement. Creditors took steps to arrest certain vessels operated by companies in the Berlian Group. In order to prevent ship arrests and other collection efforts, the Berlian Group initiated proceedings in the High Court of the Republic of Singapore on March 12, 2012. The Singapore court entered orders prohibiting for three months any arrest of vessels or collection effort. The Berlian Group filed the Chapter 15 petitions to obtain entry of an order enjoining creditors from seizing vessels that are at port in the United States. The Debtors do not have assets in the U.S. other than the transitory basis vessels that are in the U.S. CHRIST HOSPITAL: Hudson Wins Bidding for Jersey City Hospital ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a bankruptcy judge in Newark, New Jersey, authorized Christ Hospital to sell its 367-bed acute-care hospital in Jersey City to Hudson Hospital Holdco LLC from Philadelphia. Hudson will pay $29.5 million in cash, the cost of curing defaults on contracts, plus $3.5 million to the Pension Benefit Guaranty Corp. to pay part of the hospital's liability. Hudson is a for-profit hospital operator that owns the Hoboken Medical Center and the Bayonne Medical Center, both in New Jersey. It beat out Community Healthcare Associates, the acquirer of Barnert Hospital. About Christ Hospital Christ Hospital filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 12-12906) on Feb. 6, 2012. Christ Hospital, founded in 1872 by an Episcopalian priest, is a 367-bed acute care hospital located in Jersey City, New Jersey at 176 Palisade Avenue, serving the community of Hudson County. The Debtor is well-known for its broad range of services from primary angioplasty for cardiac patients to intensity modulated radiation therapy for those battling cancer. Christ Hospital is the only facility in Hudson County to offer IMRT therapy, which is the most significant breakthrough in cancer treatment in recent years. Christ Hospital filed for Chapter 11 after an attempt to sell the assets fell through. Judge Morris Stern presides over the case. Lawyers at Porzio, Bromberg & Newman, P.C., serve as the Debtor's counsel. Alvarez & Marsal North America LLC serves as financial advisor. Logan & Company Inc. serves as the Debtor's claim and noticing agent. The Health Professional and Allied Employees AFT/AFI-CIO is represented in the case by Mitchell Malzberg, Esq., at Mitnick & Malzberg P.C. DIP lender HFG is represented in the Debtor's case by Benjamin Mintz, Esq., at Kaye Scholer LLP and Paul R. De Filippo, Esq., at Wollmuth Maher & Deutsch LLP. Andrew H. Sherman, Esq., at Sills, Cummis & Gross, serves as counsel to the Official Committee of Unsecured Creditors. J.H. Cohn LLP serves as financial advisor to the committee. Suzanne Koenig of SAK Management Services, LLC, has been appointed as patient care ombudsman. She is represented by Greenberg Traurig as counsel. Hudson Hospital Holdco is represented in the case by McElroy, Deutsch, Mulvaney & Carpenter, LLP. Community Healthcare Associates is represented in the case by Lowenstein Sandler PC. Liberty Healthcare System, Inc., d/b/a Jersey City Medical Center, which joined in CHA's bid, is represented by Duane Morris LLP. CHURCH OF GOD: Case Summary & 7 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Church of God of Deliverance, Inc. fdba Church of God of Deliverance Ministries P.O. Box 492 Rocky Mount, NC 27802 Bankruptcy Case No.: 12-02331 Chapter 11 Petition Date: March 26, 2012 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: Stephani W. Humrickhouse Debtor's Counsel: George M. Oliver, Esq. OLIVER FRIESEN CHEEK, PLLC P.O. Box 1548 New Bern, NC 28563 Tel: (252) 633-1930 Fax: (252) 633-1950 E-mail: efile@ofc-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb12-02331.pdf The petition was signed by Larry T. Dickens, member/manager. CLEAN BURN: Northen Blue OK'd as Special Counsel for Trustee ------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District North Carolina authorized the Sara A. Conti, Chapter 11 trustee for Clean Burn Fuels, LLC, to employ Northen Blue, LLP, as special counsel. As reported in the Troubled Company Reporter on Feb. 17, 2012, the trustee related that pursuant to a May 17, 2011, order, John A. Northen and the firm of Northen Blue, L.L.P., were approved as bankruptcy counsel for the Debtor. Northen Blue is expected to: a. assist the trustee in finalizing and obtaining Plan confirmation; b. represent the trustee in litigation pending against Perdue BioEnergy, LLC and Cape Fear Farm Credit, ACA; c. investigate and pursue any other litigation as requested by the trustee, including any Bankruptcy causes of action arising under Sections 541, 542, 543, 544, 546, 547, 548, 549, 550 or 553 of the Bankruptcy Code; d. review claims and file objections thereto; and e. perform other legal services as may be required by the trustee in the administration of the Debtor's estate. Mr. Northen assures the Court that neither he nor any members or associates of the firm hold or represent any interest adverse to the Debtor's estate, and therefore, are "disinterested persons" as the term defined in Section 101(14) of the Bankruptcy Code. About Clean Burn Founded in 2005, Clean Burn Fuels LLC is the first company to produce ethanol in North Carolina. It completed the construction of its ethanol plant in August 2010 and started producing and selling ethanol and dried distillers grains with solubles (DDGS) shortly thereafter. Clean Burn filed for Chapter 11 bankruptcy protection (Bankr. M.D.N.C. Case No. 11-80562) on April 3, 2011. John A. Northen, Esq., at Northen Blue, L.L.P., in Chapel Hill, N.C., represents the Debtor. Anderson Bauman Tourtellot Vos & Co. serves as financial consultant and chief restructuring officer. Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP serves as special counsel to assist the Debtor in its state court litigation matters, including various lawsuits pending in Hoke County, North Carolina. The Debtor disclosed $79,516,062 in assets and $79,218,681 in liabilities as of the Chapter 11 filing. Charles M. Ivey, Esq., at Ivey McClellan Gatton, in Greensboro, N.C., represents the Creditors' Committee as counsel. Since the petition date, the Debtor has not operated its ethanol plant. CLARK AND LELAND: Case Summary & 18 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Clark and Leland Condominium, LLC 4626 N. Clark Street Chicago, IL 60640 Bankruptcy Case No.: 12-11815 Chapter 11 Petition Date: March 26, 2012 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Carol A. Doyle Debtor's Counsel: Robert Lemle, Esq. LEMLE LAW GROUP 520 S. Lafayette Park Place, Suite 560 Los Angeles, CA 90057 Tel: (213) 384-3578 Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 A copy of the list of 18 largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb12-11815.pdf The petition was signed by Heung K. Baek, managing member. COLORADO ALTITUDE: Nevin Can Pursue Patent Suit ----------------------------------------------- Bankruptcy Judge Elizabeth E. Brown said Stephen Nevin can proceed with his patent infringement lawsuit against Colorado Altitude Training LLC in Boulder District Court, in Colorado, and seek injunctive relief related to the Debtor's alleged post-petition infringement of his patents as the automatic stay does not apply to those claims. A copy of Judge Brown's March 23, 2012 Order is available at http://is.gd/dvgbodfrom Leagle.com. Based in Louisville, Colorado, Colorado Altitude Training LLC filed a Chapter 11 petition (Bankr. D. Colo. Case No: 10-21951) on May 14, 2010. Judge Elizabeth E. Brown presides over the case. Peter J. Lucas, Esq., in Denver, serves as the Debtor's counsel. In its petition, the Debtor estimated $100,001 to $500,000 in assets and $1 million to $10 million in debts. The petition was signed by L.M. Kutt, CEO. COMMUNITY MEMORIAL: AmerisourceBergen Opposes Cash Use ------------------------------------------------------ AmerisourceBergen Drug Corporation filed with the U.S. Bankruptcy Court for the Eastern District of Michigan an objection to any further bankruptcy court order authorizing Community Memorial Hospital d/b/a Cheboygan Memorial Hospital's use of cash collateral. ABDC explains that the Debtor has the burden of proving that ABDC's security interest in cash collateral is adequately protected. ABDC adds that for a replacement lien in cash collateral to constitute adequate protection, the Debtor has to prove that ABDC will retain a first priority security interest in the same amount of cash collateral it had prepetition. Unless and until that has been proven, the Debtor must be prohibited from making any use of cash collateral beyond that provided in the interim order. As reported in the March 12, 2012 edition of the Troubled Company Reporter, the Debtor on March 6 obtained limited authority to use lenders' cash collateral of up to $900,000 pursuant to a stipulation among the Debtor, Citizens National Bank of Cheboygan, the U.S. Department of Agriculture, and AmerisourceBergen Drug Corporation. The Debtor, on the one hand, and Citizens and the USDA, on the other hand, disagree as to the scope of Citizens Bank's and the USDA's security interests, particularly as to whether or not they apply to accounts receivable. The Debtor has roughly $12.8 million of secured debt resulting from four different credit facilities: -- Citizens National Bank of Cheboygan loaned the principal sum of $713,000, pursuant to a Note, dated Jan. 26, 2001. The Citizens Note is secured by mortgages on three parcels of real property owned by the Debtor, located at 702-736 S. Main Street, Cheboygan, Michigan, known as Lincoln Bridge Plaza. -- The Economic Development Corporation of the County of Cheboygan, with Citizens as the bondholder, loaned to the principal sum of $1,600,000 pursuant to a Note, dated Feb. 1, 2001. The Debtor also granted Citizens mortgages on the Lincoln Bridge Plaza. -- The EDCCC, with Citizens again as the bondholder, loaned the additional principal sum of $4,300,000, pursuant to a Note, dated April 1, 2008. The Debtor granted Citizens additional mortgages on three parcels of real property owned by the Debtor, located at 748-810 S. Main Street, Cheboygan, Michigan, referred to as the hospital main campus. -- The USDA loaned the principal sum of $8,724,251, pursuant to a Note, Dec. December 3, 2003. The Debtor granted to the USDA mortgages on the Lincoln Bridge Plaza, the Hospital and a medical office building that was to be constructed with the proceeds of the USDA loan. The USDA agreed, at the time of the Second Bond Note, to subordinate its mortgage and liens on the Lincoln Bridge Plaza and the Hospital but not its mortgage and lien on the New Clinic. The Debtor has argued that Citizens Bank and the USDA have no interest in the Debtor's cash, while Citizens Bank and the USDA assert that all of the Debtor's cash constitutes their cash collateral. The Debtors noted in court papers that, in addition to the Prepetition Lenders, certain entities may assert liens or purchase money security interests in specific equipment or supplies sold to the Debtor, including AmerisourceBergen, Eplus Technology, Inc., Stryker Sales Corporation, Med One Capital Funding, LLC, Republic Bank, Leasing Associates of Barrington, Inc., Siemens Financial Services, Inc., Fleetwood Financial, General Electric Capital Corporation, Siemens Medical Solutions USA, Inc., and Winthrop Resources Corporation. AmerisourceBergen claims a security interest in, among other things, the Debtor's accounts receivable and their proceeds, including the cash that the Debtor proposes to use. As of the Petition Date, the Debtor said total assets were $20,159,891. In its interim order, the Court made no finding on the issue, but held that use of cash by the Debtor is necessary and that the proposed protection for the cash use is adequate. As adequate protection of ABDC's interests and the Prepetition Lenders' interests in their prepetition collateral, ABDC and the Prepetition Lenders will have, pursuant to sections 361, 363 and 552(b) of the Bankruptcy Code, valid, binding, enforceable and perfected replacement liens in the same property of the Debtor's estate as held by ABDC and the Prepetition Lenders prior to the Petition Date. The Replacement Liens will enjoy the same validity and extent as the liens ABDC and the Prepetition Lenders held on the Petition Date, subject only to existing liens and encumbrances that are valid, binding and enforceable and perfected liens existing in the Prepetition Collateral on the Petition Date. About Community Memorial Hospital Community Memorial Hospital, operator of the Cheboygan Memorial Hospital, filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case No. 12-20666) on March 1, 2012. Judge Daniel S. Opperman oversees the case. Paul W. Linehan, Esq., at McDonald Hopkins LLC, represents the Debtor as counsel. The Debtor's financial advisor is Conway Mackenzie Inc. The Debtor estimated assets and debts of $10 million to $50 million. Opened in 1942, the Debtor is an independent, not-for-profit entity, organized exclusively for charitable, scientific and educational purposes, and holds tax exempt status in accordance with Section 501(c)(3) of the Internal Revenue Code. The Cheboygan Memorial Hospital is a 25-bed critical access hospital located in Cheboygan, Cheboygan County, a community on the Lake Huron coast. The Debtor has 395 employees. COMMUNITY MEMORIAL: Proposes to Sell to McLaren for $5-Mil. ----------------------------------------------------------- Community Memorial Hospital asks the U.S. Bankruptcy Court for the Eastern District of Michigan to authorize the sale of substantially all of its assets. The Debtor, with the assistance of Conway MacKenzie, Inc., as investment banker, has completed the marketing and sale process. One buyer, McLaren Health Care Corporation submitted an indication of interest, resulting in an asset purchase agreement, and undertook a comprehensive due diligence process. The APA provides for, among other things: a. McLaren will acquire substantially all of the Debtor's operating assets at its primary hospital campus, well as certain of the Debtor's non-operating assets, including but not limited to furniture, fixtures and furnishings, machinery and equipment, inventories, permits, licenses, certificates of need, certain real property, and medical records; b. excluded from the Hospital Assets cash in the Debtor's various accounts, accounts receivable and certain real property; c. McLaren will assume certain of the Debtor's liabilities, including "Cure Costs" for executory contracts and unexpired leases to be assumed by McLaren; d. the purchase price for the Hospital Assets will be (1) $5,000,000, plus (2) all amounts required for the Debtor to cure and assume the assigned Assumed Contracts and Leases; e. McLaren's obligation to purchase the Hospital Assets is not subject to financing; f. the APA allows for termination by McLaren or the Debtor under certain, limited circumstances. The Debtor also seeks approval of a break-up fee of $150,000 to be paid to McLaren under certain conditions. The Debtor says that fee is not substantial and won't provide a chilling effect on potential bidders. McLaren?s bid may serve as a catalyst for other parties to submit competing bids, the Debtor says. The sale motion doesn't provide for a deadline for initial bids or an auction date if bids are received. About Community Memorial Hospital Community Memorial Hospital, operator of the Cheboygan Memorial Hospital, filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case No. 12-20666) on March 1, 2012. Judge Daniel S. Opperman oversees the case. Paul W. Linehan, Esq., at McDonald Hopkins LLC, represents the Debtor as counsel. The Debtor's financial advisor is Conway Mackenzie Inc. The Debtor estimated assets and debts of $10 million to $50 million. Opened in 1942, the Debtor is an independent, not-for-profit entity, organized exclusively for charitable, scientific and educational purposes, and holds tax exempt status in accordance with Section 501(c)(3) of the Internal Revenue Code. The Cheboygan Memorial Hospital is a 25-bed critical access hospital located in Cheboygan, Cheboygan County, a community on the Lake Huron coast. The Debtor has 395 employees. Counsel for Citizens National Bank of Cheboygan is Sandra S. Hamilton, Esq., at Clark Hill PLC. AmerisourceBergen is represented by Dennis M. Haley, Esq., at Winegarden Haley Lindholm & Robertson PLC. The Debtor and McLaren Health Care Corporation have an Asset Purchase Agreement to buy most of the Debtor's assets for $5 million. McLaren is also providing up to $2 million in DIP financing. The APA requires that any outstanding balances on the postpetition financing will be credited toward the purchase price. Christine Derdarian in Sylvan Lake, Michigan, has been appointed as Patient Care Ombudsman pursuant to a stipulation between the Debtor and the U.S. Trustee for Region 9. The U.S. Trustee also has appointed an official committee of unsecured creditors. CONVERGYS CORP: S&P Puts 'BB+' Corp. Credit Rating on Watch Neg --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Cincinnati-based Convergys Corp., including the 'BB+' corporate credit rating, on CreditWatch with negative implications. This action follows the announcement that the company has signed a definitive agreement to sell its Information Management (IM) business to NEC Corp. for $449 million in cash. "In our opinion, the transaction would weaken Convergys' business risk profile by reducing business diversity," said Standard & Poor's credit analyst Naveen Sarma, "and increasing reliance on the more economically sensitive call center business, which has lower margins. The IM business, which provides business support services, including billing services mainly to telecommunications companies, comprised about 15% of consolidated revenues and 20% of consolidated EBITDA for 2011." "In resolving the CreditWatch, we will reassess the company's business risk profile absent the IM business. Specifically, we will evaluate Convergys' competitive position in the calling center industry, the predictability of revenues and the company's ability to manage costs when call volumes decline, and, most importantly, its ability to improve profitability. EBITDA margins for the customer care business have generally been around 11%, compared with the midteen percentage area for the IM business," S&P said. "We expect leverage to rise modestly as a result of the transaction, but to remain low for the financial risk assessment of 'intermediate," added Mr. Sarma. "Total debt to EBITDA would be about 1.3x, including our adjustments for operating leases, postretirement benefits, and net cash distributions from the company's cellular partnership with AT&T Wireless, and excluding the $52 million in EBITDA from the IM business. Convergys sold the cellular partnership to AT&T for $320 million in June 2011." "We plan to complete our evaluation before the end of the second quarter of 2012," S&P said. CUMBERLAND HOLDINGS: Case Summary & Largest Unsecured Creditor -------------------------------------------------------------- Debtor: Cumberland Holdings, LLC P.O. Box 48668 Saint Petersburg, FL 33743 Bankruptcy Case No.: 12-02329 Chapter 11 Petition Date: March 26, 2012 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: Stephani W. Humrickhouse Debtor's Counsel: Michael P. Peavey, Esq. P.O. Box 1115 Wilson, NC 27894-1115 Tel: (252) 291-8020 Fax: (252) 291-8309 E-mail: mpeavey@peaveylaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 In its list of 20 largest unsecured creditors, the Company placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Branch Banking & Trust Co. $497,236 Mr. Jack Hayes P. O. Box 1847 Wilson, NC 27894 The petition was signed by David Marshlack, member. DELTA PETROLEUM: Court OKs Amendment to Sale Process Deadlines -------------------------------------------------------------- The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware entered an order amending the relevant sale process deadlines as set forth in the bid procedures. As reported in the Troubled Company Reporter on March 27, 2012, the expanded procedures allow bidders to propose buying stock as part of a plan of reorganization, well as the asset bids currently contemplated. Delta was able to convince the Court that the amendments could protect the Company's more than $1.1 billion worth of tax benefits for its buyer. Delta said that its valuable tax benefits could eventually be used to free "cash flow for debt service, working capital, capital expenditures and other beneficial uses." Delta was initially slated to hold an auction on March 26. No buyer is under contract. The amendment includes: April 16, 2012, at 4:00 p.m. Objection Deadline April 18, 2012, at 4:00 p.m. Bid Deadline April 20, 2012, at 4:00 p.m. Auction Notice Deadline April 24, 2012, at 9:00 a.m. Auction May 1, 2012, at 11:00 a.m. Sale Hearing About Delta Petroleum Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil and gas company engaged primarily in the exploration for, and the acquisition, development, production, and sale of, natural gas and crude oil. Natural gas comprises over 90% of Delta's production services. The core area of its operations is the Rocky Mountain Region of the United States, where the majority of the proved reserves, production and long-term growth prospects are located. Delta and seven of its subsidiaries sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013, inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31, 2012 scheduled maturity of its $38.5 million secured credit facility with Macquarie Bank Limited and after several months of unsuccessful attempts to sell the business. Delta disclosed $375,498,248 in assets and $310,679,157 in liabilities, which also include $152,187,500 in outstanding obligations on account of the 7% senior unsecured notes issued in March 2005 with US Bank National Association indenture trustee; and $115,527,083 in outstanding obligations on account of 3-3/4% Senior Convertible Notes due 2037 issued in April 2007. In its amended schedules, the Delta Petroleum disclosed $373,836,358 in assets and $312,864,788 in liabilities. W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A. Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard & Reed LLP, in New York, N.Y., represent the Debtors as counsel. Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights, Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del., represent the Debtors as co-counsel. Conway Mackenzie is the Debtors's restructuring advisor. Evercore Group L.L.C. is the financial advisor and investment banker. The Debtors selected Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The petition was signed by Carl E. Lakey, chief executive officer and president. The U.S. Trustee told the bankruptcy judge that there was insufficient interest from creditors to form an official committee of unsecured creditors. EASTMAN KODAK: Court Approves Flextronics Settlement ---------------------------------------------------- The U.S. Bankruptcy Court in Manhattan approved a settlement between Eastman Kodak Co. and its major supplier, Flextronics Corp. Flextronics supplies goods for Eastman Kodak's retail kiosk and scanner business under a 2003 agreement. Under the deal, Eastman Kodak will pay more than $3.2 million for goods Flextronics supplied immediately before the company's bankruptcy filing. In exchange, Flextronics will give the company a $750,000 discount. It also agreed to release its so-called "first priority purchase-money security interest" in certain goods, according to court papers. The deal also extends the terms of the 2003 agreement until June 13, 2013, and authorizes Eastman Kodak and Flextronics to enter into another contract to replace the 2003 agreement. "Entry into the settlement agreement will benefit the estates by allowing the debtors to avoid the substantial cost of re-sourcing the Flextronics manufactured goods," said Eastman Kodak's lawyer, Andrew Dietderich, Esq., at Sullivan & Cromwell LLP, in New York. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and were expected to continue to operate as usual. KODAK, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Having invested significantly in research and development for over a century, Kodak has a vast portfolio of patents. In 1975, Kodak scientists invented the first digital camera. Kodak then went on to develop a vast collection of patented technologies to enhance digital image capture and processing, technologies that are used in virtually every modern digital camera, smartphone and tablet, as well as numerous other devices. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Kodak says it has "significant" legacy liabilities, which include $1.2 billion in non-U.S. pension liabilities, $1.3 billion of Other Post-Employment Benefit ("OPEB") liabilities and roughly $100 million in environmental liabilities. Kodak has outstanding funded debt in an aggregate amount of roughly $1.6 billion, consisting primarily of roughly: (a) $100 million outstanding under the first lien revolving credit facility plus an additional $96 million in face amount of outstanding letters of credit; (b) $750 million in principal amount of second lien secured notes; (c) $400 million in principal amount of convertible notes; and (d) $283 million in principal amount of other senior unsecured debt. Kodak also has roughly $425 million in outstanding trade debt. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). EASTMAN KODAK: Apple Ordered to Turn Over Data for Patent Claims ---------------------------------------------------------------- The U.S. Bankruptcy Court in Manhattan ordered Apple Inc. to turn over documents requested by Eastman Kodak Co. in connection with its investigation into Apple's claims that it owns some of the company's digital imaging patents. Eastman Kodak seeks to investigate Apple's patent claims out of concern that they would disrupt the sale of its digital imaging portfolio, which is reportedly worth $2.2 billion to $2.6 billion. In a previously filed reply to Apple's objection, Eastman Kodak said the patent claims are unsupported and need to be investigated so that the company could move ahead with the sale of its digital imaging portfolio. Eastman Kodak also criticized Apple for dictating what information the company can and cannot have about Apple's patent claims. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and were expected to continue to operate as usual. KODAK, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Having invested significantly in research and development for over a century, Kodak has a vast portfolio of patents. In 1975, Kodak scientists invented the first digital camera. Kodak then went on to develop a vast collection of patented technologies to enhance digital image capture and processing, technologies that are used in virtually every modern digital camera, smartphone and tablet, as well as numerous other devices. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Kodak says it has "significant" legacy liabilities, which include $1.2 billion in non-U.S. pension liabilities, $1.3 billion of Other Post-Employment Benefit ("OPEB") liabilities and roughly $100 million in environmental liabilities. Kodak has outstanding funded debt in an aggregate amount of roughly $1.6 billion, consisting primarily of roughly: (a) $100 million outstanding under the first lien revolving credit facility plus an additional $96 million in face amount of outstanding letters of credit; (b) $750 million in principal amount of second lien secured notes; (c) $400 million in principal amount of convertible notes; and (d) $283 million in principal amount of other senior unsecured debt. Kodak also has roughly $425 million in outstanding trade debt. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). EASTMAN KODAK: Fujifilm Barred From Pursuing Patent Suit -------------------------------------------------------- The U.S. Bankruptcy Court in Manhattan blocked Fujifilm Corp. from moving ahead with its patent-infringement lawsuit against Eastman Kodak Co. In a March 23 order, the bankruptcy court denied Fujifilm's bid to lift the automatic stay that was applied to the lawsuit, which is pending before the U.S. District Court in Manhattan. Fujifilm filed the lawsuit last year to prohibit Eastman Kodak from further manufacturing, selling, or importing products that infringe on patents, which Fujifilm claims it owns. In requesting for the lifting of the stay, Fujifilm argued the prosecution of the lawsuit won't affect the "core assets" at issue in Eastman Kodak's bankruptcy case. The move drew flak from the Official Committee of Unsecured Creditors and the committee representing Kodak noteholders. Both claimed that allowing Fujifilm to move ahead with its lawsuit would delay Eastman Kodak's restructuring efforts. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and were expected to continue to operate as usual. KODAK, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Having invested significantly in research and development for over a century, Kodak has a vast portfolio of patents. In 1975, Kodak scientists invented the first digital camera. Kodak then went on to develop a vast collection of patented technologies to enhance digital image capture and processing, technologies that are used in virtually every modern digital camera, smartphone and tablet, as well as numerous other devices. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Kodak says it has "significant" legacy liabilities, which include $1.2 billion in non-U.S. pension liabilities, $1.3 billion of Other Post-Employment Benefit ("OPEB") liabilities and roughly $100 million in environmental liabilities. Kodak has outstanding funded debt in an aggregate amount of roughly $1.6 billion, consisting primarily of roughly: (a) $100 million outstanding under the first lien revolving credit facility plus an additional $96 million in face amount of outstanding letters of credit; (b) $750 million in principal amount of second lien secured notes; (c) $400 million in principal amount of convertible notes; and (d) $283 million in principal amount of other senior unsecured debt. Kodak also has roughly $425 million in outstanding trade debt. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). EASTMAN KODAK: Questions Distributor's Setoff Claims ---------------------------------------------------- Eastman Kodak Co. is opposing Wynit Distribution LLC's bid to recoup customer program credits and set off its claim against the company. Wynit, which serves as distributor of consumer goods it gets from Eastman Kodak, claims it only owes $485,545 to the company under a distribution agreement, and $3,126,229 under an OEM agreement. In court papers, Eastman Kodak questioned the accuracy of Wynit's "financial calculations," saying it failed to identify "any undisputed, definite amounts due and payable" between the companies. "Wynit's motion should be denied as premature in order to avoid the kind of time consuming, burdensome and vexatious proceedings that the doctrines of recoupment and setoff were designed to avoid rather than create," Eastman Kodak said. As reported in the Feb. 20, 2012 edition of the TCR, Wynit is asking court approval to recoup customer program credits under a distribution agreement with Eastman Kodak Company. Wynit serves as distributor of consumer goods it gets from Eastman Kodak under the deal. As distributor, Wynit is provided customer program credits and is entitled to deduct those credits against the debt it owes to Eastman Kodak. The distributor reportedly owes $701,379 to Eastman Kodak. Meanwhile, there is a $215,834 outstanding credit under the agreement, which means Wynit owes $485,545 to Kodak for goods it purchased for distribution. Wynit also seeks approval to set off its claim against Eastman Kodak under an OEM agreement where it serves as supplier of ink cartridges to the company. As of January 19, 2012, it is owed $3,126,229 based on Eastman Kodak's books and records, according to court papers. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and were expected to continue to operate as usual. KODAK, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Having invested significantly in research and development for over a century, Kodak has a vast portfolio of patents. In 1975, Kodak scientists invented the first digital camera. Kodak then went on to develop a vast collection of patented technologies to enhance digital image capture and processing, technologies that are used in virtually every modern digital camera, smartphone and tablet, as well as numerous other devices. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Kodak says it has "significant" legacy liabilities, which include $1.2 billion in non-U.S. pension liabilities, $1.3 billion of Other Post-Employment Benefit ("OPEB") liabilities and roughly $100 million in environmental liabilities. Kodak has outstanding funded debt in an aggregate amount of roughly $1.6 billion, consisting primarily of roughly: (a) $100 million outstanding under the first lien revolving credit facility plus an additional $96 million in face amount of outstanding letters of credit; (b) $750 million in principal amount of second lien secured notes; (c) $400 million in principal amount of convertible notes; and (d) $283 million in principal amount of other senior unsecured debt. Kodak also has roughly $425 million in outstanding trade debt. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). ELECTRIC HOLDINGS: Fitch Downgrades Issuer Default Rating to 'CC' ----------------------------------------------------------------- Fitch Ratings has lowered the Issuer Default Rating (IDR) of Texas Competitive Electric Holdings Company LLC (TCEH) to 'CC' from 'CCC' and removed the Negative Rating Outlook. According to Fitch's Rating definitions, a 'CC' rating implies very high levels of credit risk such that default of some kind appears probable at some point in the future. On the other hand, a 'CCC' rating implies substantial credit risk such that default is a real possibility. Due to inter-company linkages, Fitch has also downgraded the IDRs of Energy Future Holdings Corp (EFH), Energy Future Intermediate Holding Company LLC (EFIH) and Energy Future Competitive Holdings Company (EFCH) to 'CC' as well. The IDR and security ratings of Oncor Electric Delivery Company LLC (Oncor) are unaffected by today's rating actions. Security Ratings at TCEH: Based on an updated recovery analysis that reflects a lower valuation for both Luminant and TXU Energy and reflecting the one- notch downgrade to the IDR, the security ratings for the first- lien senior secured debt are downgraded to 'CCC/RR3' from 'B/RR2'. The ratings are affirmed for the second-lien senior secured debt at 'C/RR6'; guaranteed unsecured notes at 'C/RR6'; and non- guaranteed unsecured notes at 'C/RR6'. Security Ratings at EFH/EFIH: Fitch has updated its recovery analysis for EFH/EFIH and now assumes a higher valuation for Oncor. The security ratings for the first-lien senior secured debt are downgraded to 'B' from 'B+' reflecting the one-notch downgrade to the IDR. The Recovery Rating (RR) for the first-lien debt remains at 'RR1'. The ratings are affirmed for the second-lien senior secured debt at 'B' albeit at a higher RR ('RR1' versus prior 'RR2'); guaranteed unsecured notes at 'CCC' albeit at higher RR ('RR3' versus prior 'RR4'); and non-guaranteed unsecured notes at 'C/RR6'. The downgrade to TCEH's IDR is driven by a further sharp deterioration in the company's business outlook over the last few months such that the current highly leveraged capital structure is no longer sustainable and some kind of default seems inevitable, in Fitch's view. The timing of default, however, has been pushed out due to the recent actions taken by management to bolster liquidity and it is quite likely that EFH/EFIH will opportunistically continue to access the capital markets. But these actions provide liquidity support only till 2014 according to Fitch and it appears increasingly unlikely that power prices will recover in the meantime to levels required for TCEH to reach cash breakeven. Fitch has significantly lowered its expectation for TCEH's EBITDA beyond 2012. This has been primarily driven by lower power price expectations for the Electric Reliability Council of Texas (ERCOT). Natural gas prices set the power prices in ERCOT 70%-90% of the time and the forward natural gas curve has weakened considerably over the last few months. As a partial offset, Fitch does expect the tightening reserve margins in ERCOT to drive market heat rates higher, especially during peak periods, but overall, Fitch's expectation of power prices in ERCOT is lower than it was before. As of Dec. 31, 2011, TCEH had 42% of 2013 and 69% of 2014 natural gas exposure unhedged and there are no natural gas hedges beyond 2014. Fitch has also lowered Luminant's expected baseload generation in 2012 reflecting recent trends of displacement of coal generation with natural gas during off-peak hours. Fitch has also lowered its EBITDA outlook for TCEH's retail business. TXU Energy has been experiencing significant customer attrition, a pace that has picked up in 2011. While TXU Energy has been able to sustain margins in 2011 and could benefit in 2012 due to falling wholesale prices, intensified competition and significant headroom between TXU Energy's and competitive offers is likely to put pressure on both margins and customer retention. Fitch forecasts TCEH to be free cash flow negative in 2012 as compared to earlier expectations that the company will break even. The change is driven by Fitch's assumption of lower EBITDA and a shift in capex for environmental compliance towards earlier years. Beyond 2012, Fitch expects TCEH's cash flow generation from operations to be significantly lower than its cash interest expense and capex needs. This is driven by the roll-off of above- market natural gas hedges beginning 2013, rising environmental expenditures and higher cash interest expenses driven by the termination of PIK interest in November 2012, and higher interest rates on floating debt, partially offset by the roll-off of current interest rate swaps. While not in Fitch's rating case at present, the Environment Protection Agency's (EPA) Cross State Air Pollution Rule (CSAPR) could potentially have a material adverse impact on the company as well. The rule mandates steep SO2 and seasonal NOx reduction that could lead to sizeable capital investment, reduced generation, and higher costs for the portion of Luminant's coal fleet that is not scrubbed. The rule has been stayed by the United States Court of Appeals for the D.C. Circuit, and given the possibility that the rule gets modified and/or delayed, Fitch has not included the likely impact of CSAPR in its rating case. Fitch expects consolidated liquidity at EFH/EFIH and TCEH to be affected by free cash flow deficits at TCEH as highlighted above and reduced upstream dividend from Oncor during 2012-13. Liquidity in 2012 has been bolstered by the recent $1.15 billion of senior secured second-lien issuances at EFIH in two separate transactions. The majority of the net proceeds have been used by EFIH to pay distribution to EFH, which in turn, has paid down $950 million of inter-company loan to TCEH, thus bolstering TCEH's liquidity. As a result of these transactions, EFH currently has an estimated $660 million of inter-company notes outstanding as compared to $1.6 billion at the end of 2011. Management has publicly stated that EFH does not plan to borrow from TCEH any more and will be in a repayment mode. Fitch anticipates EFIH to opportunistically access capital markets again to repay the balance of the inter-company note. Liquidity may not be a concern until 2014 given the current ability to issue $500 million first-lien and $1.3 billion second- lien debt at EFH/EFIH. TCEH has the ability to issue $750 million of first-lien debt at TCEH and $1.88 billion of second-lien debt, of which $1 billion can be issued for cash. TCEH has unlimited ability to issue first-lien debt for refinancing purposes. Fitch's forecasts include an increase in leverage from an already untenable level due to a need for higher borrowings to fund operations. TCEH's near-term debt maturities are significant including the $645 million unextended portion of the revolving credit facility in October 2013, the $3,851 million unextended portion of term loans and deposit letter of credit (LOC) loans in October 2014 and the $4,693 million of cash pay/PIK toggle notes in 2015/16 (which excludes approximately $363 million of notes held by EFH and EFIH). The debt maturity schedule could be exacerbated by the springing maturity provision for the extended portions of the term loans and deposit LOC loans if the requisite conditions are not met. Volatile capital market conditions and weakened fundamental outlook could hamper the company's ability to execute refinancings on a timely basis. EFH has over $1 billion of debt maturities over 2014-17 and, in Fitch's view, would need to preserve a substantial portion of its debt issuance capacity for debt repayments. Recovery Analysis: The individual security ratings at TCEH and EFH/EFIH are notched above or below the IDR, as a result of the relative recovery prospects in a hypothetical default scenario. Fitch values the power generation assets at Luminant using a net present value (NPV) analysis. Fitch uses the plant valuation provided by its third-party power market consultant, Wood Mackenzie, as an input as well as Fitch's own gas price deck and other assumptions. The generation asset net present values (NPVs) vary significantly based on future gas price assumptions and other variables, such as the discount rate and heat rate forecasts in ERCOT. Fitch's valuation of Luminant's generation fleet at approximately $13.5 billion reflects a value of approximately $1,700 per kilowatt (kw) for the nuclear units, $700/kw for the older coal fleet, $1,500/kw for the newer coal units and $600/kw for the natural gas plants. Fitch values TXU Energy at $2.5 billion using an EV/EBITDA multiple of 5.0 times (x). For the purpose of the recovery analysis, Fitch has assumed that the credit facilities are fully drawn and the first-lien capacity is fully utilized. Fitch has also assumed that the current balance of $660 million of demand notes payable to TCEH by EFH has been paid in full. Fitch does note that natural gas prices are a key variable that drives the valuation of TCEH's power generation assets. According to Fitch's estimates, every $1/MMMBtu move in natural gas prices can drive approximately $500 million variance in TCEH's EBITDA beyond 2014. The recovery analysis results in a 'CCC/RR3' rating for TCEH's first-lien bank facilities and first-lien senior secured notes. The 'RR3' rating reflects a one-notch positive differential from the 'CC' IDR and indicates that Fitch estimates recovery of 51%- 70%. The recovery waterfall yields no recovery for all debt junior to the first lien as the first-lien debtholders are not paid in full. Fitch's assessment of the collateral valuation at EFH/ EFIH continues to depend solely on the value of Oncor Electric Delivery Holdings Company LLC's (Oncor Holdings) 80% ownership interest in Oncor. Fitch has updated its value of Oncor Holdings' equity interest. Fitch is now using an EV/EBITDA multiple approach rather than a book value of equity approach to value Oncor. Given the high EBITDA growth expectation at Oncor, the book value approach grossly undervalued the utility. Fitch is using an 8.5x EV/EBITDA multiple to value Oncor's expected 2014 EBITDA of $1.8 billion. This approach values Oncor Holdings' proportional interest in Oncor at $7.5 billion as of 2014 year-end. Fitch has also assumed for the purposes of the recovery analysis that first- lien capacity and the currently permissible second-lien capacity is fully utilized. As a result, the rating of the second-lien debt is no longer being suppressed. Fitch downgrades the following and removes the Negative Rating Outlook: EFH: -- IDR to 'CC' from 'CCC'; -- Senior secured first lien notes to 'B/RR1' from 'B+/RR1. EFIH: -- IDR to 'CC' from 'CCC'; -- Senior secured first lien notes to 'B/RR1' from 'B+/RR1'. TCEH: -- IDR to 'CC' from 'CCC'; -- Senior secured bank facilities to 'CCC/RR3' from 'B/RR2'; -- Senior secured first lien notes to 'CCC/RR3' from 'B/RR2'. EFCH: -- IDR to 'CC' from 'CCC. Fitch affirms the following and removes the Negative Rating Outlook: EFH: -- Senior notes (guaranteed) at 'CCC' and the RR changed to 'RR3' from 'RR4'; -- Senior notes (non-guaranteed) at 'C/RR6'. EFIH: -- Senior secured second-lien notes at 'B' and the RR changed to 'RR1' from 'RR2'. TCEH: -- Senior secured second-lien notes at 'C/RR6'; -- Secured lease facility bonds at 'B-/RR3' (secured by certain combustion turbine assets); -- Guaranteed unsecured notes at 'C/RR6'; -- Senior unsecured debt (non-guaranteed) at 'C/RR6'; -- Senior unsecured pollution control bonds issued by the Brazos River Authority (TX), Sabine River Authority (TX), and Trinity River Authority (TX) at 'C'. EFCH: -- Unsecured notes at 'C/RR6'. ENDURANCE INT'L: S&P Rates $185 Million First Lien Term Loan 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Burlington, Mass.