/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120411.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, April 11, 2012, Vol. 16, No. 100 Headlines 200 WHP: Voluntary Chapter 11 Case Summary 261 EAST 78: Asks Court to Expunge $17.6MM Claim of MB Financial 261 EAST 78: Court Approves Georgoulis as Litigation Counsel 261 EAST 78: Has Until April 20 to File Reorganization Plan A-1 PLANK: Bank Wins Default Judgment Over Unreturned Equipment ALC HOLDINGS: Plan Exclusivity Extension Hearing Tomorrow ALVARION LTD: To Default on Financial Covenant Under $30MM Loan AMERICAN AIRLINES: ALPA Says CBA Rejection Won't Help Long Term AMERICAN ORIENTAL: Receives NYSE Notice of Delisting AMERICAS ENERGY: SEC Says Reorganization Plan Not Confirmable ARCAPITA BANK: Court Approves GCG as Claims and Noticing Agent ARCAPITA BANK: Taps Alvarez & Marsal as Financial Advisors ARCAPITA BANK: Taps Trowers & Hamlins as Bahraini Counsel AUGUST CAYMAN: S&P Assigns Preliminary 'B' Corp. Credit Rating AZKAR INC: Voluntary Chapter 11 Case Summary BANKATLANTIC BANCORP: Incurs $17.4-Mil. Net Loss in 4th Quarter BATAA/KIERLAND LLC: Wants JPMCC to Pay for Mediation Expenses BERNARD L. MADOFF: Trustee Can't Aim Tort Claims at 3rd Parties BERNARD L. MADOFF: Sons' Wives Mostly Let Off the Hook on Suits BETSY WEBB: Case Summary & 20 Largest Unsecured Creditors BION ENVIRONMENTAL: 2011 Unitholders Participate in New Offering BILLMYPARENTS INC: Grants 10 Million Warrants to Robert DeSantis BRILEY FARMS: Case Summary & 20 Largest Unsecured Creditors BUFFETS INC: Plan Outline Hearing Continued Until April 30 BVI ASSURED: Case Summary & 20 Largest Unsecured Creditors C. B. & H.: Case Summary & 20 Largest Unsecured Creditors CDC CORP: Maples and Calder Approved as Cayman Islands Counsel CDC CORP: Plan Disclosure Hearing Continued Until April 26 CHINQUA PENN: April 25 & 26 Auction for Property Assets CHRISTOPHER GARNER: Court Conditionally Approves Hiring of Counsel COMMUNITY FIRST: Bank Closes Assets Sale to Southern Community CONNECTICUT LIGHT: Moody's Cuts Preferred Stock Ratings to 'Ba1' DEAN WARREN: Voluntary Chapter 11 Case Summary DELTA INVESTMENTS: Voluntary Chapter 11 Case Summary DETROIT, MI: Moody's Cuts Ratings on Water & Sewerage Debt DORACON INC: Response Deadline Extended to April 24 DREIER LLP: BDO USA OK'd to Handle Solvency Related Issues DRI CORP: Sec. 341 Creditors' Meeting Set for April 25 DRYDOCKS WORLD: Adviser Says Monarch Unlikely to Back Debt Deal DYNEGY INC: Brower Piven Looking to Participate in Class Suit EASTERN LIVESTOCK: Amends Schedules of Assets and Liabilities EASTERN LIVESTOCK: Ken Byrd OK'd as Ch. 11 Trustee's Auctioneer EASTERN LIVESTOCK: Kroger Gardis OK'd to Prosecute Estate Claims EASTMAN KODAK: Asks Court for Retired Workers' Committee EASTMAN KODAK: Proposes $13.5-Mil. in Employee Bonuses EASTMAN KODAK: To Sell Lease on Times Square Billboard EASTMAN KODAK: Amends Terms of Photo Business Sale EASTMAN KODAK: U.S. Trustee Opposes Equity Committee EC DEVELOPMENT: Schulman Wolfson Raises Going Concern Doubt EDIETS.COM INC: Kevin Richardson Assumes PFO and PAO Roles EDIETS.COM INC: Incurs $1.65 Million Net Loss in Fourth Quarter ENDURANCE INTERNATIONAL: S&P Gives 'B' Rating on $535MM Term Loan ENERGY FOCUS: Continued Losses Cue Going Concern Doubt ENERGY FUTURE: Files Post-Effective Amendment to Form S-1 FAIRGROUNDS PROPERTIES: Court Confirms Bankruptcy-Exit Plan FILENE'S BASEMENT: May 3 Auction for Intellectual Property FIRST NATIONAL: Court OKs Modification of Adequate Protection FIRST NATIONAL: Has Access to Cash Collateral Until May 31 FIRST NATIONAL: Lender's Cash for Elevator Modernization OK'd GALP CYPRESS: Court Dismisses Chapter 11 Case GIORDANO'S ENTERPRISES: Apostolous Suit to Proceed in State Court GMX RESOURCES: To Exchange 2.2MM Shares for $4.1MM Conv. Notes GREDE HOLDINGS: S&P Gives 'B+' Corp. Credit Rating; Outlook Stable GRUBB & ELLIS: Colliers Int'l Snags Eight Brokers GRUBB & ELLIS: Brokers Object to Asset Purchase Deal Supplement GRUBB & ELLIS: Alvarez & Marsal OK'd as Financial Advisor GRUBB & ELLIS: Files Schedules of Assets and Liabilities GRUBB & ELLIS: Taps Kurtzman Carson Consultants as Admin. Agent GRUBB & ELLIS: Togut Segal Approved as Bankruptcy Counsel GRUBB & ELLIS: Zukerman Gore Approved as Corporate Counsel HARLAY HOSPITALITY: Case Summary & 9 Largest Unsecured Creditors HARRELSON UTILITIES: Court Won't Reopen Chapter 11 Case HARRISBURG, PA: Seeks Hearing on Receiver's Resignation HARRINGTON WEST: Bankruptcy Case Converted to Chapter 7 HD SUPPLY: Completes Sale of Interest in IPVF to Shale-Inland HD SUPPLY: Plans to Offer Senior Secured Notes HEBB BUILDERS: Case Summary & 20 Largest Unsecured Creditors HESPERIA RDA: S&P Removes 'BB+' Rating on Tax Bonds Off Watch HINSON MANAGEMENT: Case Summary & 2 Largest Unsecured Creditors HMC/CAH: Wants Continued Use of Cash Collateral Until Sept. 28 HMC/CAH: Court Approves CliftonLarsonAllen as Tax Advisor HMC/CAH: Wants to Borrow $61,948 from Fuduka to Buy Equipment HMC/CAH: Court Rejects Application for Royal Blue as Consultant HORIZON LINES: Delays Filing of 2011 Annual Report HORIZON RIDGE: Case Summary & 3 Largest Unsecured Creditors HOSTESS BRANDS: Proposes Salary Freeze for Union Workers HOSTESS BRANDS: Claim Buyers Circle Bankruptcy Case HOSTESS BRANDS: Won't Disclose Details on Executives' Raises ICG REAL ESTATE: Files for Chapter 11 in Detroit IDQ HOLDINGS: S&P Gives 'B' Corp. Credit Rating; Outlook Stable IMAGEWARE SYSTEMS: Incurs $3.2 Million Net Loss in 2011 IMPERIAL PETROLEUM: Discloses Re-Structuring & Management Changes INTERFUND CORPORATION: Case Summary & 20 Largest Unsec Creditors INTERNATIONAL TOBACCO: Portion of USDA Claim Entitled to Priority JAPAN INTERNATIONAL: Case Summary & 8 Largest Unsecured Creditors JDB FARMS: Case Summary & 20 Largest Unsecured Creditors JEFFERSON COUNTY: Accuses BNY Mellon of Transferring Funds JEFFERSON COUNTY: Workers' Names Erased in Court Files KLN STEEL: Taps Mcdermott Will to Aid in Gov't Deal Bid Protest KNOWLEDGE UNIVERSE: S&P Cuts Corp. Credit Rating to 'B-', on Watch LACK'S STORES: Court Confirms Reorganization Plan LOS ANGELES DODGERS: Expect to Emerge From Bankruptcy April 30 MARICOPA SOLAR: Assets to be Auctioned on April 17 MELROSE CONSTRUCTION: Case Summary & 4 Largest Unsecured Creditors MERIDIAN MORTGAGE: Judge Orders $140-Mil. Judgment for Founder MINOR FAMILY: Judge Approves Sale Protocol for Landmark Hotel MOUNTAIN CITY: Secured Lender Opposes Plan Confirmation NAB HOLDINGS: Moody's Assigns 'B1' Corporate Family Rating NAB HOLDINGS: S&P Assigns Preliminary 'BB-' Corp. Credit Rating NATIONAL HOLDINGS: Enters Into $3.3-Mil. Securities Purchase Pact NATIONAL HOLDINGS: Agrees to Transfer 50% Interest in OPN to Opus NORD RESOURCES: Nedbank Refuses to Extend Forbearance Anew NORTHAMPTON GENERATING: Has Until July 2 to Exclusively File Plan NORTHAMPTON GENERATING: Can Decide on Leases Until July 2 NORTHCORE TECHNOLOGIES: Launches New Web Site for CHPCA NUPATHE INC: Needs to Raise Additional Funds to Continue NYTEX ENERGY: Whitley Penn Raises Going Concern Doubt OILSANDS QUEST: Closes Eagles Nest Asset Sale, Signs DIP Financing PACKAGING SYSTEMS: Case Summary & 20 Largest Unsecured Creditors PDQ COOLIDGE: Files for Chapter 11 in Miami PEMCO WORLD: Has Final Approval for Sun Capital Financing PETER HENZE: Court Directs Appointment of Chapter 11 Trustee PHOENIX DINER: Case Summary & 13 Largest Unsecured Creditors PILGRIM PINES: Case Summary & 20 Largest Unsecured Creditors PINNACLE AIRLINES: Court Order Restricts Trading in Equity PONCE TRUST: Files List of 20 Largest Unsecured Creditors POTOMAC SUPPLY: Committee Wants Final Cash Use Order Amended POTOMAC SUPPLY: Court OKs Adequate Assurance Payment to Dominion PREGIS CORP: S&P Withdraws 'B-' Corporate Credit Rating at Request QUALTEQ INC: Wants Access to Cash Collateral Until June 15 R & J HOLDINGS: Case Summary & 5 Largest Unsecured Creditors RCC DALLAS: Voluntary Chapter 11 Case Summary ROG CHURCH: Case Summary & 4 Largest Unsecured Creditors ROOMSTORE INC: Rooms To Go Pays $2 Million for 10 Texas Stores ROSEMARY MARSH: Dist. Court Rejects Age Discrimination Suit S & Y ENTERPRISES: Court Confirms Reorganization Plan SBA SENIOR: Moody's Assigns 'Ba2' Rating to New $200MM Term Loan SEALY CORP: Reports $1.2 Million Net Income in Fiscal Q1 2012 SEJWAD HOTELS: Has OK to Hire Michael G. Spector as Bankr. Counsel SIMMONS FOODS: S&P Raises Corporate Credit Rating to 'CCC+' SINO-FOREST CORP: Shares Delisted from Toronto Stock Exchange SINO-FOREST: Ernst & Young Resigns as Auditor SINO-FOREST: Receives Enforcement Notice From OSC SK FOODS: District Court Moves Hearing in Collins Case to April 18 SOLAR TRUST: Plans to Hold Auction on April 30 SOLAR TRUST: No Taxpayer Funds Loaned ST CATHERINE'S HOSPITAL: Files for Chapter 11 Bankruptcy STAR BUFFET: Files Full-Payment Reorganization Plan STATE FAIR OF VIRGINIA: Case Converted to Chapter 7 STRATEGIC AMERICAN: Now Known as "Duma Energy Corp." T-L BRYWOOD: Gets Interim Okay to Use Private Bank Cash TAXMASTERS INC: Moving to Trustee or Chapter 7 Liquidation TAYLOR BEAN: Creditors' Objections Missed Deadline, Judge Says TRENDMARK HOMES: Case Summary & 17 Largest Unsecured Creditors TRIBUNE CO: Plan Confirmation Hearing Delayed to June 7 TRIBUNE CO: Court Enters Ruling on Allocation Disputes Under Plan TRIBUNE CO: Panel's Claims vs. Citi, Merrill Severed From JPM Suit TRIDENT MICROSYSTEMS: A&M OK'd as Equity Panel's Fin'l Advisors TRIDENT MICROSYSTEMS: Bayard OK'd as Statutory Panel's Co-Counsel TRIDENT MICROSYSTEMS: Dewey & Leboeuf OK'd as Committee's Counsel TRIDENT MICROSYSTEMS: Pachulski Stang OK'd as Panel's Counsel TRIDENT MICROSYSTEMS: Quinn Emanuel Tapped as Committee Counsel TRILOGY DEVELOPMENT: 8th Cir. BAP Affirms Lien Ruling UNIVERSAL SOLAR: Incurs $2.7 Million Net Loss in 2011 VANDEMERE LLC: Case Summary & 20 Largest Unsecured Creditors VEBLEN EAST: Ch. 11 Trustee Wants Reorganization Case Dismissed VERSO PAPER: S&P Rates $180.2 Million Secured Notes 'BB-' VINASHIN: U.S. Hedge Fund Drops Lawsuit Against Firm VOLUNTEER BANCORP: Crowe Horwath Raises Going Concern Doubt VUZIX CORP: Defers Payment of $141,666 to LC Capital Until 2014 WARNER SPRINGS: Court Wants U.S. Trustee's Objections Addressed WARREN SAPP: Former Pro Bowl Lineman Files for Chapter 7 WAVE2WAVE COMMUNICATIONS: Verizon Agrees to Continue Services WAVE2WAVE COMMUNICATIONS: Can Hire Mintz Levin as Special Counsel WAVE2WAVE COMMUNICATIONS: Committee Taps Cooley LLP as Counsel WAVE2WAVE COMMUNICATIONS: Ford Wants to Repossess Motor Vehicles WEBB REAL ESTATE: Case Summary & 20 Largest Unsecured Creditors WENDY'S INTERNATIONAL: S&P Rates $1.3-Bil. Credit Facilities 'BB-' WJO INC: Court OKs Re-engagement of Ciardi Ciardi as Counsel * Homeowners Win Punitive Award Over Wells Fargo Overcharges * Circuit Court Stands Behind In Pari Delicto Defense * Divorce Settlement Upheld Regardless of Madoff Fraud * Amount of Mortgage Can't Be Fixed in Chapter 13 Plan * Unjust Enrichment Is Core When Paired With Fraudulent Transfer * Investors Watch Pricing of J.P. Morgan Rialto Distressed CMBS * Moody's Says Global Speculative Grade Default Rate Up to 2.3% * Upcoming Meetings, Conferences and Seminars ********* 200 WHP: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: 200 WHP, LLC 201 Moss Mill Road Port Republic, NJ 08241 Bankruptcy Case No.: 12-18821 Chapter 11 Petition Date: April 3, 2012 Court: United States Bankruptcy Court District of New Jersey (Camden) Judge: Judith H. Wizmur Debtor's Counsel: Anthony Sodono, III, Esq. Joao Ferreira Magalhaes, Esq. TRENK, DIPASQUALE, ET AL. 347 Mt. Pleasant Avenue, Suite 300 West Orange, NJ 07052 Tel: (973) 243-8600 Fax: (973) 243-8600 E-mail: asodono@trenklawfirm.com jmagalhaes@trenklawfirm.com Scheduled Assets: $2,000,000 Scheduled Liabilities: $1,140,791 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Perry Stamelos, sole member. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Phoenix Diner Corp. 12-18819 04/03/12 261 EAST 78: Asks Court to Expunge $17.6MM Claim of MB Financial ---------------------------------------------------------------- 261 East 78 Realty Corp. asks the Bankruptcy Court to expunge MB Financial Bank, N.A.'s lien and proof of claim and determine that MB Financial has failed to establish a valid lien on its premises located at 261 East 78th Street, New York. On Feb. 2, 2012, MB Financial a filed proof of claim for $17.67 million. MB Financial claims to be a secured creditor of the Debtor having perfected its claims through "recorded mortgages and related documents". Chris Georgoulis, Esq., at Georgoulis & Associates PLLC, in New York, attorney for the Debtor, assert that MB Financial does not have standing to assert its claim because it does not have the original mortgage notes. Without proper documentation, MB Financial's claim must be expunged because there is proof to establish its lien or claim, he adds. According to the Debtor, there are three relevant mortgage loan notes that MB Financial must have in its possession to have standing to foreclose, namely: (1) the original acquisition note of $5.58 million; (2) a consolidated, amended and restated building loan note of $6.68 million; and (3) a consolidated, amended and restated project loan note of $205,000. The Debtor made a mortgage loan with Broadway Bank, Chicago, Illinois, a bank that is no longer in business, in April 2007. At that time executed an acquisition loan note, a building loan note and a project loan note in favor of Broadway, as well as related mortgages and other loan documents. Two of these loans were subsequently extended in September 2009, at which time the Debtor executed a gap building loan note, a consolidated building loan note, a gap project loan note and a consolidated project loan note in favor of Broadway. On April 23, 2010, the FDIC took over Broadway Bank and MB Financial agreed to purchase certain of Broadway's assets through the execution of a purchase and assumption agreement with FDIC. About 261 East 261 East 78 Realty Corp. owns real property located at 261 East 78th Street, in New York. The premises consist of seven commercial units, three of which are currently occupied. 261 East 78 Realty filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 11-15624) on Dec. 6, 2011. Judge Robert E. Gerber presides over the case. The Chapter 11 filing was precipitated by the commencement of foreclosure proceedings on the premises. The Debtor scheduled $20,211,417 in assets and $18,757,664 in liabilities. The petition was signed by Lee Moncho, president. 261 EAST 78: Court Approves Georgoulis as Litigation Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized 261 East 78 Realty Corp. to employ Georgoulis & Associates, PLLC, as its litigation counsel for the purpose of objecting to MB Financial Bank N.A.'s claim and disputing its standing as a secured creditor. On Feb. 9, 2012, MB Financial filed a proof of claim as a secured creditor in the amount of $17,674,827. The Debtor will pay Georgoulis at its normal hourly rates of $475 per hour for Partners and $225 to $360 per hour for associates. About 261 East 261 East 78 Realty Corp. owns real property located at 261 East 78th Street, in New York. The premises consist of seven commercial units, three of which are currently occupied. 261 East 78 Realty filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 11-15624) on Dec. 6, 2011. Judge Robert E. Gerber presides over the case. The Chapter 11 filing was precipitated by the commencement of foreclosure proceedings on the premises. The Debtor scheduled $20,211,417 in assets and $18,757,664 in liabilities. The petition was signed by Lee Moncho, president. 