-based Endurance International Group Inc. The outlook is stable. "We are also assigning a 'B' issue rating with a recovery rating of '3' to the company's $185 million incremental first-lien term loan. The '3' recovery rating indicates our expectation for meaningful (50%-70%) recovery for lenders in the event of payment default," S&P said. The company is using $155 million of the proceeds to redeem convertible preferred stock and $24 million for future acquisitions. As a result, leverage will increase marginally. "In addition, we affirmed our 'B' issue rating on the company's existing senior secured facilities, including the revolver due 2014 following the $20 million add-on. The '3' recovery rating on this debt remains unchanged," S&P said. "Standard & Poor's expects that Endurance will generate good free operating cash flow (FOCF) and that revenue and EBITDA measures will improve over the next 12 months as the company fully benefits from recent acquisitions and associated purchase accounting adjustments are normalized. However, the rating also reflects the company's acquisition-driven growth, its focus on the small-to- midsize business (SMB) market in a weak economy, and what we view as an 'aggressive' (based on our criteria) financial risk profile," S&P said. "Endurance helps SMBs establish, maintain, and promote their online presence. We assess the company's business risk profile as 'vulnerable' (based on our criteria). Our assessment primarily reflects Endurance's limited market share in a highly fragmented industry with moderate switching costs and low barriers to entry, as well as significant exposure to the SMB sector, which historically has been more sensitive to weak economies than large enterprises. In addition, the company's growth has primarily reflected acquisitions, resulting in a limited track record at its current operating scale. Finally, while we expect Endurance to continue improving its revenue diversity via cross-selling add-on products, like search engine optimization and custom Web development products, its Web hosting segment still accounts for approximately 65% of its revenue base," S&P said. "For the full year 2012, we expect the company's GAAP revenue to improve toward the mid-$200 million area due to growth in its subscriber base and increased average revenue per user (ARPU). Further, we expect the combination of higher revenue and lower operating expenses to lead to adjusted EBITDA margins in the midteen area by the end of 2012," S&P said. "Due to the company's historically acquisitive growth strategy and its largely subscription-based business model, which results in significant increases in deferred revenues, we believe that cash flow metrics rather than debt to EBITDA metrics currently better reflect both the company's underlying operating performance and its credit quality. Pro forma for the transaction, we estimate the company's ratio of FOCF to debt to be in the low-teen percentage area, which is good for the rating. Pro forma debt to EBITDA, for the full year 2012, is likely to be around the midteens times. As a result of these factors, we view the financial risk profile as aggressive. Additionally, the ratings also reflect the capacity the company has put in place to add debt via accordion loans (within the parameters of a leverage-based incurrence test)," S&P said. ESP RESOURCES: MaloneBailey LLP Raises Going Concern Doubt ---------------------------------------------------------- ESP Resources, Inc., filed on March 22, 2012, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011. MaloneBailey, LLP, in Houston, Tex., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred losses and negative cash from operations through Dec. 31, 2011. The Company reported a net loss of $4.3 million on $11.1 million of sales for 2011, compared with a net loss of $2.3 million on $5.5 million of sales for 2010. The Company's balance sheet at Dec. 31, 2011, showed $6.9 million in total assets, $6.2 million in total liabilities, and stockholders' equity of $746,992. A copy of the Form 10-K is available for free at: http://is.gd/Jry0Al Scott, La.-based ESP Resources, Inc., through its wholly owned subsidiary, ESP Petrochemicals, Inc., is a custom formulator of specialty chemicals for the oil and gas industry. EVERGREEN SOLAR: Devens Plant Sold to Hackman Capital ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Evergreen Solar Inc. was given authorization from the bankruptcy court on March 23 to sell the non-operating plant in Devens, Massachusetts, to Hackman Capital Acquisition Co. LLC for $8.53 million. Sale proceeds don't go to Evergreen, however. The Massachusetts Development Finance Agency receives $5 million with the remainder earmarked for holders of the 13 percent secured notes. The report notes that when there were no buyers for the Devens plant, the underlying land and equipment at prior auctions, Evergreen worked out a three-way transaction with Hackman and the state agency. The agency was leasing the underlying land to Evergreen. In the sale, the agency conveys the land outright to Hackman and receives $5 million in satisfaction of $10.1 million in claims. About Evergreen Solar Evergreen Solar, Inc. -- http://www.evergreensolar.com/-- developed, manufactured and marketed String Ribbon solar power products using its proprietary, low-cost silicon wafer technology. The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge Mary F. Walrath. The Company's balance sheet at April 2, 2011, showed $373,972,000 in assets, $455,506,000 in total liabilities, and a stockholders' deficit of $81,534,000. Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham McCutchen LLP, serve as general bankruptcy counsel to the Debtor. Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as co-counsel. Hilco Industrial LLC serves as exclusive marketing and sales agent. Klehr Harrison Harvey Branzburg serves as special conflicts counsel. Zolfo Cooper LLC is the financial advisor. UBS Securities, LLC, serves as investment banker. Epiq Bankruptcy Solutions has been tapped as claims agent. The supporting noteholders are represented by Michael S. Stainer, Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York. An official committee of unsecured creditors retained Pepper Hamilton and Kramer Levin Naftalis & Frankel as counsel. The Committee tapped Garden City Group as communications services agent. In conjunction with the Chapter 11 filing, the Company entered into a restructuring support agreement with certain holders of more than 70% of the outstanding principal amount of the Company's 13% convertible senior secured notes. As part of the bankruptcy process the Company will undertake a marketing process and will permit all parties to bid on its assets, as a whole or in groups pursuant to 11 U.S.C. Sec. 363. An entity formed by the supporting noteholders, ES Purchaser, LLC, entered into an asset purchase agreement with the Company to serve as a 'stalking-horse" and provide a "credit-bid" pursuant to the Bankruptcy Code for assets being sold. Eventually, Evergreen sold the assets piecemeal in three auctions. Max Era Properties Ltd. from Hong Kong paid $6 million cash and $3.2 million in stock of China Private Equity Investment Holdings Ltd. for the company name, intellectual property, and wafermaking assets. Kimball Holdings LLC paid $3.8 million for solar panel inventory while the secured lenders exchanged $21.5 million of their $165 million claim for a $171 million claim against Lehman Brothers Holdings Inc. Max Era Properties Limited and Sovello AG bought equipment and machinery located at the Debtor's Devens, Massachusetts facility for $8.9 million. Evergreen Solar is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are start-up Spectrawatt Inc., which also filed in August, Solyndra Inc., which filed early in September 2011, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. FIELDS: GA Keen Realty Advisors to Market Department Stores ----------------------------------------------------------- GA Keen Realty Advisors, LLC, a subsidiary of Great American Group LLC, has been retained by Hudson's Bay Company to assist in the subleasing and assignment of 36 Fields Department Store locations throughout Canada. Founded in 1950, Fields is a chain of Canadian discount stores owned by the Hudson's Bay Company serving rural and urban Canadian communities. In December 2011, Hudson's Bay announced that Fields will cease operation beginning in February 2012 in Ontario where 26 stores will close. The remaining 141 stores will be closed in phases throughout the year, ending in the fall of 2012. "This is a great opportunity for an expanding retailer to pick up some excellent locations throughout Canada," said Craig Fox, Senior Vice President of GA Keen Realty Advisors. "Because of the diversity of the spaces available, we anticipate strong interest from various types of retailers." GA Keen Realty Advisors will help sublease or assign retail locations between 5,900 and more than 14,000 square feet in size. The properties are located throughout Alberta, British Columbia, Manitoba, Ontario, and Saskatchewan. GA Keen Realty Advisors provides real estate analysis, valuation and strategic planning services, brokerage, M&A, auction services, lease restructuring services and real estate capital market services. About Great American Group, LLC Great American Group, LLC -- http://www.greatamerican.com-- is a provider of asset disposition solutions and valuation and appraisal services to a wide range of retail, wholesale and industrial clients, as well as lenders, capital providers, private equity investors and professional service firms. Great American Group has offices in Atlanta, Boston, Chicago, Dallas, London, Los Angeles, New York and San Francisco. FILENE'S BASEMENT: To Sell Intellectual Property Assets ------------------------------------------------------- Filene's Basement LLC and Syms Corp have filed a motion with the U.S. Bankruptcy Court for the District of Delaware seeking approval of procedures for the auction and sale of their intellectual property rights. According to Enhanced Online News, , the assets being offered for sale include the Syms and Filene's Basement trade names as well as some of their house brands such as Stanley Blacker and Maine Bay. Also for sale is the IP in connection with the world-famous Running of the Brides event. The sale process is being conducted by Hilco Streambank. Domain Names Rachel Feintzeig, writing for Dow Jones' Daily Bankruptcy Review, reports that Filene's Basement and Syms Corp. are looking to put everything from their trademarks to their domain names on the auction block -- including intellectual property associated with what they call the "world renowned" Running of the Brides event. Syms and Filene's Basement brought in Hilco Streambank LLC to help them dispose of their intellectual property. According to DBR, Jack Hazan, an executive vice president with Hilco Streambank, said in an interview Tuesday that a purchaser of the Running of the Brides IP would get "all of the history and good will that comes along with it." Mr. Hazan also said the Running of the Brides intellectual property could be snatched up by another retail chain or player in the bridal business who could reinstate the event. "We're confident that someone's going to pick this up," Mr. Hazan said. "We've had good interest in this already, in all of the brands actually." The report also notes "royalty-free license agreement with Macy's for the Filene's Basement trademark," and both Syms and Filene's Basement's customer information databases will also be sold. May 3 Auction Enhanced Online News reports that the proposed procedures, if approved by the Court at a hearing scheduled for April 10, 2012, set a bid deadline of May 1, 2012 and an auction on May 3, 2012. The proposed procedures also authorize the Debtors to select stalking horse bidders prior to the auction. "Numerous parties have expressed an interest in these famous brands," the EON report quotes David Peress, Executive Vice President with Hilco Streambank, as saying. "This is an opportunity to acquire a wealth of intellectual property associated with two iconic retail chains and the brands they built over generations. This rich history has given these brands a tremendous level of recognition in the Off-Price Retail space." Interested bidders should contact Hilco Streambank at 212-610-5663 for more information. April 10 Hearing The Court will consider approval of the proposed sale procedures at a hearing on April 10. According to Bill Rochelle, the bankruptcy columnist for Bloomberg News, the company said it intends to file a Chapter 11 plan by April 10. At a hearing that day, the official shareholders' committee can ask the bankruptcy court to end the companies' exclusive right to submit a plan. The Bloomberg report relates that on March 28, Syms filed papers asking the bankruptcy judge to push back the equity committee's motion for authority to file a plan to May 10 from April 10. The company wants its own motion for an examiner to be rescheduled for May 10 as well. About Syms Corp. Massachusetts-based Filene's Basement, also called The Basement, is the oldest off-price retailer in the United States. The Basement focuses on high-end goods and is known for its distinctive, low-technology automatic markdown system. Filene's Basement first filed for Chapter 11 bankruptcy protection in August 1999. Filene's Basement was bought by a predecessor of Retail Ventures, Inc., the following year. Retail Ventures in April 2009 transferred the unit to Buxbaum. Filene's Basement, Inc. and its affiliates filed for Chapter 22 (Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy Solutions serves as claims and notice agent. The Debtors estimated $50 million to $100 million in assets and $100 million to $500 million in debts. The 2009 Debtor was formally renamed FB Liquidating Estate, following the sale of all of its assets to Syms Corp. in June 2009. Pursuant to the Liquidating Plan confirmed in January 2010, secured creditors in the Chapter 11 case have been paid in full, and holders of priority, administrative and convenience class claims have received 100% of their allowed claims. As reported by the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen, Chairman of Abacus Advisors LLC and Chief Restructuring Officer for FB Liquidating Estate disclosed that a second distribution of dividend checks to Filene's unsecured creditors amounting to 12.5% of approved claims has been made, bringing the cumulative distributions on unsecured claims to 62.5%. On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-13511 to 11-13514) after a failed bid to sell the business. The two units are Syms Clothing Inc. and Syms Advertising Inc. Judge Kevin J. Carey presides over the case. Lawyers at Skadden Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The Debtors tapped Rothschild Inc. as investment banker and Cushman and Wakefield Securities, Inc., as real estate financial advisors. Syms shuttered its namesake and Filene's Basement outlets upon the bankruptcy filing and tapped a joint venture of Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC to run the going-out-of-business sales. The sale may continue until Jan. 31, 2012. Filene's Basement estimated $1 million to $10 million in assets and $50 million to $100 million in debts. The petitions were signed by Gary Binkoski, authorized representative of Filene's Basement. The official committee of unsecured creditors appointed in the 2011 case has retained Hahn & Hessen LLP as legal counsel. Holders of equity in Syms Corp. pushed for an official shareholders' committee and separation of the Syms and Filene's Basement bankruptcy estates. Gordon Brothers and Hilco are represented by Goulston & Storrs, P.C. and Ashby & Geddes, P.A. FIRST BANKS: Posts $44.1 Million Net Loss in 2011 ------------------------------------------------- First Banks, Inc., filed on March 23, 2012, its annual report on Form 10-K, reporting a net loss of $44.1 million on net interest income before provision for loan losses of $191.0 million for the fiscal year ended Dec. 31, 2011, compared with a net loss of $198.3 million on net interest income before provision for loan losses of $239.9 million for the fiscal year ended Dec. 31, 2010. The Company's balance sheet at Dec. 31, 2011, showed $6.609 billion in total assets, $6.345 billion in total liabilities, and stockholders' equity of $263.7 million. The Company did not meet the minimum regulatory capital standards established for bank holding companies by the Federal Reserve at Dec. 31, 2011, and 2010. At Dec. 31, 2011, the Company's required and actual capital ratios were as follows: Actual Required Ratio Ratio ----- ----- Total capital (to risk-weighted assets): 1.88% 8.0% Tier 1 capital (to risk-weighted assets): 0.94% 4.0% Tier 1 capital (to average assets): 0.56% 4.0% First Bank was categorized as well capitalized at Dec. 31, 2011, and 2010, under the prompt corrective action provisions of the regulatory capital standards. A copy of the Form 10-K is available for free at: http://is.gd/lDumEZ First Banks, Inc., is a registered bank holding company incorporated in Missouri in 1978 and headquartered in St. Louis, Missouri. The Company operates through its wholly owned subsidiary bank holding company, The San Francisco Company, or SFC, headquartered in St. Louis, Missouri, and SFC's wholly owned subsidiary bank, First Bank, also headquartered in St. Louis, Missouri. FISH & FISHER: Coxwell Cleared From Bank Lender's Suit ------------------------------------------------------ Bankruptcy Judge Edward Ellington dismissed Frank Coxwell and Coxwell & Associates, PLLC, from the lawsuit, Merchants and Farmers Bank, v. Fish & Fisher, Inc., Debtor, Frank Coxwell, Coxwell & Associates, PLLC, Sekco, Inc., H&E Equipment Services, Inc., Puckett Machinery Company, Waring Oil Company, LLC, McGraw Rental & Supply Company, Inc., United States of America, and Precious Martin, Adv. Proc. No. 11-00027 (Bankr. S.D. Miss.). The Court held that the Second Amended Complaint fails to state a claim against Coxwell for imposition of a constructive trust or for negligence under Mississippi law. M&F loaned Fish & Fisher $681,000 in early 2007. Fish & Fisher executed Commercial Security Agreements granting M&F a security interest in "all accounts receivable whether now owned or hereinafter acquired by Debtor." Fish & Fisher defaulted on its loan payments. As of March 8, 2011, Fish & Fisher owed M&F $450,673, an amount that does not include interest, fees, or expenses. In the meantime, beginning in November 2007, L&T Construction, Inc. stopped paying Fish & Fisher for labor and materials that Fish & Fisher had supplied for site preparation work. After submitting its payment dispute with L&T Construction to arbitration, Fish & Fisher received an award of $1,283,351 on June 23, 2009. Fish & Fisher then retained Coxwell as its legal counsel to handle the disbursement of the arbitration proceeds and, for that purpose, deposited all of the proceeds into Coxwell's trust account. According to M&F, Fish & Fisher's claim against L&T Construction constituted an "account receivable" subject to M&F's security interest. M&F alleges that Coxwell knew about its lien on the proceeds from the arbitration award before he disbursed the funds. Coxwell did not disburse any of the proceeds from the arbitration award to M&F. Instead, Coxwell disbursed almost all of the proceeds to other creditors of Fish & Fisher and then returned the remaining amount to Fish & Fisher, all without M&F's knowledge or consent. On Aug. 7, 2009, M&F and two other creditors filed an involuntary Chapter 7 petition (Bankr. S.D. Miss. Case No. 09-02747) against Fish & Fisher. An order for relief was entered on Sept. 23, 2009. At the behest of Fish & Fisher, the Court converted the case to a Chapter 11 case on March 2, 2010. M&F initiated the adversary action on March 9, 2011, by filing a Complaint for Declaratory Judgment to Determine Extent, Validity and Priority of Liens and for other Relief. A few weeks later, on March 25, 2011, M&F amended the First Complaint to reflect the dismissal of certain parties, to add Coxwell as defendant, and to provide a fuller factual bases for its claims. On Aug. 30, 2011, M&F filed itsSecond Amended Complaint. In addition to Coxwell, the Second Amended Complaint names as defendants numerous creditors of Fish & Fisher who allegedly received part of the arbitration award. As to Coxwell, M&F claims that (1) Coxwell "negligently exercised control over the entire amount of the arbitration award"; (2) a constructive trust was imposed upon the arbitration proceeds for the benefit of M&F; (3) Coxwell violated the constructive trust; and (4) Coxwell is liable to M&F for all sums owed M&F by Fish & Fisher. A copy of the Court's March 25, 2012 Memorandum Opinion and Order is available at http://is.gd/Zcz6VCfrom Leagle.com. FLINN SPRINGS: Case Summary & 9 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Flinn Springs Owners Association, Inc. 14595 Olde Highway 80 El Cajon, CA 92021 Bankruptcy Case No.: 12-04090 Chapter 11 Petition Date: March 26, 2012 Court: United States Bankruptcy Court Southern District of California (San Diego) Judge: Laura S. Taylor Debtor's Counsel: Michael T. O'Halloran, Esq. LAW OFFICE OF MICHAEL T. O'HALLORAN 1010 Second Avenue, Suite 1727 San Diego, CA 92101 Tel: (619) 233-1727 Fax: (619) 233-6526 E-mail: mto@debtsd.com Scheduled Assets: $2,397,739 Scheduled Liabilities: $2,020,425 A list of the Company's nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/casb12-04090.pdf The petition was signed by C. Humpherys, president. FNBH BANCORP: Has Restated Net Loss of $2.92-Mil. in June 30 Qtr. ----------------------------------------------------------------- FNBH Bancorp, Inc., filed on March 23, 2012, Amendment No. 2 to its quarterly report on Form 10-Q for the period ended June 30, 2011, to amend and restate the Corporation's unaudited consolidated financial statements and other information as of and for the three and six months ended June 30, 2011. In January 2012 and subsequent to the filing of the Corporation's quarterly report on Form 10-Q, after consultation with its regulatory examiners, the Corporation's wholly-owned bank subsidiary, First National Bank in Howell, determined to restate its June and September 2011 Call Reports to reflect an additional $3.0 million provision expense in the allowance for loan losses, recognize an additional $2.6 million of loan charge offs, and record the transfer of a $950,000 loan to other real estate owned, effective June 30, 2011, based on findings from an examination initiated in June 2011. The related loan charge offs and transfer to other real estate were originally recognized by the Bank during the quarter ended Sept. 30, 2011. The Corporation's previously issued consolidated financial statements included in the Form 10-Q for the quarter ended June 30, 2011, as originally filed with the SEC, should no longer be relied upon. The Company reported a restated net loss of $2.92 million on $2.89 million of net interest income for the three months ended June 30, 2011, compared with a net loss of $915,345 on $2.90 million of net interest income for the same period of 2010. For the six months ended June 30, 2011, the Company had a restated net loss $3.14 million on $5.67 million of net interest income, compared with a net loss of $1.53 million on $5.93 million of net interest income for the same period of 2010. The Company's restated balance sheet at June 30, 2011, showed $290.53 million in total assets, $283.13 million in total liabilities, and stockholders' equity of $7.40 million. Since June 30, 2009, the Bank has been undercapitalized by regulatory standards. Effective Sept. 24, 2009, the Bank has been subject to the terms of a Consent Order agreement with the Office of the Comptroller of the Currency. Pursuant to the Consent Order, the Bank was required to achieve and maintain total capital equal to 11% of risk weighted assets and Tier 1 capital equal to at least 8.5% of adjusted total assets by Jan. 22, 2010. To date, the Bank has failed to meet these required minimum ratios and is currently out of compliance with these required minimum capital ratios as well as other requirements of the Consent Order. In light of the Bank's noncompliance with the Consent Order, continued losses, deficient capital position and the uncertainty regarding the ability to raise additional equity capital, management believes it is reasonable to anticipate that further regulatory oversight or enforcement action may be taken by the OCC. A complete text of the Form 10-Q/A is available for free at http://is.gd/ZrWTID FNBH Bancorp, Inc., a Michigan business corporation, is a one bank holding company which owns all of the outstanding capital stock of First National Bank in Howell and all of the outstanding stock of HB Realty Co., a subsidiary. The Bank serves primarily five communities, Howell, Brighton, Green Oak Township, Hartland, and Fowlerville, all of which are located in Livingston County. FNBH BANCORP: Has $3.57-Mil. Restated Loss in 9-Mos. Ended Sept 30 ------------------------------------------------------------------ FNBH Bancorp, Inc., filed on March 23, 2012, Amendment No. 1 to its quarterly report on Form 10-Q for the period ended Sept. 30, 2011, to amend and restate the Corporation's unaudited consolidated financial statements and other information as of and for the three and nine months ended Sept. 30, 2011, to reflect the cumulative effect of adjustments made to the provision and allowance for loan losses and the timing of certain loan charge offs and loan transfers to other real estate owned, which required restatement of the Corporation's quarterly report on Form 10-Q for the period ended June 30, 2011. In January 2012 and subsequent to the Dec. 2, 2011, filing of the Company's quarterly report on Form 10-Q for the period ended Sept. 30, 2011, after consultation with its regulatory examiners, the Corporation's wholly-owned bank subsidiary, First National Bank in Howell, determined to restate its June and September 2011 Call Reports to reflect an additional $3.0 million provision expense in the allowance for loan losses, recognize an additional $2.6 million of loan charge offs, and record the transfer of a $950,000 loan to other real estate owned, effective June 30, 2011, based on findings from an examination initiated in June 2011. The related loan charge offs and transfer to other real estate were originally recognized by the Bank during the quarter ended Sept. 30, 2011. The Company's previously issued consolidated financial statements included in the Form 10-Q for the quarter ended Sept. 30, 2011, as originally filed with the SEC, should no longer be relied upon. The Company reported a net loss of $427,681 on $2.73 million of net interest income for the three months ended Sept. 30, 2011, compared with a net loss of $681,759 on $2.86 million of net interest income for the same period of 2010. For the nine months ended Sept. 30, 2011, the Company had a restated net loss of $3.57 million on $8.40 million of net interest income, compared with a net loss of $2.22 million on $8.79 million of net interest income for the same period of 2010. The Company's restated balance sheet at Sept. 30, 2011, showed $296.18 million in total assets, $289.10 million in total liabilities, and stockholders' equity of $7.08 million. Since June 30, 2009, the Bank has been undercapitalized by regulatory standards. Effective Sept. 24, 2009, the Bank has been subject to the terms of a Consent Order agreement with the Office of the Comptroller of the Currency. Pursuant to the Consent Order, the Bank was required to achieve and maintain total capital equal to 11% of risk weighted assets and Tier 1 capital equal to at least 8.5% of adjusted total assets by Jan. 22, 2010. To date, the Bank has failed to meet these required minimum ratios and is currently out of compliance with these required minimum capital ratios as well as other requirements of the Consent Order. In light of the Bank's noncompliance with the Consent Order, continued losses, deficient capital position and the uncertainty regarding the ability to raise additional equity capital, management believes it is reasonable to anticipate that further regulatory oversight or enforcement action may be taken by the OCC. A complete text of the Form 10-Q/A is available for free at http://is.gd/IxGS3P FNBH Bancorp, Inc., a Michigan business corporation, is a one bank holding company which owns all of the outstanding capital stock of First National Bank in Howell and all of the outstanding stock of HB Realty Co., a subsidiary. The Bank serves primarily five communities, Howell, Brighton, Green Oak Township, Hartland, and Fowlerville, all of which are located in Livingston County. FOSTER WHEELER: Moody's Withdraws 'Ba1' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service upgraded Foster Wheeler LLC to Baa3. Accordingly, Moody's withdrew FW's Ba1 Corporate Family and Ba1 Probability of Default ratings, as these ratings are not assigned to investment grade issuers. FW's bank facility rating was lowered to Baa3 from Baa2 as Moody's expects the rating upgrade will trigger the automatic release of the liens securing the related obligation. The company's rating outlook has been changed to stable from positive. "The ratings upgrade reflects Foster Wheeler's demonstrated ability to profitably bid and execute on key projects through prolonged cyclical pressures while maintaining its key credit metrics at levels consistent with an investment grade rating", said Darren Kirk, a vice president with Moody's. Ratings Rationale FW's Baa3 rating primarily incorporates the company's conservative approach to taking on construction risk coupled with its strong project execution, global diversity and significant financial flexibility gauged by its minimal debt, strong liquidity and ability to consistently generate positive free cash flow. The concentration of FW's activities in highly volatile and intensely competitive end-markets, uncertainty of the industry recovery that is starting to show, the relatively modest size of the company's earnings base, possible pressures on coal-based boilers, and acquisition risk also influence the rating. The stable outlook reflects Moody's view that FW's operating results will begin to trend higher over the next 12 to 18 months, but that the company's cyclical exposure and potential for share repurchases and/or acquisition activity will prohibit further upwards rating movement near term. FW's rating could be upgraded over the longer term should its adjusted EBITA be sustained above $500 million, adjusted Debt/ EBITDA remain below 1.5x and FFO/ Debt above 60%. The rating could be revised downward in the event FW were to pursue a large acquisition or share repurchases which resulted in Debt/ EBITDA sustained above 2.5x and FFO/ Debt below 30%. The principal methodology used in rating Foster Wheeler was the Global Construction Industry Methodology published in November 2010. Foster Wheeler LLC, owned by Foster Wheeler AG of Zug Switzerland, is a leading international engineering, construction and project management contractor and power equipment supplier. Consolidated operating revenue for 2011 was approximately $4.5 billion. FRANCISCAN COMMUNITIES: Sets Orion-Led Auction for April 17 ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Franciscan Communities St. Mary of the Woods Inc. will hold an auction on April 17 to learn whether anyone will pay more than $15 million cash for the facility. The bankruptcy judge in Cleveland approved sale procedures on March 25. Other bids are due April 13. A hearing to approve the sale is scheduled for April 17. The buyer already under contract is Orion Properties Eleven LLC. About Franciscan Communities Illinois-based Franciscan Communities St. Mary of the Woods, Inc., owns and operates a senior living community in Avon, Ohio. The not-for-profit community is owned and managed by the Franciscan Sisters of Chicago Service Corp. Franciscan Communities St. Mary of the Woods filed for Chapter 11 bankruptcy (Bankr. N.D. Ohio Case No. 11-19865) on Nov. 21, 2011, after it failed to negotiate an out-of-court workout with holders of tax-free bonds. Judge Jessica E. Price Smith oversees the case. The Debtor disclosed assets of $36 million and debt totaling $48 million as of the Chapter 11 filing. In its schedules, the Debtor disclosed $22,314,854 in assets and $49,555,487 in liabilities. The Debtor is represented by Heather Lennox, Esq., Carl E. Black, Esq., and Daniel M. Syphard, Esq., at Jones Day, as bankruptcy counsel. The Garden City Group, Inc., is the claims and noticing agent. The Debtor tapped Deloitte Financial Advisory Services LLP as restructuring advisor, and Houlihan Lokey Capital, Inc., as its investment banker. The U.S. Trustee appointed Beverly Laubert as patient care ombudsman. Franciscan Sisters of Chicago, the sole member of the Debtor, is providing $4.5 million in DIP loans. The DIP Lender is represented by George Mesires, Esq., and Daniel P. Strzalka, Esq., at Ungaretti & Harris LLP. The Bank of New York Mellon Trust Company, N.A., the bond trustee, is represented by Bruce H. White, Esq., and Clifton R. Jessup, Esq., at Greenberg Traurig LLP. Wells Fargo Bank, N.A., as Master Trustee, is represented by Daniel S. Bleck, Esq., at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., and John R. Weiss, Esq., at Duane Morris LLP. Sovereign Bank, provider of the Debtor's letter of credit facility, is also represented by John R. Weiss, Esq., at Duane Morris LLP. The Official Committee of Unsecured Creditors in the Chapter 11 cases of the Debtor is represented by McDonald Hopkins LLC as counsel. FULLER BRUSH: Loan From Victory Park Is Approved by Court --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that The Fuller Brush Co. secured final approval from the bankruptcy court on March 23 to borrow $5 million from an affiliate of Victory Park Capital Advisors LLC, the secured lender owed $22.7 million. Victory Park plans to buy the business in exchange for debt. According to the report, the company also was given the court's blessing for Lawrence R. Perkins to serve as chief restructuring officer and his firm, Conway MacKenzie Management Services LLC, to provide restructuring and advisory management services. About The Fuller Brush Company The Fuller Brush Company -- http://www.fuller.com/-- sells branded and private label products for personal care, commercial and household cleaning and has a current catalog of 2,000 cleaning products. Some of Fuller's retail partners include Home Trends, Bi-Mart, Byerly's, Lunds, Home Depot, Do-It-Best, Primetime Solutions, Vermont Country Store and Starcrest. Founded in 1906 and based in Great Bend, Kansas, The Fuller Brush Company, Inc., and its parent, CPAC, Inc., filed for Chapter 11 protection (Bankr. S.D.N.Y. Case Nos. 12-10714 and 12-10715) in Manhattan on Feb. 21, 2012. Fuller Brush filed for bankruptcy five years after the company was taken over by private equity firm Buckingham Capital Partners. Fuller said it will be business as usual while undergoing Chapter 11 restructuring. But it said that while in reorganization, it intends to trim about half of the current catalog of cleaning products. Herrick Feinstein LP is the bankruptcy counsel. Fuller, which has 180 employees as of the Chapter 11 filing, disclosed $22.9 million in assets and $50.9 million in debt. The official committee of unsecured creditors has tapped the law firm of Kelley Drye & Warren LLP as counsel. FUTTER LUMBER: Dist. Court Rejects Insiders' Interlocutory Appeal ----------------------------------------------------------------- District Judge Arthur D. Spatt denied the request of Bernice Futter, Ileana Futter, James Futter, David Korkham and Lyn Gaylord for leave to file an interlocutory appeal from a decision of the Bankruptcy Court (Dorothy D.T. Eisenberg, J.), denying their motion to dismiss an adversary proceeding commenced by Todd E. Duffy, as trustee for the Futter Lumber Corporation Liquidation Trust. On May 9, 2011, the Trustee commenced an adversary proceeding against Bernice Futter et al., in their capacity as "insiders" of the Debtor under the Bankruptcy Code. The Trustee sought a money judgment under the Bankruptcy Code and New York Debtor and Creditor Law for damages resulting from, or relating to, certain alleged preferential transfers in the aggregate sum of $355,977 and fraudulent conveyances in the aggregate sum of $745,365 from the Debtor to or for the benefit of Bernice Futter et al. In addition, the Trustee sought to (a) disallow any claims made by Bernice Futter et al. against the Debtor's bankruptcy estate under 11 U.S.C. Sec. 502 until they paid the Trustee the amount of the alleged transfers; (b) subordinate their claims; and (c) re- characterize their claims as equity. The case before the District Court is, Bernice Futter, Ileana Futter, James Futter, David Korkham and Lyn Gaylord, Petitioners, v. Todd E. Duffy, Trustee for The Futter Lumber Corporation Liquidation Trust, Respondent, No. 11-MC-838 (E.D.N.Y.). A copy of the District Court's March 24, 2012 Memorandum of Decision and Order is available at http://is.gd/uDvNlafrom Leagle.com. Futter Lumber Corporation was a lumber wholesaler and distributor. The corporation was privately held and owned by Bernard Futter; Bernice Futter, his wife; Bernard Futter as Trustee f/b/o the Bernard Futter Trust; and Kenneth Futter as Trustee of the Ileana Futter Trust, the David Futter Trust, and the James Futter Trust. On May 8, 2009, an involuntary petition was filed under Chapter 7 of the Bankruptcy Code against the Debtor in the Bankruptcy Court. It was subsequently converted to one under Chapter 11 on June 11, 2009. The Debtor had three non-debtor affiliates -- Futter Trading LLC, Futter West LLC, and Global Wood LLC. The ownership interests in the Affiliates were held by Bernard Futter and his children, David Futter, James Futter, and Ileana Futter. The Affiliates owed the Debtor roughly $4.5 million in receivables related to services and financial accommodations. After winding down the businesses, the Affiliates held roughly $1.3 million, which was turned over by the Affiliates to the Debtor to help fund the Debtor's liquidating Chapter 11 reorganization plan. On June 9, 2010, the Debtor's Plan was confirmed by the Bankruptcy Court. The Plan provides specific releases to Bernard Futter and Kenneth Futter. As part of the consideration for the specific releases given in favor of these two individuals, the general unsecured claim of Bernard Futter was reduced by $114,300 and allowed in the amount of $1,418,695, and the general unsecured claim of Kenneth Futter was reduced by $35,700 and allowed in the amount of $444,300. Pursuant to the confirmed Plan, a liquidation trust was established with Mr. Duffy as Liquidation Trustee. GENERAL MARITIME: Reaches Plan Deal With Unsecured Creditors ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that General Maritime Corp. has resolved objections by the Official Committee of Unsecured Creditors and holders of senior unsecured notes to the proposed Chapter 11 plan. The Debtor, as a result, will seek approval of a "consensual" plan at a hearing on May 3. According to the report, the Committee agreed to withdraw claims that the plan is "patently unconfirmable" after the Debtor agreed to submit a revised plan that would sweeten the pot for unsecured creditors and noteholders. After the changes, unsecured creditors estimated to have claims totaling $327.5 million and holders of $300 million in unsecured notes will see their recovery elevated from a maximum 1.88% to 5.41%. Unsecured creditors' enhanced recovery will come from $6 million in cash, 2% of the reorganized company's stock, and warrants for 3% more of the stock. A hearing is scheduled in bankruptcy court on April 2 for approval of the plan-support agreement. The report relates that to accommodate notices required for the revised plan, the deadline for voting is being pushed out from April 10 to April 25, and the confirmation hearing reset from April 6 to May 3. The Debtors first filed a proposed Chapter 11 plan on Jan. 31 to implement an agreement worked out before the Nov. 17 bankruptcy filing with affiliates of Oaktree Capital Management LP. The Oaktree group, lenders on three credits totaling more than $1 billion, were to invest $175 million while converting secured debt to equity. In addition, there was to be a $61.3 million rights offering where creditors can purchase new stock. Papers recently filed in court indicate that the rights offering allowing unsecured creditors to purchase stock is being dropped from the plan, because there was disagreement over the value of the rights and noteholders didn't show a "strong interest" in participating. 