261 EAST 78: Has Until April 20 to File Reorganization Plan ----------------------------------------------------------- At the behest of 261 East 78 Realty Corp., the Bankruptcy Court extended the Debtor's deadline to file a plan of reorganization until April 20, 2012. MB Financial Bank, N.A., opposed the requested extension asserting that the Debtor has failed to meet its burden of establishing cause under Section 362 of the Bankruptcy Code. MF Financial asserted that the entire premise of the Debtor's application -- that it cannot file a plan of reorganization until the issue of standing is decided -- is fatally flawed. "MB Financial's standing was conclusively determined on October 25, 2011 when the State Court, ruling from the bench, held that MB Financial has standing to prosecute the Foreclosure Action, denied the Debtor's cross-motion for summary judgment, and granted MB Financial's motion for summary judgment as a matter of law." About 261 East 261 East 78 Realty Corp. owns real property located at 261 East 78th Street, in New York. The premises consist of seven commercial units, three of which are currently occupied. 261 East 78 Realty filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 11-15624) on Dec. 6, 2011. Judge Robert E. Gerber presides over the case. The Chapter 11 filing was precipitated by the commencement of foreclosure proceedings on the premises. The Debtor scheduled $20,211,417 in assets and $18,757,664 in liabilities. The petition was signed by Lee Moncho, president. A-1 PLANK: Bank Wins Default Judgment Over Unreturned Equipment --------------------------------------------------------------- District Judge John W. Lungstrum granted Sunflower, Bank, N.A.'s request for a default judgment against H.P. Construction Ltd., for failure to return certain equipment. The Court entered judgment against H.P. Construction on the bank's breach of contract claim in the amount of $380,418, plus interest accruing from and after judgment at the statutory rate, until paid in full. On Oct. 18, 2011, Sunflower, Bank, N.A. filed a diversity suit against H.P. Construction Ltd., asserting conversion of construction equipment. The Defendant has failed to appear or otherwise defend, and the clerk of the court entered default against it as to liability. In its complaint, the bank alleges that in 2009, H.P. Construction leased construction equipment, including shoring panels, props, and extensions that were patented or trademarked as "TABLA" from a third-party lessor, A-1 Scaffold & Shoring, LLC. After the lease term ended in December 2009, H.P. Construction failed to return the equipment to A-1S. In December 2009, A-1S transferred ownership of the equipment to A-1 Plank and Scaffold Manufacturing, Inc., in satisfaction of A-1's indebtedness. On Feb. 21, 2010, A-1P filed for relief under Chapter 11 of the Bankruptcy Code. Sunflower Bank acquired the equipment through a sale pursuant to 11 U.S.C. Sec. 363 that was confirmed by the Bankruptcy Court. Although the bank formally demanded return of the equipment, to date, H.P. Construction has failed to comply. The lawsuit is, Sunflower Bank, N.A., v. H.P. Construction Ltd., Case No. 11-1324 (D. Kan.). A copy of the Court's April 4, 2012 Memorandum and Order is available at http://is.gd/fBzFZ1from Leagle.com. Sunflower Bank, N.A., is represented by Michael P. Alley, Esq. -- mpalley@cml-law.com -- at Clark, Mize & Linville, Chtd. About A-1 Plank A-1 Plank & Scaffold Mfg., Inc., and Allenbaugh Family Limited Partnership sought chapter 11 protection (Bankr. D. Kan. Case Nos. 10-10379 and 10-10378) on Feb. 21, 2010, and are represented by Edward J. Nazar, Esq., at Redmond & Nazar, L.L.P., in Wichita, Kansas. The debtors ceased normal business operations in October 2009 and all operations came to a halt in February 2010. A-1 Plank & Scaffold disclosed $1.7 million in assets and $11.3 million in liabilities at the time of the filing. Allenbaugh disclosed $3.3 million in assets and liabilities of $3.2 million. Sunflower Bank is the major secured creditor. ALC HOLDINGS: Plan Exclusivity Extension Hearing Tomorrow --------------------------------------------------------- CLA Hold LLC, formerly known as ALC Holdings LLC and its debtor- affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Aug. 6, 2012, and Oct. 3, respectively. Pursuant to the sale order and asset purchase agreement, the sale of the Debtors' assets was consummated and closed on Feb. 3, 2012. As reported in the Troubled Company Reporter on Feb. 6, 2012, Bellus ALC Investments 1, LLC, agreed to purchase the Debtors' assets for $30 million. Bellus is an affiliate of Versa Capital Management. Bellus is both the Debtors' prepetition secured lender and postpetition DIP financing lender. The Debtors relate that they need additional time to examine the remaining assets to determine the best strategy to recover and distribute value to creditors. The Debtors scheduled a hearing on April 12, 2012, at 11:30 a.m. (E.T.) on their requested exclusivity extensions. 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. ALVARION LTD: To Default on Financial Covenant Under $30MM Loan --------------------------------------------------------------- Alvarion(R) Ltd. expects first quarter 2012 revenues to be approximately $33 million to $33.5 million, below the guidance previously provided by the company, primarily as a result of lower than expected sales of an older product line which the company currently intends to replace later this year, as well as a large order which has been delayed from Q1 until Q2. Based on this estimated revenue, non-GAAP net loss per diluted share is expected to be between ($0.09) and ($0.10) for the first quarter of 2012, compared to the company's previous guidance of a non-GAAP net loss per diluted share between ($0.01) and ($0.06) based on expected revenues of $38 to $43 million. GAAP per share results, which include charges of approximately $1.5 million related to the acquisition of Wavion Inc. in November 2011 and stock-based compensation, are expected to range between a loss of ($0.12) and ($0.13) compared to the company's previous guidance of a per share loss between ($0.03) and ($0.08). Cash and cash equivalents totaled approximately $51.5 million as of March 31, 2012. As a result of the foregoing, the company will be in default of a financial covenant under certain loan and credit facility agreements, including a $30 million loan obtained by the company for the acquisition of Wavion Inc. The company has initiated discussions with the respective banks. "Although we expected a decline in demand for certain older products ahead of their planned replacement later this year, we did not anticipate it would be of the magnitude we began to see in the last few weeks," said Eran Gorev, President and CEO of Alvarion. "We are reevaluating our plan to address certain vertical market applications with the aim of accelerating a solution. "In addition, a large order valued at over $3 million for our carrier-grade Wi-Fi solution has been delayed and we expect such order will be delivered in the second quarter. Nevertheless, we shipped over $5 million of this product line in Q1 and we believe this portion of the business is on track to meet our expectations for 2012. During Q1, we won several large carrier-grade Wi-Fi deals with Tier 1 carriers in the Asia Pacific region. We expect these deals will contribute to revenues in future quarters and they represent attractive opportunities for business over the next several years. We are encouraged by the fact that our carrier Wi- Fi solution continues to outperform competing products in field tests. With the expanded sales effort and growing list of distributors, we believe we are gaining traction as more prospective customers have an opportunity to evaluate our solution. "Meanwhile, our business in the broadband wireless access segment was only slightly below our expectations and we recently received a large multi-million dollar order for a combination of base stations and CPEs which we expect to ship over the next several quarters," continued Mr. Gorev. Specific guidance for Q2 and any revisions that may be required to the financial targets for 2012 will be provided when the company announces final results for the first quarter of 2012 on May 16, 2012. About Alvarion Alvarion Ltd. -- http://www.alvarion.com/-- provides optimized wireless broadband solutions addressing the connectivity, coverage and capacity challenges of telecom operators, smart cities, security, and enterprise customers. AMERICAN AIRLINES: ALPA Says CBA Rejection Won't Help Long Term --------------------------------------------------------------- The Allied Pilots Association (APA), certified collective bargaining agent for the 10,000 pilots of American Airlines, issued the following statement in response to the filing of an 1113(c) motion with the bankruptcy court by airline management: "The 10,000 pilots of American Airlines remain absolutely committed to our airline's successful restructuring, and to reaching a consensual agreement with management," said APA President Captain Dave Bates. "We are well aware that a financially healthy company is a prerequisite to enjoying full, rewarding careers. "However, we're extremely concerned that despite giving lip- service to the importance of reaching a consensual agreement with APA, American Airlines management appears intent on having the bankruptcy court reject our contract," he said. "If the court decides to grant management's 1113(c) motion, management would then be able to impose new terms of employment on our pilots. Taking this step--one that could be fairly described as running roughshod over our contract--will not foster long-term success for American Airlines. "In recent bargaining sessions with APA, management has repeatedly stated that a consensual agreement will be 'impossible' if we continue making proposals designed to keep our working conditions at or near industry-standard levels. Just saying no to everything the APA leadership has proposed at the negotiating table does not constitute good-faith bargaining. It also does not bode well for our ability to work collaboratively to address the many other challenges confronting American Airlines. "We therefore urge management to rethink their strategy and join us in committing to good-faith bargaining, with the goal of reaching a consensual agreement at the earliest possible opportunity," Bates said. "The alternative course--rejection of our contract by the bankruptcy court--is not in the best interests of American Airlines' stakeholders. "As we await management's response, we will be making our case to the bankruptcy court that management's 1113(c) motion is premature. We do not believe that management has fulfilled the statutory requirements that must be met prior to filing an 1113(c) motion," he said. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN ORIENTAL: Receives NYSE Notice of Delisting ---------------------------------------------------- American Oriental Bioengineering, Inc. disclosed that the New York Stock Exchange has notified the Company that it is not in compliance with NYSE rules due to the Company's failure to timely file its Annual Report on Form 10-K with the Securities and Exchange Commission. Under NYSE rules, when a Company does not comply with annual report filing requirements, the NYSE allows a company an additional six months to file its annual report in order to regain compliance. In the case of the Company, the annual report would be due on or before Oct. 29, 2012. If the Company fails to file its annual report within that time period, the NYSE may, in its sole discretion, allow the Company's securities to remain listed for up to an additional six months or may, in its sole discretion, commence suspension and delisting procedures. As previously announced, during the performance of the annual audit of the Company's financial statements for the fiscal year 2011, the Company's auditors, Ernst & Young Hua Ming's (E&Y), noted certain inconsistencies. As a result, the Audit Committee has commenced an independent investigation into the matters identified by E&Y. Although the Company cannot know at this time how long the investigation will take, the Company will endeavor to file the Form 10-K as soon as possible upon the completion of the investigation. About American Oriental American Oriental Bioengineering, Inc. is a pharmaceutical company dedicated to improving health through the development, manufacture and commercialization of a broad range of prescription and over the counter products. AMERICAS ENERGY: SEC Says Reorganization Plan Not Confirmable ------------------------------------------------------------- Josh Flory at knoxvillebiz.com reports that the Securities and Exchange Commission filed an objection in U.S. Bankruptcy Court, arguing that the reorganization plan of Americas Energy Co. was premature, unconfirmable and possibly unauthorized. According to the report, the SEC was appearing in the case as a regulator and party-in-interest, as a result of an ongoing investigation of activities related to the company "to determine whether the federal securities laws have been violated." The report, citing court documents, relates that on Jan. 18, the same day that Americas Energy filed its reorganization plan, the court-appointed trustee in the case, Thomas Dickenson, filed a preliminary report which took issue with several aspects of the company's strategy. For example, Americas Energy had previously outlined a proposed deal with a Chinese firm, Beijing Guohua Technology Group, which had agreed to provide $6 million in exchange for a 30% stake in Americas Energy. That deal was contingent on Americas Energy acquiring certain assets from a Virginia company called Alpha Natural Resources for $71 million. According to the knoxvillebiz.com report, the trustee said that deal appeared to be dead and argued that it was not worth pursuing anyway, in part because Americas Energy didn't have the financial ability to pursue "this or any other transaction"; because no "legal" due diligence had been done on any of the leases related to the deal; and "all of the financial information on Beijing Guohua provided to the Trustee is in Chinese and unintelligible." The report relates more recent filing from the trustee, submitted in March, cited alleged inconsistencies in different documents regarding the value of Americas Energy's assets and liabilities, and said the company must disclose the new business ventures in which the company's president was planning to invest. The SEC made a similar point in arguing that the reorganization plan was likely unconfirmable, noting that under the proposal, surplus cash from the sale of Evans assets was to be used for pursuing a new business venture. "Creditors and shareholders are given no option to receive a cash payment, and instead, are forced to invest in a new business (which may have nothing to do with coal mining) and assume all associated risks of that new business, none of which are disclosed," the report says citing the objection. The report says the SEC also noted that the plan was signed by Americas Energy President Chris Headrick, despite the fact that the trustee had reported that all employees of Americas Energy had been laid off in December. Mr. Headrick said in an email that the trustee wasn't privy to the information the company had on the Alpha deal. As for the asset and liability numbers, he said that "Our company was fully compliant with all of our SEC filings." About Americas Energy Knoxville, Tenn.