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. GETTY IMAGES: Moody's Affirms 'Ba3' Rating on Sr. Sec. Term Loan ---------------------------------------------------------------- Moody's Investors Service affirmed the Ba3, LGD3 -- 32% rating assigned to Getty Images, Inc.'s incremental senior secured term loan that was upsized to $350 million from $275 million. 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 $455 million. Moody's also affirmed the Ba3 Corporate Family Rating (CFR), B1 Probability-of-Default Rating (PDR), and the Ba3, LGD3 -- 32% ratings each on the existing 1st lien senior secured revolver due 2015 and the existing 1st lien senior secured term loan B due 2016. The outlook remains stable. The following ratings were Affirmed: Issuer: Getty Images, Inc. Corporate Family Rating: Affirmed Ba3 Probability of Default Rating: Affirmed B1 NEW Incremental $350 Million 1st Lien Senior Secured Term Loan due November 2015: Affirmed Ba3, LGD3 -- 32% $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% Outlook remains Stable. Ratings Rationale The Ba3 corporate family rating incorporates the increase in debt balances by $350 million to partially fund its planned dividend. The upsized deal increases total leverage to 4.4x (including Moody's standard adjustments) which is within the 4.5x threshold for the current CFR rating, although with less cushion to maintain existing ratings. The upsized incremental term loan continues to result in 10.5% free cash flow-to-debt ratios for FY2012 falling from 13.5% in FY2011. Expected reduction in cash balances of more than $100 million will reduce liquidity. 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 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. GLOBAL CLEAN: Hansen Barnett Raises Going Concern Doubt ------------------------------------------------------- Global Clean Energy Holdings, Inc., filed its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses from current operations, used a substantial amount of cash to maintain its operations and has a large working capital deficit. The Company reported a net loss of $779,118 on $1.3 million of revenues for 2011, compared with a net loss of $2.1 million on $848,808 of revenues for 2010. The Company's balance sheet at Dec. 31, 2011, showed $16.1 million in total assets, $13.1 million in total liabilities, and stockholders' equity of $3.0 million. A complete text of the Form 10-K is available for free at: http://is.gd/VHd9eM Long Beach, Calif.-based Global Clean Energy Holdings, Inc., is a U.S. based multi-national energy agri-business focused on the development of non-food based bio-fuel feedstocks. GLOBAL GEOPHYSICAL: S&P Keeps 'B+' Note Rating After $50MM Add-On ----------------------------------------------------------------- Standard & Poor's Ratings Services said that Global Geophysical Services Inc. is adding $50 million to its existing $200 million notes due 2017. This brings the new total on the notes to $250 million. The existing 'B+' rating on these notes remains unchanged. "The recovery rating remains unchanged at '4', indicating our expectation of average (30%-50%) recovery in a payment default," S&P said. "The 'B+' issue rating is the same as the corporate credit rating on Global Geophysical and incorporates our expectation that the company will use the proceeds from the proposed add-on notes to repay a portion of the outstanding debt under its revolving credit facility," S&P said. "The ratings on Houston-based Global Geophysical reflect the company's participation in the very volatile land seismic acquisition business, its limited size, and extreme cash flow volatility due to its dependence on the capital budgets of exploration and production (E&P) companies. The ratings also incorporate our expectation that E&P companies will continue to maintain spending in 2012 comparable with 2011 levels and the company's good backlog of data-acquisition projects. Standard & Poor's views the seismic industry as very challenging because of high levels of competition, and revenue and earnings volatility," S&P said. "We categorize Global's business profile as 'weak'. Our assessment primarily reflects Global's relatively small revenue base and the highly cyclical nature of the seismic industry, as companies defer or cancel projects during weaker periods. Global competes with larger, better-capitalized industry participants, including WesternGeco (A) Pty. Ltd. and CGG Veritas Services Holding (U.S.) Inc. However, during weak industry conditions in 2009 and 2010, Global did not exhibit the sharp decline in EBITDA and margins that U.S. land seismic companies historically experience, partly because the company has expanded internationally. With interest in international proprietary data acquisitions picking up, we expect Global's margins to remain strong," S&P said. RATINGS LIST Global Geophysical Services Inc. Corporate credit rating B+/Stable/-- $250 million senior unsecured notes due 2017 B+ Recovery rating 4 GOODYEAR TIRE: Moody's Rates $1.2-Bil. Sr. Sec. Term Loan 'Ba1' --------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to The Goodyear Tire & Rubber Company's new $1.2 billion senior secured term loan. The new senior secured term loan along with a new unrated $2 billion senior secured revolving credit facility will be used to replace Goodyear's existing revolving credit and term loan facilities and extend the capital structure maturity profile. In a related action Moody's affirmed Goodyear's Corporate Family Rating at Ba3 and other ratings as detailed below. The rating outlook remains stable. Ratings assigned: The Goodyear Tire & Rubber Company $1.2 billion second lien term loan due 2019, Ba1 (LGD-2, 16%); Ratings affirmed: The Goodyear Tire & Rubber Company Corporate Family Rating, Ba3; Probability of Default Rating, Ba3; SGL-2, Speculative Grade Liquidity Rating; $1.5 billion first lien revolving credit facility due 2013, Baa3 (LGD-1, 5%) -- this rating will be withdrawn upon replacement; $1.2 billion second lien term loan due 2014, Ba1 (LGD-2, 16%) -- this rating will be withdrawn up repayment; 8.75% senior unsecured guaranteed notes due 2020, B1 (LGD-4, 66%); 8.25% senior unsecured guaranteed notes due 2020, B1 (LGD-4, 66%); 7.0% senior unsecured guaranteed notes due 2022, B1 (LGD-4, 66%); 7.0% senior unsecured unguaranteed notes due 2028, B2 (LGD-6, 96%); (P)B1, guaranteed senior unsecured shelf. Goodyear Dunlop Tires Europe B.V.: Baa3 (LGD-1, 6%), EUR400 million of first lien revolving credit facilities due April 2016; Ba2 (LGD-2, 27%), EUR250 million of senior unsecured notes due April 2019. Ratings Rationale The affirmation of Goodyear's Ba3 Corporate Family Rating and stable outlook continues to reflect the company's efforts to improve its business profile by selling a greater share of higher value added tires in its product mix, pursuing market pricing initiatives consistent with its higher value added product line, and delivering on cost saving initiatives. The new bank credit facilities will be used to replace Goodyear's existing $1.5 billion revolving credit and $1.2 billion term loan facilities. The terms and conditions for the new bank credit facilities will be substantially similar to the existing bank credit facilities. The principal methodology used in rating The Goodyear Tire & Rubber Company was the Global Automotive Supplier Industry Methodology published in January 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. The Goodyear Tire & Rubber Company, based in Akron, OH, is one of the world's largest tire companies with 53 manufacturing facilities in 22 countries around the world. Revenues in 2011 were approximately $22.8 billion. GRUBB & ELLIS: BGC Has Court Approval to Buy Brokerage ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Martin Glenn in New York handed down a 23-page opinion authorizing the sale of Grubb & Ellis Co.'s assets and business to BGC Partners Inc. Approval of the sale was simplified when BGC settled with unsecured creditors by increasing their recovery. Judge Glenn also approved the settlement on March 27. Mr. Rochelle also reports that before the day was out, several brokers filed an appeal. To stop completion of the acquisition, the brokers must persuade a court to impose a stay pending appeal. The report notes that although there were originally more than 700 objections to the sale, most were resolved or put off until later. Judge Glenn was able to approve the sale by overruling the remaining objections, mostly from brokers. 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. In addition, BGC, according to Mr. Rochelle, will pay $16 million in cash because the sale was approved by the March 27 deadline. Otherwise, the cash component would have been $14 million. According to the Bloomberg report, Martin Bunin, a creditors' committee lawyer from Alston & Bird LLP, said in an e-mailed statement that the cash will permit confirmation of a liquidating Chapter 11 plan that will make "a modest distribution to unsecured creditors and provide an opportunity for additional recoveries." Judge Glenn, the report relates, turned down an objection to the sale lodged by a creditor contending that lawsuits against company managers shouldn't be sold to BGC. The judge said that the sale is structured so some lawsuit recoveries could go to creditors if claims and suits bring in more than $20 million. The judge also disagreed with brokers' arguments that sales commissions were in a constructive trust. He rejected other arguments that brokers had a lien on commissions. A copy of Judge Glenn's March 27, 2012 Memorandum Opinion is available at http://is.gd/HWo0wsfrom Leagle.com. 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. 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: Brokers Want Sale Term on Commissions Clarified -------------------------------------------------------------- Brokers Vincent Carrega, Neil Helman, Jon Epstein, Charles Kingsley, Yoav Oelsner, Jason Meister, Michael Gottlieb, Howard Grufferman and Martin Cottingham filed with the U.S. Bankruptcy Court for the Southern District of New York their limited objection to Grubb & Ellis Company, et al.'s sale motion. As reported in the Troubled Company Reporter on March 26, 2012, with no competing bids filed, an auction for the assets of the Debtors was canceled, leaving stalking horse BGC Partners Inc., the only buyer standing. The Brokers sought to clarify that the Brokers' Commissions will not be inadvertently and unjustly transferred to the purchaser in connection with the sale and, unless the order approving the sale is modified, they object to the sale to the extent the Debtors are seeking to sell the Debtors' assets free and clear of Brokers' Constructive Trust Claims, which must be expressly preserved either against the Debtors' estates or the purchaser under any proposed order approving the Sale. In a separate filing, the Official Committee of Unsecured Creditors in the Debtors' cases consented to the sale of substantially all of the Debtors' assets to BGC Partners, Inc., subject to the terms of that certain stipulation and settlement among the Debtors, the Creditors' Committee and BGC Partners, Inc. 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. 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. HANDY & HARMAN: Moody's Assigns 'B2' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service assigned a first-time Corporate Family Rating of B2 and Probability of Default Rating of B2 to Handy & Harman Ltd. In a related rating action, Moody's also assigned a B3 rating to the proposed $200 million Senior Secured Term Loan due 2018, which will be issued by Handy & Harman Group Ltd., a wholly- owned and direct subsidiary of Handy & Harman Ltd. (collectively "HNH"). Proceeds from the term loan will be used to simplify the company's debt capital structure by refinancing about $155 million of existing indebtedness, adding about $30 million to balance sheet cash, and using the remaining balance for related debt premiums, fees and other expenses. Moody's also assigned a speculative grade liquidity assessment of SGL-3. The rating outlook is stable. The following rating actions were taken: Handy & Harman Ltd. : Corporate family rating assigned B2; Probability of default rating assigned B2; and, A speculative grade liquidity assessment of SGL-3 assigned. Handy & Harman Group Ltd.: Senior Secured Tem Loan due 2018 assigned B3 (LGD4, 58%). Ratings Rationale The B2 Corporate Family Rating reflects HNH's high debt leverage characteristics. Its debt-to-EBITDA was 5.1x and debt-to-book capitalization was about 87% at FYE11 (all ratios incorporate Moody's standard adjustments). Additionally, the company has significant negative tangible net worth. The rating also considers the company's volatile earnings due to the cyclicality of its end markets and its strategy of growth through acquisitions. The company may use excess cash on hand and revolver availability to fund future acquisitions, potentially reducing liquidity and introducing various integration risks. The rating is supported by HNH's strategy of investing in diverse niche markets, that sell into a myriad of end markets (no customer accounts for more than 5% of consolidated revenues) and offsets the cyclical downturns in any specific business segment. HNH consistently generates solid operating margins (adjusted EBITA margin of 8.6% for 2011) as it realizes the benefits from its ongoing cost reduction programs by improving its manufacturing and operational effectiveness. No near-term maturities and sufficient availability (on a pro forma basis) under its revolving credit facility give HNH financial flexibility to contend with potential acquisitions and economic uncertainties. The SGL-3 speculative grade liquidity assessment reflects Moody's view that the company will maintain an adequate liquidity profile over the next twelve months. Upon completion of the company's debt refinancing, pro forma availability under the company's revolver will near $90 million, which should be sufficient to meet any potential shortfall in operating cash flows and cover working capital needs and capital expenditure requirements. The stable rating outlook reflects Moody's expectation that HNH will generate better operating profits, improving debt leverage ratios to levels that are more appropriate for the rating category. Its liquidity profile, characterized by expectations of sizeable pro forma availability under the revolving credit facility and the absence of near-term maturities give the company financial flexibility to contend with ongoing uncertainties in its end markets. The corporate family rating and probability of default rating are assigned to Handy & Harman Ltd., the parent holding company of Handy & Harman Group Ltd. and subsidiaries, since it will be the entity issuing the financial statements. Handy & Harman Group Ltd. will be the primary obligor of the proposed term loan, but will not receive a parental guarantee from Handy & Harman Ltd. The B3 rating assigned to the proposed $200 million Senior Secured Term Loan due 2018, one notch below the corporate family rating, results from its position as structurally subordinated to the company's asset-based revolving credit facility, which has a priority claim on HNH's most liquid assets. Moody's does not anticipate favorable rating action over the intermediate term until the company improves its debt leverage credit metrics. HNH needs to demonstrate its ability to generate better levels of earnings and free cash flow, resulting in improved credit metrics. Over the longer term, debt-to-EBITDA trending towards 4.0 times and EBITA-to-interest expense sustained above 4.0 times (all ratios incorporate Moody's standard adjustments), while maintaining a solid liquidity profile, could result in positive rating actions. 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 HNH's end markets. EBITA-to-interest expense trending towards 2.0 times, debt-to-EBITDA nearing 6.0 times (incorporating Moody's standard adjustments), or a deteriorating liquidity profile may result in negative rating pressures. The principal methodology used in rating HNH 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. Handy & Harman Ltd., located in White Plains, NY, is a diversified manufacturing company whose business units focus on niche markets, encompassing the following segments: Engineered Materials, Precious Metal, Arlon Electronic Materials, Tubing, and Kasco Blades and Route Repair Services. The company sells into diverse end markets including commercial and residential construction and appliances, as well as the energy sector. It operates mainly in North America. Steel Partners Holdings L.P. through its affiliated funds, is the majority owner of HNH. Revenues for the twelve months through December 31, 2011 totaled about $664 million. HECKMANN CORP: Moody's Assigns 'B3' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service has assigned first time credit ratings to Heckmann Corporation, including a B3 corporate family rating. The rating outlook is stable. The B3 corporate family rating incorporates high financial leverage, small size and a range of risks stemming from Heckmann's plan to rapidly grow within the water supply/wastewater services niche of the U.S. shale drilling sector. The rating also considers a more predictable earnings and cash flow base from Heckmann's pending acquisition of Thermo Fluids, Inc. ("TFI"), a used oil collection and processing business. Notes proceeds, along with approximately $97 million of total equity issuance, will go toward funding the TFI acquisition and the re-financing of Heckmann's existing debts. Ratings are: Corporate family, B3 Probability of default, B3 $250 million senior unsecured notes gtd due 2018, Caa1, LGD 4, 65% Speculative grade liquidity, SGL-3 Rating outlook is Stable Ratings Rationale Elevated leverage against Heckmann's plan to execute a roll-up strategy of an emerging energy services and specialized waste niche drive the rating. On a Moody's adjusted basis, pro forma for the pending TFI acquisition, 2011 debt to EBITDA, is about 5x which is high for the waste sector. Following the acquisition of TFI, 58% of the company's revenue base will stem from its Heckmann Water Resources (HWR) segment, which has rapidly developed to meet water supply and wastewater disposal demands of U.S. hydraulic fracturing drillers. Evolution of environmental regulations surrounding hydraulic fracturing, as well as drilling technology developments, could change the niche in unpredictable ways, altering Heckmann's revenue and margin potential. Further, rig counts within individual shale formations -- which drive water services demand -- vary with energy spot market price changes, making asset utilization subject to high variability. The company's early entry in some shale regions, such as with its Haynesville wastewater pipeline investment, could prove valuable, and have helped build some market presence. However, larger, better capitalized environmental services players could ultimately enter. Successful execution will depend on integration of future acquisitions, effective management of both a rapidly growing transportation network and the often high environmental liabilities inherent to the waste business. Visibility into Heckman's efficiencies thus far is complicated by the company's short operating history and its 2011 operating loss. The rating favorably considers the management team's past successes at executing industry roll-up strategies and Moody's thinks that demand for water supply/wastewater services in U.S. shale regions should remain reasonably steady over at least the next couple of years. Steady demand could drive substantial revenue and earnings growth which could minimize dependence on debt for growth funding and thereby improve credit metrics. The planned acquisition of TFI (which will represent 42% of 2011 pro forma revenues), will add revenue diversity and a more established earnings/cash flow base. Execution risk related to the TFI acquisition seems low because only a modest degree of systems integration is planned between HWR and TFI. TFI's existing management team will stay on to manage the business as a separate reporting segment of Heckmann. TFI's recent performance has been helped by high diesel prices which raise demand for reprocessed fuel oil (RFO), a substitute product made from used oil. Although used oil collection/processing earnings could decline with changes in oil spot market prices, most of TFI's contracts tie what it pays for used oil with oil spot market prices, which should permit margin spread and performance consistency. Near-term, TFI's earnings should remain on par with the favorable 2011 level. The rating outlook is stable, reflecting an adequate liquidity profile which should give the company enough financial flexibility to execute its operational ramp up and high near-term capital spending plans. Liquidity profile adequacy stems from a planned $150 million, five-year revolving credit facility (unrated), that will be undrawn at transaction close. Good size of the facility versus the company's upcoming capital spending plans and a lack of near-term scheduled debt maturities supports the profile. Financial ratio covenant headroom of the revolver may be limited at the onset which could limit revolver access until earnings expand. To date, Heckmann has used equity to supplement debt funding of acquisitions. If continued, this practice could help keep leverage from rising and supports outlook stability. The outlook does not assume material future costs from pending shareholder lawsuits or from past financial reporting issues. Upward rating momentum would develop with an expectation of debt to EBITDA in the low 4x range, EBIT to interest above 1.5x and free cash flow to debt of 5% or higher. Downward rating pressure would mount with debt to EBITDA above 6x, EBIT to interest below 1.0x, or a weakening liquidity profile. The principal methodology used in rating Heckmann Corporation 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. Heckmann Corporation provides water services for shale oil and gas exploration, including water disposal, trucking, fluids handling, treatment and pipeline transport facilities, and water infrastructure services for oil and gas exploration and production companies. Following the acquisition of TFI, the company will also provide collection and recycling services for waste products, including used motor oil, wastewater, spent antifreeze, used oil filters and parts washers. Revenues in 2011, pro forma for the business combination, were about $270 million. HORIZON PHARMA: PricewaterhouseCoopers Raises Going Concern Doubt ----------------------------------------------------------------- Horizon Pharma, Inc., formerly Horizon Therapeutics, Inc., filed on March 23, 2012, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011. PricewaterhouseCoopers LLP, in Chicago, Illinois, expressed substantial doubt about Horizon Pharma's ability to continue as a going concern. The independent auditors noted that the Company has a limited commercial operating history and may not be able to comply with certain debt covenants. The Company reported a net loss of $113.3 million on $6.9 million on net sales for 2011, compared with a net loss of $27.1 million on $2.4 million of net sales for 2010. Results for 2011 included an intangible impairment charge of $69.6 million related to an impairment of In-Process Research and Development (IPR&D) as of Dec. 31, 2011. The Company's balance sheet at Dec. 31, 2011, showed $101.1 million in total assets, $55.2 million in total liabilities, and stockholders' equity of $45.9 million. A complete text of the Form 10-K is available for free at: http://is.gd/Z6fjaA Horizon Pharma, Inc., headquartered in Deerfield, Illinois, is a biopharmaceutical company that is developing and commercializing innovative medicines to target unmet therapeutic needs in arthritis, pain and inflammatory diseases. HOWREY LLP: Trustee Mulls Claims Against Dissolution Committee -------------------------------------------------------------- Sara Randazzo, writing for The AmLaw Daily, reports that Howrey bankruptcy trustee Allan Diamond, Esq., at Diamond McCarthy, is taking a hard look at the work performed by a committee of former Howrey partners responsible for winding down the firm's affairs in the wake of its collapse. Mr. Diamond, who was appointed to the trustee's post in the Chapter 11 proceedings about six months ago, is seriously weighing whether to bring adversary claims against the Howrey dissolution committee and its five members, filings show. The AmLaw Daily relates that a fee request filed with the bankruptcy court on March 22 states that attorneys with Mr. Diamond's Texas-based firm Diamond McCarthy have conducted an "extensive review" of former dissolution committee member Robert Green's e-mails related to work winding down Howrey "to investigate whether the estate has claims against members of the Dissolution Committee," scoured the committee's invoices, and met several times to discuss initiating litigation. The AmLaw Daily also relates Diamond McCarthy partner J. Benjamin King, Esq. -- bking@diamondmccarthy.com -- who is among those working on the Howrey case, confirmed Monday that the trustee's team is exploring the possibility of suing dissolution committee members. Mr. King characterized discussions on the subject as "very preliminary" and said he "can't really speak to them or say anything" at the moment. About Howrey LLP Three creditors filed an involuntary Chapter 7 petition (Bankr. N.D. Calif. Case No. 11-31376) on April 11, 2011, against the remnants of the Washington-based law firm Howrey LLP. The filing was in San Francisco, where the firm had an office. The firm previously was known as Howrey & Simon and Howrey Simon Arnold & White LLP. The firm at one time had more than 700 lawyers in 17 offices. The partners voted to dissolve in March. The firm specialized in antitrust and intellectual-property matters. The three creditors filing the involuntary petition together have $36,600 in claims, according to their petition. The involuntary chapter 7 petition was converted to a chapter 11 case in June at the request of the firm. In its schedules filed in July, the Debtor disclosed assets of $138.7 million and liabilities of $107.0 million. Representing Citibank, the firm's largest creditor, is Kelley Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton & Garrison. Representing Howrey is H. Jason Gold, Esq., a partner at Wiley Rein. The Official Committee of Unsecured Creditors is represented in the case by Bradford F. Englander, Esq., at Whiteford, Taylor And Preston LLP. In September 2011, Citibank sought conversion of the Debtor's case to Chapter 7 or, in the alternative, appointment of a Chapter 11 Trustee. The Court entered an order appointing a Chapter 11 Trustee. In October 2011, Allan B. Diamond was named as Trustee. IMAGINE FULFILLMENT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Imagine Fulfillment Services, LLC 20100 S. Vermont Avenue Torrance, CA 90502 Bankruptcy Case No.: 12-20544 Chapter 11 Petition Date: March 25, 2012 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Julia W. Brand Debtor's Counsel: Aram Ordubegian, Esq. ARENT FOX LLP 555 W 5th St 48th Fl Los Angeles, CA 90013-1065 Tel: (213) 629-7410 Fax: (213) 629-7401 E-mail: ordubegian.aram@arentfox.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-20544.pdf The petition was signed by Andy Arvidson, managing member. JODENE PUFF: Court Says Bankruptcy Plan Not Feasible ---------------------------------------------------- Chief Bankruptcy Judge Thad J. Collins declined to approve Jodene Audrey Puff's Third Amended Chapter 11 Plan of Reorganization filed on July 11, 2011. Several secured creditors objected to the Plan. They made a variety of arguments against confirmation, including lack of feasibility. The creditors include Wells Fargo Financial Leasing, JP Morgan Chase Bank, N.A., and Farmers Savings Bank Colesburg. The Court agrees with the creditors and finds that the Debtor's Plan is not feasible. The Court noted the marginal monthly budget surplus presented in the Plan and the Debtor's past history. The Court directed the Debtor to file a Fourth Amended Plan within 60 days of the Order. A copy of the Court's March 23, 2012 Order is available at http://is.gd/E6NGhtfrom Leagle.com. The Plan proposes to pay creditors from cash-on-hand, operating income, and future income. The Plan includes four classes of secured claims and two classes of unsecured claims. It provides for full payment of administrative expenses, priority tax claims, and United States Trustee fees. The Plan proposes to significantly reduce the secured portion of the secured creditor claims by using property valuations significantly lower than those proposed by the creditors. The Plan provides for payment in full of reduced secured claims, over the course of 30 years at 4.25% interest. Each secured claim is its own class under the Plan. All unsecured claimants -- including those formerly fully secured claimants that would have a large unsecured claim under the Plan valuations -- will be paid approximately 1% of their claims, without interest, in semi-annual payments over five years. All unsecured claims constitute one class under the Plan. Under the Plan, Debtor would remain in possession of all property of the Estate moving forward. An amended Disclosure Statement was conditionally approved by the Bankruptcy Court on July 11, 2011. About Jodene Audrey Puff Jodene Audrey Puff, in Hazleton, Iowa, filed a Chapter 11 petition (Bankr. N.D. Iowa Case No. 10-01877) on July 1, 2010. Robert Cardell Gainer, Esq. -- gainer@dwx.com -- in Des Moines, serves as bankruptcy counsel. According to the Debtor's schedules, assets total $824,512 while debts total $3,554,817. Ms. Puff operates a hog confinement facility which includes three barns that can each house at least 1,300 head of hog. Ms. Puff has been engaged in hog confinement facility operations for over 10 years. She also owns a number of properties which she rents to third parties. Ms. Puff filed for Chapter 11 to seek relief as a result of failed negotiations with her primary lender to restructure outstanding obligations. She hoped to negotiate or obtain a Farm Service Agency loan. During bankruptcy, certain vehicles have been sold, but no other significant asset sales have occurred. LOS ANGELES DODGERS: Guggenheim to Acquire Club for $2 Billion -------------------------------------------------------------- The Los Angeles Dodgers and Frank McCourt unveiled an agreement under which Guggenheim Baseball Management LLC will acquire the Los Angeles Dodgers for $2 billion upon completion of the closing process. The purchasing group includes Mark R. Walter, CEO of financial services firm Guggenheim Partners, as controlling partner; former National Basketball Association star Earvin "Magic" Johnson; Mandalay Entertainment CEO Peter Guber; Stan Kasten, the former president of the Atlanta Braves and Washington Nationals; Guggenheim Partners president Todd Boehly; and Bobby Patton, who operates oil and gas properties among his investments. The Los Angeles Dodgers stated, "This transaction underscores the Debtors' objective to maximize the value of their estate and to emerge from Chapter 11 under a successful Plan of Reorganization, under which all creditors are paid in full." Frank McCourt stated, "This agreement with Guggenheim reflects both the strength and future potential of the Los Angeles Dodgers, and assures that the Dodgers will have new ownership with deep local roots, which bodes well for the Dodgers, its fans and the Los Angeles community. We are delighted that this group will continue the important work we have started in the community, fulfilling our commitment to building 50 Dream Fields and helping with the effort to cure cancer." Earvin "Magic" Johnson stated, "I am thrilled to be part of the historic Dodger franchise and intend to build on the fantastic foundation laid by Frank McCourt as we drive the Dodgers back to the front page of the sports section in our wonderful community of Los Angeles." ESPN.com reports that the price would shatter the mark for a North American sports franchise, topping the $1.1 billion Stephen Ross paid for the National Football League's Miami Dolphins in 2009. Meanwhile, the Chicago Cubs baseball club was sold to the Ricketts family in 2009 for $845 million as part of Tribune Co.'s bankruptcy. The Texas Rangers fetched $561 million in a bankruptcy sale in 2010. ESPN.com recounts that Mr. McCourt paid $430 million in 2004 to buy the team, Dodger Stadium and 250 acres of land that includes the parking lots, from the Fox division of Rupert Murdoch's News Corp. Mr. McCourt and certain affiliates of the purchasers will also be forming a joint venture, which will acquire the Chavez Ravine property for an additional $150 million. According to ESPN.com, sources with knowledge of the situation told ESPNLosAngeles.com's Tony Jackson that the deal for Chavez Ravine property, the land surrounding Dodgers Stadium, means Guggenheim will purchase half the Dodger Stadium parking lots, which were deemed to have a total value of $300 million, with Mr. McCourt keeping the other half. The source said it has yet to be determined how that relationship will work and whether the new ownership group still will be forced to lease the McCourt-owned half of the lots. The other two finalists in the Dodgers bidding were: -- Stan Kroenke, whose family properties own the NFL's St. Louis Rams, the NBA's Denver Nuggets, the NHL's Colorado Avalanche and Major League Soccer's Colorado Rapids, and who is majority shareholder of Arsenal in the English Premier League; and -- Steven Cohen, founder of the hedge fund SAC Capital Advisors and a new limited partner of the New York Mets; biotechnology entrepreneur Patrick Soon-Shiong; and agent Arn Tellem of Wasserman Media Group. ESPN.com says it remains to be seen whether Major League Baseball will challenge the deal in U.S. Bankruptcy Court in Delaware. As reported by the Troubled Company Reporter on March 26, 2012, Forbes listed the Dodgers as the second most valuable baseball club in Major League Baseball, worth $1.4 billion. The New York Yankees is the most valuable club with a value of $1.85 billion. The New York Mets, which recently settled a lawsuit with the trustee of the Bernard Madoff estate, came in sixth with a value estimated at $719 million, followed by the Texas Rangers, which was sold in bankruptcy in 2010, at seventh, with a value of $674 million. About Los Angeles Dodgers Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a professional Major League Baseball club in the Los Angeles metropolitan area. Frank McCourt, a Boston real-estate developer who unsuccessfully bid for the Boston Red Sox, bought the Dodgers from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for $330 million. Mr. McCourt also bought the Dodgers Stadium from Fox for $100 million. Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB Commissioner Bud Selig rejected a television deal with News Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for June 30 and July 1. Fox Sports has exclusive cable television rights for Dodgers games until the end of 2013 baseball season. Chapter 11 filings were also made for LA Real Estate LLC, an affiliated entity which owns Dodger Stadium, and three other related holding companies. The petition estimates assets of up to $500 million and debts of up to $1 billion. In its schedules, the LA Dodgers baseball club disclosed $77,963,734 in assets and $4,695,702 in liabilities. LA Real Estate LLC disclosed $161,761,883 in assets and $0 in liabilities. Judge Kevin Gross presides over the case. Lawyers at Young, Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Public relations specialist Kekst and Company has been hired for crisis support. Covington & Burling LLP serves as special counsel. An official committee of unsecured creditors has been appointed in the case. The panel has tapped Lazard Freres & Co. as financial adviser and investment banker, and Morrison & Foerster LLP and Pinckney, Harris & Weidinger, LLC as counsel. The LA Dodgers is the 12th sports team in North America to have sought bankruptcy protection. The reorganization is being financed with a $150 million unsecured loan from the Commissioner of Major League Baseball. The loan gives the Commissioner few of the controls lenders often demanded from bankrupt companies. LYONDELLBASELL INDUSTRIES: S&P Ups $3-Bil. Note Rating From 'BB+' ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on LyondellBasell Industries N.V. (LyondellBasell) to 'BBB- ' from 'BB+' and affirmed its 'BB+' issue-level ratings on the company's existing senior unsecured notes. "At the same time we assigned our 'BB+' senior unsecured debt rating to LyondellBasell's proposed $3 billion notes with seven- and 12-year maturities. The outlook is stable," S&P said. The company plans to use net proceeds from the offering and cash on hand to repay notes issued by subsidiary Lyondell Chemical Co. due in 2017 and 2018 and related transaction costs. "The upgrade reflects our opinion that LyondellBasell should continue to benefit during the next several years from an improved competitive position and strong operating results, stemming in part from the availability of low-cost natural gas in the U.S.," said Standard & Poor's credit analyst Cynthia Werneth. "We believe that the North American petrochemical sector is entering a multiyear period of low-cost production economics and will likely see an increase in domestic capital investment. However, we think LyondellBasell will focus primarily on moderate-cost, high-return projects with quick returns. We believe it will consider larger investments only if management believes the company can maintain credit metrics consistent with the current ratings. On the other hand, in Europe, where LyondellBasell has higher-cost operations, we think market conditions will remain challenging. However, we believe results there should continue to benefit from a focus on higher-margin downstream products, such as automotive plastics, as well as byproduct sales." "Other considerations leading to the upgrade include our reduced concern that parties with historically aggressive financial policies, including private equity firm Apollo Management Holdings L.P. and Access Industries LLC--which together currently hold more than 40% of LyondellBasell's shares--are likely to negatively influence the company's financial policies, resulting in increased leverage or reduced liquidity," S&P said. "Another reason supporting the upgrade is LyondellBasell's continuing evolution and improvement of its capital structure. Steps the company is currently initiating include the planned replacement of its secured asset-based revolving credit facility with an unsecured revolver and the release of subsidiary guarantees if the proposed financings are completed as currently contemplated and certain existing debt is repaid," S&P said. "Our ratings on LyondellBasell reflect its 'fair' business risk profile and 'intermediate' financial risk profile. LyondellBasell is a leading global petrochemical producer, with 2011 sales of more than $50 billion. The majority of its products are cyclical commodities such as ethylene, propylene, and their derivatives, including various plastic resins used to manufacture a wide variety of durable goods and consumer products. It also produces automotive and other fuels at a refinery in Houston, Texas. The company recently closed an unprofitable refinery in France," S&P said. "Commodity chemicals show high sensitivity to global GDP growth, supply and demand imbalances, and raw material price movements. Despite significant capital intensity, the industry has relatively low barriers to entry for many product lines, creating a high degree of competition and weak pricing flexibility during periods of excess supply. Business strengths that somewhat counterbalance these risks include LyondellBasell's large scale of operations, management's focus on operational excellence and cost reduction, and a portfolio of differentiated products (including advanced polyolefins, propylene oxide and derivatives, and catalysts), which are more profitable and stable than its commodity product lines," S&P said. "LyondellBasell has performed strongly and generated significant cash since emerging from bankruptcy in April 2011 with much more prudent capitalization, a better cost structure, and lower environmental and other liabilities. Since then, it has benefited from improved global economic conditions, a better-than-expected supply and demand balance, and an advantaged cost position in the U.S. It has also reduced debt significantly and contributed to its pension plans. The company remains committed to maintaining at least $3 billion of available liquidity," S&P said. "Pro forma for the transaction, total debt will be about $6.1 billion. We adjust debt to include about $1.8 billion of adjustments for capitalized operating leases, as well as tax- effected unfunded postretirement, asset retirement, and environmental obligations. Funds from operations (FFO) to total debt is close to 60%. At the 'BBB-' corporate credit rating, we expect LyondellBasell to maintain an 'intermediate' financial risk profile with FFO to debt averaging 40% to 45% and remaining near 30% at the trough," S&P said. "We expect regular dividends to total about $700 million in 2012 and to gradually and modestly increase thereafter. LyondellBasell has sized its regular dividend so that it can continue paying dividends without borrowing, even in industry troughs. Therefore, we expect the company to generate excess cash at other times and periodically consider paying special dividends as it did in 2011. We regard ongoing litigation and regulatory matters as modest risk factors," S&P said. "The outlook is stable. Our view is that the global economy is gradually strengthening, but our outlook remains clouded by difficult economic conditions, particularly in Europe, where LyondellBasell has substantial and higher-cost operations," Ms. Werneth continued. "Despite this, however, we expect LyondellBasell to maintain ratios appropriate for its investment- grade corporate credit rating, including an FFO to total debt ratio averaging 40% to 45% and remaining near 30% even in industry troughs. We believe the company can maintain a sufficiently strong financial profile even if revenues drop by 20% and EBITDA margins decline to 7% from 2011 levels. Also key to maintaining the ratings are the continuation of prudent financial policies and sufficient liquidity." "We could, therefore, lower the ratings if there were an unexpected shift to more aggressive financial policies including more aggressive-than-expected shareholder returns or very large debt-funded acquisitions or capital investments, even if they are financed off balance sheet," S&P said. "During the next few years, we could consider a slightly higher rating if LyondellBasell improves its business risk profile to 'satisfactory' by making investments that promote increased stability and diversification, and the company continues to perform strongly and maintain prudent financial policies," S&P said. MAYVILLE DIE: Precision Castparts Acquires Assets ------------------------------------------------- BizTimes.com reports that Precision Castparts Corp. has acquired Mayville Die and Tool Inc. The report relates Wyman-Gordon Forgings, a Houston-based subsidiary of Precision Castparts, will manage Mayville. Mayville's assets were sold at auction as part of Chapter 11 bankruptcy proceedings in late 2011. According to the report, Royko Enterprises LLC, a mergers and acquisitions advisory firm, helped Mayville find a buyer among nine competitive bids. An auction helped increase the final purchase price almost 20% higher than the original bid. Based in Mayville, Wisconsin, Mayville Die & Tool, Inc., filed for Chapter 11 protection on Aug. 25, 2011 (Bankr. E.D. Wis. Case No. 11-33128). Judge James E. Shapiro presides over the case. Jane F. Zimmerman, Esq., at Murphy Desmond S.C., represents the Debtor. The Debtor listed assets of $2,603,622, and debts of $3,221,806. MERITAGE HOMES: Fitch Rates Proposed $250-Mil. Notes at 'BB-/RR3' ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB-/RR3' rating to Meritage Homes Corporation's (NYSE: MTH) proposed offering of $250 million principal amount of senior notes due 2022. This issue will be rated on a pari passu basis with all other senior unsecured debt. Net proceeds from the notes offering will be used for debt repurchase and general corporate purposes. Fitch currently rates MTH as follows: -- Long-term Issuer Default Rating (IDR) 'B+'; -- Senior unsecured debt 'BB-/RR3'; -- Senior subordinated debt 'B-/RR6'. The Rating Outlook is Stable. The ratings and Outlook for MTH are influenced by the company's execution of its business model, conservative land policies, geographic and product line diversity, acquisitive orientation and healthy liquidity position. While Fitch expects somewhat better prospects for the housing industry this year, there are still significant challenges facing the housing market, which are likely to meaningfully moderate the early stages of this recovery. Nevertheless, MTH has the financial flexibility to navigate through the still challenging market conditions and continue to selectively and prudently invest in land opportunities. The Recovery Rating (RR) of 'RR3' on the company's senior unsecured debt indicates good recovery prospects for holders of these debt issues. MTH's exposure to claims made pursuant to performance bonds and joint venture debt and the possibility that part of these contingent liabilities would have a claim against the company's assets were considered in determining the recovery for the unsecured debt holders. The 'RR6' on MTH's senior subordinated debt indicates poor recovery prospects in a default scenario. Fitch applied a liquidation value analysis for these RRs. Certain recent economic/construction related statistics, such as job growth, consumer confidence, mortgage rates, household formations, multifamily starts, existing home sales, pending home sales, housing inventories, and foreclosures were improving and/or above consensus. A few key statistics such as single-family housing starts, new home sales, home prices (CoreLogic, Case Shiller) were declining/short of expectations. Overall, the current setting is much like at the beginning of 2011. Fitch's housing forecasts for 2012 assume a modest rise off a very low bottom. New home inventories are at historically low levels and affordability is at near record highs. In a slowly growing economy with distressed home sales competition similar to 2011, less competitive rental cost alternatives, and, probably, even lower mortgage rates on average, single-family housing starts should improve about 5% to 450,000, while new home sales increase approximately 5.6% to 319,000 and existing home sales grow 3% to 4.388 million. MTH's sales are reasonably dispersed among its 13 metropolitan markets within six states. The company ranks among the top 10 builders in such markets as Houston, Dallas/Fort Worth, San Antonio and Austin, TX, Orlando, FL, Phoenix, AZ, Riverside/San Bernardino, CA, Denver, CO, and Sacramento, CA. The company also builds in the East Bay/Central Valley, CA, Las Vegas, NV, Inland Empire, CA, Tucson, AZ and Raleigh-Durham, NC. In recent years, about 65 - 70% of MTH's home deliveries are to first and second time trade up buyers, 25&-30% to entry level buyers, less than 5% are to luxury home buyers and approximately 5% to active adult (retiree) buyers. MTH employs conservative land and construction strategies. The company typically options or purchases land only after necessary entitlements have been obtained so that development or construction may begin as market conditions dictate. Under normal circumstances MTH extensively uses lot options, and that is expected to be the future strategy in markets where it is able to do so. The use of non-specific performance rolling options gives the company the ability to renegotiate price/terms or void the option which limits down side risk in market downturns and provides the opportunity to hold land with minimal investment. However, as of Dec. 31, 2011, only 17% of MTH's lots were controlled through options - a much lower than typical percentage due to considerable option abandonments and write-offs in recent years. Additionally, there are currently fewer opportunities to option lots and, in certain cases, the returns for purchasing lots outright are far better than optioning lots from third parties. Total lots controlled, including those optioned, were 16,722 at Dec. 31, 2011. This represents a 5.1 year supply of total lots controlled based on trailing 12 months deliveries. On the same basis, MTH's owned lots represent a supply of 4.2 years. MTH successfully managed its balance sheet during the severe housing downturn, allowing the company to accumulate cash and pay down its debt as it pared down inventory. The company had unrestricted cash of $173.6 million and investments and securities of $147.4 million at Dec. 31, 2011. As MTH is now tendering for its 6.25% $285 million senior notes due March 2015, its next major debt maturity is in April 2017, when $125.9 million of senior subordinated notes mature. Fitch expects MTH to be cash flow negative in 2012 by about $100 million as the company continues to rebuild its land position. The company expects to moderately increase its land spending in 2012 from the $246.6 million spent in 2011. Fitch is comfortable with this strategy given the company's liquidity position and debt maturity schedule. Fitch expects MTH over the next few years will maintain liquidity of at least $200 - 250 million, a level which Fitch believes is appropriate given the challenges still facing the industry. Future ratings and Outlooks will be influenced by broad housing market trends as well as company specific activity, such as trends in land and development spending, general inventory levels, speculative inventory activity (including the impact of high cancellation rates on such activity), gross and net new order activity, debt levels and especially free cash flow trends and uses, and the company's cash position. Negative rating actions could occur if the anticipated recovery in housing does not materialize and the company prematurely steps up its land and development spending, leading to consistent and significant negative quarterly cash flow from operations and diminished liquidity position. Positive rating actions may be considered if the recovery in housing is significantly better than Fitch's current outlook, MTH shows sustained improvement in credit metrics, and the company continues to maintain a healthy liquidity position. MERITAGE HOMES: Moody's Rates $250-Mil. Sr. Unsecured Notes 'B1' ---------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Meritage Homes Corporation's proposed $250 million senior unsecured notes due 2022. In the same rating action Moody's affirmed the company's B1 corporate family rating, B1 probability of default rating, B1 rating on the existing senior unsecured notes due 2015 and 2020, and SGL-2 speculative grade liquidity rating. The rating outlook is stable. The following rating actions were taken: Proposed $250 million senior unsecured notes due 2022, assigned B1, LGD3 - 44% Corporate family rating, affirmed at B1; Probability of default rating, affirmed at B1; $285 million 6.25% senior unsecured notes due 2015, affirmed at B1, LGD3 - 44%; $196 million 7.15% senior unsecured notes due 2020, affirmed at B1, LGD3 - 44%; Speculative grade liquidity rating, affirmed at SGL-2. The rating outlook is stable. Ratings Rationale The proposed $250 million senior unsecured notes will be guaranteed by all of Meritage's wholly owned subsidiaries, as are the existing senior unsecured notes. The proceeds from the note offering together with cash on hand will be used to retire all outstanding amounts of the $285 million 6.25% senior unsecured notes due 2015. The proposed transaction will be debt neutral to Meritage's capital structure and will be liquidity positive due to the extension of debt maturities. The ratings on the $285 million 6.25% senior unsecured notes will be withdrawn upon repayment. The B1 corporate family rating reflects the relative stability of Meritage's operating performance over the last two years, and Moody's expectation that the company will generate consistent or marginally improved results in 2012. In Moody's view, the company will likely break even or turn slightly positive on a net income basis. Moody's recognizes that despite certain positive trends, the homebuilding industry continues to be pressured by numerous risk factors, and Moody's anticipates the majority of Meritage's credit metrics, including interest coverage and returns, will remain weak in the intermediate term, which constrains the rating. Moody's expects cash flow from operations to be negative and cash balances to decline as the company invests in land and land development over the next 12 to 18 months. The rating also reflects Meritage's reliance on its Texas operations for about 46% of its revenues. The rating is supported by the company's moderate homebuilding debt-to-capitalization ratio, healthy gross margins, modest land supply and solid cash position. The SGL assessment takes into account internal and external sources of liquidity, covenant compliance, and alternate sources of liquidity. Meritage's SGL-2 rating indicates a good liquidity profile, supported by its healthy cash balance and by its lack both of covenants and of near term debt maturities. However, liquidity is constrained by the expected negative cash flow generation and lack of any significant sources of alternate liquidity. The stable outlook reflects Meritage's steady financial performance, driven largely by an expansion of gross margins, and Moody's view that the company will continue to generate comparable results over the next year, as demand gradually solidifies. The outlook also recognizes Meritage's solid cash position and lack of debt maturities until 2017 because of the refinancing transaction. Lastly, an improving operating environment combined with expected capital structure discipline should allow the company's debt leverage, currently at approximately 57.5%, to improve over the next several years. The ratings would be considered for an upgrade if the company's homebuilding debt-to-capitalization ratio declined and was maintained below 50%, if the company restored its healthy profitability on a net income basis, and if the company were to maintain solid liquidity. The ratings could be lowered if the company jeopardized its liquidity position by engaging in large land purchases or substantial share buy-backs, experienced a material erosion in pre-impairment operating performance, or reversed its recent trend of booking fewer and smaller impairment charges, causing homebuilding debt-to-capitalization ratio to increase above 60%. The principal methodology used in rating Meritage was the Global Homebuilding Industry Methodology published in March 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. Meritage Homes Corporation is the 8th largest homebuilder in the U.S., primarily building single-family and attached homes in 13 metropolitan areas in Arizona, Texas, California, Nevada, Colorado, Florida and North Carolina. Formerly known as Meritage Corporation, the company was founded in 1985 and is headquartered in Scottsdale, Arizona. Total revenues and consolidated net loss for fiscal year ending December 31, 2011 were approximately $861 million and $21 million, respectively. MICROBILT CORP: Plan Outline Hearing Scheduled for April 5 ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey will convene a hearing on April 5, 2012, at 10:00 a.m., to consider adequacy of the Disclosure Statement explaining MicroBilt Corporation and CL Verify, LLC's Plan of Reorganization. As reported in the Troubled Company Reporter on Jan. 23, 2012, all cash necessary for the Reorganized Debtors to make payments pursuant to the Plan will be funded by the use of the Debtors' existing cash on hand as of the Effective Date. As of Dec. 15, 2011, the Debtors' cash on hand is $6,430,721. The Debtors anticipate that the available cash as of the distribution date will be sufficient to pay allowed general unsecured claims in full. The classification and treatment of claims under the plan are: A. Class 1 (Non-Tax Priority Claims) will receive cash equal to the amount of allowed claim. The estimated amount of Class 1 claims is $10,000 and the estimated recovery is 100%. B. Class 2 (General Unsecured Claims) will receive a pro rata share of available cash in the class 2 cash pool. The estimated amount of allowed class 2 claims is $2,658,391 while the estimated percentage recovery of the claims is 75% to 100%. C. Class 3 (Equity Interests) will be retained and will remain unaffected and unchanged by the Plan. The estimated percentage recovery of Class 3 claims is 100%. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/MICROBILT_ds.pdf About MicroBilt Corporation MicroBilt Corporation in Princeton, New Jersey, and CL Verify LLC in Tampa, Florida, offer small business owner solutions for fraud prevention, consumer financing, debt collection, skip tracing and background screening. MicroBilt provides access to over 3 billion debit account records, nearly 30 billion pieces of demographic and public record data and over 100 million unique consumer records to prevent identity fraud, evaluate credit risk and retain customer relationships. MicroBilt and CL Verify filed for Chapter 11 five days apart: MicroBilt (Bankr. D. N.J. Case No. 11-18143) on March 18, 2011, and CL Verify (Bankr. D. N.J. Case No. 11-18715) on March 23, 2011. The Debtors tapped Lowenstein Sandler PC as their counsel, and Maselli Warren, PC, as their special litigation counsel. MicroBilt estimated $10 million to $50 million in both assets and debts. CL Verify estimated $100 million to $500 million in assets, but under $1 million in debts. Court papers say the Debtors have roughly $8.4 million in unsecured debt and no secured debt. The Debtors believe they have an enterprise value of $150 million to $180 million. No trustee, examiner or committee has been requested or appointed in these Chapter 11 cases. MIRANT CORP: Trust May Sue Even After Creditors Are Paid in Full ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in New Orleans ruled on March 20 that a trustee for a bankrupt company can continue a lawsuit even after unsecured creditors are paid in full,. Mirant Corp. confirmed a Chapter 11 plan paying creditors in full. The plan also created a trust to bring lawsuits. After confirmation, the trust sued several banks for preferences received before bankruptcy. The district court dismissed the suit, saying the trustee lost standing to sue once creditors were fully paid. Accoridng to the report, U.S. District Judge Micaela Alvarez, sitting by designation on the appellate panel of three judges, reversed, in the process taking sides with the U.S. Court of Appeals in San Francisco on the same issue. She ruled that "a bankruptcy trustee may still have standing to avoid a fraudulent transfer after the unsecured creditors are paid in full." The case is MC Asset Recovery LLC v. Commerzbank AG (In re Mirant Corp.), 11-10070, 5th U.S. Circuit Court of Appeals (New Orleans). About Mirant Mirant Corporation -- http://www.mirant.com/-- produces and sells electricity in the United States. Mirant owns or leases approximately 10,097 megawatts of electric generating capacity. The company operates an asset management and energy marketing organization from its headquarters in Atlanta, Georgia. Mirant Corporation filed for Chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtor in its restructuring. When the Debtor filed for protection from its creditors, it listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. On March 7, 2007, the Court entered a final decree closing 46 Mirant cases. Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant New York Inc., and Hudson Valley Gas Corporation, were not included in the parent's bankruptcy exit plan. In February 2007, Mirant NY-Gen filed its Chapter 11 Plan of Reorganization and Disclosure Statement. The Court confirmed an amended version of the Plan on May 7, 2007. Mirant NY-Gen emerged from Chapter 11 on May 7, 2007. On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan. The Court confirmed Mirant Lovett's Plan on Sept. 19, 2007. Mirant Lovett emerged from bankruptcy on Oct. 2, 2007. MONTANA ELECTRIC: Trustee Tosses Out PPL EnergyPlus Contract ------------------------------------------------------------ Greatfallstribune.com, citing court documents, reports that PPL EnergyPlus was unable to save its power contract with Southern Montana Electric Generation and Transmission Cooperative, Inc. The pact will be terminated officially on April 1, 2012. According to the report, one of the biggest players in Montana's energy picture, PPL Montana, no longer provides power to Southern Montana's six member cooperatives. PPL EnergyPlus' contract with Southern Montana was set to run through 2019, but the contract has been rejected by court-appointed trustee Lee Freeman under a stipulation filed in court on March 26, 2012. About Southern Montana Electric Based in Billings, Montana, Southern Montana Electric Generation and Transmission Cooperative, Inc., was formed to serve five other electric cooperatives. The city of Great Falls later joined as the sixth member. Including the city, the co-op serves a population of 122,000. In addition to Great Falls, the service area includes suburbs of Billings, Montana. Southern Montana filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana estimated assets of $100 million to $500 million and estimated debts of $100 million to $500 million. Timothy Gregori signed the petition as general manager. Jon E. Doak, Esq., at Doak & Associates, P.C., in Billings, Montana, served as the Debtor's counsel. In December 2011, Southern Montana also sought permission to employ the Goodrich Law Firm, P.C., as general co-counsel. Also in December, Lee A. Freeman was appointed as Chapter 11 trustee. The co-op agreed to a request for appointment of a Chapter 11 trustee. Mr. Freeman retained Horowitz & Burnett, P.C., as his counsel and Waller & Womack, P.C., as local counsel. The United States Trustee for Region 18 appointed an Official Committee of Unsecured Creditors in the case. NEBRASKA BOOK: Gets Approval for Amended Plan Support Agreement --------------------------------------------------------------- Judith Rosen at Publishers Weekly reports that Nebraska Book Company got one more step closer to exiting Chapter 11 bankruptcy with a signed order for the Amended and Restated Plan Support Agreement, filed earlier this month. The report says, under the agreement, 8.625% senior subordinated noteholders will receive an improved package of warrants to purchase stock in the reorganized company along with $1.75 million to cover fees incurred by their advisors. The holders of class 5 general unsecured claims will receive cash payments equal in value to the percentage recovery by the 8.625% senior subordinated noteholders. According to the report, NBC president Barry Major said "We are more than ready to move beyond this process and get back to doing what we do best. By finalizing an agreement with both of these groups of noteholders, we are confident that we can move forward in this process with the support we need." The report notes there are still a few more hurdles for NBC to get past before it emerges from bankruptcy. On April 13, the court will hold a hearing on the Disclosure Statement, which was filed with the Second Amended Plan of Reorganization on March 7. Plan Support Deal Objection Withdrawn The Ad Hoc 8.625% Noteholders and the Official Committee of Unsecured Creditors in the Chapter 11 cases of Nebraska Book Co., previously asked the U.S. Bankruptcy Court for the District of Delaware to disapprove the execution and implementation of a Plan Support Agreement, dated March 7, 2012. The ad hoc consortium is consist of certain holders of notes issued under that certain Indenture, dated March 4, 2004 (as may be amended, restated and supplemented from time to time), pursuant to which the Debtors issued $175 million of Senior Subordinated Notes. According to the Ad Hoc Committee, the Second Amended Plan is fundamentally flawed for a number of reasons. Chief among them is the fact that it is neither (i) feasible nor (ii) fair and equitable. The Second Amended Plan suggests that the Debtors' enterprise value has fallen by an alarming 44% in less than seven months. If that's true, the reorganized Debtors will likely be unable to service the over $180 million of debt contemplated by the Second Amended Plan, ensuring their failure and return to Chapter 11. On the other hand, if the revised valuation is seriously understated, which the Ad Hoc 8.625% Noteholders believe to be the case, then the Senior Secured Noteholders are receiving value greater than the amount of their claims. Either way, the Second Amended Plan cannot be confirmed, the group said. About Nebraska Book Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the leading providers of new and used textbooks for college students in the United States. Nebraska Book and seven affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002 to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over the case. Lawyers at Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The Debtors; restructuring advisors are AlixPartners LLC; the investment bankers are Rothschild, Inc.; the auditors are Deloitte & Touche LLP; and the claims agent is Kurtzman Carson Consultants LLC. As of the Petition Date, the Debtors had consolidated assets of $657,215,757 and debts of $563,973,688. JPMorgan Chase Bank N.A., as administrative agent for the DIP lenders, is represented by lawyers at Richards, Layton & Finger, P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment Management Inc., the DIP arranger, is represented by lawyers at Bayard, P.A., and Willkie Farr & Gallagher LLP. An ad hoc committee of holders of more than 50% of the Debtors' Second Lien Notes is represented by lawyers at Brown Rudnick. An ad hoc committee of holders of the Debtors' 8.625% unsecured notes are represented by Milbank, Tweed, Hadley & McCloy LLP. The Official Committee of Unsecured Creditors selected Lowenstein Sandler LLP and Stevens & Lee, P.C., as lawyers and Mesirow Financial Inc. as financial advisers. Nebraska Book was unable to confirm a pre-packaged Chapter 11 plan that would have swapped some of the existing debt for new debt, cash and the new stock, due to an inability to secure $250 million in exit financing. In March 2012, Nebraska Book filed a revised Chapter 11 reorganization plan that offers the new stock plus a new $100 million second-lien note to holders of the existing $200 million in second-lien debt. The projected recovery is 81% on the second-lien notes. NEPHROS INC: Rothstein Kass Raises Going Concern Doubt ------------------------------------------------------ Nephros, Inc., filed its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011. Rothstein Kass, in Roseland, N.J., expressed substantial doubt about Nephros, Inc.'s ability to continue as a going concern. The independent auditors noted that the Company has incurred negative cash flow from operations and net losses since inception. The Company reported a net loss of $2.4 million on $2.2 million of revenues for 2011, compared with a net loss of $1.9 million on $2.9 million of revenues for 2010. The Company's balance sheet at Dec. 31, 2011, showed $4.0 million in total assets, $2.6 million in total current liabilities, and stockholders' equity of $1.4 million. A copy of the Form 10-K is available for free at: http://is.gd/cvBIlo Headquartered in River Edge, N.J., Nephros, Inc. (OTC bb: NEPH) -- http://www.nephros.com/-- is a medical device company developing and marketing filtration products for therapeutic applications, infection control, and water purification. NEW GOLD: Moody's Assigns 'B1' Corporate Family Rating ------------------------------------------------------ Moody's Investors Service assigned first-time ratings to New Gold Inc., including a corporate family rating of B1, a probability of default rating of B1, and a B2 rating to the company's proposed $300 million of senior unsecured notes. Moody's also assigned a speculative grade liquidity rating of SGL-2. The outlook is stable. The proceeds of the notes are expected to be used to repay existing senior secured notes with an outstanding balance of $189 million and for general corporate purposes. Ratings Rationale New Gold's B1 corporate family rating reflects its limited diversity and modest size, as well as the relatively short reserve life of the existing mines (roughly 13 years) and substantial development plans. However, the ratings acknowledge the company's low cost production profile, as well as the stable operating jurisdictions of their mines (US, Mexico, and Australia). In addition the product mix of both precious and base metals offers some stability for the credit metrics. The company's properties include Mesquite gold mine in the United States, Cerro San Pedro gold and silver mine in Mexico, Peak Mines gold and copper mine in Australia, New Afton gold and copper mine in Canada, 30% ownership of El Morro gold and copper project in Chile and Blackwater gold and silver project in Canada. New Gold's production levels represent a relatively small proportion of the total market for gold, silver and copper. The company currently depends on three operating mines, with Mesquite mine responsible for roughly 45% of total revenue, and Peak Mines and Cerro San Pedro accounting for about 25% and 30% respectively. In addition, a new copper and gold mine, New Afton, is due to come online in the next six to twelve months. The ratings reflect the risk that operational difficulty at any one of these mines could have a significant impact on the company's financial position. Although the company's development projects have the potential to boost reserves and production levels, New Afton will be the only new mine to come online during Moody's rating horizon, as the El Morro and Blackwater mines are not scheduled to start producing until 2017. The ratings reflect Moody's expectation that in the next few years, the company will need to invest in the new projects, as well as in productive capacity at the current mines. During 2011, $291mm was invested in New Afton with approximately $200mm of capital investment remaining. A substantial proportion of the company's development costs over the next few years will relate to the El Morro project, for which remaining total capital expenditures (on 100% basis) are estimated to approximate $4 billion. This will not pressure the company's cash flows, since the 70% owner of the El Morro project, Goldcorp Inc. (Baa2 Stable), will provide the financing for New Gold's portion of the development costs. However, the company will not recover meaningful cash flows from the project for at least a decade, as a significant portion of El Morro's initial cash flows will be used to repay amounts funded by Goldcorp. Since amounts invested in projects other than El Morro are not expected to be excessive over the next few years (roughly $370 million in 2012, and $300 million in 2013 and 2014 combined), Moody's anticipates that the company's leverage, excluding El Morro financing, will be low over the rating horizon (adjusted Debt to EBITDA ranging from 1.5x to 3.0x). That said, the ratings reflect execution risk related to the company's development plans, the potential for cost overruns, and possibility of additional debt-financed project acquisitions. The ratings also consider that the company enjoys a low-cost position, in part due to the by-product credits it sells along with its gold production. New Gold's low cost production profile helps to support credit metrics in a less favorable commodity price environment. That said, two of the company's operating mines, Mesquite and Cerro San Pedro, are expected to experience declining production levels and increasing costs over the next few years. The company's SGL-2 rating reflects its strong liquidity position. Pro forma for the transaction, New Gold will have good liquidity. This includes $309 million of cash at the end of 2011 and net proceeds of approximately $100 million from the proposed financing. Although Moody's expects sizeable negative free cash flow due to the large capex plans, the rating agency expects that the cash flow from operations, low debt service requirements, and the financing arrangement with Goldcorp will support the cash position going forward. The B2 rating on senior unsecured notes is one notch below the corporate family rating, reflecting the presence of the secured revolving facility in the company's capital structure. The stable outlook reflects Moody's positive view on market fundamentals for prescious metals and copper, as well as Moody's expectation that, excluding the fully funded El Morro project, the company will enjoy a conservative leverage position and manageable cash outflow for development projects over the rating horizon. Upward rating momentum is limited at this time due to the limited scale and diversity of the company's operations. An upgrade could be considered once the company's expansion plans are closer to completion and New Gold demonstrates that it can consistently generate positive free cash flow to service its debt. The ratings could be lowered if New Gold experiences any significant operational difficulties, substantial increase in operating or capital costs, or material deterioration in liquidity position. A downgrade would also be considered should Debt/ EBITDA, excluding El Morro financing, increase above 4.0x. The principal methodology used in rating New Gold Inc. was the Global Mining Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. NEWPORT TELEVISION: Moody' Says Sale May Trigger Debt Provisions ---------------------------------------------------------------- Moody's Investors Service said Newport Television Holdings LLC (Caa1 Corporate Family Rating) was the subject of recent financial newspaper articles suggesting the company is exploring strategic alternatives including the sale of some or all operations of the company. Newport Television Holdings LLC has released no statement regarding these articles which management considers to be speculative. Moody's currently rates approximately $750 million of debt of Newport Television including the senior secured revolver and term loans due 2016, as well as the senior PIK toggle notes due 2017. "Moody's believes that, depending on the deal structure, change of control protection under the indentures (requiring repayment of these notes at 101%) and under the credit agreement is likely to mitigate the potential negative impact of a sale of the company under a typical, highly-leveraged LBO capital structure. Absent change of control protection under each of its debt agreements, Newport Television's debt would likely face downward rating pressure if the company were to be sold and potential increases in debt used to finance the transaction were to meaningfully increase leverage ratios and reduce free cash flow," stated Carl Salas, Moody's Vice President and Senior Analyst. Newport Television Holdings LLC, headquartered in Kansas City, Missouri, owns or operates 28 primary television stations plus 27 digital multicast stations in 20 markets including 8 duopolies and 12 additional multi-station markets. Newport has been a portfolio company of Providence Equity Partners, Inc. since it was formed to acquire the television group of Clear Channel Communications, Inc. in 2008. Revenues for the trailing twelve months ended December 31, 2011 totaled $292 million. OLD CORKSCREW: Committee and U.S. Trustee Object to Amended Plan ---------------------------------------------------------------- Don Walton, the U.S. Trustee for Region 21 filed with the U.S. Bankruptcy Court for the Middle District of Florida its objection to the confirmation of Old Corkscrew Plantation LLC, et al.'s Proposed Amended Joint Plan of Reorganization dated Feb. 7, 2012. According to the U.S. Trustee, the Amended Plan has these problems: -- the Plan at Article 3.2, is contrary to the statutory requirement to file post-confirmation quarterly reports; -- the Plan at Articles 5.2, 6.1, and 6.2, are contrary to Section 1124 in that the Priority Claims are impaired under the Plan as the Plan fails to leave unaltered the legal, equitable, and contractual