-based Americas Energy Company-AECo (OTC BB: AENYQ.OB) operates surface mines in southeastern Kentucky. In March 2010, the Company acquired Evans Coal Corp. for $7,000,000 in cash, a $25,000,000 promissory note and a 2% overriding royalty on all coal sales generated from the properties acquired from Evans. Evans owns or controls by lease mineral rights and currently operates by use of contractors, two surface mines in Bell County and one in Knox County, Kentucky. In addition, the Company has rights to oil properties located in Cumberland County, Kentucky that are intended for future development. The Company and its wholly owned subsidiary, Evans Coal Corporation, filed voluntary petitions for Chapter 11 relief (E.D. Tenn. Case Nos. 11-35466 and 11-35468) on Dec. 7, 2011, in order that they may orderly dispose of assets owned in Kentucky and reorganize their financial obligations and capital structure. Judge Richard Stair, Jr., presides over the case. Jimmy Terry, Esq., at The Law Offices of Jim Terry, in Clinton, Tenn., represents the Debtors as counsel. AENY estimated estimated assets of $500,000 to $1 million and estimated liabilities of $1 million to $10 million in its petition. The petition was signed by Christopher Headrick, president. ARCAPITA BANK: Court Approves GCG as Claims and Noticing Agent -------------------------------------------------------------- The Hon. Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York, in an interim basis, authorized Arcapita Bank B.S.C.(c), et al., to employ GCG, Inc. as claims and noticing agent. GCG, Inc., is expected to, among other things: i) distribute required notices to parties in interest; ii) receive, maintain, docket and otherwise administer the proofs of claim filed in the Chapter 11 cases; and iii) provide such other administrative services -- as required by the Debtors -- that would fall within the purview of services to be provided by the Clerk's Office. To the best of the Debtors' knowledge GCG does not hold or represent an interest adverse to the Debtors or the estates respecting the matters upon which it is to be engaged. The final hearing on the relief requested will be on April 17, 2012 at 11:00 a.m. (prevailing Eastern Time). Administrative Agent The bankruptcy judge entered a separate interim order authorizing Arcapita Bank to employ GCG, Inc., as administrative agent. GCG, Inc., is expected to, among other things: a) assist with the preparation and filing of the Debtors' schedules of assets and liabilities and statements of financial affairs; b) generate and provide claim reports and claim objection exhibits, as requested by the Debtors and their professionals; and c) manage the preparation, compilation, and mailing of documents to creditors and other parties in interest in connection with the solicitation of a chapter 11 plan. Prior to the Petition Date, the Debtors paid to GCG a $30,000 retainer. As of the Petition Date, GCG has applied the retainer to all prepetition invoices. GCG will apply any remaining amounts of its prepetition retainer as a credit toward postpetition fees and expenses, after the postpetition fees and expenses are approved pursuant to the first Order of the Court awarding fees and expenses to GCG. To the best of the Debtor's knowledge, GCG is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The final hearing on the relief requested will be on April 17, 2012, at 11:00 a.m. (prevailing Eastern Time). About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. The Debtors have tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG, Inc., as notice and claims agent. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group currently has roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios. The Debtors, however, have been unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as a provisional liquidator. No official committee has yet been appointed by the Office of the United States Trustee. At the end of March 2012, Arcapita Bank received interim approval of its routine first day motions. ARCAPITA BANK: Taps Alvarez & Marsal as Financial Advisors ---------------------------------------------------------- Arcapita Bank B.S.C.(c), et al., ask the U.S. Bankruptcy Court for the Southern District of New York for permision to employ Alvarez & Marsal North America, LLC, together with employees of its affiliates, its wholly owned subsidiaries, and independent contractors as financial advisors. A&M will, among other things: a) interface with the Official Committee of Unsecured Creditors, Zolfo Cooper (as Cayman Provisional Liquidator), and other creditors regarding the Debtors' operations; b) review proposed investment activities (investment in and monetization of existing investments and new investments) and present the proposed actions to the Creditors Committee; and c) report/validate accounting entries of the Debtors, and cash flows between and among Debtors and non-Debtor entities. The hourly rates of A&M personnel are: Managing Director $650 - $850 Director $450 - $650 Analyst/Associate $250 - 450 The Debtors and A&M have agreed that A&M will be entitled to incentive compensation in the amount of 15% of the aggregate hourly fees incurred by A&M during the pendency of the Chapter 11 cases, which Incentive Fee will become payable upon the satisfaction of certain conditions. To the best of the Debtors' knowledge, A&M is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtors set a hearing on April 17, 2012, at 11:00 a.m. (Eastern Time) on the employment of A&M. About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. The Debtors have tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG, Inc., as notice and claims agent. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group currently has roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios. The Debtors, however, have been unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as a provisional liquidator. No official committee has yet been appointed by the Office of the United States Trustee. At the end of March 2012, Arcapita Bank received interim approval of its routine first day motions. ARCAPITA BANK: Taps Trowers & Hamlins as Bahraini Counsel --------------------------------------------------------- Arcapita Bank B.S.C.(c), et al., ask the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Trowers & Hamlins (Bahrain office), a branch office of Trowers & Hamlins, an unincorporated English law partnership to serve as Bahraini counsel. Trowers & Hamlins will, among other things: -- provide advice, to the Debtors with respect to their rights and duties under the laws of Bahrain, in accordance with the terms of the license issued by the Ministry of Justice and Islamic Affairs and the Ministry of Industry and Commerce under which Trowers & Hamlins operates as a "foreign" law firm in Bahrain; -- assist in the negotiation with creditors and other parties- in-interest in the Chapter 11 cases by advising on potential issues particular to Bahrain law impacting such negotiations; -- assist with the preparation of certain legal documents on behalf of the Debtors; -- continue to serve as the Debtors' local international counsel in connection with any pending proceedings in Bahrain; and -- perform all other legal services for the Debtors that may be necessary. The hourly rates of Trowers & Hamlins's personnel are: Partners $754 Senior Associates $688 Solicitor $582 To the best of the Debtors' knowledge, Trowers & Hamlins does not represent or hold any interest adverse to the Debtors or their estates. The Debtors set an April 17, 2012, hearing at 11:00 a.m. (Eastern Time) on the employment of Trowers & Hamlins. The firm can be reached at Michael A. Rosenthal, Esq. Janet M. Weiss, Esq. Matthew K. Kelsey, Esq. GIBSON, DUNN & CRUTCHER LLP 200 Park Avenue New York, NY 10166-0193 Tel: (212) 351-4000 Fax: (212) 351-4035 E-mail: mrosenthal@gibsondunn.com jweiss@gibsondunn.com mkelsey@gibsondunn.com About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. The Debtors have tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG, Inc., as notice and claims agent. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group currently has roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios. The Debtors, however, have been unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as a provisional liquidator. No official committee has yet been appointed by the Office of the United States Trustee. At the end of March 2012, Arcapita Bank received interim approval of its routine first day motions. AUGUST CAYMAN: S&P Assigns Preliminary 'B' Corp. Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B' corporate credit rating to August Cayman Intermediate Holdco Inc. The rating outlook is stable. "At the same time, we assigned our preliminary issue-level ratings of 'B' to the senior secured debt (preliminary recovery rating '3') and 'B-' to the second-lien term loan (preliminary recovery rating '5'). The preliminary '3' and preliminary '5' recovery ratings reflect our expectations for meaningful (50%-70%) and modest (10%-30%) recovery, respectively, of principal in the event of default," S&P said. "Our final ratings will depend on receipt and satisfactory review of all final transaction documentation. Accordingly, the preliminary rating should not be construed as evidence of a final rating. If we do not receive final documentation within a reasonable time frame, or if final documentation departs from materials reviewed, we reserve the right to withdraw or revise our rating," S&P said. "The ratings reflect what we consider to be Schrader's weak business risk profile, reflecting its exposure to cyclical auto production levels--limited scale and product diversity--somewhat offset by growth prospects supported by regulatory requirements, and its highly leveraged financial risk profile, given leverage expectations between 4.5x to 5.0x, with limited positive free cash flow generation prospects over the next two years," said Standard & Poor's credit analyst Nishit Madlani. Schrader manufactures tire pressure monitoring systems (TPMS), fluid control components, and tire hardware and accessories, primarily for the light vehicle automotive end-markets. The proposed $505 million leveraged buyout (LBO) transaction announced by Madison Dearborn Partners, the private-equity sponsor, would be financed with equity of $205 million and proposed debt of $365 million including $230 million first lien term loan, $100 million second lien term loan and an undrawn $35 million revolver. AZKAR INC: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Azkar, Inc. dba Shell Food Mart 5395 Buford Highway Norcross, GA 30071 Bankruptcy Case No.: 12-58651 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Judge: Paul W. Bonapfel Debtor's Counsel: Martha A. Miller, Esq. SCHULTEN, WARD & TURNER LLP 260 Peachtree Street, NW, Suite 2700 Atlanta, GA 30303-1240 Tel: (404) 688-6800 E-mail: mam@swtlaw.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 Aziz Mitha, president. BANKATLANTIC BANCORP: Incurs $17.4-Mil. Net Loss in 4th Quarter --------------------------------------------------------------- BankAtlantic Bancorp, Inc., reported a net loss of $17.46 million on $30.96 million of total interest income for the three months ended Dec. 31, 2011, compared with a net loss of $46.29 million on $40.76 million of total interest income for the same period a year ago. The Company reported a net loss of $28.74 million on $141.32 million of total interest income for the year ended Dec. 31, 2011, compared with a net loss of $143.25 million on $176.31 million of total interest income during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $3.67 billion in total assets, $3.69 billion in total liabilities and a $16.92 million in total deficit. BankAtlantic Bancorp's Chairman and CEO, Alan B. Levan commented "BankAtlantic's capital ratios have remained relatively stable and have never fallen below its regulatory requirements during the last several difficult years for the U.S. and Florida economies. "As previously announced, on March 13, 2012, BankAtlantic Bancorp and BB&T Corporation entered into an amendment to their November 1, 2011 Stock Purchase Agreement. Pursuant to the agreement as amended, BankAtlantic Bancorp will sell BankAtlantic to BB&T and BB&T will assume all of Bancorp's obligations following the closing with respect to approximately $285 million of outstanding Trust Preferred securities ("TruPs"). As previously disclosed, it is contemplated that prior to the sale of the Bank, the Bank will distribute to the Company membership interests in two limited liability companies. "While the Company had previously announced a possible rights offering of its Class A Common Stock to its shareholders, in light of the amended agreement with BB&T, the contemplated rights offering is no longer being pursued at this time. "In connection with the closing of the transaction with BB&T, BankAtlantic Bancorp has requested decertification as a savings and loan holding company. Post closing, the Company expects to remain listed on the New York Stock Exchange, and plans to operate as an asset management company in the near term and to the extent of available funds transition into specialty finance," concluded Mr. Levan. A copy of the press release is available for free at: http://is.gd/h16Kb0 About BankAtlantic Bancorp BankAtlantic Bancorp (NYSE: BBX) -- http://www.BankAtlanticBancorp.com/-- is a bank holding company and the parent company of BankAtlantic. BankAtlantic -- "Florida's Most Convenient Bank" with a Web presence at http://www.BankAtlantic.com/-- has nearly $6.0 billion in assets and more than 100 stores, and is one of the largest financial institutions headquartered junior in Florida. BankAtlantic has been serving communities throughout Florida since 1952 and currently operates more than 250 conveniently located ATMs. * * * As reported by the TCR on March 1, 2011, Fitch has affirmed its current Issuer Default Ratings for BankAtlantic Bancorp and its main subsidiary, BankAtlantic FSB at 'CC'/'C' following the announcement regarding the regulatory order with the Office of Thrift Supervision. BankAtlantic has announced that it has entered into a Cease and Desist Order with the OTS at both the bank and holding company level. The regulatory order includes increased regulatory capital requirements, limits to the size of the balance sheet, no new commercial real estate lending and improvements to its credit risk and administration areas. Further, the holding company must also submit a capital plan to maintain and enhance its capital position. BATAA/KIERLAND LLC: Wants JPMCC to Pay for Mediation Expenses ------------------------------------------------------------- Bataa/Kierland, LLC, asks the U.S. Bankruptcy Court for the District of Arizona to enter an order: -- requiring JPMCC 2007-CIBC 19 East Greenway, LLC, to pay the attorney's fees and costs (including the mediation fee) incurred by the Debtor in connection with the mediation conducted on Feb. 16, 2012, as a sanction for JPMCC's failure to participate in the mediation in good faith; and -- setting a final hearing on confirmation of the Debtor's Amended Plan of Reorganization dated Sept. 2, 2011, because the settlement reached at the mediation has not been approved by JPMCC's credit committee. The Debtor related that JPMCC, Bataa/Kierland II, LCC (who has asserted certain claims against the Debtor), and Banker's Trust Company (a secured creditor of Kierland II who has also asserted claims against the Debtor) agreed to participate in the mediation with the hopes of resolving, among other things: a) the treatment of JPMCC's claims under the Debtor's Plan; and b) certain litigation among the parties concerning the Debtor's parking rights and responsibilities on Kierland II's property. According to the Debtor, the mediation was conducted by Gary Birnbaum. The parties reached a stipulated resolution at the mediation, consisting of a discounted payoff of JPMCC's claim through take-out financing which was to be provided by Banker's Trust. Objection JPMCC is asking the Court to strike the Debtor's motion for sanctions in its entirety. JPMCC disagrees with the Debtor's characterization of events that purportedly took place during the mediation. JPMCC also disagrees with the Debtor's inflammatory remarks relating to, among other things, the senior lender's purported actions before, during, and after the mediation. JPMCC related that it is prepared to address all of the Debtor's remarks. But, before doing so, JPMCC must seek guidance from the Court because it does not want to breach the mediation agreement, or violate Arizona law and Federal Rule of Evidence 408. JPMCC added that, among other things: -- because mediations are confidential, the Debtor's motion for sanctions is improper, inadmissible, and must be stricken in its entirety; and -- motions must be supported by competent evidence. About Bataa/Kierland Bataa/Kierland, LLC, owns and operates a Class "A" office building known as Kierland Corporate Center located at 7047 E. Greenway Parkway, Scottsdale, Arizona. It filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 11-05850) on March 9, 2011. The Debtor estimated its assets and debts at $10 million to $50 million. Polsinelli Shughart PC serves as the Debtor's bankruptcy counsel. The United States Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Bataa/Kierland have expressed interest in serving on a committee. BERNARD L. MADOFF: Trustee Can't Aim Tort Claims at 3rd Parties --------------------------------------------------------------- Sindhu Sundar at Bankruptcy Law360 reports that UniCredit Bank Austria AG on Friday argued Bernard L. Madoff's bankruptcy trustee could not bring common law claims against third parties to try to get back customer property after he had accused the bank of enabling the imprisoned fraudster's Ponzi scheme by directing billions of dollars into Madoff's firm. In a brief filed in the Second Circuit, Bank Austria argued that the Securities Investor Protection Act only allows for clawback claims by Irving H. Picard, the trustee recovering funds for investors in Bernard L. Madoff Investment, according to Law360. 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: Sons' Wives Mostly Let Off the Hook on Suits --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee liquidating Bernard L. Madoff Investment Securities Inc. largely failed in his effort at belatedly suing the wife of one son of Bernard Madoff and the widow and former wife of another son who committed suicide. The report recounts that in October 2009 the Madoff trustee sued Mr. Madoff's two sons and family members to recover $255 million they received that was stolen from customers. In December, the trustee filed a motion for court permission to add the wives as defendants. According to the report, in a 21-page decision, U.S. Bankruptcy Judge Burton R. Lifland refused to allow suit against the wives on the largest claims. The wives opposed being added to the complaint, saying the suit would have begun beyond the six years allowed by New York law. Judge Lifland agreed for the most part. The trustee argued that his tardy complaint should relate back to the original filing in 2009 because the wives should have known they would be named in the complaint were it not for "a mistake on" the trustee's part, Judge Lifland said. Judge Lifland refused to employ the relation-back doctrine, saying it was not unreasonable for the wives to believe their omission from the original complaint was a "strategic decision." Although the wives are off the hook for the main $255 million complaint, Judge Lifland said the new complaint comes in time to sue them for $5.5 million, representing funds they later received that were originally given to other family members. Judge Lifland also said it's still timely to sue the wives for constructive trust and unjust enrichment, even though he might later rule that the so-called in pari delicto defense bars the claims. The family lawsuit is Picard v. Estate of Mark Madoff, 09-01503, U.S. District Court, Southern District of New York (Manhattan). 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. BETSY WEBB: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Betsy Webb Stables, LLC dba Louisville Equestrian Center 2612 S. English Station Road Louisville, KY 40299 Bankruptcy Case No.: 12-31594 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Western District of Kentucky (Louisville) Debtor's Counsel: Mark J. Sandlin, Esq. GOLDBERG & SIMPSON, P.S.C. 9301 Dayflower Street Louisville, KY 40059 Tel: 589-4440 Fax: 581-1344 E-mail: msandlin@goldbergsimpson.com Estimated Assets: $50,001 to $100,000 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 The petition was signed by Elizabeth A. Webb, manager. BION ENVIRONMENTAL: 2011 Unitholders Participate in New Offering ---------------------------------------------------------------- All holders of Units of Bion Environmental Technologies, Inc.'s securities issued during 2011 elected to amend their subscription agreements to participate in the Company's current Unit offering of its securities by amending their original subscription agreement to apply their original purchase price to the new purchase price. As a result, the holders will retain the shares and warrants they originally received and they will be issued 208,000 additional warrants, in aggregate, to purchase the Company's common stock at a price of $3.10 per share until Dec. 31, 2014. This warrant issuance includes issuance of 30,000 warrants to each of Mark A. Smith and Dominic Bassani, the Company's President and CEO, respectively. As a result of this election, the Company believes that the item 'Other Liabilities' on the Company's Dec. 31, 2011, Balance Sheet (unaudited) totaling $1,009,388, will now be recorded as equity/additional paid in capital. The Company anticipates that this change will be reflected in its March 31, 2012, Financial Statements. On March 30, 2012, MAS and DB each agreed to extend the maturity of their outstanding deferred compensation until Jan. 15, 2014, and to continue to defer their compensation until June 2012. The deferred compensation accrues interest at an annual rate of 8% from Jan. 1, 2012, and will be convertible, at the sole options of MAS and DB, into units with each unit consisting of one share of common stock and one warrant to purchase a share of the Company's common stock exercisable at $2.50 per share until Dec. 31, 2016 . The conversion price will be the lower of $2.50 per unit or the lowest price at which the Company issues its common stock before Jan. 15, 2014. As of March 31, 2012, the balances owed to MAS and DB were $195,868 and $290,160, respectively. About Bion Environmental Crestone, Colo.