non-bankruptcy rights; and -- the Plan at Articles 5.4 and 6.1, are contrary to Section 1124 in that the Plan fails to provide whether the Class is impaired or unimpaired. In a separate filing, the Official Committee of Unsecured Creditors objected to the confirmation of the Amended Plan subject to the modifications to the Drop Dead Provisions. The Committee related that the most troubling part of the Plan from the Committee's perspective is the Drop Dead Provisions. The Committee has discussed the bases for the objection with both the Debtors and BMO Harris, and had previewed the concerns with the Drop Dead Provisions at numerous points during the case, including in an objection to the disclosure statement. In the hope that settlement discussions could occur without the costs and expenses associated with formally stating positions well-known to the parties, the Committee made this proposal: "Notwithstanding anything herein to the contrary, in the event of a monetary default that is not timely cured, the Debtors will be provided a ninety day period from the date of the cure deadline within which to market and try to sell the property at issue with the assistance of a reputable brokerage firm. In the event that the Debtors are not able to obtain a contract for sale within this ninety day period in a net amount at least equal to the indebtedness owed to the Bank, title to the property will be transferred immediately to the Bank. In the event that the Debtors are able to timely procure such a contract for sale, the Debtors will have an additional forty- five days from the date of the contract to close the transaction. In the event of a failure to timely close, title to the property will be transferred immediately to the Bank. The sale proceeds in excess of the indebtedness owed to the Bank will be distributed in accordance with the provisions of the Plan." The Debtors' Plan As reported in the Troubled Company Reporter on March 1, 2012, according to the Amended Disclosure Statement, the Plan provides for the reorganization of the OCP Debtors, the emergence of the OCP Debtors from the Bankruptcy Cases as the Reorganized Debtor and the treatment of Allowed Claims against the OCP Debtors and Allowed Equity Interests in the OCP Debtors. As of the Effective Date, each of the OCP Debtors will be substantively consolidated with and merged into the Reorganized Debtor pursuant to the terms of the Plan. The primary source of the funds necessary to implement the Plan initially will be the funding under the DIP Loan and the Debtors' cash from operations. At the present time, the Debtors believe that the Reorganized Debtor will have sufficient funds as of the Effective Date through funding of the DIP Loan and the Debtors' cash from operations to pay in full the expected payments required under the Plan, including to the Holders of Allowed Administrative Claims (including Allowed Administrative Claims of Professionals), Allowed Priority Claims, and DIP Lender Allowed Claims. Under the Plan, each holder of an Allowed Unsecured Claim in Class 4 will receive cash from the Reorganized Debtor in an amount equal to 100% of the Allowed Unsecured Claim, plus Postpetition Interest. A full-text copy of the Amended Disclosure Statement is available for free at http://bankrupt.com/misc/OLD_CORKSCREW_ds_amended.pdf About Old Corkscrew Plantation Fort Myers, Florida-based Old Corkscrew Plantation LLC, whose oranges are made into Minute Maid and Tropicana juice, filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 11-14559) on July 29, 2011, disclosing $25,264,047 in assets and $60,751,633 in debts. Old Corkscrew sought Chapter 11 protection along with its affiliates. Donald G. Scott, Esq., -- dscott@mcdowellrice.com -- at McDowell, Rice, Smith & Buchanan, in Kansas City, Missouri, serves as the Debtors' bankruptcy co-counsel. Berger Singerman, P.A., serves as their bankruptcy counsel. Arcadia Citrus Enterprises, Inc., serves as manager of their citrus growing properties. Kapila & Company serves as chief restructuring officer. The Debtors' orange groves are valued at $24 million. Scott Westlake, the Debtors' managing member, signed the petition. Mr. Westlake is also listed as the Debtors' largest unsecured creditor, with $4,827,906 owed. Another $338,511 debt is owed to Scott and Vicki Westlake. No trustee or examiner has been appointed in this Chapter 11 case. An official committee of unsecured creditors was appointed and is represented by counsel. OPTIONABLE INC: Sherb & Co. Raises Going Concern Doubt ------------------------------------------------------ Optionable, Inc., filed on March 23, 2012, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011. Sherb & Co., LLP, in New York City, expressed substantial doubt about Optionable, Inc.'s ability to continue as a going concern. The independent auditors noted that of the Company's recurring losses from operations and uncertainty regarding pending legal matters. The Company reported a net loss of $2.3 million for 2011, compared with a net loss of $2.5 million for 2010. The Company has not generated any revenues since the third quarter of 2007 as a result of the termination of the business relationship by its largest customer and the succession of events since then. The Company's balance sheet at Dec. 31, 2011, showed $1.3 million in total assets, $500,990 in total liabilities, and stockholders' equity of $829,292. A copy of the Form 10-K is available for free at; http://is.gd/QJDPbF New York City-based Optionable, Inc., is a corporation that was formed in Delaware in February 2000. Between April 2001 and July 2007, a substantial portion of the Company's revenues were generated from providing energy derivative brokerage services to brokerage firms, financial institutions, energy traders and hedge funds worldwide. The Company's management is exploring and seeking possible business transactions and new business relationships in areas unrelated to brokerage services. OXBOW MACHINE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Oxbow Machine Products, Inc. 12777 Merriman Livonia, MI 48150 Bankruptcy Case No.: 12-47404 Chapter 11 Petition Date: March 26, 2012 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Thomas J. Tucker Debtor's Counsel: David R. Shook, Esq. DAVID R. SHOOK ATTORNEY AT LAW, PLLC 6480 Citation Drive Clarkston, MI 48346 Tel: (248) 625-6600 Fax: (248) 625-6611 E-mail: ecf@davidshooklaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the list of 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/mieb12-47404.pdf The petition was signed by Robert C. Tiano, president. PACER MANAGEMENT: Files for Chapter 11 to Keep Hospital ------------------------------------------------------- Pacer Management Kentucky LLC, operator of the Knox County Hospital in Kentucky, filed for Chapter 11 protection (Bankr. E.D. Ky. Case No. 12-60410). Pacer Management, which filed for bankruptcy along with affiliates Pacer Health Management Corporation and Cumberland-Pacer, LLC, estimated up to $50 million in assets and liabilities. The Debtors lease the assets and real property to operate the hospital from Knox County, Kentucky and Knox Hospital Corporation. According to court filings, the lessors in 2009 filed suit against Pacer Health and others in the Knox Circuit Court alleging a breach of the Lease Agreement but the suit was later resolved. Under the deal, CP was substituted as lessee. CP is a Kentucky limited liability company established by Dr. Satyabrata Chatterjee and Dr. Ashwini Anand to purchase the stock of Pacer Holdings of Kentucky, Inc., which owned 100% of the stock of Pacer Health and 60% of the stock of Pacer Management. CP, which previously owned 40% of the stock of Pacer Management, became the sole owner of Pacer Management following the transaction. In October 2011, the county notified CP it was in default under the lease agreement. The parties negotiated numerous extensions of time to cure the alleged defaults, most recently until 12:01 a.m. on March 29, 2012. Prior to expiration of the most recent extension, the Lessors again filed suit in the Knox Circuit Court on March 20, 2012 seeking to have the Lease Agreement terminated and requesting entry of a restraining order against CP, PHM and PM, among others. On March 20, 2012, the Knox Circuit Court issued a restraining order which precluded the Debtors from spending hospital funds other than for ordinary operating expenses, among other things. A March 22, 2012 report by The Associated Press said that county officials and the hospital board have agreed to terminate the facility's lease with the Debtors. The group then agreed to sign with another management company that will keep the hospital open and prepare it to be sold, according to the report. Accordingly, the Debtors have filed for Chapter 11 protection to retain control of the Hospital. The Debtors said they seek to continue operating the Hospital pursuant to the terms of the Lease Agreement and preserve their option to purchase the Hospital. The Debtors obtained a feasibility study in September 2011 which sets forth an economically viable method to reorganize the operations of the Hospital The Debtors have also applied for financing from various sources for operating expenses and to fund the purchase of the Hospital, but were not able to obtain such financing. The Debtors have recently been able to obtain a commitment for debtor- in-possession financing from the principals of the Debtors and a third party. The Debtors have filed typical "first day" motions, including emergency requests to pay prepetition employees, pay service providers and access cash collateral. PENINSULA HOSPITAL: To Close After DOH Shuts Down Laboratory ------------------------------------------------------------ Crain's New York Business reports that Peninsula Hospital will permanently close. The state Department of Health shut down the laboratory of the Far Rockaway hospital on Feb. 23, an action that sealed Peninsula's fate. According to the report, Chief Executive Todd Miller -- despite being handed an internal report in December that said Peninsula's lab deficiencies were so serious that DOH could shut down the hospital at any time -- had underestimated the seriousness of the situation. Mr. Miller said he assumed that the lab deficiencies would take a few weeks at most to remedy. The report relates the new Chapter 11 trustee, Lori Lapin Jones, wrote on March 26, 2012, in a court filing that she had been "hopeful that the remedial efforts undertaken by management and the professionals they retained would result in prompt recertification of the laboratory and a return of patient admissions." But when she asked state regulators to review the remedial work Peninsula has performed on the lab since it was shuttered, the news was not good. She wrote in the court filing that DOH determined that "substantial additional time, effort and expense would be required before the laboratory would be eligible for recertification." DOH said the process would take months, not weeks. The report notes Ms. Jones disclosed that she will now "turn to determining the most efficient and responsible manner in which to wind down the affairs of the hospital," including exploring the use of the closed hospital for other health care purposes. That could include transforming Peninsula into a primary care facility or an urgent care or emergency care center. The report adds the nursing home will survive. According to the report, Ms. Jones will submit a closure plan to DOH. Meanwhile, the department said it will "monitor operations at Peninsula to ensure an orderly closure," work with other providers to make sure patients have access to services that will be closing, and make sure medical records are available or transferred. 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. PENN VIRGINIA: Moody's Lowers Corporate Family Rating to 'B2' ------------------------------------------------------------- Moody's Investors Service downgraded Penn Virginia Corporation's (PVA) Corporate Family Rating (CFR) to B2 and its senior unsecured notes rating to B3. At the same time, Moody's lowered PVA's Speculative Grade Liquidity Rating to SGL-3 (from SGL-2), reflecting adequate liquidity. The outlook remains negative. Ratings Rationale "The downgrade reflects Penn Virginia's diminishing liquidity and significant anticipated negative free cash flow in 2012 arising from its aggressive drilling campaign in the Eagle Ford shale and stubbornly weak North American natural gas prices," commented Sajjad Alam, Moody's analyst. "While the planned asset sales in the second quarter of 2012 should ease near term liquidity pressures, solid execution on the drilling front and some recovery in natural gas prices will be necessary to prevent further deterioration in credit metrics." PVA shifted its drilling strategy in mid 2010 to significantly boost its oil and natural gas liquids (NGLs) production. Although this unconventional resource focus has lifted combined oil and NGL production by roughly 200% over the past 20 months, the company has also heavily outspent cash flows during this period. PVA plans to invest $300 million in 2012 - virtually all of this capital (~90%) in the oily Gonzalez and Lavaca Counties of the Eagle Ford to drill 31 net wells using a two rig program. While this singular focus in a liquids-rich basin should bear fruit over the long term, if the ramp up in production is slower-than-expected or if there are cost overruns, funding challenges will re-emerge in 2013. Shale assets are long lived, repeatable and present low geological risks. However, they are also very capital intensive, have sharp declines following high rates of initial production and require constant drilling over a substantial period of time to reach a steady-state production level. Despite amassing approximately 23,000 net acres in the oil and liquids-rich parts of the Eagle Ford and running an active drilling program since 2010, there are significant risks that PVA may not achieve a sustainable production platform given the company's limited cash flow generation ability from a natural gas weighted production profile (~63% of fourth quarter 2011 production), shrinking asset base from ongoing asset sales, and the inherent geological complexity of the Eagle Ford Shale. The SGL-3 rating captures PVA's adequate liquidity during 2012 supported by asset divestitures. Moody's estimates cash outspending to be roughly $130 million in 2012, which the company plans to cover through selective non-core asset sales. However, any asset dispostion will also reduce the company's borrowing base. Additionally, the borrowing base will likely be reduced (currently $380 million) during the next semi-annual redetermination in April, 2012 because of the decline in natural gas prices, although Moody's does not anticipate any material cuts in the facility commitment amount which is currently at $300 million. The company should be able to gradually rebuild its borrowing base in 2012 and 2013 with successful drilling results at the Eagle Ford. PVA does not have any debt maturities until 2016 and should have sufficient headroom under the financial covenants governing the revolving credit facility throughout 2012. The negative outlook captures the uncertainty around drilling performance, production growth, and funding through 2013. Moody's would revise the outlook to stable when the company sufficiently addresses its liquidity needs for the forward 18 months. A rating upgrade is unlikely in 2012 given PVA's significant projected capital expenditures and negative free cash flow. Further deterioration in liquidity will likely be the catalyst for a rating downgrade. If combined cash and revolver liquidity falls below $100 million, the CFR will be downgraded. The principal methodology used in rating Penn Virginia was the Independent Exploration and Production (E&P) 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. Penn Virginia Corporation, headquartered in Radnor, Pennsylvania, is a publicly traded oil and gas company primarily engaged in the development, exploration, and production of natural gas and oil in Texas, Oklahoma, Mississippi and the Appalachia. PETTUS PROPERTIES: Lawsuit Against VFC Stays in Bankruptcy Court ---------------------------------------------------------------- Bankruptcy Judge Laura T. Beyer denied the motion filed by Pettus Properties, Inc., Sterling Properties of the Carolinas, LLC, and Jerrod H. Pettus, Sr., individually and as the Executor of the estate of Eleanor Phillips Pettus, to remand he lawsuit, Pettus Properties, Inc., Sterling Properties of the Carolinas, LLC, and Jerrod H. Pettus, Sr., individually and as the Executor of The Estate of Eleanor Phillips Pettus, v. VFC Partners 8, LLC, Adv. Proc. No. 11-3213 (Bankr. W.D.N.C.). The Court held that the causes of action asserted in the complaint, as amended, constitute "core" proceedings, under 28 U.S.C. Sec. 157(b), which arise in Pettus Properties' bankruptcy case. VFC had opposed the Remand Motion. On the Petition Date, Branch Banking & Trust Company was the largest secured creditor of Pettus Properties. BB&T filed a Proof of Claim (No. 6) on Oct. 7, 2010 asserting a secured claim for $3,087,397 based upon four notes owed by Pettus to BB&T. On the Petition Date, the other Plaintiffs were also allegedly obligated to BB&T under other promissory notes or guaranty agreements. In December 2010, VFC purchased BB&T's interest as the obligee under the Notes, as well as certain obligations allegedly owed to BB&T by Catawba Station, LLC. Following VFC's acquisition of the obligations owed by Pettus Properties et al. to BB&T, on or about Dec. 30, 2010, VFC and Pettus Properties et al. entered into an agreement whereby VFC agreed to release all liens and claims against Pettus Properties et al. under the Notes, as well as liens and claims against Catawba Station in exchange for a reduced payoff of the obligations under the Notes and obligations owed by Catawba Station in the amount of $6,500,000 plus a 1% fee. The Global Agreement provided for the reduced payoff amount to be paid through a two phase settlement. As part of the first phase of the settlement, on Dec. 30, 2010, Pettus Properties et al. made a payment to VFC of $1,500,000, along with payment of a $15,000 fee. As part of the second phase, VFC and Pettus Properties et al. entered into a Settlement Agreement and Mutual Release of Claims dated Feb. 17, 2011, which provided, among other provisions, for VFC to release all liens and claims against Pettus Properties et al. under the Notes and related documents in exchange for a reduced payoff of the obligations under the Notes in the amount of $5,000,000, plus a fee in the amount of $65,000, which was to be paid pursuant to a payment schedule. The Settlement Agreement provided that the final payment of the reduced payoff amount was due on April 30, 2011, with the option for Pettus Properties et al. to extend the final payment through July 31, 2011, by notice and payment of an extension fee. In February 2011, $500,000 in funds that had been deposited in escrow by Pettus Properties et al. under the first phase of the Global Agreement were paid to VFC and reduced the remaining amount owed under the Settlement Agreement to $4,500,000, plus the applicable fee. Pettus Properties et al. exercised their option to extend the final payment date under the Settlement Agreement through July 31, 2011. By Supplements to the Settlement Agreement, Pettus Properties et al. and VFC agreed to further extend the final payment date through Aug. 31, 2011. Pettus Properties et al. did not make the final settlement payment by Aug. 31, 2011. On Nov. 4, 2011, Pettus Properties et al. sued VFC in Superior Court for Union County, North Carolina, alleging causes of action for Tortious Interference of Contract, Breach of Covenant of Good Faith and Fair Dealing, Unfair and Deceptive Trade Practices, and Preliminary and Permanent Injunctions. The claims in the Complaint are based upon allegations that VFC wrongfully communicated with Commonwealth Commercial Properties, LLC, who had entered into a contract for the sale of certain real property owned by Sterling in South Carolina, and allegedly took other actions which were intended to result in, and which did result in, Commonwealth terminating its contract to purchase the South Carolina property. The proceeds from the sale of this property to Commonwealth were going to be used to fund the final payment under the Settlement Agreement. As a result of Commonwealth's termination of the contract to purchase the South Carolina property, Pettus Properties et al. were not able to make the Aug. 31 final payment. On Nov. 11, 2011, VFC removed the lawsuit to the Bankruptcy Court in accordance with Federal Rule of Bankruptcy Procedure 9027 and 28 U.S.C. Sections 157 and 1452. On Dec. 21, 2011, Pettus Properties et al. filed an Amended Complaint alleging additional causes of action for Breach of Contract, Negligent Misrepresentation, and Antecedent Breach/Waiver/Estoppel against VFC. On Dec. 28, 2011, Pettus Properties et al. filed the Remand Motion. A copy of the Bankruptcy Court's March 20, 2012 Order is available at http://is.gd/Tt9YNTfrom Leagle.com. Charlotte, North Carolina-based Pettus Properties, Inc., filed For Chapter 11 bankruptcy protection (Bankr. W.D.N.C. Case No. 10-31632) on June 8, 2010. The Company estimated its assets and debts at $10 million to $50 million. Richard M. Mitchell, Esq., at Mitchell & Culp, PLLC, serves as the Debtor's bankruptcy counsel. PETTUS PROPERTIES: Mitchell & Culp Withdraws as Counsel ------------------------------------------------------- Richard M. Mitchell, Christopher J. Culp and Mitchell & Culp, PLLC sought and obtained approval from the U.S. Bankruptcy Court to withdraw as attorneys of Pettus Properties, Inc. Discussions about the arrangement of the firm's services to the Debtor have been contentious and have irreparably harmed the relationship. The firm is unable to provide further services to the Debtor under these circumstances. Charlotte, North Carolina-based Pettus Properties, Inc., filed For Chapter 11 bankruptcy protection (Bankr. W.D.N.C. Case No. 10-31632) on June 8, 2010. The Company estimated its assets and debts at $10 million to $50 million. PHILADELPHIA NEWSPAPERS: Trust May Recoup $30K From Inserts East ---------------------------------------------------------------- Bankruptcy Judge Stephen Raslavich ruled on the Motion for Partial Summary Judgment filed by PN Chapter 11 Estate Liquidating Trust in a lawsuit against Inserts East, Incorporated to recover prepetition transfers made by Philadelphia Newspapers, LLC. The Liquidation Trustee seeks summary judgment against Inserts East with respect to these Counts of the Amended Complaint: Count I for the avoidance of preferential transfers pursuant to 11 U.S.C. Sec. 547; Count IV for the recovery of avoided transfers pursuant to 11 U.S.C. Sec. 550; and Count V for the disallowance of claims pursuant to 11 U.S.C. Sec. 502(d) and (j). While the original amount at issue in the Amended Complaint was $118,163, the amount has been decreased to $65,655 as a result of (i) the Trustee's concession that six of the transfers at issue were made within the ordinary course of business between the parties; and (ii) the Trustee's concession that the Defendant provided subsequent new value to the Debtor in the amount of $30,294. In a March 22, 2012 Opinion, Judge Raslavich granted the Trustee summary judgment. Based on the Court's conclusion that the ordinary course of business exception under 11 U.S.C. Sec. 547(c)(2)(A) protects some of the transfers which the Trustee is seeking to avoid, the amount of the judgment is $37,082 rather than the higher amount of $65,655 which the Trustee requested. However, the Trustee is granted pre-judgment interest at the federal judgment interest rate from the date upon which the Trustee filed the Amended Complaint. The Trustee's counsel advised the Court that the Trustee will not be proceeding on Counts II and III of the Amended Complaint. Accordingly, these counts are dismissed with prejudice. The avoidance action is, PN Chapter 11 Estate Liquidating Trust, Through Its Liquidation Trustee, v. Inserts East, Incorporated, Adv. Proc. No. 11-00068 (Bankr. E.D. Pa.). A copy of the Court's opinion is available at http://is.gd/mEF0x9from Leagle.com. About Philadelphia Newspapers Philadelphia Newspapers, LLC -- http://www.philly.com/-- owned and operated numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications were the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its debtor-affiliates filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 09- 11204) on Feb. 22, 2008. Proskauer Rose LLP is the Debtors' bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth Paxson LLP is the local counsel. The Debtors' financial advisor is Jefferies & Company Inc. Philadelphia Newspapers estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. The Debtors proposed a plan of reorganization which would sell substantially all of their assets at an auction. The Philadelphia Media Network, which was formed by the Debtors' secured lenders, acquired the Philadelphia Inquirer, the Daily News and Philly.com for $105 million in cash. The Court approved the sale and confirmed a revised plan at a hearing on Sept. 30. Philadelphia Newspapers previously won confirmation of a plan based on the sale of the business to the same group of lenders for $139 million. The sale failed to close because the buyers weren't able to reach agreement on a new labor contract with the Teamsters union. After another auction on Sept. 23, the lenders again emerged as the winning bidder but with a lower offer. The Plan became effective and the sale closed on Oct. 8, 2010. PHILLIPS RENTAL: Has Access to Bank's Cash Collateral Until May 18 ------------------------------------------------------------------ The Hon. Marcia Phillips Parsons of the U.S. Bankruptcy Court for the Eastern District of Tennessee signed an amended agreed order authorizing Phillips Rental Properties, LLC, to use cash collateral until May 18, 2012. The Court will consider the Debtor's request for continued access to the cash collateral at a May 15, hearing at 9:00 a.m. As reported in the Troubled Company Reporter on Jan. 6, 2012, any variance in the expense figures in the interim budget in excess of 10% will require approval by the Court. The Debtor is authorized to use cash collateral based on a pro rata distribution of the rents and sale proceeds from each property in which the Banks have an interest. As adequate protection, Bank of Tennessee, Carter County Bank, Citizens Bank, Eastman Credit Union, First Tennessee Bank, Regions Bank and TriSummit Bank are granted interim replacement liens in and to all assets of the estate that are within the collateral descriptions of the Banks' loan and security documents. In addition, the Debtor is authorized and agrees to pay the amounts as set forth in the budget to the Banks within the time periods specified therein with the first payment being paid on or bejore Feb. 18, 2011. As reported in the TCR on Dec. 28, 2010, the Debtor, along with Gary and Karla Phillips, is a co-maker and guarantor on notes with: Approximate Amount of Claim --------------------------- a. Bank of Tennessee $514,748 b. Carter County Bank $204,419 c. Citizens Bank $565,947 d. Eastman Credit Union $2,383,489 e. First Tennessee Bank $791,808 f. Regions Bank $3,770,512 g. TriSummit Bank $1,036,460 About Phillips Rental Properties Piney Flats, Tennessee-based Phillips Rental Properties, LLC, is primarily engaged in the business of real estate development for resale and rental or leasing of properties. The Company filed for Chapter 11 bankruptcy protection (Bankr. E.D. Tenn. Case No. 10-53129) on Dec. 7, 2010. Fred M. Leonard, Esq. -- fredmleonard@earthlink.net -- in Bristol, Tennessee, serves as the Debtor's bankruptcy counsel. According to its schedules, the Debtor disclosed $13,499,682 in total assets and $9,650,892 in total liabilities. No unsecured creditors committee has been appointed in the case. QIMONDA RICHMOND: Citibank Fails in Bid to Dismiss Avoidance Suit ----------------------------------------------------------------- Bankruptcy Judge Mary F. Walrath declined Citibank National Association's requested to dismiss the complaint filed by the liquidating trust established in the Chapter 11 cases of Qimonda North America Corp. and Qimonda Richmond, LLC. The Trustee seeks to avoid two allegedly preferential transfers to Citibank: a deposit of more than $33 million into the Debtors' Citibank Account (creating a security interest in favor of Citibank on these funds) and the transfer of those funds from the Debtors' account to Citibank pursuant to a debit. Citibank asserts three reasons why the Trustee's preference claims should be dismissed: (1) the Deposit and Debit fall within the safe harbor provisions of 11 U.S.C. Section 546(e) as a settlement payment or payments made "in connection with a securities contract;" (2) Citibank was a fully-secured creditor and therefore could not receive more pursuant to the Deposit and Debit than it would have received in a liquidation; and (3) the preference claim with respect to the Deposit is facially deficient because it does not specify who deposited the funds into the account. In January 2000, a predecessor of the Debtors borrowed $33,688,000 through the issuance of industrial revenue bonds by the Economic Development Authority of Henrico County, Virginia -- Bonds -- pursuant to an indenture. U.S. Bank serves as the Indenture Trustee for the Bonds. To collateralize the Debtors' obligation to pay the bondholders, Citibank issued a letter of credit in the amount of $34,103,332 in favor of the Indenture Trustee. Under the LC, Citibank assumed the obligation to pay the Indenture Trustee upon a valid draw notice. In exchange for that undertaking, the Debtors agreed to reimburse Citibank if the LC was drawn and gave Citibank certain liens on their assets to secure that obligation. The LC had an initial expiration date of Jan. 27, 2001, but automatically renewed in one-year increments unless Citibank notified the Indenture Trustee of its intent not to renew at least 90 days prior to the expiration date. If Citibank declined renewal, the Indenture Trustee was entitled to draw on the LC. As the financial crisis worsened throughout 2008, Citibank sought additional collateral for the Debtors' obligation to reimburse Citibank under the LC Agreement. On Sept. 19, 2008, the Debtors and Citibank entered into an agreement whereby the Debtors granted Citibank a security interest in additional collateral, certain equipment and funds in the Debtors' cash collateral account held at Citibank. In October 2008, Citibank provided the requisite 90-day notice to the Debtors and the Indenture Trustee that it would not renew the LC on the Jan. 27, 2009, expiration date, triggering the Indenture Trustee's right to draw on the LC. The Debtors agreed to reimburse Citibank in full before or immediately after the Indenture Trustee drew on the LC or to re-pay the Bonds in full prior to a draw on the LC. On Nov. 23, 2008, the Debtors' cash balance in its deposit account at Citibank was zero. On Dec. 2, 2008, the Debtors directed the Indenture Trustee to redeem the Bonds and on Dec. 15, 2008, the Indenture Trustee sent a redemption notice to the bondholders. The Debtors then deposited funds into their Citibank Account for various purposes, including satisfying their obligation to reimburse Citibank under the LC. On Dec. 31, 2008, the Debtors' cash balance in the Citibank account was $47,937,873. On Jan. 2, 2009, Citibank debited the Debtors' account for $33,715,873 and paid that amount to the Indenture Trustee which retired the Bonds. Citibank then released its liens against the Debtors' property. On Feb. 11, 2011, the Trustee filed a Complaint against Citibank seeking to avoid and recover fraudulent and preferential transfers. Citibank filed a Motion to Dismiss the Complaint which the Trustee opposed. The lawsuit is, EPLG I, LLC, as Trustee for the QR Liquidating Trust, v. Citibank, National Association and U.S. Bank, National Association, Adv. Proc. No. 11-50603 (Bankr. D. Del.). A copy of Judge Walrath's March 26, 2012 Memorandum Opinion is available at http://is.gd/zEBTa8from Leagle.com. About Qimonda AG Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- was a global memory supplier with a diversified DRAM product portfolio. The Company generated net sales of EUR1.79 billion in financial year 2008 and had -- prior to its announcement of a repositioning of its business -- roughly 12,200 employees worldwide, of which 1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond, Va. Qimonda AG commenced insolvency proceedings in a local court in Munich, Germany, on Jan. 23, 2009. On June 15, 2009, QAG filed a petition (Bankr. E.D. Va. Case No. 09-14766) for relief under Chapter 15 of the U.S. Bankruptcy Code. Qimonda North America Corp., an indirect and wholly owned subsidiary of QAG, is the North American sales and marketing subsidiary of QAG. QNA is also the parent company of Qimonda Richmond LLC. QNA and QR sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10589) on Feb. 20, 2009. Mark D. Collins, Esq., Michael J. Merchant, Esq., and Lee E. Kaufman, Esq., at Richards Layton & Finger PA, in Wilmington Delaware; and Mark Thompson, Esq., Morris J. Massel, Esq., and Terry Sanders, Esq., at Simpson Thacher & Bartlett LLP, in New York City, represented the Debtors as counsel. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed seven creditors to serve on an official committee of unsecured creditors. Jones Day and Ashby & Geddes represented the Committee. In its bankruptcy petition, Qimonda Richmond, LLC, estimated more than US$1 billion in assets and debts. The information, the Chapter 11 Debtors said, was based on QR's financial records which are maintained on a consolidated basis with QNA. In September 2011, the Chapter 11 Debtors won confirmation of their Chapter 11 liquidation plan which projects that unsecured creditors with claims between US$33 million and US$35 million would have a recovery between 6.1% and 11.1%. No secured claims of significance remained. QUALTEQ INC: Wants to Incur $38MM Exit Loan from Bayside Vmark -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, according to Qualteq, Inc., et al.'s case docket, has adjourned to April 3, 2012, at 9:30 a.m., the hearing to consider the motion to enter into an exit financing commitment letter. The Debtors are asking the Court for authorization to: a) enter into a commitment letter with respect to exit financing to be provided by Bayside Vmark Funding, LLC; b) pay deposit and certain fees in connection therewith; and c) honor all other obligations thereunder. The Debtors explained that obtaining exit financing is a key milestone in their successful emergence from bankruptcy and consummation of the transactions contemplated under the Plan. Under the Commitment Letter and the term sheet, Bayside has agreed to provide the Debtors with exit financing consisting of a term loan facility in the amount of up to $38 million. The Exit Facility will be used to satisfy all obligations of and claims against the Debtors, including without limitation: (i) approximately $10 million of prepetition bank debt; (ii) $10 million of prepetition unsecured claims; (iii) administrative expense claims; (iv) transaction expenses; and (v) potential fraudulent transfer liability. The material terms of the Exit Facility include: -- The Debtors agree to pay or reimburse Bayside for all reasonable and documented expenses. -- The Debtors agree that in the event they, or any of their subsidiaries or their advisors or representatives, receives any offer or proposal, whether oral or written, with respect to the arrangement, sale, solicitation, syndication, or issuance of any credit facilities, equity, or debt security (including any renewals thereof), they will promptly inform (and, to the extent available, provide a copy to) Bayside of the terms thereof. -- The Commitment Letter further requires that and the Debtors agree that the order entered by the Court authorizing the Debtors to enter into the Commitment Letter, to pay the Deposit, and to honor their other obligations under the Commitment Letter will provide that all due diligence by Bayside or at the direction of Bayside in connection with the Senior Credit Facility and the other Transactions and all Financing Documentation (each as defined in the Commitment Letter), whether in draft or final form, shall be and remain the exclusive property of Bayside without the Debtors having any rights to the information until the Closing Date, regardless of whether the costs and expenses incurred in connection with the due diligence and Financing Documentation are reimbursed by the Debtors. -- The Debtors are required to effectuate the Plan by May 31, 2012. About QualTeq Inc. South Plainfield, New Jersey-based QualTeq, Inc., engages in the design, manufacture, and personalization of plastic cards in the United States. The company manufactures magnetic, contact, and dual interface smart cards. Qualteq Inc. and 17 affiliated companies filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12572) on Aug. 14, 2011. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, serve as local counsel to the Debtors. K&L Gates LLP is the general bankruptcy counsel. Eisneramper LLP is the accountants and financial advisors. Scouler & Company is the restructuring advisors. Lowenstein Sandler PC is counsel to the Committee. Avadamma LLC disclosed $38,491,767 in assets and $36,190,943 in liabilities as of the Petition Date. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed four unsecured creditors to serve on the Official Committee of Unsecured Creditors. RYAN INTERNATIONAL: Has Final Order to Use Cash Through July 9 -------------------------------------------------------------- Ryan International Airlines Inc. and its debtor-affiliates obtained a final court order authorizing them to use cash collateral of INTRUST Bank N.A. and grant adequate protection to the lender. The Debtors may use cash collateral through July 9, 2012. As of the petition date, INTRUST Bank is owed $53.2 million under a prepetition credit facility. The debt is secured by liens on the Debtors' assets. On March 8, the Debtors obtained interim authority to use the lender's cash collateral. In seeking to use cash collateral, the Debtors said they do not have insufficient sources of working capital to continue the orderly operation of their businesses and administration of their estates. The Final DIP Order grants the Official Committee of Unsecured Creditors to comment or object to the Final Order. The Court will hold a hearing March 28 on any comment or objection of the Creditors' Committee. INTRUST Bank is represented by Thomas P. Sandquist, Esq., of WilliamsMcCarthy LLP; and Edward J. Nazar, Esq. -- ednazar@redmondnazar.com -- at Redmond & Nazar LLP. Ryan International Airlines, Inc., filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 12-80802) in its hometown in Rockford, Illinois, on March 6, 2012. Ryan International, which filed for bankruptcy along with 10 affiliates, estimated assets and debts of up to $100 million. Ryan and its affiliates -- http://www.flyryan.com/-- provide commercial air charter services, to a diverse mix of customers including U.S., Canadian and British military entities, the Department of Homeland Security, the U.S. Marshall Service, leisure travelers, professional and college sports teams and an ad hoc charter services. Ryan has 460 employees, with the cockpit crew, flight attendants and dispatchers are represented by labor unions. Judge Manuel Barbosa presides over the case. Thomas J. Lester, Esq., at Hinshaw & Culbertson LLP, serves as the Debtors' counsel. Silverman Consulting serves as financial advisor. The petition was signed by Mark A. Robertson, executive vice president. RYAN INTERNATIONAL: Has 5-Member Creditors' Committee ----------------------------------------------------- Patrick S. Layng, the Untied States Trustee, appointed five members to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Ryan International Airlines, Inc. The Committee members are: (1) Air Line Pilots Association International 1625 Massachusetts Avenue, N.W. Washington, D.C. 20036 Captain David "Erik" Sparks (Interim Chair) 8144 Buena Vista Drive Denver, NC 28037 Tel: (704) 622-6341 (2) BBAM Aircraft Management, LLC 50 California Street, 14th Floor San Francisco, CA 94111 Richard Strollo 126 East 56th Street, Suite 2610 New York, NY 10022 Tel: (212) 415-0262 (3) Wright Express Financial Services 7090 Union Park Center, Suite 350 Midvale, UT 84047 Dan Simpson 7090 Union Park Center, Suite 350 Midvale, Utah 84047 Tel: (801) 568-4365 (4) Euro Jet Intercontinental 12 Mount Havelock Douglas, IM12QG Isle of Man, UK Karol Bodnar 12 Mount Havelock Douglas, IM12QG Isle of Man, UK Tel: 420 736648122 (5) Professional Insurance Management Post Office Box 12750 Wichita, KS 67277 Nathan Hoffman 8301 E. 21st St. N., Suite 450 Wichita, KS 67208 Tel: (316) 262-4000 About Ryan International Ryan International Airlines, Inc., filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 12-80802) in its hometown in Rockford, Illinois, on March 6, 2012. Ryan International, which filed for bankruptcy along with 10 affiliates, estimated assets and debts of up to $100 million. Ryan and its affiliates -- http://www.flyryan.com/-- provide commercial air charter services, to a diverse mix of customers including U.S., Canadian and British military entities, the Department of Homeland Security, the U.S. Marshall Service, leisure travelers, professional and college sports teams and an ad hoc charter services. Ryan has 460 employees, with the cockpit crew, flight attendants and dispatchers are represented by labor unions. Judge Manuel Barbosa presides over the case. Thomas J. Lester, Esq., at Hinshaw & Culbertson LLP, serves as the Debtors' counsel. Silverman Consulting serves as financial advisor. The petition was signed by Mark A. Robertson, executive vice president. Prepetition lender INTRUST Bank is represented by Thomas P. Sandquist, Esq., of WilliamsMcCarthy LLP; and Edward J. Nazar, Esq., at Redmond & Nazar LLP. SEITEL INC: S&P Raises Corp. Credit Rating to 'B'; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Houston-based Seitel Inc. to 'B' from 'B-'. The outlook is stable. "At the same time, we raised the issue rating on Seitel's senior unsecured notes to 'B' (same as the corporate credit rating) from 'B-'. The recovery rating on this debt issue remains unchanged at 3', indicating our expectation for meaningful (50% to 70%) recovery in the event of a default," S&P said. "The rating on Seitel reflects our assessment of the company's 'vulnerable' business risk and 'aggressive' financial risk," said Standard & Poor's credit analyst Carin Dehne-Kiley. "The ratings incorporate the continued recovery of the North American oilfield services industry from the trough levels of 2009, along with the company's improved liquidity position and debt leverage measures. Seitel's cash EBITDA was roughly $115 million in each of the past two years as a result of the increased North American rig count, the E&P industry's shift to resource plays, and associated seismic data acquisition activity. This is a significant improvement over the $33 million cash EBITDA posted in 2009. The improved financial performance has enhanced the company's liquidity position such that total liquidity was $105 million as of Dec. 31, 2011, with a cash balance of $75 million and $30 million available on its undrawn credit facility. Debt levels were also reduced by a $125 million equity infusion from Centerbridge Partners (a private investment firm) in mid-2011." "We view Seitel's business risk as 'vulnerable'. Seitel provides seismic data and processing services to oil and gas companies ranging from small, independent producers to major integrated firms. Demand is closely correlated with E&P firms' capital budgets, which are typically influenced by commodity prices and available capital. Although natural gas-directed drilling held up better than anticipated during the first half of 2011 due to hedging, drilling to hold leases and other factors, the U.S. natural gas rig count has begun to drop, and we expect this trend to continue through 2012. Nevertheless, current demand for seismic data is being spurred by oil and liquids-rich drilling (primarily in onshore resource plays), the growing use of seismic data in the development phase of a field, the fragmented ownership of many resource plays, and the return of the majors to onshore North American drilling activity," S&P said. "Seitel's current data acquisition activity is focused on the oil- prone Eagle Ford shale, Montney and Cardium plays in Canada, as well as the gas and liquids-rich Marcellus shale. Although industry conditions look brighter over the next few quarters, they have historically been volatile, and could drop off sharply in the event of lower oil or natural gas liquids prices. In addition, as E&P companies' natural gas hedges and drilling requirements taper off in late 2012, we would expect a continued drop in natural gas drilling, which, if not offset by an increase in oil drilling, could weigh on Seitel's profitability," S&P said. "Not only is Seitel's business highly influenced by commodity prices, the seismic industry is very competitive. While Seitel has the largest onshore seismic library in North America and has a top or second position in most of its key markets, its chief competitors include larger, better capitalized geophysical firms such as WesternGeco (a wholly owned subsidiary of Schlumberger Ltd.) and Compagnie Generale de Geophysique - Veritas, both of which have broader geographical scope and product offerings. It also competes against a range of smaller, regional competitors. However, Seitel outsources all of its seismic acquisition service needs, and as a result, its fixed-cost base is lower than that of seismic acquisition firms such as Global Geophysical Services Inc.," S&P said. "The outlook is stable. Seitel has demonstrated improved financial performance and healthier credit measures over the past two years," Ms. Dehne-Kiley continued. "However, it continues to maintain a high debt to capital ratio--more than 70%--and is subject to volatile industry conditions. A potential drop in the price of crude oil or natural gas liquids could lead to a drop in drilling activity in 2012 that could quickly lead to much lower cash flows at Seitel, leading to higher debt leverage. We would consider lowering the ratings on Seitel if debt to cash EBITDA exceeds 5.0x, or if liquidity becomes constrained. Our internal forecast indicates that even if cash resales declined by 35%, leverage in 2012 would still be below 5.0x. We view an upgrade over the outlook period as unlikely given the company's relatively small scale and vulnerable business risk profile." SK FOODS: Hearing on Ch.11 Trustee's Appeals Reset to April 23 -------------------------------------------------------------- Senior District Judge Lawrence K. Karlton re-scheduled for April 23, 2012 at 10:00 a.m. the hearing on various appeals by Bradley D. Sharp, the Chapter 11 Trustee for SK Foods L.P. Judge Karlton's order indicates that Frederick Scott Salyer has entered a plea of guilty, U.S. v. Salyer, 10 Cr. 61 (March 23, 2012), and that a contested sentencing hearing is currently scheduled for July 10, 2012. "Appellees shall therefore file a letter with this court no later than seven days from the date of this order advising this court whether they still require a stay of the bankruptcy court proceedings, in light of the guilty plea. The letter shall be no longer than two pages in length, and shall only advise the court, and shall not argue, re-argue or supplement their appeal papers. Appellant (the Trustee), may file a responsive letter, no later than seven days from the date of appellees' letter, which shall be subject to the same constraints as were imposed on appellees," the Order said. A copy of Judge Karlton's March 26, 2012 Order is available at http://is.gd/D5STYVfrom Leagle.com. SK Foods LP ran a tomato processing facility. It filed for Chapter 11 bankruptcy protection after being dropped by its lending group. Creditors filed an involuntary Chapter 11 petition against SK Foods LP and affiliate RHM Supply/ Specialty Foods Inc. (Bankr. E.D. Calif. Case No. 09-29161) on May 8, 2009. SK Foods had said it was preparing to file a voluntary Chapter 11 petition when the creditors initiated the involuntary case. The Company later put itself into Chapter 11 and Bradley D. Sharp was appointed as Chapter 11 trustee. The Debtors were authorized on June 26, 2009, to sell the business for $39 million cash to a U.S. arm of Singapore food processor Olam International Ltd. The replacement cost for the assets is $139 million, according to Olam. As reported by the Troubled Company Reporter on Feb. 19, 2010, a federal grand jury returned a seven-count indictment charging Frederick Scott Salyer, former owner and CEO of SK Foods, with violations of the Racketeer Influenced and Corrupt Organizations Act, in connection with his direction of various schemes to defraud SK Foods' corporate customers through bribery and food misbranding and adulteration, and with wire fraud and obstruction of justice. SOLYNDRA LLC: Did Not Mislead Energy Dept., CRO Report Says ----------------------------------------------------------- R. Todd Neilson, the chief restructuring officer appointed in the Chapter 11 case of Solyndra LLC, filed with the U.S. Bankruptcy Court the results of his four-month-long investigation. The 196- page report concludes Solyndra didn't mislead the U.S. Department of Energy about its financial health in connection with its $535 million federal loan guarantee. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Mr. Neilson's report said that Solyndra was never profitable, generated greater losses as sales increased, and completed construction of a plant that "along with other factors led to its demise." He said, according to Bloomberg, Solyndra might have been successful had the price per watt remained at $3.30. He said the drop in price to $1 a watt was probably the single greatest contributor to Solyndra's failure. Revenue was less than half the level projected when Solyndra applied for $535-million government-backed loan. By July 2011, losses totaled almost $1.1 billion while long-term debt exceeded $787 million. Cash had dwindled to just $18 million. Mr. Neilson pointed out that while the government sustained a loss, so did private investors who provided $1.2 billion in capital. About Solyndra LLC Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Solyndra LLC. The Committee has tapped Blank Rome LLP as counsel. In October 2011, the Debtors hired Berkeley Research Group, LLC, and designated R. Todd Neilson as Chief Restructuring Officer. Solyndra is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are Evergreen Solar and start-up Spectrawatt Inc., both of which filed in August, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. When they filed for Chapter 11, the Debtors pursued a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors were unable to identify any potential buyers, an orderly liquidation of the assets for the benefit of their creditors. Solyndra did not receive acceptable offers to buy the business as a going concern. Solyndra began piecemeal auctions of the assets on Feb. 22, 2012. It has auctioned non-core assets and obtained $6.2 million. Solyndra also took in $1.86 million from the sale of miscellaneous equipment. Solyndra LLC retained the exclusive right for filing a Chapter 11 plan until April 3. SPROUTS FARMERS: Moody's Confirms 'B2' CFR; Outlook Stable ---------------------------------------------------------- Moody's Investors Service confirmed Sprouts Farmers Markets, LLC B2 Corporate Family and Probability of Default ratings . Additionally, Moody's confirmed the B2 rating on company's existing $310 million senior secured term loan and $50 million senior secured revolving credit facility. Moody's also assigned a B2 rating to the company's proposed $100 million add-on senior secured term loan. The rating outlook is stable. These rating actions conclude the review for possible downgrade initiated on March 12, 2012 following Sprouts' announcement that it had signed a definitive agreement to acquire Sunflower Farmers Market. "The acquisition will result in the combination of two very similar grocery store concepts with very little geographic overlap and will therefore have relatively low integration costs and minimal disruption in customer base," Moody's Senior Analyst Mickey Chadha stated. "We expect the acquisition to be leverage neutral as the transaction is being financed with a combination of debt and equity." The following ratings are confirmed and point estimates updated: Corporate Family Rating at B2 Probability of Default rating at B2 $310 million Senior Secured Term Loan maturing 2018 at B2 (LGD3 45% from LGD4, 50%) $50 million Senior Secured Revolving Credit Facility maturing 2016 at B2 (LGD3 45% from LGD4, 50%) The following rating is assigned: Proposed new $100 million Senior Secured Add-on Term Loan maturing 2018 at B2 (LGD3 45%) Ratings Rationale Sprouts' B2 Corporate Family Rating reflects its high leverage, relatively small scale, aggressive growth strategy, increased amount of funded debt and financial policy risk. The ratings also reflect the company's attractive market niche and good operating performance in a challenging economic and competitive environment and good liquidity. The stable outlook incorporates Moody's expectation that Sprouts' same store sales growth will remain positive, the integration of Sunflower will not result in deterioration in liquidity or margins and there will be no material change in industry conditions due to the sluggish economic recovery. Therefore Moody's does not expect any meaningful debt reduction or improvement in credit metrics in the next 12 months. The outlook also reflects Moody's expectation that the company will not make any material change in financial policies. Ratings could be upgraded should the company demonstrate improvement in profitability and operating margins while maintaining good liquidity. Quantitatively, an upgrade could be achieved if debt to EBITDA is sustained below 4.5 times and EBITA to interest is maintained in excess of 2.25 times. Ratings could be downgraded if debt to EBITDA is sustained above 5.5 times, or if EBITA to interest is sustained below 1.5 times. Ratings could also be downgraded if the company's same store sales or cash flow deteriorates or if operating performance indicates loss of customer traffic or if there is a shift towards a more aggressive financial policy. Sprouts Farmers Market, LLC is a specialty food retailer headquartered in Phoenix, Arizona. Pro forma for the Sunflower Farmers Market acquisition the company will operate 139 stores in 8 states including Arizona, California, Texas, Colorado, New Mexico, Nevada, Oklahoma and Utah. After the closing of the Sunflower acquisition an affiliate of Apollo Management will own 47.4% of Sprouts with the rest owned by the founding family and private investors (33.2%), Sunflower shareholders (11.4%) and management (8%). The principal methodology used in rating Sprouts was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. STOCKTON, CA: Former Bankruptcy Judge Named Mediator ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Ralph Mabey, a former U.S. bankruptcy judge, was selected as mediator to conduct negotiations between Stockton, California, and its creditors. Judge Mabey is now a lawyer in Salt Lake City. Mediation is required by California law before a municipality is permitted to file for Chapter 9 municipal bankruptcy. STOCKTON, CA: Moody's Cuts Pension Obligation Rating to 'B3' ------------------------------------------------------------ Moody's Investors Service has downgraded to B3 from B1 the rating on the City of Stockton's 2007 pension obligation bonds, and downgraded to Caa1 from B2 the rating on the city's 2006 lease revenue refunding bonds. Concurrently, Moody's has affirmed the city's Ba2 Issuer Rating, the rating on the city's sewer enterprise revenue bonds of Ba1, on its water enterprise revenue bonds of Ba3, and on the two Moody's rated community facilities districts' special tax bonds of Baa2. All the city's long-term ratings remain under review for downgrade. Ratings Rationale Moody's rating action on the city's general fund obligations (its pension obligation and lease revenue bonds) reflects the growing likelihood of default and the potential for less than 100% recovery for bondholders as the city continues down the path of mediation and potential bankruptcy. The city has taken the steps needed to begin the mediation process, although a mediator has not yet been selected and therefore the 60 to 90 day mediation process has not yet officially begun. During the 60 to 90 day mediation process, the city's general fund creditors will most likely be faced with an offer to accept less than full amounts due in exchange for avoiding the expense and uncertainty of a bankruptcy proceeding. Moody's would consider such an offer, if accepted, to be a "forced exchange" and the equivalent to a debt service payment default. The B3 rating on the pension obigation bonds reflects a likely recovery, in the event of a default, of 95% to 97%, while the Caa1 rating on the lease supported obligations reflects a lower potential recovery, though still above 90%. The affirmation of the city's Ba2 Issuer Rating primarily reflects the fact that this rating represents the equivalent of the city's voter-approved, unlimited tax general obligation bonds, were it to have such debt outstanding. The security for a California municipality's unlimited tax general obligation debt is extremely strong. This strength is based on the constitutional requirement that property taxes levied for GO bond repayment may not be used for any other purpose than the related debt repayment. GO bond investors also benefit from a lock-box structure which requires that the county levy and collect the taxes. Such pledges have been demonstrated to receive favorable treatment in bankruptcy proceedings in California, largely owing to the "special revenue" nature of the California local government GO bond pledge. The Issuer Rating also reflects the risk that the favorable treatment received to date is not based on well established legal precedent, suggesting that this treatment may not be consistently applied. The city's Issuer Rating therefore also reflects the risk associated with the city's potential bankruptcy filing once the mediation process is completed. The Baa2 ratings on the special tax bonds, B1 ratings on the sewer revenue bonds, and Ba3 ratings on the water revenue bonds primarily reflect the expectation that these obligations woulod be protected in the event of city's bankruptcy, owing their being obligations secured by sound special revenue streams. Like the Issuer Rating, however, these ratings reflect the uncertainties that these obligations would face were the city to file for bankruptcy after the mediation process. The Ba3 rating on the water revenue bond additionally reflects the enterprise's likelihood of defaulting on a demand for immediate reimbursement (if made) by the letter of credit bank supporting $55 million of the enterprise's outstanding debt. As we've previously noted, tby itself the city's adoption of the resolution to enter into mediation likely represents the city's stated inability to pay its obligations when due, which is a defined event of default under the LOC reimbursement agreement. The reimbursement agreement permits the bank, at its option, to make a full and immediate reimbursement demand. Such a demand, if it were exercised, would put severe and likely unmanageable liquidity pressure on the enterprise and imperil payments on the enterprise's other, fixed rate parity obligations. By adopting the resolution to proceed with the mediation, the city clearly indicated a significantly diminished willingness to make debt service payments beyond the end of the current fiscal year. The city indicated that all of its near-term debt obligations would be paid from other revenue sources, cash funded debt service reserves, or bond insurers, thereby avoiding a debt service payment default. However in its material event notice leading up to adoption of the resolution, the city explicitly stated that "no assurance can be given" that these obligations will be paid in future fiscal years. The ratings on the general fund obligations, as well as those discussed above, also reflect the city's indication that it is in the process of restating prior year audited financial results. While this process is in its preliminary stages and only estimates have been released, the potential for restatement reduces the credibility of the city's financial reporting to date for all of its obligations, not just those subject to the mediation process. Future rating reviews will reflect the likely continued sufficiency and accuracy of the city's reported financial information. All of the city's ratings remain on review for further downgrade. Future rating action will be driven primarily by the results of the mediation process and whether or not the city ultimately files for bankruptcy protection. WHAT COULD CHANGE THE RATINGS - UP -- Significantly improved economic performance leading to a resumption of revenue growth -- Restored structural balance in the city's budget, whether from revenue growth or expenditure reduction -- Successful avoidance of a bankruptcy filing without a debt service payment default or forced exchange WHAT COULD CHANGE THE RATINGS - DOWN -- A bankruptcy filing by the city -- Significant, negative restatement of the city's financial results indicating a materially weaker balance sheet than had been reported previously -- The city's default on any capital lease obligation or other long-term debt -- Indications that expected recovery in the event of default has deteriorated beyond currently anticipated levels -- The water enterprise's variable rate revenue bonds become immediately due The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. SUNSHINE HEART: Ernst & Young Raises Going Concern Doubt -------------------------------------------------------- Sunshine Heart, Inc., filed on March 23, 2012, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011. Ernst & Young LLP, in Minneapolis, Minnesota, expressed substantial doubt about Sunshine Heart's ability to continue as a going concern. The independent auditors noted that of the Company's recurring losses from operations and projected future capital requirements. The Company reported a net loss of US$16.2 million on no sales for 2011, compared with a net loss of US$7.6 million on US$407,000 of sales for 2010. The Company's balance sheet at Dec. 31, 2011, showed US$7.4 million in total assets, US$2.8 million in total liabilities, and stockholders' equity of US$4.6 million. A copy of the Form 10-K is available for free at: http://is.gd/nF3mby Valley View Road, Minn.-based Sunshine Heart, Inc., is an early- stage medical device company focused on developing, manufacturing and commercializing our C-Pulse Heart Assist System for treatment of Class III and ambulatory Class IV heart failure. TAYLOR MORRISON: Moody's Assigns B1 CFR, Rates Unsec. Notes B2 -------------------------------------------------------------- Moody's Investors Service assigned B1 corporate family rating and probability of default ratings to Taylor Morrison Communities, Inc. (a U.S. issuer) and to its Canadian co-issuer, Monarch Communities Inc. (collectively, "Taylor Morrison"). At the same time, Moody's assigned a B2 rating to Taylor Morrison's proposed $500 million senior unsecured note offering due 2020. The rating outlook is stable. Ratings Rationale TMM Holdings Limited Partnership was formed in July 2011 by the private equity companies, TPG Capital, Oaktree Capital Management, and JH Investments, when they acquired the North American operations of Taylor Wimpey plc, a UK homebuilder. The North American business of Taylor Wimpey plc included Taylor Morrison Communities in the U.S. and Monarch Communities in Canada. The $500 million of senior unsecured notes are being issued to retire the remaining $350 million balance on the $500 million unsecured loan provided by the sponsors in connection with the acquisition in July 2011 and to add to Taylor Morrison's liquidity. $150 million of the loan balance is being contributed by the sponsors to TMM Holdings Limited Partnership in exchange for additional equity. This is the first time Moody's is rating Taylor Morrison. The following rating actions were taken: Corporate family rating assigned a B1; Probability of default rating assigned a B1; Proposed $500 million senior unsecured notes due 2020 assigned a B2, (LGD5, 73%); The rating outlook is stable. The unsecured notes are notched below the corporate family rating because of the sizable proportion of secured debt and debt-like obligations in the capital structure. The notes will be guaranteed on a senior unsecured basis by Taylor Morrison Holdings, Inc. and by TMM Holdings Limited Partnership, which are direct and indirect parents of Taylor Morrison Communities, Inc. and of Monarch Communities Inc. In addition, the notes will be guaranteed by certain existing and future U.S. operating subsidiaries of Taylor Morrison Communities, Inc. The operating subsidiaries of Monarch Communities Inc. are organized under Canadian law and will not guarantee the notes. The B1 corporate family rating reflects the company's track record of profitability and solid gross margin performance, moderate adjusted homebuilding debt leverage, geographic diversity including a strong presence in Canada, and a land position that appears to be realistically valued. At the same time, the rating incorporates the company's limited time as an independent, stand- alone entity, the negative cash flow from operations that Moody's is projecting for at least the next two years, the lumpiness in the company's projected revenues and earnings from its high-rise exposure in Toronto, the long land position, and the still- uncertain U.S. economy together with a housing market attempting to gain traction. The stable rating outlook reflects Moody's expectation that the company will continue being profitable on a net income basis, generate solid gross margins, and gradually reduce its adjusted homebuilding debt to capitalization as the U.S. market slowly begins to improve while the Canadian market remains healthy. The outlook also assumes that the company will maintain adequate liquidity and prudently manage its land spend. The company's liquidity is supported by its adequate pro forma unrestricted cash balance of approximately $414 million at December 31, 2011, the availability under its $75 million secured revolving credit facility, and an extended debt maturity schedule. The expected negative cash flow generation as the company pursues land investments and the need to maintain compliance with financial covenants in the credit agreement, however, constrain the liquidity. The ratings could be considered for an upgrade if the company improves its scale and geographic diversity, expands its profitability, builds tangible net worth in excess of $1 billion, reduces adjusted homebuilding debt to capitalization to below 50% on a sustained basis, and maintains good liquidity. The ratings could be pressured if the company becomes unprofitable, its adjusted homebuilding debt to capitalization rises above 60%, homebuilding interest coverage remains below 2.0x for an extended period of time, or if liquidity deteriorates. The principal methodology used in rating Taylor Morrison was the Global Homebuilding Industry Methodology published in March 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. Taylor Morrison is headquartered in Scottsdale, Arizona and builds homes and develops master planned communities in the U.S. and engages in high-rise and low-rise residential development in Canada. In the fiscal year ended December 31, 2011, the company generated approximately $1.36 billion in homebuilding revenues and delivered 3,920 homes. TERRESTAR CORP: Wants Control of Case Through October 2012 ---------------------------------------------------------- Terrestar Corporation and its debtor-affiliates are seeking yet another extension of the periods within which they have the exclusive right to file and solicit acceptances of a plan of reorganization. The Motion is the TSC Debtors' fifth request for extension and was lodged March 26, four days after Judge Sean H. Lane graned the TSC Debtors an extension of their Exclusive Plan Filing Period through and including May 14, 2012, and the Exclusive Solicitation Period through and including July 13, 2012. The TSC Debtors now seek an 87-day extension of the Exclusivity Periods. hey want the Exclusive Filing Period stretched to Aug. 9 and the Exclusive Solicitation Period to Oct. 8, 2012. The TSC Debtors said their request is supported by Highland Capital Management, L.P. and certain of its affiliated and managed funds; Solus Alternative Asset Management LP; and West Face Long Term Opportunities Global Master L.P. The TSC Debtors filed a Second Amended Joint Chapter 11 Plan of TerreStar Corporation, Motient Communications Inc., Motient Holdings Inc., Motient License Inc., Motient Services Inc., Motient Ventures Holding Inc., MVH Holdings Inc., TerreStar Holdings Inc. and TerreStar New York Inc. and an accompanying Disclosure Statement explaining the Plan in January. The Court approved the Disclosure Statement in an order dated Jan. 17. On Feb. 8, the TSC Debtors filed plan supplement documents. A hearing on confirmation of the Plan is currently scheduled for April 11. The TSC Debtors are soliciting the Plan for vote; however, solicitation may not be complete before the expiration of the Exclusive Periods. The voting deadline with respect to the Plan was Feb. 24, 2012. However, the voting deadline has been extended for certain of the TSC Debtors' key stakeholders and creditors to facilitate further negotiations concerning the Plan. The TSC Debtors also said they are involved in complex and delicate negotiations with certain of their significant stakeholders and creditors. The TSC Debtors said they need to maintain flexibility to continue these negotiations and incorporate any potential resolution into their Plan and Disclosure Statement should negotiations extend beyond May 14. As a result, the TSC Debtors seek an extension of the Exclusivity Periods. The TSC Debtors noted that they have been paying their bills as they come due. Further, in the days since filing their chapter 11 cases, the TSC Debtors have made significant progress in negotiating with their preferred stockholders, culminating in the filing of the Plan and approval of the Disclosure Statement. In addition, the TSC Debtors' debtor-in-possession financing facility was satisfied in full on Jan. 3, 2012. NexBank, SSB, serves as agent for the lenders under the TSC Debtors' bridge loan agreement and as agent for the TSC Debtors' post-petition DIP financing. Weil, Gotshal & Manges LLP serves as counsel to Harbinger Capital Partners LLC and certain of its managed and affiliated funds. Wachtell, Lipton, Rosen & Katz serves as counsel to Highland Capital Management, L.P. and certain of its managed and affiliated funds. Quinn Emanuel Urquhart & Sullivan, LLP argues for Solus Alternative Asset Management LP. Quinn Emanuel also serves as counsel to the agent for the TSC Debtors' post-petition DIP financing. The March 22 Order provides that, if the TSC Debtors withdraw the Plan, the Preferred Stockholders reserve the right to seek to terminate the Exclusive Periods. A hearing on the TSC Debtors' request is set for April 12, 2012, at 10:00 a.m. (ET). About TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which filed on Oct. 19, 2010. The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC's case is jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11-10612 (SHL). The seven Debtor entities who sought joint administration with TSC are TerreStar New York Inc., Motient Communications Inc., Motient Holdings Inc., Motient License Inc., Motient Services Inc., Motient Ventures Holdings Inc., and MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks -- TSN -- the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the Committee's financial advisor. TerreStar Networks sold its business to Dish Network Corp. for $1.38 billion. It canceled a June 2011 auction because there were no competing bids submitted by the deadline. TerreStar Networks previously filed a reorganization plan that called for secured noteholders to swap more than $850 million in debt for nearly all the equity in reorganized TerreStar. Junior creditors, however, would see little recovery under that plan while existing equity holders would be wiped out. TerreStar Networks scrapped that plan in 2011 in favor of the auction. In November 2011, TerreStar Networks filed a liquidating Chapter 11 plan after striking a settlement with creditors. The creditors' committee initiated lawsuits in July to enhance the recovery by unsecured creditors. Judge Lane approved on Feb. 14, 2012, TerreStar Networks Inc.'s Chapter 11 plan to divvy up the proceeds from the sale to Dish Network. TERRESTAR CORP: Court Rejects Bid to Stay Plan Voting ----------------------------------------------------- Bankruptcy Judge Sean H. Lane denied the request of shareholder Aldo Ismael Perez for a stay of the order approving (i) the disclosure statement the Joint Chapter 11 Plan of Terrester Corporation and its debtor-affiliates and (ii) establishing solicitation and voting procedures with respect to the Joint Chapter 11 Plan, pending his pro se appeal from the Bankruptcy Court's order denying his request to appoint an examiner case. Judge Lane said the Debtors would sustain a substantial injury if a stay were granted. The Disclosure Statement Order was entered Jan. 17, 2012. The request of Mr. Perez was not received by the Bankruptcy Court until a month later, well into the voting process contemplated by the disclosure statement. The Debtors have expended substantial time and money in the solicitation process on their plan, all of which would be wasted if the case were frozen at this juncture. The Bankruptcy Court also does not believe Mr. Perez has a substantial likelihood of success on the merits of his appeal. A copy of Judge Lane's March 26, 2012 Memorandum Opinion and Order is available at http://is.gd/0TxRQPfrom Leagle.com. About TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which filed on Oct. 19, 2010. The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC's case is jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11-10612 (SHL). The seven Debtor entities who sought joint administration with TSC are TerreStar New York Inc., Motient Communications Inc., Motient Holdings Inc., Motient License Inc., Motient Services Inc., Motient Ventures Holdings Inc., and MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks -- TSN -- the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the Committee's financial advisor. TerreStar Networks sold its business to Dish Network Corp. for $1.38 billion. It canceled a June 2011 auction because there were no competing bids submitted by the deadline. TerreStar Networks previously filed a reorganization plan that called for secured noteholders to swap more than $850 million in debt for nearly all the equity in reorganized TerreStar. Junior creditors, however, would see little recovery under that plan while existing equity holders would be wiped out. TerreStar Networks scrapped that plan in 2011 in favor of the auction. In November 2011, TerreStar Networks filed a liquidating Chapter 11 plan after striking a settlement with creditors. The creditors' committee initiated lawsuits in July to enhance the recovery by unsecured creditors. Judge Lane approved on Feb. 14, 2012, TerreStar Networks Inc.'s Chapter 11 plan to divvy up the proceeds from the sale to Dish Network. THORNBURG MORTGAGE: Orrick Retention Order Vacated -------------------------------------------------- Bankruptcy Judge Duncan W. Keir signed off on a Stipulation and Consent Order vacating the order approving the retention of Orrick, Herrington & Sutcliffe, LLP, as special counsel to TMST, Inc., f/k/a Thornburg Mortgage, Inc. The Bankruptcy Court authorized Thornburg Mortgage to employ Orrick as special counsel pursuant to a May 22, 2009 order. On Feb. 13, 2012, Joel I. Sher, the Chapter 11 Trustee for Thornburg Mortgage, sought approval of a settlement agreement between Orrick, the Chapter 11 Trustee, the US Trustee and other parties in the Lawsuits styled Joel I. Sher, Chapter 11 Trustee v. SAF Financial, Inc., et al., Case No. 10-1895 and W. Clarkson McDow, Jr., United States Trustee v. Orrick Herrington & Sutcliffe, LLP, Case No. 10-2619, pending in the United States District Court for the District of Maryland, the cases having been consolidated into Case No. 10-1895. Pursuant to the terms of the Settlement Agreement, the Chapter 11 Trustee, US Trustee and Orrick have agreed that the Retention Order is to be vacated. A copy of the March 27, 2012 Stipulation is available at http://is.gd/220NN2from Leagle.com. About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- was a single- family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originated, acquired, and retained investments in adjustable and variable rate mortgage assets. Its ARM assets comprised of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage and its four affiliates filed for Chapter 11 bankruptcy (Bankr. D. Md. Lead Case No. 09-17787) on May 1, 2009. Thornburg changed its name to TMST, Inc. Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, served as counsel to Thornburg Mortgage. Orrick, Herrington & Sutcliffe LLP served as special counsel. Jim Murray, and David Hilty, at Houlihan Lokey Howard & Zukin Capital, Inc., served as investment banker and financial advisor. Protiviti Inc. served as financial advisory services. KPMG LLP served as the tax consultant. Epiq Systems, Inc., serves claims and noticing agent. Thornburg disclosed total assets of $24.4 billion and total debts of $24.7 billion, as of Jan. 31, 2009. On Oct. 28, 2009, the Court approved the appointment of Joel I. Sher as the Chapter 11 Trustee for the Company, TMST Acquisition Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging Strategies, Inc. He is represented by his firm, Shapiro Sher Guinot & Sandler. TITAN PHARMACEUTICALS: OUM & Co. Raises Going Concern Doubt ----------------------------------------------------------- Titan Pharmaceuticals, Inc., filed on March 15, 2012, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011. OUM & Co. LLP, in San Francisco, California, expressed substantial doubt about Titan Pharmaceuticals' ability to continue as a going concern. The independent auditors noted that the Company's cash resources will not be sufficient to sustain its operations through 2012 without additional financing, and that the Company also has suffered recurring operating losses and negative cash flows from operations. The Company reported a net loss of $15.2 million on $4.1 million of revenues for 2011, compared with a net loss of $5.6 million on $10.1 million of revenues for 2010. The Company's balance sheet at Dec. 31, 2011, showed $10.2 million in total assets, $30.3 million in total liabilities, and a stockholders' deficit of $20.1 million. A copy of the Form 10-K is available for free at: http://is.gd/Fol93B South San Francisco, California-based Titan Pharmaceuticals, Inc., is a biopharmaceutical company developing proprietary therapeutics primarily for the treatment of central nervous system (?CNS?) disorders. TRANSATLANTIC PETROLEUM: KPMG LLP Raises Going Concern Doubt ------------------------------------------------------------ TransAtlantic Petroleum Ltd. filed its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011. KPMG LLP, in Calgary, Canada, expressed substantial doubt about TransAtlantic Petroleum's ability to continue as a going concern, The independent auditors noted that the Company has suffered recurring losses from operations and has a working capital deficiency. The Company reported a net loss of US$115.8 million on US$126.3 million of revenues for 2011, compared with a net loss of US$69.7 million on US$70.9 million of revenues for 2010. The Company's balance sheet at Dec. 31, 2011, showed US$444.0 million in total assets, $267.8 million in total liabilities, and stockholders' equity of US$176.2 million. A complete text of the Form 10-K is available for free at: http://is.gd/ViJzFd Istanbul, Turkey-based TransAtlantic Petroleum Ltd. (TSX: TNP)(NYSE-AMEX: TAT) -- http://www.transatlanticpetroleum.com/-- is an international oil and natural gas company engaged in acquisition, exploration, development and production. The Company holds interests in developed and undeveloped oil and natural gas properties in Turkey, Bulgaria and Romania. As of March 1, 2012, it held approximately 5.4 million net onshore acres. As of March 1, 2012, approximately 40% of its outstanding common shares were beneficially owned by N. Malone Mitchell, 3rd, the chairman of the its board of directors and chief executive officer. TRIDENT MICROSYSTEMS: Sigma Designs-Led Auction on April 2 ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Trident Microsystems Inc. will hold an auction on April 2 to learn if anyone will pay more than the approximately $21 million that Sigma Designs Inc. is offering for the television business. Under procedures approved on March 23 by the bankruptcy court in Delaware, competing bids are due March 30. A hearing for approval of the sale will take place April 4. Patents aren't among the assets being sold. The price is subject to a working capital adjustment. About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set-top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $309,992,980 in assets and $39,607,591 in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. The Official Committee of Unsecured Creditors of Trident Microsystems, Inc., et al., tapped Pachulski Stang Ziehl & Jones LLP as its counsel, and Imperial Capital, LLC, as its investment banker and financial advisor. The Official Committee of Equity Security Holders tapped Dewey & LeBoeuf LLP serves as attorneys, Bayard, P.A., as co-counsel, and Alvarez & Marsal North America, LLC, as financial advisors. The Debtors sold to Entropic Communications Inc. their set-top box business for $65 million. Entropic came out on top after a 15- hour court-sanctioned auction. The opening bid at auction had been $55 million. UNITED GILSONITE: Hires EisnerAmper as Financial Advisor -------------------------------------------------------- United Gilsonite Laboratories seeks permission from the U.S. Bankruptcy Court to employ EisnerAmper LLP as financial advisor. The firm will provide: -- analysis and advice regarding financial and bankruptcy and related issues that may arise in connection with the development and negotiation of a plan of reorganization and otherwise during the course of the Chapter 11 Case, -- advice in connection with and in preparation for meetings with the Official Committee, the Future Claimants Representative and other constituencies and their respective professionals; -- expert testimony on financial matters, if requested; and -- such other services as management or counsel to the Debtor may request. Anthony R. Calascibetta, partner-in-charge at EisnerAmper LLP, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Mr. Calascibetta's hourly rate $450 per hour. About United Gilsonite Scranton, Pennsylvania-based United Gilsonite Laboratories, a Pennsylvania Corporation, is a small family-owned corporation engaged in the manufacturing of wood and masonry finishing products and paint sundries. It filed for Chapter 11 bankruptcy protection (Bankr. M.D. Pa. Case No. 11-02032) on March 23, 2011. Judge Robert N. Opel, II, oversees the case. Mark B. Conlan, Esq., at Gibbons P.C., serves as the Debtor's bankruptcy counsel. Joseph M. Alu & Associates P.C. serves as accountants. K&L Gates LLP serves as special insurance counsel. Garden City Group is the claims and notice agent. The Company disclosed $21,084,962 in assets and $3,008,688 in liabilities as of the Chapter 11 filing. Roberta A. DeAngelis, United States Trustee for Region 2, appointed five creditors to serve on an Official Committee of Unsecured Creditors. Montgomery, McCracken, Walker & Rhoads, LLP, represents the Committee. The Committee retained Legal Analysis Systems, Inc., as its consultant on the valuation of asbestos liabilities. James L. Patton, Jr., has been appointed as legal representative for future holders of personal injury or wrongful death claims based on alleged exposure to asbestos and asbestos-containing products. He retained Young Conaway Stargatt & Taylor LLP as his attorneys. Charter Oak Financial Consultants LLC serves as financial advisor to the Unsecured Creditors Committee and the Future Claimants Representative. UNITED RETAIL: No Competing Bids, Auction Canceled -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that United Retail Group Inc. canceled the auction that would have been held last week when there were no bids to compete with the offer from an affiliate of Versa Capital Management to buy the company with debt acquired from the owner Redcats USA Inc. or affiliates. The hearing to approve the sale will take place April 3. According to the report, to buy the business, Versa will pay the loan financing the Chapter 11 case as much as $15 million, provide $2 million to wind-up the bankruptcy, carve out $500,000 for unsecured creditors, and provide $11.1 million to cover expenses of the Chapter 11 case along with priority claims that must be paid in full. In addition Versa will pay as much as $2.2 million owing to supplier Redcats Asia Ltd., an affiliate of the owner. Finally, Versa will assume as much as $4.7 million in other debt. About United Retail Group United Retail Group Inc., owner of the Avenue brand of women's fashion apparel and a subsidiary of Redcats USA, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Feb. 1, 2012, as it seeks to sell the business to Versa Capital Management for $83.5 million, subject to higher and better offers. The Company's legal advisor is Kirkland & Ellis LLP; AlixPartners LLP serves as restructuring advisor and Peter J. Solomon Company serves as financial advisor and investment banker; and Donlin Recano & Company Inc. is the notice, claims and administrative agent. Versa Capital's legal advisor is Sullivan & Cromwell LLP. Avenue has 433 stores and an e-commerce site -- http://www.avenue.com/. Avenue employs roughly 4,422 employees, roughly 294 of which are located at Avenue's corporate headquarters in Rochelle Park, New Jersey or at the Troy Distribution Facility. The Company disclosed $117.2 million in assets and $67.3 million in liabilities as of the Chapter 11 filing. Cooley LLP serves as counsel for the Official Committee of Unsecured Creditors. US CAPITAL: Files Schedules of Assets and Liabilities ----------------------------------------------------- US Capital Holdings LLC filed with the Bankruptcy Court for the Southern District of Florida its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $11,496 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $21,419 E. Creditors Holding Unsecured Priority Claims $91,233 F. Creditors Holding Unsecured Non-priority Claims $22,664,775 ----------- ----------- TOTAL $11,496 $22,777,428 About US Capital Holdings US Capital Holdings, LLC, and an affiliate, US Capital/Fashion Mall, LLC, filed Chapter 11 petitions (Bankr. S.D. Fla. Case Nos. 12-14517 and 12-14519) in Forth Lauderdale, Florida, on Feb. 24, 2012. US Capital/Fashion Mall is the owner of the former "Fashion Mall at Plantation", now vacant, located at 321 N. University Drive, in Plantation, Florida. US Capital Holdings is the 100% owner of US Capital/Fashion Mall. The mall -- http://www.321north.com-- is presently dormant, in part, as a result of a redevelopment plan for the mall of a project called 321 North, which is intended to be a major, retail, office and residential project. The mall suffered extensive hurricane damage from Hurricane Wilma, and has yet to be paid on its insurance claim. Judge John K. Olson presides over the case. UTE MESA: District Court Affirms Lis Pendens Ruling --------------------------------------------------- Chief District Judge Wiley Y. Daniel affirmed the Bankruptcy Court's June 14, 2011 Order granting First Citizen Bank & Trust Company's motion to dismiss a lawsuit commenced by Ute Mesa Lot 1 LLC. In the Order, the Bankruptcy Court concluded that a lis pendens does not create a new interest and only serves the limited purpose of notice. Thus, the filing of a lis pendens is not a transfer disposing of or parting with an interest in the property within the meaning of 11 U.S.C. Sec. 547. The effect of the Bankruptcy Order dismissed Ute Mesa's complaint seeking avoidance of a lis pendens that was recorded on May 21, 2010, during the 90 days prior to the filing of Ute Mesa's bankruptcy petition. Ute Mesa appealed from the Bankruptcy Court order, asserting that the Order errs in determining that a lis pendens is not a transfer because it fails to consider the effect of the recordation. Moreover, Ute Mesa argues that there is "substantial federal statutory language and case law that treats a recorded lis pendens as an avoidable transfer in the context of the Bankruptcy Code." "I am not persuaded by Ute Mesa's arguments," said Judge Daniel in denying the appeal. Prior to the filing of the bankruptcy action, United Western National Bank commenced a civil action in the state district court of Pitkin County, Colorado, against several defendants including Ute Mesa. The State Court Action involved a loan from UWB to Ute Mesa. On May 21, 2010, UWB recorded a lis pendens in the real property records of Pitkin County, Colorado, with respect to Ute Mesa's Property. On Jan. 21, 2011, UWB was closed and the FDIC was appointed as receiver. During this process, the FDIC acquired from UWB, among other assets, the Loan. Subsequently, First-Citizens acquired the FDIC's interests in the Loan and UWB's claims asserted in the State Court Action. On April 1, 2011, Ute Mesa commenced the adversary proceeding alleging that the filing and recordation of the Lis Pendens constituted an avoidable transfer. Ute Mesa asked the Bankruptcy Court for a judgment avoiding the Lis Pendens. On July 27, 2011, First-Citizens moved to dismiss Ute Mesa's Complaint, arguing that recording a lis pendens was not a transfer that could be avoided under Sec. 547. Instead, First-Citizens asserted that a lis pendens merely provides notice to prospective purchasers and is not a transfer of an interest in property or a lien. In its Order granting First-Citizens Motion to Dismiss, the Bankruptcy Court concluded that under Colorado law, "a lis pendens merely provides that a subsequent purchaser will be bound by the outcome of the litigation, and does not create a new interest." Thus, "the filing of a lis pendens is not a transfer disposing of or parting with an interest in the property within the meaning of Sec. 101(54)(D)(ii). Consequently, a lis pendens is not a transfer within the meaning of Sec. 547." The case is Ute Mesa Lot 1, LLC, Plaintiff/Appellant, v. First Citizens Bank & Trust Company and United Western Bank, Defendants/Appellees, Civil Action No. 11-cv-01786 (D. Colo.). A copy of the District Court's March 23, 2012 Order is available at http://is.gd/ISFmNWfrom Leagle.com. About Ute Mesa Lot 1 Denver, Colorado-based Ute Mesa Lot 1, LLC, filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 10-30620) on Aug. 13, 2010. Duncan E. Barber, Esq., and Steven T. Mulligan, Esq., at Bieging Shapiro & Burrus LLP, in Denver, assist the Debtor in its restructuring effort. Ute Mesa owns real property located in Pitkin County, Colorado. The Debtor disclosed $10,017,982 in assets and $11,633,024 in liabilities. VANGUARD HEALTH: Moody's Rates $350MM Sr. Unsecured Notes 'B3' -------------------------------------------------------------- Moody's Investors Service assigned a B3 (LGD 4, 68%) rating to the $350 million of senior unsecured notes due 2019 to be issued by Vanguard Health Holding Company II. Vanguard Health Holding Company II is a wholly owned subsidiary of Vanguard Health Systems, Inc. (collectively Vanguard Health). Moody's understands that the proceeds of the offering, which is an add-on to the company's 7.75% senior notes issued in January 2011, will be used for general corporate purposes, including capital spending and acquisitions. Moody's existing ratings of the company, including the B2 Corporate Family and Probability of Default Ratings, are unchanged. However, Moody's estimates that the increase in funded debt will increase pro forma gross leverage by almost half a turn to approximately 5.6 times and detrimentally impact interest coverage and cash flow. Therefore, if the company were to subsequently utilize the additional liquidity provided by this issuance for shareholder initiatives instead of reinvestment in the business, Moody's could revaluate its ratings or outlook. The rating outlook remains stable. Ratings assigned: Vanguard Health Holding Company II: $350 million senior unsecured notes due 2019, B3 (LGD 4, 68%) Ratings unchanged: Vanguard Health Holding Company II: Senior secured revolving credit facility expiring 2015, Ba2 (LGD 2, 12%) Senior secured term loan due 2016, Ba2 (LGD 2, 12%) 7.75% senior notes due 2019, B3 (LGD 4, 68%) Vanguard Health Systems: Senior discount notes due 2016, Caa1 (LGD 6, 97%) Corporate Family Rating, B2 Probability of Default Rating, B2 Speculative Grade Liquidity Rating, SGL-2 Ratings Rationale Vanguard Health's B2 Corporate Family Rating reflects Moody's expectation that leverage will remain very high. Capital commitments will also limit the ability to reduce the amount of debt outstanding through free cash flow. However, leverage metrics should improve modestly through growth in acquired businesses. Moody's also expects cash flow to benefit from improvements in the acquired businesses and aid in the company's ability to maintain a good liquidity profile. Finally, the company has a significant geographic concentration in the Detroit market in terms of total revenue contribution. If Vanguard can implement its capital spending plan and fund the committed capital spending at Detroit Medical Center while continuing to improve credit metrics, Moody's could upgrade the rating. More specifically, if the company can sustainably reduce leverage to below 5.0 times and maintain retained cash flow to debt above 5%, Moody's could upgrade the rating. If operating results deteriorate, either through market specific pressures, industry challenges or integration issues, Moody's could downgrade the ratings. For example, if Moody's comes to expect that the company will not be able to maintain leverage below 5.5 times, the rating could be downgraded. The principal methodology used in rating Vanguard Health was the Global Healthcare Service Provider 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. Vanguard Health, through its subsidiaries and affiliates, owns and operates hospitals and related healthcare businesses in urban and suburban areas. As of December 31, 2011, the company operated 28 acute and specialty hospitals in five states. The company also owns managed care health plans in Phoenix, Arizona, Harlingen, Texas and Chicago, Illinois and manages two surgery centers in Orange County, California. Vanguard Health recognized revenue, before the provision for bad debt, of approximately $6.2 billion for the twelve months ended December 31, 2011. VANGUARD NATURAL: S&P Rates Corporate Credit 'B', Unsec Notes 'B-' ------------------------------------------------------------------ Standard & Poor's Rating Services assigned its 'B' corporate credit rating to independent exploration and production (E&P) company Vanguard Natural Resources LLC (Vanguard). The outlook is stable. "We also assigned a 'B-' issue-level rating (one notch lower than the corporate credit rating) to its proposed $300 million senior unsecured notes due 2020. We assigned a '5' recovery rating to this debt, indicating expectations of modest (10% to 30%) recovery in the event of a payment default," S&P said. "The ratings on Vanguard reflect a reserve base that is small relative to other speculative-grade E&P peers, a reserve replacement strategy that relies heavily on acquisitions, and its high dividend payout to shareholders. Our ratings also reflect its exposure to robust crude oil prices, a decent hedge book over the next several years that should mitigate hydrocarbon volatility, a high percentage of lower risk proved developed reserves, and modest capital spending requirements. We consider the business risk profile 'vulnerable' and the financial risk profile 'aggressive'," S&P said. "Vanguard is a limited liability company. However, it resembles a master limited partnership (MLP) in several ways. Vanguard pays out nearly all available cash flows to unitholders on a quarterly basis, and equity investors typically value the company on a yield basis. Unlike the typical MLP structure, there is neither a general partnership interest nor incentive distribution rights," S&P said. "To sustain its dividend, Vanguard operates with a mostly proven reserve base, taking on very little explorations risk. Also, it acquires reserve in very mature basins where the geology is well known and where wells have been operated for many years. Vanguard typically hedges a majority of its future production to provide additional stability to cash flows. Nevertheless, it must rely heavily on acquisitions to grow production due to the limited organic growth prospects of the mature reserve base. This acquisition-focused growth strategy exposes Vanguard to the risk that it could overpay for assets or could have difficulty replenishing production during periods of capital market duress," S&P said. "Vanguard had a relatively small reserve base of approximately 440 Bcfe at year-end 2011 pro forma for its Appalachia asset sale, with 71% of reserves exposed to oil and natural gas liquids (NGLs), which are enjoying robust prices compared with natural gas. Its proved developed reserve life, pro forma for the Appalachia asset sale, is long at 15 years. Vanguard has a high percentage (88%) of proved developed producing (PDP) reserves, and therefore a low-risk production profile. The company's reserves are scattered throughout the U.S., but most of its reserves and future production comes from the Permian Basin in Texas and the Big Horn Basin in Wyoming," S&P said. "The cost structure is in line with similarly rated peers, with all-in levered break-even cost at approximately $6.60 per thousand cubic feet equivalent (mcfe) as of year-end 2011. Lifting costs at $2.20 per mcfe compare favorably with oil-weighted peers, given Vanguard's focus on enhancing well production rather than drilling very capital-intensive new wells. However, three-year finding and development (F&D) costs, inclusive of revisions, at $3.05 are higher than peers' due to the premium placed on less risky proved developed reserves," S&P said. "Vanguard's aggressive financial risk profile incorporates pro forma adjusted debt of approximately $670 million (pro forma for recent net equity proceeds of $125 million), corresponding to leverage at year-end 2011 of approximately 3.1x. Based on our price deck for oil of $85 per barrel (bbl) in 2012, $80/bbl in 2013, and $75/bbl thereafter and for natural gas of $3/mcf in 2012, $3.25/mcf in 2013, and $4/mcf in 2014, we forecast that leverage will be 3x over the next couple years. This assumes that Vanguard's production remains flat in 2012 and 2013 at slightly more than 80 Mmcfe/d. We have not incorporated the impact of acquisitions to production or cash outflows and have assumed that oil production will represent about two-thirds of production in 2012 and nearly 70% of production in 2013. Our forecast incorporates Vanguard's current hedges, which represent approximately 76% of total projected production in 2012 and 70% of production in 2013," S&P said. VANTIV LLC: Moody's Upgrades Corporate Family Rating to 'Ba2' ------------------------------------------------------------- Moody's Investors Service has upgraded Vantiv, LLC's corporate family rating ("CFR") to Ba2 from Ba3 while confirming the probability of default rating ("PDR") at Ba3. In addition, Moody's has assigned Ba2 ratings to the new senior credit facilities, consisting of $1 billion Term Loan A due 2017, $250 million Term Loan B due 2019, and a $250 million revolver maturing 2017, and a speculative grade liquidity rating of SGL-1. This rating action concludes the review initiated on February 22, 2012 and reflects completion of the initial public offering (IPO). The outlook is stable. Ratings Rationale The upgrade is based upon Vantiv's improved credit profile arising from debt reduction of $463 million using the net proceeds from last week's $500 million IPO of about 15% of the company, continued strong execution as evidenced by double-digit revenue and EBITDA growth in 2011, which Moody's anticipates will continue through 2012 (albeit at a more tempered rate), and Moody's expectation that the company will maintain leverage at the current 3 times level (adjusted debt to EBITDA). In connection with the debt paydown, Vantiv refinanced the remaining portion of its credit facilities to 2017 and 2019. Vantiv's Ba2 CFR is supported by the company's significant size and strong market positions as both a merchant acquirer and card issuing processor for financial institutions. The payments market continues to benefit from the secular shift from cash/check payment to electronic payments. The rating also considers the solid recurring transaction-based revenue stream, which is supported by the client referral network of Fifth Third Bancorp (about a 40% owner of Vantiv following the IPO) and multi-year contracts with merchants and financial institutions. In addition, Vantiv has a highly scalable processing platform, which helps to drive high profit margins and steady cash flow generation and liquidity. The CFR also incorporates business concentration risks with cash flow highly dependent on the debit card market. That market may be susceptible to the Dodd - Frank Wall Street Reform and Consumer Protection Act. While same-store transaction growth continues into 2012, Moody's believes that future revenue growth could be challenged by still high unemployment rates and consumer debt levels, as well as a weak housing market. The SGL-1 rating factors in Moody's expectation of annual free cash flow exceeding $200 million, a cash balance over $200 million, and an undrawn revolver of $250 million. The stable outlook is supported by Moody's view that Vantiv will generate at least mid-single digit revenue growth and steady cash flow even with a slowly recovering U.S. economy as the company continues to benefit from its expanding merchant base and the ongoing shift to electronic payment cards. Moody's expects that acquisition activity will be funded through excess cash and no dividends will be paid over the intermediate term. The confirmation of the Ba3 PDR reflects Moody's view that all- bank debt transactions have a higher recovery rate of 65% (versus the average rate of 50%), which implies above-average default probabilities relative to other companies with the same CFR. With the upgrade, any upwards rating pressure is considered unlikely over the intermediate term. The Ba2 CFR could be downgraded with declines in revenue and profits greater than 5% due to economic conditions, increased customer churn, poor execution, or heightened competition. In addition, negative rating pressure could arise from higher financial leverage (in excess of 4x on a Moody's adjusted basis) for an extended period of time. Rating upgraded: CFR Ba2 Rating confirmed: PDR Ba3 Ratings assigned: US$1000M Senior Secured Term Loan A, Assigned Ba2, (LGD2, 28%) US$250M Senior Secured Term Loan B, Assigned Ba2, (LGD2, 28%) US$250M Senior Secured Revolving Credit Facility, Assigned Ba2, (LGD2, 28%) Ratings withdrawn: US$1609M Senior Secured Term Loan B-1, Ba3, (LGD3, 49%) US$150M Senior Secured Term Loan B-2, Ba3, (LGD3, 49%) US$150M Senior Secured Revolving Credit Facility, Ba3, (LGD3, 49%) The principal methodology used in rating Vantiv 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. VERASUN ENERGY: Execs' Claims Subject to Sec. 502(b)(7) Cap ----------------------------------------------------------- Bankruptcy Judge Brendan Linehan Shannon sustained the objection to proofs of claim filed by four former high-level executives at VeraSun Energy Corp. The executives claim to be owed money under "change in control agreements" that they signed in connection with a pre-bankruptcy merger. KDW Restructuring & Liquidation Services LLC, which is the entity empowered to administer VeraSun's plan of liquidation on a post-confirmation basis, objects to the executives' claims, arguing that they exceed the cap that Sec. 502(b)(7) of the Bankruptcy Code imposes on claims resulting from the termination of employment contracts. According to the Court, the Sec. 502(b)(7) cap applies to the executives' claims because the change in control agreements are part of the executives' employment contracts with VeraSun and the claims flow from the termination of those contracts. The executives' claims are disallowed to the extent they exceed the cap. The senior executives are Donald Endres, VeraSun's Chief Executive Officer, Danny Herron, its Chief Financial Officer, and William Honnef and Barry Schaps, both Senior Vice Presidents. Messrs. Herron and Schaps were terminated soon after the petition date. Messrs. Endres and Honnef stayed on at VeraSun until May 2009, when they too were let go. Taken together the Executives' claims exceed $7.3 million. A copy of the Court's March 26, 2012 Opinion is available at http://is.gd/vT9gAVfrom Leagle.com. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.com/or http://www.VE85.com/-- produced and marketed ethanol and distillers grains. Founded in 2001, the company had a fleet of 16 production facilities in eight states, with 14 in operation. The Company and certain affiliates filed for Chapter 11 protection on Oct. 31, 2008 (Bankr. D. Del. Lead Case No. 08-12606). Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP, represented the Debtors in their restructuring efforts. AlixPartners LLP served as their restructuring advisor. Rothschild Inc. served as their investment banker and Sitrick & Company as their communication agent. Kurtzman Carson Consultants LLC served as claims, noticing and balloting agent. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. On April 1, 2009, VeraSun closed the sale of substantially all of its assets to Valero Renewable Fuels, a subsidiary of Valero Energy Corporation, North America's largest petroleum refiner and marketer. Valero paid $350 million for the ethanol production facilities in Aurora, Fort Dodge, Charles City, Hartley and Welcome, in addition to the Reynolds site. Valero also successfully bid $72 million for the Albert City facility and $55 million for the Albion facility. VeraSun also completed on April 9 the sale to AgStar Financial Services PCA of substantially all of the assets relating to the company's production facilities in Dyersville, Iowa; Hankinson, North Dakota; Janesville, Minnesota; Central City and Ord, Nebraska; and Woodbury, Michigan. AgStar released the USBE Subsidiaries from their obligations under $319 million of existing indebtedness and assumed certain liabilities relating to the AgStar Facilities. Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware confirmed on Oct. 23, 2009, the Chapter 11 Plan of Liquidation filed by VeraSun and its affiliates. VITRO SAB: Bondholders Can Collect From Non-Bankrupt Units ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a New York State judge ruled that the bankruptcy reorganization of Vitro SAB de CV approved by a court in Mexico won't stop bondholders from collecting on $1 billion in bonds from nonbankrupt Vitro subsidiaries. The report relates that a justice of the New York Supreme Court in Manhattan ruled on March 21 that Vitro subsidiaries remain liable on their guarantees on two of three bond issues, despite a ruling to the contrary in Mexico. A lawsuit to establish liability on the third bond issue has yet to be decided. A judgment in New York state court "will have no impact on Vitro or its subsidiaries," company spokesman Roberto Riva Palacio Alonso said in an e-mailed statement. Vitro characterized the bondholders as "vulture funds." Mr. Rochelle recounts that in February the Vitro parent won approval of its reorganization plan from a court in Mexico. Even though none of the operating subsidiaries were in bankruptcy in Mexico or any other country, the Mexican court relieved the subsidiaries of their guarantees of the $1.2 billion in bonds, substituting new obligations in a smaller amount. According to the report, the bondholders unsuccessfully opposed the Mexican reorganization and have been fighting in courts in the U.S. as well. Last week, Justice Bernard J. Fried in Manhattan rejected Vitro's argument that the Mexican reorganization bars suit against the subsidiaries. Justice Fried will determine the amount of the liability later if the parties can't agree. The report notes that bondholders are also fighting Vitro in a bankruptcy court in Dallas and in the U.S. Court of Appeals in New Orleans. On May 1, the bondholders are scheduled to argue to the circuit court that the Mexican reorganization shouldn't be enforced in the U.S. because it was approved using $1.9 billion in intercompany claims to vote down opposition from bondholders. Vitro is also scheduled to face the bondholders at trial now scheduled to begin on June 4 in U.S. Bankruptcy Court in Dallas where the creditors will ask the bankruptcy judge to rule that the Mexican reorganization shouldn't be enforced in the U.S. for many of the same reasons that will have been argued to the circuit court May 1. The suit in state court is Wilmington Trust NA v. Vitro Automotriz SA, New York state Supreme Court (Manhattan), 652303- 2011. About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global glass producer, serving the construction and automotive glass markets and glass containers needs of the food, beverage, wine, liquor, cosmetics and pharmaceutical industries. Vitro is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009, and sought to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. Concurso Mercantil & Chapter 15 Proceedings Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, commencing its voluntary concurso mercantil proceedings -- the Mexican equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on Dec. 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. But an appellate court in Mexico reinstated the reorganization in April 2011. Following the reinstatement, Vitro SAB on April 14, 2011, re-filed a petition for recognition of its Mexican reorganization in U.S. Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11- 11754). The Vitro parent received sufficient acceptances of its reorganization by using the US$1.9 billion in debt owing to subsidiaries to vote down opposition by bondholders. The holders of US$1.2 billion in defaulted bonds opposed the Mexican reorganization plan because shareholders could retain ownership while bondholders aren't being paid in full. Vitro announced in March 2012 that it has implemented the reorganization plan approved by a judge in Monterrey, Mexico. In the present Chapter 15 case, the Debtor seeks to block any creditor suits in the U.S. pending the reorganization in Mexico. Chapter 11 Proceedings A group of noteholders opposed the exchange -- namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P. Together, they held US$75 million, or approximately 6% of the outstanding bond debt. The Noteholder group commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders, known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. A bankruptcy judge in Fort Worth, Texas, denied involuntary Chapter 11 petitions filed against four U.S. subsidiaries. On April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro America LLC and three other U.S. subsidiaries -- that were subject to the involuntary petitions into voluntary Chapter 11. The Texas Court on April 21 denied involuntary petitions against the eight U.S. subsidiaries that didn't consent to being in Chapter 11. Kurtzman Carson Consultants is the claims and notice agent to Vitro America, et al. Alvarez & Marsal North America LLC, is the Debtors' operations and financial advisor. The official committee of unsecured creditors appointed in the Chapter 11 cases of Vitro America, et al., has selected Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, as counsel. Blackstone Advisory Partners L.P. serves as financial advisor to the Committee. The U.S. Vitro companies sold their assets to American Glass Enterprises LLC, an affiliate of Sun Capital Partners Inc., for US$55 million. U.S. subsidiaries of Vitro SAB are having their cases converted to liquidations in Chapter 7, court records in January 2012 show. In December, the U.S. Trustee in Dallas filed a motion to convert the subsidiaries' cases to liquidations in Chapter 7. The Justice Department's bankruptcy watchdog said US$5.1 million in bills were run up in bankruptcy and hadn't been paid. W.R. GRACE: Canada Appeals District Court Plan Approval ------------------------------------------------------- Her Majesty the Queen in Right of Canada notified the U.S. District Court for the District of Delaware that she will take an appeal to the United States Court of Appeals for the Third Circuit from Judge Ronald L. Buckwalter's memorandum opinion and order affirming the confirmation of the Debtors' Joint Plan of Reorganization dated January 30, 2012. The Crown wants the Third Circuit to determine whether the District Court erred in concluding that: (1) the First Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code of W. R. Grace & Co., et al., the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative, and the Official Committee of Equity Security Holders is confirmable pursuant to Section 1129 of the Bankruptcy Code; (2) the Plan complies with Section 524(g) of the Bankruptcy Code; (3) the Crown's requests for contribution and indemnification may be subject to an injunction pursuant to Section 524(g), even though they are of a different nature than asbestos claims; (4) the Crown's requests for contribution and indemnification may be subject to an injunction imposed pursuant to Section 524(g), even though they are not "claims" or "demands;" (5) the Plan complies with Section 1122(a) of the Bankruptcy Code, even though it classifies claims that are not substantially similar within the same class; (6) the Trust Distribution Procedures comply with Sections 1123(a)(4) and 524(g)(2)(b) of the Bankruptcy Code, even though they give disparate treatment to claims within a class, including: * the possibility that the Trust Distribution Procedures might be interpreted to give disparate treatment by providing for no payout on account of requests for contribution and indemnification; * that the Trust Distribution Procedures give disparate treatment by implementing a first-in-first-out mechanic; * that the Trust Distribution Procedures give disparate treatment by imposing additional restrictions or requirements on holders of Indirect PI Trust Claims; and * that the Trust Distribution Procedures give disparate treatment by making an "extraordinary claim" available to only certain types of claimants; and (7) the Trust Distribution Procedures and the Plan are fair and equitable. Bank Lenders' Issues on Appeal In connection with their appeal to the United States Court of Appeals for the Third Circuit from Judge Ronald L. Buckwalter's memorandum opinion and order affirming the confirmation of the Debtors' Joint Plan of Reorganization dated January 30, 2012, the Bank Lender Group wants the Third Circuit to determine whether the U.S. District Court for the District of Delaware erred in: (1) confirming the First Amended Joint Plan of Reorganization and Recommended Supplemental Findings of Fact and Conclusions of Law dated as of January 31, 2011, which extinguishes the obligation of the Debtors to pay the Bank Lenders interest on money borrowed at the rate provided in the applicable credit agreements while allowing Grace's shareholders to retain their equity interests in the Company -- equity interests valued at over $2.97 billion as of April 21, 2011; (2) concluding that defaults cannot occur after the commencement of the bankruptcy case and that the applicable terms of the credit agreements among the Bank Lenders and Grace that entitle the Bank Lenders to interest at the contract default rate do not survive the commencement of the bankruptcy case; (3) concluding that the Joint Plan does not impair the Bank Lenders' claims within the meaning of Section 1124 of the Bankruptcy Code given that the Joint Plan provides for payment of interest on the Bank Lenders' claims at a rate that is lower than the rate set forth in the applicable credit agreements; (4) concluding that Section 1129(b) of the Bankruptcy Code is not applicable to confirmation of the Joint Plan; (5) concluding that, if Section 1129(b) is applicable, the Joint Plan satisfies this section, because among other things, equity is retaining value at the expense of the Bank Lenders, and made a series of erroneous factual findings and legal conclusions in connection with this conclusion; (6) concluding that, if Section 1129(b) is applicable, the Joint Plan satisfies this section, because among other things, equity is benefiting at the expense of the Bank Lenders; (7) concluding that there is no basis in evidence or law to support a finding that Grace is "solvent" when, among other things, the Joint Plan provides for Grace's existing shareholders to retain their valuable equity interests in the Company, without the agreement of the Bank Lenders and while the Bank Lenders did not receive the payment of interest at the rate set forth in the applicable credit agreements; (8) concluding that the Joint Plan complies with Section 1129(a)(7) of the Bankruptcy Code; and (9) concluding that no prepetition interest is owed to the Bank Lenders under the Credit Agreements despite, among other things, Grace's admission that some pre-petition interest amounts are owed to the Bank Lenders as part of their claims. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: To Release 1Q 2012 Financial Results on April 25 ------------------------------------------------------------ W. R. Grace & Co. said it will release its first quarter 2012 financial results at 6:00 a.m. EDT on Wednesday, April 25. A company-hosted conference call and webcast will follow at 11:00 a.m. EDT that day. During the call, Fred Festa, Chairman and Chief Executive Officer, and Hudson La Force, Senior Vice President and Chief Financial Officer, will discuss the first quarter results. A question and answer session with analysts will follow the prepared remarks. Access to the live webcast and the accompanying slides will be available through the Investor Information section of the company's Web site, http://www.grace.com/ Those without access to the Internet can participate by dialing +1 866.770.7051 (U.S.) or +1 617.213.8064 (International). The participant passcode is 91635057. Investors are advised to dial into the call at least 10 minutes early in order to register. An audio replay will be available at 2:00 p.m. EDT on April 25. The replay will be accessible by dialing +1 888.286.8010 (U.S.) or +1 617.801.6888 (International) and entering the participant passcode 64388125. The replay will be available for one week. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Garlock Defends Plan Order Revision Plea ---------------------------------------------------- W.R. Grace & Co. and its debtor affiliates, the Official Committee of Equity Security Holders, the Official Committee of Asbestos- related Personal Injury Claimants, and the Future Claims Representative -- the Plan Proponents -- are opposing a request by Garlock Sealing Technologies LLC for re-argument, rehearing and to alter or amend Judge Ronald L. Buckwalter's January 30, 2012 decision affirming the confirmation of the Debtors' plan of reorganization. Representing the Debtors, Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, contends that as both the Bankruptcy Court and the District Court correctly ruled, ever since Garlock filed its Chapter 11 case in June 2010, the possibility that Garlock might someday face injury from putative joint and several liability with Grace has been, and remains, hypothetical and conjectural. Thus, she insists, the District Court's reference to the GST Plan is merely an additional, incidental observation that corroborates the District Court's conclusion that Garlock's hypothesized claims remain too conjectural to create standing. Brett D. Fallon, Esq., at Morris James LLP, in Wilmington, Delaware, on behalf of Garlock, argues that the Plan Proponents misstate that (i) the District Court denied Garlock standing based solely on the fact that Garlock filed its own Chapter 11 bankruptcy case, and (ii) Garlock made a misrepresentation to the District Court that its plan was well on the way toward approval. He contends that neither contention has merit, and that the fact remains that the Decision denies Garlock standing based on a misreading of Garlock's plan and a misunderstanding of the status of Garlock's bankruptcy case. Ruling now that Garlock lost standing instead simply because it filed a bankruptcy petition would trade one error for another, Mr. Fallon asserts. He adds that hedging their position, the Plan Proponents also urge the District Court to address and overrule Garlock's objections. Doing so, he insists, would require an unprecedented decision and Grace would become the first asbestos defendant in history to obtain confirmation of a plan, and approval of an injunction under Section 524(g) of the Bankruptcy Code, that would permit shareholders to retain equity while asbestos claimants receive a fraction of the value of their claims. "Such a plan would leave billions of dollars of Grace's asbestos liabilities to be borne by Grace's codefendants while allowing Grace's shareholders to keep billions of dollars of equity," Mr. Fallon points out. He adds that overruling Garlock's objections, therefore, requires the District Court to explain how an injunction that protects a debtor's equity at the expense of the debtor's asbestos claimants satisfies the requirement that an injunction be "fair and equitable" under Section 524(g). Plan Proponents Talk Back Garlock's reply exceeds the bounds of zealous advocacy by making false statements and inventing a fictitious legal standard, the Plan Proponents tell the District Court. They contend that without any citation, Garlock asserts that the Debtors' Plan would be the first Section 524(g) plan "in history" that "permit[s] shareholders to retain equity while asbestos claimants receive a fraction of the value of their claims." That assertion is false, says John Donley, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, on behalf of the Plan Proponents. He explains that equity holders did in fact retain value in "USG, Babcock & Wilcox" and other approved Section 5 24(g) plans that paid asbestos claims less than 100% of their value. In addition, Garlock asserts -- again without citation -- that the Plan Proponents failed to meet their purported burden of proving the "fairness and necessity" of the Plan's Trust Distribution Procedures that allegedly injure Garlock, Mr. Donley contends. He argues that the Bankruptcy Code does not require any showing of "fairness and necessity," and Garlock simply made up this so- called "burden." Garlock's misstatements and imaginary legal standard must be rejected, and its Motion for Reconsideration denied, Mr. Donley asserts. The Plan Proponents also urge the District Court to go further and to supplement its January 30, 2012 Memorandum Opinion with more detailed rulings on Garlock's arguments on the merits. They say that those rulings would put to rest any contention by Garlock, however frivolous, that its substantive arguments on the merits were overlooked. Garlock's Motion to Strike Garlock asks the District Court to strike, or, in the alternative, for permission to file a response and objection to the Plan Proponents' sur-reply regarding its Motion for Reconsideration. The Sur-Reply is an improper attempt to brief a new issue for the first time after all briefing has been completed and where the issue previously was not disputed by the Plan Proponents, Mr. Fallon contends. He asserts that arguing that they needed to rebut an allegedly false statement in Garlock's reply, the Plan Proponents argue that the Grace Plan is not the first Section 524(g) plan pursuant to which a debtor's shareholders retained equity without paying asbestos claims in full. Until the Plan Proponents' filed the Sur-Reply, Grace's own bankruptcy counsel agreed that Grace would indeed be the "first asbestos bankruptcy settlement allowing [a] debtor to retain equity," Mr. Fallon tells the District Court. He argues that it is improper for the Plan Proponent to use a Sur-Reply on a motion for rehearing to argue at length that there is precedent for Section 524(g) plans that preserve shareholders' equity in debtors while paying only a fraction of the debtors' asbestos liabilities, after repeatedly failing to challenge previous statements by Garlock that no case precedent existed. He insists that as set forth in Garlock's proposed response to the Sur-Reply, none of the cases cited by the Plan Proponents provide precedent for the Grace Plan. Rule 12(f) of the Federal Rules of Civil Procedure allows the District Court to strike pleadings that are, among other factors, "redundant," Mr. Fallon notes. He contends that the Sur-Reply rehashes arguments and frequently cites to the Plan Proponents' own brief from last May. He asserts that the Plan Proponents filed a Sur-Reply and continue to address the substance of Garlock's arguments implicitly acknowledges Garlock's standing in this case and counsels in favor of granting Garlock's Motion for Reconsideration on the issue of standing. * * * Judge Buckwalter denied Garlock's Motion to Strike or to file response to the Plan Proponents' Sur-Reply. Judge Buckwalter declined to consider Garlock's proposed response and objection as no further briefing on this issue is needed. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Garlock Fails to Stay Jan. 30 Plan Order ---------------------------------------------------- District Judge Ronald Buckwalter denied Garlock Sealing Technologies LLC's request to stay the District Court's memorandum opinion and order dated January 30, 2012, affirming the bankruptcy-exit plan for W.R. Grace, pending disposition of Garlock's motion for rehearing and, if necessary, appeal to the Court of Appeals. Garlock's Motion for Rehearing argues that the Decision (i) misreads the key terms of Garlock's proposed plan of reorganization, particularly those that relate to the channeling of some, but not all, asbestos-related claims to a trust, (ii) mistakenly concludes that merely filing the proposed plan automatically resolves present and future asbestos claims against Garlock and provides injunctive relief pursuant to Section 524(g) of the Bankruptcy Code, insulating Garlock from joint and several liability claims, (iii) is inconsistent with controlling law on standing, and (iv) overlooks undisputed evidence that the Grace Plan will severely alter Garlock's rights against Grace and underpay all claims, including claims for contribution and set-off from co-defendants like Garlock. A stay of the Decision is appropriate to preserve the status quo until the District Court has an opportunity to address these important issues, Brett D. Fallon, Esq., at Morris James LLP, in Wilmington, Delaware, contends. He adds that a stay is also warranted to protect Garlock's fundamental right to a hearing on its objections to the Grace Plan and the trust distribution procedures. Appellees Respond On a motion for stay pending appeal, the moving parties shoulder a "heavy burden for making out a case for such extraordinary relief," the Appellees -- comprising the Debtors, the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PT Future Claimants' Representative, and the Official Committee of Equity Security Holders -- assert in response to Garlock's pleading. They add that "[a] motion for stay pending appeal is an extraordinary remedy and requires a substantial showing on the part of the movant." To satisfy its "heavy burden" and make the "substantial showing" needed to obtain a stay, Garlock must do two things, John Donley, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, contends. He argues that: (1) first, Garlock must post a bond sufficient to cover losses that will be incurred by the estate during the pendency of the appeal. In this case, the declaration of the Debtors' financial advisor establishes that the amount of that bond should be more than $77 million; and (2) second, Garlock must prove, by a preponderance of the evidence, that it has satisfied the four-factor test for obtaining a stay pending appeal: * likelihood of success on the merits; * irreparable harm to Garlock absent a stay; * no substantial harm to others if a stay is granted; and * the public interest. Garlock has not posted any bond, nor has it provided any reason why it should be excused from the normal bonding requirement, Mr. Donley contends. He asserts that Garlock's Stay Motion must fail for this reason alone. He adds that Garlock also fails on each of the four-factor test. Hence, the Appellees urge the District Court to deny Garlock's Motion to Stay. Garlock Talks Back Garlock contends that despite the explicit discretionary language of Rule 8017(b) of the Federal Rules of Bankruptcy Procedure, stating that a bond or other security "may" be required, Appellees argue that the Court "must" require a bond for appeal. Appellees also fail to show that a stay in this case necessarily injures the Debtors or that a bond would address delay costs caused by a stay, as opposed to other reasons, Mr. Fallon asserts. Mr. Fallon notes that the Appellees argue that Garlock has not met the four-factor test for granting a motion to stay, inviting Garlock to show why it is likely to succeed on the merits of its objections to confirmation of the Grace Plan and TDP and implementation of the Channeling Injunction. He insists that Garlock has already addressed all four stay factors in its Motion for Stay. He adds that Garlock will likely succeed on the merits because it will likely prevail in showing that the contributions to be made to the Grace Trust by Grace and other protected parties will be insufficient to qualify Grace for protection of a channeling injunction issued pursuant to Section 524(g). About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * Fee-Only Chapter 13 Plans Not Automatically Prohibited -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in Boston ruled that "fee- only" Chapter 13 plans aren't per se impermissible. In a concurring opinion, Circuit Judge Kermit V. Lipez explained how a fee-only plan is a "creative solution for the 'Lamie' problem." He was referring to a 2004 opinion from the U.S. Supreme Court saying that a lawyer's fees in Chapter 7 cannot be paid from estate funds. Judge Lipez didn't agree with the majority when it came to saying that a bankrupt has a heavy burden in showing special circumstances for approval of a fee-only plan. The case is Berliner v. Pappalardo (In re Puffer), 11-1831, U.S. Court of Appeals for the First Circuit (Boston). * Redemption Right Suffices to Require Return of Auto ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. District Judge Glenn T. Suddaby in Syracuse, New York, ruled on March 23 that when an individual demanded return of an auto repossessed immediately before the bankruptcy filing, the lender violated the automatic stay by not giving back the car until it was sued. Judge Suddaby disagreed with a 2001 opinion by David N. Hurd, another district judge in the Northern District of New York, in a case called Alberto. The case is Weber v. SEFCU, 11-0138, U.S. District Court, Northern District of New York (Syracuse). * Moody's New U.S. Municipal Methodology Prompts Rating Reviews --------------------------------------------------------------- Moody's Investors Service has published its new methodology for U.S. municipal bonds backed by special tax revenues. As a result, Moody's has placed 23 ratings on review for possible downgrade and four ratings on review for possible upgrade. The review affects a combined $2.7 billion of rated debt. The ratings and outlooks of the remaining 533 special tax credits are not directly impacted as a result of the introduction of this new methodology. The new methodology applies to over 425 state and local government bond issuers with over $200 billion in debt outstanding. The issuers covered in this methodology have 560 individually rated securities outstanding, as many issuers have ratings for multiple special tax security pledges that may have multiple liens. The methodology describes Moody's approach to evaluating bonds backed by state or municipal revenues derived from a wide range of special taxes, including sales and excise, income, utility, gas, tourist related, and other taxes and fees. The primary goal of the methodology is to provide a reference tool for evaluating credit profiles of special tax bonds, in order to help issuers, investors, and other interested market participants understand the key qualitative and quantitative risk characteristics that affect rating outcomes. In the coming weeks, Moody's review of the credits on review will focus on the issuer's taxable base and revenue pledge, legal security package for the bonds, and financial metrics to determine the appropriate rating. Moody's will also focus on qualitative factors such as fiscal and debt management policies, as well as expectations of future tax revenue performance and debt service requirements. The conclusion of the rating reviews may result in multi-notch rating changes for some credits. "The rating methodology provides a common framework for the analysis and comparison of a disparate group of credits," said Moody's Analyst John Medina. "The methodology largely reflects existing practice and introduces a new scorecard that standardizes the analysis and relative weighting of quantitative and qualitative factors currently considered in Moody's ratings analysis." The new methodology reflects the approach outlined in Moody's Request for Comment on New Proposed U.S. Special Tax Methodology, published on November 7, 2011. The methodology continues to constrain the special tax ratings to the level of their corresponding general obligation rating unless certain conditions are met, as outlined in the methodology. Special tax ratings that satisfy those conditions may be de-linked from the relevant municipal general obligation rating. The new methodology immediately replaces these three methodologies: Piercing the G.O. Ceiling Rating Methodology -- December 5, 2008; Moody's Perspective on Lottery Bonds -- December 5, 2008; and Federal Highway Aid Grant Anticipation Financing Rating Methodology --December 5, 2008. Sales tax backed bonds previously rated under The Mass Transit Sector Rating Methodology, published in June 30, 2000, are now rated under this Special Tax Methodology. The Mass Transit Sector Methodology continues to apply to bonds issued by mass transit agencies that are backed by enterprise revenues. The new "U.S. Special Tax Methodology" is available on moodys.com. The list of special tax bond ratings placed on review appears below. The following ratings have been placed on REVIEW FOR POSSIBLE DOWNGRADE: 1. BALDWIN COUNTY BOARD OF EDUCATION, AL -- Aa3 rated Sales tax bonds 2. CHANDLER (CITY OF), AZ -- Aa2 rated Gas tax and Motor Vehicle Fees (HURF) bonds 3. GILBERT (CITY OF), AZ -- Aa3 rated Gas tax and Motor Vehicle Fees (HURF) bonds 4. PARADISE VALLEY MUNICIPAL PROPERTY CORPORATION, AZ -- Aa1 rated Excise taxes and State Shared Revenue bonds 5. PIMA (COUNTY OF), AZ -- Aa3 rated Gas tax and Motor Vehicle Fees (HURF) bonds 6. SCOTTSDALE PRESERVE AUTHORITY, AZ -- Aa2 rated Sales tax bonds 7. INDUSTRY (CITY OF), CA -- Aa2 rated Sales tax bonds 8. ST. JOHNS (COUNTY OF), FL -- A1 rated Sales tax bonds 9. ST. LUCIE (COUNTY OF), FL -- A2 rated Sales tax bonds 10. CARMEL REDEVELOPMENT AUTHORITY, IN -- Aa2 rated Income tax bonds 11. JEFFERSON SALES TAX DISTRICT, LA -- Aa3 rated Sales tax bonds 12. LOUISIANA PUBLIC FACILITIES AUTHORITY (Obligor - 19th Judicial Dist. Bldg. Comm.), LA -- A2 rated Court Filing Fees bonds 13. HENNEPIN (COUNTY OF) MN -- Aaa (1st lien), Aa2 (2nd lien), Aa3 (3rd lien) rated Sales tax bonds 14. LINCOLN (CITY OF), NE -- Aa1 rated Sales tax bonds 15. CHAVES (COUNTY OF), NM -- A1 rated Sales tax bonds 16. LEA (COUNTY OF), NM -- A1 rated Sales tax bonds 17. SAN JUAN (COUNTY OF), NM -- Aa3 (Sr) & A2 (Sub) rated Gas tax and Motor Vehicle Fees bonds 18. HAMILTON (COUNTY OF), OH -- A1 rated Sales tax bonds 19. ARLINGTON (CITY OF), TX -- A1 rated Sales, Hotel, and Rental Car tax bonds 20. WISCONSIN CENTER DISTRICT, WI -- A2 rated Hotel, Meals, and Rental Car tax bonds The following ratings have been placed on REVIEW FOR POSSIBLE UPGRADE: 1. BESSEMER (CITY OF), AL -- Baa3 rated Gas tax bonds 2. ADEL-DESOTO COMMUNITY SCHOOL DISTRICT, IA -- A2 rated Sales tax bonds 3. JEFFERSON DAVIS PARISH SCHOOL BOARD SALES TAX DISTRICT 1, LA -- Baa1 rated Sales tax bonds 4. WILLIAMS (COUNTY OF), ND -- Baa2 rated Sales tax bonds The principal methodology used in this rating was U.S Public Finance Special Tax Methodolgy published in March 2012. * Hackman Capital to Expand Equipment Platform ---------------------------------------------- Hackman Capital on March 28 disclosed that it is expanding its equipment platform. The effort will increase the firm's ability to purchase both industrial real estate and equipment, either separately or together. "Historically, equipment dealers and auctioneers don't purchase real estate, and real estate investors don't purchase equipment. However, the two are often tied together," said Michael Hackman, the firm's CEO. "We want the marketplace to see us as a single-source solution, able to quickly convert surplus or distressed assets to cash, whether liquidating real estate and equipment, separately or combined." Hackman Capital, which was founded in 1986, sources opportunities through its extensive deal network in both the real estate and equipment industries. The company is known across marketplaces for its ability to navigate complex transactions and financial restructuring and to close transactions quickly. "We offer a successful, 26-year track record in both the real estate and equipment arenas," Mr. Hackman said. That successful track record reflects both the company's strong entrepreneurial spirit and highly disciplined investment approach. Since 1986, the company has been the principal investor in more than $800 million of real estate and has conducted hundreds of equipment transactions across four continents. In the real estate arena, Hackman Capital targets primarily value- added and opportunistic industrial properties. The company acquires, redevelops, repurposes, manages, and leases facilities, and is currently overseeing, on behalf of its affiliates, a national portfolio of more than 50 properties, exceeding 14 million square feet, and 950 acres of developable land. The company's equipment transactions span a diverse range of industries, and most are sourced through corporate distress, bankruptcy, insolvency, turnarounds and financial restructurings. Once the equipment is acquired, Hackman Capital works with equipment dealers and auctioneers to facilitate the disposition. About Hackman Capital Founded in 1986, Hackman Capital -- http://www.hackmancapital.com -- is a privately-held investment firm that focuses on the acquisition and management of industrial real estate. The firm is one of the few real estate companies in the country that also purchases and sells industrial equipment. Hackman Capital has acquired more than $800 million of property on behalf of its affiliates, and currently manages a national portfolio of more than 50 facilities, exceeding 14 million square feet, and 950 acres of developable land. Hackman Capital also has conducted hundreds of equipment acquisitions, dispositions and liquidations on four continents. Hackman Capital is based in Los Angeles, California and has satellite offices in Columbus, Ohio, Boston, Massachusetts and Kalamazoo, Michigan. * Great American Moves Office Space in Downtown Chicago ------------------------------------------------------- Great American Group has relocated to new office space in downtown Chicago -- located at 10 South LaSalle St., Suite 2170. Great American Group's Chicago office has been located in the downtown area since 2009, but growth in its Advisory and Valuation Services business in the Midwest has prompted a move, recently promoted Senior Vice President, Bill Soncini said. "The growth in activity necessitated bringing on additional resources, which involved the relocation of senior personnel to Chicago from other company offices, as well as the local hiring of new associates," Mr. Soncini said. "We now have more in-market operational resources as it relates to our inventory, machinery & equipment, and intellectual property appraisal groups, as well as our corporate valuation services division." Lester Friedman, Chief Executive Officer of the Advisory and Valuation Services division, adds that the expansion in office personnel also means Great American Group can maintain its standard of exemplary customer service. "We've been a valuable resource for our Midwest clients, evidenced by our need for expansion. We sell on expertise, the ability to deliver what we promise, and accessibility. Bringing more personnel to the market equates to more attention for our clients." Although there is a change in the physical address of the Chicago office, all office phone and fax numbers remain unchanged. To reach Great American Group's Chicago office, contact 312-777- 7945. For more information about asset disposition, valuation and appraisal services available through Great American Group, visit the company's Web site at http://www.greatamerican.com About Great American Group, LLC (GAMR-G) Great American Group, LLC -- http://www.greatamerican.com-- is a provider of asset disposition solutions and valuation and appraisal services to a wide range of industrial and retail clients, as well as lenders, capital providers, private equity investors and professional service firms. Great American Group has offices in Atlanta, Boston, Chicago, Dallas, London, Los Angeles, New York and San Francisco. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Maria Lopez Bankr. C.D. Calif. Case No. 12-18643 Chapter 11 Petition filed March 10, 2012 In re Fortune West Enterprises, Inc. Bankr. E.D. Calif. Case No. 12-24741 Chapter 11 Petition filed March 11, 2012 See http://bankrupt.com/misc/caeb12-24741.pdf represented by: W. Austin Cooper, Esq. In re Blue Jay Investsments, Inc. Bankr. W.D. Mo. Case No. 12-60369 Chapter 11 Petition filed March 11, 2012 See http://bankrupt.com/misc/mowb12-60369.pdf represented by: Diana P. Brazeale, Esq. Brazeale Law Firm, LLC E-mail: diana@brazealelaw.com In re Southeastern Medical Center, PC Bankr. E.D.N.C. Case No. 12-01897 Chapter 11 Petition filed March 11, 2012 See http://bankrupt.com/misc/nceb12-01897.pdf represented by: Richard D. Sparkman, Esq. Richard D. Sparkman & Assoc., P.A. E-mail: rds@sparkmanlaw.com In re Tommy Constantine Bankr. D. Ariz. Case No. 12-04842 Chapter 11 Petition filed March 12, 2012 In re David Vosoughkia Bankr. C.D. Calif. Case No. 12-13131 Chapter 11 Petition filed March 12, 2012 In re Hector Alvarado Bankr. C.D. Calif. Case No. 12-13144 Chapter 11 Petition filed March 12, 2012 In re Roberto Gonzalez Bankr. N.D. Calif. Case No. 12-51936 Chapter 11 Petition filed March 12, 2012 In re Cardiovascular Diagnostic Image Bankr. S.D. Fla. Case No. 12-15953 Chapter 11 Petition filed March 12, 2012 filed pro se See http://bankrupt.com/misc/flsb12-15953.pdf In re Ocean Poinciana Development, LLC Bankr. S.D. Fla. Case No. 12-15972 Chapter 11 Petition filed March 12, 2012 See http://bankrupt.com/misc/flsb12-15972.pdf represented by: Steven S. Newburgh, Esq. E-mail: ssn@newburghlaw.net In re Sicily's NOLA I, L.L.C. dba Sicily's Italian Buffet Bankr. E.D. La. Case No. 12-10717 Chapter 11 Petition filed March 12, 2012 See http://bankrupt.com/misc/laeb12-10717p.pdf See http://bankrupt.com/misc/laeb12-10717c.pdf represented by: Gary K. McKenzie, Esq. Steffes, Vingiello & McKenzie, LLC E-mail: gmckenzie@steffeslaw.com In re Berry Holdings, LLC Bankr. D. Mass. Case No. 12-30349 Chapter 11 Petition filed March 12, 2012 See http://bankrupt.com/misc/mab12-30349.pdf represented by: Gary M. Weiner, Esq. Weiner & Lange, P.C. E-mail: GWeiner@Weinerlegal.com In re Seiler, Inc. Bankr. D. Nev. Case No. 12-12780 Chapter 11 Petition filed March 12, 2012 See http://bankrupt.com/misc/nvb12-12780.pdf represented by: Zachariah Larson, Esq. Marquis Aurbach Coffing E-mail: cshurtliff@maclaw.com In re Andrea Connolly Bankr. D. N.J. Case No. 12-16290 Chapter 11 Petition filed March 12, 2012 In re Debra Zakarin Bankr. E.D.N.Y. Case No. 12-71461 Chapter 11 Petition filed March 12, 2012 In re Manville Properties, Ltd. Bankr. N.D. Ohio Case No. 12-11783 Chapter 11 Petition filed March 12, 2012 See http://bankrupt.com/misc/ohnb12-11783.pdf represented by: Jeffrey H. Weir, II, Esq. Colella & Weir, P.L.L. E-mail: jhweir@cnwlaw.com In re St. Marys Country Club Bankr. W.D. Pa. Case No. 12-10364 Chapter 11 Petition filed March 12, 2012 See http://bankrupt.com/misc/pawb12-10364.pdf represented by: Guy C. Fustine, Esq. Knox McLaughlin Gornall & Sennett, P.C. E-mail: mwernick@kmgslaw.com In re BaiBai Kamara Bankr. E.D. Va. Case No. 12-11612 Chapter 11 Petition filed March 12, 2012 In re Farmville Group, LLC Bankr. E.D. Va. Case No. 12-11588 Chapter 11 Petition filed March 12, 2012 filed pro se See http://bankrupt.com/misc/vaeb12-11588.pdf In re Tri County Rentals, Inc. aka Boone Equipment Bankr. S.D. W.Va. Case No. 12-20152 Chapter 11 Petition filed March 12, 2012 See http://bankrupt.com/misc/wvsb12-20152.pdf represented by: Mitchell Lee Klein, Esq. Klein Law Office E-mail: sydney@kleinhall.com In re Michael Bohlman Bankr. D. Ariz. Case No. 12-04998 Chapter 11 Petition filed March 13, 2012 In re B & B Petroleum Inc. Bankr. C.D. Calif. Case No. 12-18898 Chapter 11 Petition filed March 13, 2012 See http://bankrupt.com/misc/cacb12-18898.pdf represented by: Robert K. Wing, Esq. Robert K. Wing APLC E-mail: rkw@rkwing.com In re Christopher Scott Bankr. C.D. Calif. Case No. 12-12359 Chapter 11 Petition filed March 13, 2012 In re Istefan Cinoglu Bankr. C.D. Calif. Case No. 12-12357 Chapter 11 Petition filed March 13, 2012 In re Patricia De Luca Bankr. N.D. Calif. Case No. 12-51940 Chapter 11 Petition filed March 13, 2012 In re W. Rogers Bankr. S.D. Calif. Case No. 12-03485 Chapter 11 Petition filed March 13, 2012 In re Kinship Academy, Inc. Bankr. D. Conn. Case No. 12-50472 Chapter 11 Petition filed March 13, 2012 See http://bankrupt.com/misc/ctb12-50472.pdf represented by: Stephen P. Wright, Esq. Harlow, Adams, and Friedman E-mail: spw@quidproquo.com In re Paul Bryan Bankr. M.D. Fla. Case No. 12-01638 Chapter 11 Petition filed March 13, 2012 In re Manifest Capital Unlimited Inc. Bankr. D. Mass. Case No. 12-12041 Chapter 11 Petition filed March 13, 2012 See http://bankrupt.com/misc/mab12-12041.pdf represented by: Robert L. O'Brien, Esq. E-mail: robjd@mail2firm.com In re MYLLENE2020 LLC Bankr. D. Mass. Case No. 12-12069 Chapter 11 Petition filed March 13, 2012 See http://bankrupt.com/misc/mab12-12069.pdf represented by: Warren E. Wood, Esq. Law Office of Warren E. Wood, LLC E-mail: woodattys2009@yahoo.com In re Paul Gray Bankr. D. Mass. Case No. 12-12046 Chapter 11 Petition filed March 13, 2012 In re Douglas Bates Jan Bates Bankr. E.D. Mo. Case No. 12-42216 Chapter 11 Petition filed March 13, 2012 In re KEODY Transfer, LLC Bankr. D. Neb. Case No. 12-40519 Chapter 11 Petition filed March 13, 2012 See http://bankrupt.com/misc/neb12-40519.pdf represented by: David Grant Hicks, Esq. Pollak & Hicks PC E-mail: dhickslaw@aol.com In re Kih Gourrier Bankr. D. Nev. Case No. 12-12785 Chapter 11 Petition filed March 13, 2012 In re Elegant Home Furnishings NY Inc. Bankr. E.D.N.Y. Case No. 12-71463 Chapter 11 Petition filed March 13, 2012 filed pro se See http://bankrupt.com/misc/nyeb12-71463.pdf In re Kharun, Inc. Bankr. E.D.N.Y. Case No. 12-41779 Chapter 11 Petition filed March 13, 2012 filed pro se See http://bankrupt.com/misc/nyeb12-41779.pdf In re Todd J. Amus DDS, P.C. Bankr. S.D.N.Y. Case No. 12-22522 Chapter 11 Petition filed March 13, 2012 See http://bankrupt.com/misc/nysb12-22522.pdf represented by: Todd S. Cushner, Esq. Cushner & Garvey, LLP E-mail: Todd@cushnergarvey.com In re Alfonso Diaz Merheb Bankr. D. Puerto Rico Case No. 12-01871 Chapter 11 Petition filed March 13, 2012 In re Raymond Bolles Bankr. E.D. Tenn. Case No. 12-11289 Chapter 11 Petition filed March 13, 2012 In re Jones Brothers Enterprises, Inc. dba Brother's Grill & Seafood Bankr. W.D. Tenn. Case No. 12-22755 Chapter 11 Petition filed March 13, 2012 See http://bankrupt.com/misc/tnwb12-22755.pdf represented by: Earnest E. Fiveash, Jr., Esq. E-mail: earnietheattorney@gmail.com In re Noel Zamora Bankr. S.D. Texas Case No. 12-50077 Chapter 11 Petition filed March 13, 2012 In re Douglas Goodart Bankr. W.D. Wash. Case No. 12-12517 Chapter 11 Petition filed March 13, 2012 In re Courtney Roberts Bankr. D. Ariz. Case No. 12-05106 Chapter 11 Petition filed March 14, 2012 In re G.R.I.P Development, Inc. Bankr. E.D. La. Case No. 12-10767 Chapter 11 Petition filed March 14, 2012 See http://bankrupt.com/misc/laeb12-10767.pdf represented by: Edwin M. Shorty, Jr., Esq. Shorty, Dooley & Hall, LLC E-mail: EShorty@sdhlawllc.com In re The Stolen Menu Cafe, LLC Bankr. D. Maine Case No. 12-20249 Chapter 11 Petition filed March 14, 2012 See http://bankrupt.com/misc/meb12-20249.pdf represented by: Jacqueline Cardinali, Esq. The Cardinali Law Firm PLLC E-mail: jcardinaliesq@gmail.com In re George Woods Bankr. D. Mass. Case No. 12-40896 Chapter 11 Petition filed March 14, 2012 In re Boodles, Inc. Bankr. D. Mont. Case No. 12-60362 Chapter 11 Petition filed March 14, 2012 See http://bankrupt.com/misc/mtb12-60362.pdf represented by: Gary S. Deschenes, Esq. E-mail: descheneslaw@dslawoffices.net In re Darby Garcia Bankr. D. Nev. Case No. 12-12928 Chapter 11 Petition filed March 14, 2012 In re 144 Food Corp, Inc. dba Fifth Avenue Epicure Bankr. S.D.N.Y. Case No. 12-11031 Chapter 11 Petition filed March 14, 2012 See http://bankrupt.com/misc/nysb12-11031.pdf represented by: Khagendra Gharti Chhetry, Esq. Chhetry & Associates, P.C. E-mail: khunu@aol.com In re Shothaven LTD aka Mark Carero, Jr. Bankr. M.D. Pa. Case No. 12-01441 Chapter 11 Petition filed March 14, 2012 filed pro se See http://bankrupt.com/misc/pamb12-01441.pdf In re Pacific Plains Company, LLC Bankr. N.D. Texas Case No. 12-31653 Chapter 11 Petition filed March 14, 2012 See http://bankrupt.com/misc/txnb12-31653.pdf represented by: Howard Marc Spector, Esq. Spector & Johnson, PLLC E-mail: hspector@spectorjohnson.com In re Ivy Lake Properties, Inc. Bankr. W.D. Va. Case No. 12-60611 Chapter 11 Petition filed March 14, 2012 See http://bankrupt.com/misc/vawb12-60611.pdf represented by: T. Henry Clarke, IV, Esq. E-mail: ivlaw.clarke@verizon.net In re Steven Groom Bankr. E.D. Wash. Case No. 12-01168 Chapter 11 Petition filed March 14, 2012 In re Laurie Haake Bankr. W.D. Wis. Case No. 12-11398 Chapter 11 Petition filed March 14, 2012 In re R and D Properties, Inc. Bankr. N.D. Ala. Case No. 12-01293 Chapter 11 Petition filed March 15, 2012 See http://bankrupt.com/misc/alnb12-01293.pdf represented by: Walter F. McArdle, Esq. Spain & Gilllon LLC E-mail: wfm@spain-gillon.com In re Michael Mendelsohn Bankr. D. Ariz. Case No. 12-05217 Chapter 11 Petition filed March 15, 2012 In re Jaire Home, Inc. Bankr. C.D. Calif. Case No. 12-13313 Chapter 11 Petition filed March 15, 2012 See http://bankrupt.com/misc/cacb12-13313.pdf represented by: Stephen A. Madoni, Esq. In re Maria Munoz Bankr. C.D. Calif. Case No. 12-11105 Chapter 11 Petition filed March 15, 2012 In re Naeem Ahmad Bankr. E.D. Calif. Case No. 12-25027 Chapter 11 Petition filed March 15, 2012 In re Mark DAmico Bankr. M.D. Fla. Case No. 12-01688 Chapter 11 Petition filed March 15, 2012 In re R&J Aviation, Inc. Bankr. N.D. Ill. Case No. 12-10348 Chapter 11 Petition filed March 15, 2012 See http://bankrupt.com/misc/ilnb12-10348.pdf represented by: Nicholas M. Miller, Esq. Neal, Gerber & Eisenberg LLP E-mail: nmiller@ngelaw.com In re Brown Services, LLC Bankr. D. Md. Case No. 12-14863 Chapter 11 Petition filed March 15, 2012 See http://bankrupt.com/misc/mdb12-14863.pdf represented by: Diana L. Klein, Esq. Klein & Associates, LLC E-mail: dklein@klein-lawfirm.com In re Carlton Hull Bankr. D. Nev. Case No. 12-50554 Chapter 11 Petition filed March 15, 2012 In re Marla Pascua Bankr. D. Nev. Case No. 12-12989 Chapter 11 Petition filed March 15, 2012 In re Franklin Medina Bankr. D. N.J. Case No. 12-16708 Chapter 11 Petition filed March 15, 2012 In re Jack Fiorelli Bankr. D. N.J. Case No. 12-16713 Chapter 11 Petition filed March 15, 2012 In re Robert Klepner Bankr. D. N.J. Case No. 12-16662 Chapter 11 Petition filed March 15, 2012 In re Emelis Inc. Bankr. E.D.N.Y. Case No. 12-41868 Chapter 11 Petition filed March 15, 2012 See http://bankrupt.com/misc/nyeb12-41868.pdf represented by: Emmanuella Mary Agwu, Esq. E-mail: emmanuella_a@yahoo.com In re Jahaira Canela Bankr. E.D.N.Y. Case No. 12-41871 Chapter 11 Petition filed March 15, 2012 In re ACI Group Holdings LLC dba Piezaro's Pizza and Pasta Bankr. S.D.N.Y. Case No. 12-22540 Chapter 11 Petition filed March 15, 2012 See http://bankrupt.com/misc/nysb12-22540.pdf represented by: Paul S. Cooper, Esq. E-mail: pscooperlaw@aol.com In re Whispering Pines, Inc. Bankr. M.D. Pa. Case No. 12-01481 Chapter 11 Petition filed March 15, 2012 See http://bankrupt.com/misc/pamb12-01481.pdf represented by: Robert E. Chernicoff, Esq. Cunningham and Chernicoff PC E-mail: rec@cclawpc.com In re Darwin Schmidt Bankr. N.D. Texas Case No. 12-20140 Chapter 11 Petition filed March 15, 2012 In re Houston Columbian Protection, L.L.C. fdba Tactical Security International dba Houston Columbian Uniforms & Supplies fdba Stanley Tactical Security Academy Bankr. S.D. Texas Case No. 12-32029 Chapter 11 Petition filed March 15, 2012 See http://bankrupt.com/misc/txsb12-32029.pdf represented by: Helene Thaissa Bergman, Esq. E-mail: Bergmanlawfirm@sbcglobal.net In re Karen Foster Bankr. W.D. Va. Case No. 12-60619 Chapter 11 Petition filed March 15, 2012 In re Ericksen Avenue Properties, LLC Bankr. W.D. Wash. Case No. 12-12592 Chapter 11 Petition filed March 15, 2012 See http://bankrupt.com/misc/wawb12-12592.pdf represented by: Jerome Shulkin, Esq. Shulkin Hutton Inc PS E-mail: mepelbaum@shulkin.com In re Windsock Lane LLC Bankr. W.D. Wash. Case No. 12-12593 Chapter 11 Petition filed March 15, 2012 See http://bankrupt.com/misc/wawb12-12593.pdf represented by: Jacob D. DeGraaff, Esq. John Long Law PLLC E-mail: ecf@johnlonglaw.com In re Desert Valley Assisted Living, LLC Bankr. D. Ariz. Case No. 12-05309 Chapter 11 Petition filed March 16, 2012 filed pro se See http://bankrupt.com/misc/azb12-05309.pdf In re Robert Highsmith Bankr. D. Ariz. Case No. 12-05374 Chapter 11 Petition filed March 16, 2012 In re Alice's Sapin-Sapin Inc. Bankr. C.D. Calif. Case No. 12-19475 Chapter 11 Petition filed March 16, 2012 See http://bankrupt.com/misc/cacb12-19475.pdf represented by: Nathan V. Hoffman, Esq. Law Offices of Hoffman & Osorio LLP E-mail: ecf@choicelawgroup.com In re Olympic Tile and Stone, Inc. Bankr. C.D. Calif. Case No. 12-12502 Chapter 11 Petition filed March 16, 2012 See http://bankrupt.com/misc/cacb12-12502.pdf represented by: Leonardo Drubach, Esq. E-mail: zlaw578@yahoo.com In re David Hodge Bankr. N.D. Calif. Case No. 12-30838 Chapter 11 Petition filed March 16, 2012 In re Andrew Houseman Bankr. M.D. Fla. Case No. 12-01731 Chapter 11 Petition filed March 16, 2012 In re Eric Stilp Bankr. M.D. Fla. Case No. 12-03478 Chapter 11 Petition filed March 16, 2012 In re Jon Saltzman Bankr. M.D. Fla. Case No. 12-03806 Chapter 11 Petition filed March 16, 2012 In re Michael Johnson Bankr. S.D. Fla. Case No. 12-16425 Chapter 11 Petition filed March 16, 2012 In re Paul Ciarelli Bankr. S.D. Fla. Case No. 12-16429 Chapter 11 Petition filed March 16, 2012 In re Acars Towing, LLC Bankr. N.D. Ga. Case No. 12-57001 Chapter 11 Petition filed March 16, 2012 filed pro se See http://bankrupt.com/misc/ganb12-57001.pdf In re Hubert Duffie Bankr. S.D. Ga. Case No. 12-10516 Chapter 11 Petition filed March 16, 2012 In re Jackson GR, Inc. dba Ground Round Grill & Bar Bankr. E.D. Mich. Case No. 12-46528 Chapter 11 Petition filed March 16, 2012 See http://bankrupt.com/misc/mieb12-46528p.pdf See http://bankrupt.com/misc/mieb12-46528c.pdf represented by: Matthew J. Vivian, Esq. E-mail: matt@vivianlaw.com In re Queen Anne Hospitality Corp. Bankr. W.D. Mo. Case No. 12-60423 Chapter 11 Petition filed March 16, 2012 See http://bankrupt.com/misc/mowb12-60423.pdf represented by: Diana P. Brazeale, Esq. Brazeale Law Firm, LLC E-mail: diana@brazealelaw.com In re Michael Abboud Bankr. E.D.N.Y. Case No. 12-41906 Chapter 11 Petition filed March 16, 2012 In re D. J.'s Restaurant, Inc. Bankr. S.D.N.Y. Case No. 12-22548 Chapter 11 Petition filed March 16, 2012 See http://bankrupt.com/misc/nysb12-22548.pdf represented by: Neil R. Flaum, Esq. Flaum & Associates, P. C. E-mail: flaumandassociatespc@gmail.com In re William Brooks Bankr. E.D.N.C. Case No. 12-02072 Chapter 11 Petition filed March 16, 2012 In Hector Velez Roman Bankr. D. Puerto Rico Case No. 12-01989 Chapter 11 Petition filed March 16, 2012 In Jose Torres Maldonado Bankr. D. Puerto Rico Case No. 12-01986 Chapter 11 Petition filed March 16, 2012 In re San Vito-Burke LLC dba San Vito-Burke Ristorante Italiano And Brick Oven Pizzaria Bankr. E.D. Va. Case No. 12-11748 Chapter 11 Petition filed March 16, 2012 See http://bankrupt.com/misc/vaeb12-11748.pdf represented by: George LeRoy Moran, Esq. E-mail: glmoran@yahoo.com In Kevin Choi Bankr. W.D. Wash. Case No. 12-12641 Chapter 11 Petition filed March 16, 2012 In Daniel Davis Bankr. N.D. Calif. Case No. 12-42401 Chapter 11 Petition filed March 17, 2012 In re ABS Pizzeria Inc. Bankr. S.D.N.Y. Case No. 12-11075 Chapter 11 Petition filed March 18, 2012 See http://bankrupt.com/misc/nysb12-11075p.pdf See http://bankrupt.com/misc/nysb12-11075c.pdf represented by: Lawrence F. Morrison, Esq. E-mail: morrlaw@aol.com In re TaxMasters, Inc. fka Crown Partners, Inc. Bankr. S.D. Texas Case No. 12-32064 Chapter 11 Petition filed March 18, 2012 See http://bankrupt.com/misc/txsb12-32064.pdf represented by: Johnie J. Patterson, Esq. Walker & Patterson,P.C. E-mail: jjp@walkerandpatterson.com In re Caroline in Heaven, LLC dba Caroline's Chateau Bankr. C.D. Calif. Case No. 12-12591 Chapter 11 Petition filed March 19, 2012 See http://bankrupt.com/misc/cacb12-12591.pdf represented by: Robert Reganyan, Esq. Reganyan Law Firm E-mail: reganyanlawfirm@gmail.com In re In Yi Bankr. C.D. Calif. Case No. 12-13461 Chapter 11 Petition filed March 19, 2012 In re Michael Kamen Bankr. C.D. Calif. Case No. 12-19793 Chapter 11 Petition filed March 19, 2012 In re William Barth Bankr. C.D. Calif. Case No. 12-19650 Chapter 11 Petition filed March 19, 2012 In re Capitol Technology Centre, Inc. Bankr. D. D.C. Case No. 12-00198 Chapter 11 Petition filed March 19, 2012 See http://bankrupt.com/misc/dcb12-00198.pdf represented by: Michael D. Sendar, Esq. Law Offices of Michael D. Sendar In re King and Queen LLC Bankr. D. Md. Case No. 12-15041 Chapter 11 Petition filed March 19, 2012 See http://bankrupt.com/misc/mdb12-15041.pdf represented by: Sonila Isak, Esq. The Isak Law Firm E-mail: sonila@isaklaw.com In re Kelly James Bankr. W.D. Mo. Case No. 12-41013 Chapter 11 Petition filed March 19, 2012 In re Roger Anderson Bankr. D. Neb. Case No. 12-40585 Chapter 11 Petition filed March 19, 2012 In re MMR Ventures LLC Bankr. E.D.N.Y. Case No. 12-71614 Chapter 11 Petition filed March 19, 2012 See http://bankrupt.com/misc/nyeb12-71614.pdf represented by: Diana P. Brazeale, Esq. E-mail: morrlaw@aol.com In re Mohan Sadana Bankr. N.D.N.Y. Case No. 12-10721 Chapter 11 Petition filed March 19, 2012 In re Pam Real Thai Food, Inc. Bankr. S.D.N.Y. Case No. 12-11094 Chapter 11 Petition filed March 19, 2012 See http://bankrupt.com/misc/nysb12-11094.pdf represented by: Jonathan S. Pasternak, Esq. Rattet Pasternak, LLP E-mail: jsp@rattetlaw.com In re Pam Real Thai II Corp. Bankr. S.D.N.Y. Case No. 12-11096 Chapter 11 Petition filed March 19, 2012 See http://bankrupt.com/misc/nysb12-11096.pdf represented by: Jonathan S. Pasternak, Esq. Rattet Pasternak, LLP E-mail: jsp@rattetlaw.com In re Robert Youngblood Bankr. E.D.N.C. Case No. 12-02105 Chapter 11 Petition filed March 19, 2012 In re Jason Kraus Bankr. S.D. Ohio Case No. 12-11408 Chapter 11 Petition filed March 19, 2012 In re DesignerWare, LLC Bankr. W.D. Pa. Case No. 12-10397 Chapter 11 Petition filed March 19, 2012 See http://bankrupt.com/misc/pawb12-10397.pdf represented by: Robert S. Bernstein, Esq. Bernstein Law Firm, P.C. E-mail: rbernstein@bernsteinlaw.com In re Bobby Jackson Electrical Inc. Bankr. D. S.C. Case No. 12-01757 Chapter 11 Petition filed March 19, 2012 See http://bankrupt.com/misc/scb12-01757.pdf represented by: Robert H. Cooper, Esq. E-mail: bknotice@thecooperlawfirm.com In re Pat Blaylock Bankr. M.D. Tenn. Case No. 12-02675 Chapter 11 Petition filed March 19, 2012 In re Paul Proctor Bankr. M.D. Tenn. Case No. 12-02674 Chapter 11 Petition filed March 19, 2012 In re Sterling Capital Partners, LLC Bankr. N.D. Calif. Case No. 12-52170 Chapter 11 Petition filed March 22, 2012 Filed Pro Se In re 680 Stonehouse Lane LLC Bankr. C.D. Calif. Case No. 12-11221 Chapter 11 Petition filed March 23, 2012 Filed pro se ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. 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