-based Bion Environmental Technologies, Inc. (OTC BB: BNET) -- http://biontech.com/-- has provided environmental treatment solutions to the agriculture and livestock industry since 1990. Bion's patented next-generation technology provides a unique comprehensive treatment of livestock waste that achieves substantial reductions in nitrogen and phosphorus, ammonia, greenhouse and other gases, as well as pathogens, hormones, herbicides and pesticides. The Company's balance sheet at Dec. 31, 2011, showed $8.60 million in total assets, $10.01 million in total liabilities, $41,400 in Series B redeemable convertible preferred stock, and a $1.45 million total deficit. The Company has not generated revenues and has incurred net losses of approximately $6,998,000 and $2,976,000 during the years ended June 30, 2011, and 2010, respectively. At Dec. 31, 2011, the Company has a working capital deficit and a stockholders' deficit of approximately $344,000 and $1,543,000, respectively. GHP Horwath, PC, in Denver, Colorado, expressed substantial doubt about the Company's ability to continue as a going concern the fiscal 2011 financial results. The independent auditors noted that the Company has not generated revenue and has suffered recurring losses from operations. BILLMYPARENTS INC: Grants 10 Million Warrants to Robert DeSantis ---------------------------------------------------------------- BillMyParents, Inc., executed a Warrant Agreement with Robert DeSantis, a member of the Company's Board of Directors. The Warrant Agreement grants Mr. DeSantis warrants to purchase up to 10,000,000 shares of common stock at an exercise price of $0.40 per share and having a term of 5 years. The warrants vest monthly over a period of 24 months provided Mr. DeSantis continues to serve on the Board. From Feb. 16, 2012, through March 31, 2012, the Company issued to 20 accredited investors a total of 714 shares of the Company's Series B Convertible Preferred Stock at a price of $1,000.00 per share, and five year warrants to purchase up to an additional 446,250 shares of the Company's Common Stock at exercise price of $0.60 per share, in exchange for gross proceeds totaling $714,000. The Series B Stock is convertible into shares of Company common stock as provided in the Certificate of Designations at a price per share of $0.40, subject adjustments for stock dividends, splits, combinations and similar events as described in the Certificate of Designations. The total number of outstanding shares of Preferred Stock of the Company as of the date of April , 2012, is 4039, consisting of 3,325 shares of Series A convertible preferred stock and 714 shares of Series B Preferred Stock. The total number of outstanding shares of common stock of the Company as of the date of April 4, 2012, is 98,119,842. About BillMyParents San Diego, Calif.-based BillMyParents, Inc., markets prepaid cards with special features aimed at young people and their parents. BMP is designed to enable parents and young people to collaborate toward the goal of responsible spending. The Company reported a net loss of $14.2 million on $104,030 of revenues for the fiscal year ended Sept. 30, 2011, compared with a net loss of $6.9 million on $6,675 of revenues for the fiscal year ended Sept. 30, 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.95 million in total assets, $1.37 million in total liabilities, all current, and $583,366 in total stockholders' equity. For Fiscal 2011, the Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. BDO USA, LLP, in La Jolla, California, noted that the Company has incurred net losses since inception and has an accumulated deficit and stockholders' deficiency at Sept. 30, 2011. BRILEY FARMS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Briley Farms, LLC 4747 US 264 East Greenville, NC 27834 Bankruptcy Case No.: 12-02547 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: Randy D. Doub Debtor's Counsel: William P Janvier, Esq. JANVIER LAW FIRM, PLLC 1101 Haynes Street, Suite 102 Raleigh, NC 27604 Tel: (919) 582-2323 Fax: (866) 809-2379 E-mail: bill@janvierlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb12-02547.pdf The petition was signed by Glenda Briley, member/manager. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Briley Enterprises of Greenville, Inc. 12-01290 02/20/12 J.O.C. Farms, L.L.C. 12-01285 02/20/12 Joseph D. Briley, Jr. 12-01284 02/20/12 Pactolus Farms, L.L.C. 12-01291 02/20/12 BUFFETS INC: Plan Outline Hearing Continued Until April 30 ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a hearing on April 30, 2012, (Eastern Time) at 11:30 p.m. to consider adequacy of the Disclosure Statement explaining Buffets Restaurants Holdings, Inc., et al.'s Plan of Reorganization. Objections, if any, are due April 23 at 4:00 p.m. As reported in the Troubled Company Reporter on Jan. 25, 2012, Buffets Inc. negotiated the terms of the Plan with an ad hoc committee of the Debtors' first lien secured lenders. Lenders holding roughly 83% of the first lien debt agreed to support the Plan. Buffets Inc. hopes to emerge from Chapter 11 within six months of the petition date. The Plan contemplates payment in full in cash either on or after the effective date to holders of Allowed Administrative Claims, Fee Claims, Priority Tax Claims, DIP Financing Claims, and Other Priority Claims. Holders of Allowed First Lien Prepetition Secured Credit Facility Claims will receive 100% of Reorganized Buffets Restaurant Holdings common stock. Holders of general unsecured claims and holders of equity interests won't get anything. The Debtors said the holders of general unsecured claims (class 5 under the Plan) and holders of equity interests (class 6) are deemed to reject the Plan. The Debtors added that they will seek confirmation of the plan pursuant to 11 U.S.C. Sec. 1129(b). The Plan also calls for the Debtors to close several underperforming locations. The Bankruptcy Court has yet to schedule a hearing to consider approval of the Disclosure Statement. A copy of the Plan outline is available at http://www.scribd.com/doc/79188037 The Debtors' $50 million DIP financing with Credit Suisse AG, Cayman Islands Branch, as administrative agent, credit-linked deposit account agent, and collateral agent, requires the Debtors to obtain approval of the Disclosure Statement within 120 days after the petition date, obtain confirmation of the Plan within 160 days after the petition date, and effectuate the Plan within 180 days after the petition date. However, if the Debtors elect to pursue an asset sale, they must have executed a binding definitive agreement no later than 120 days after the petition date. About Buffets Inc. Buffets Inc., the nation's largest steak-buffet restaurant company, operates 494 restaurants in 38 states, comprised of 483 steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R) restaurants, and franchises 3 steak-buffet restaurants in two states. The restaurants are principally operated under the Old Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire Mountain(R) brands. Buffets employs 28,000 team members and serves 140 million customers annually. Buffets Inc. and all of its subsidiaries filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18, 2012, after it reached a restructuring support agreement with 83% of its lenders to eliminate virtually all of the Company's roughly $245 million of outstanding debt. In its schedules Buffets Inc. disclosed $384,810,974 in assets and $353,498,404 in liabilities. The Debtors are seeking to reject leases for 83 underperforming restaurants. Buffets had 626 restaurants when it began its prior bankruptcy case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged from bankruptcy in April 2009. Higher gasoline and energy costs, along with a decline in guest count, have hampered the Debtors' ability to service their long- term debt and caused a liquidity strain, forcing the Company to return to Chapter 11 bankruptcy. In the new Chapter 11 case, Buffets Inc.'s legal advisors are Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway, Stargatt & Taylor, LLP. The Company's financial advisor is Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims, noticing and balloting agent. An ad hoc committee of secured lenders is represented by Willkie Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP Agent and Prepetition First Lien Agent, is represented by Skadden Arps Slate Meagher & Flom as counsel. The U.S. Trustee has appointed a 5-member Official Committee of Unsecured Creditors in the Debtors' cases. BVI ASSURED: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: BVI Assured LLC dba Sleep Inn 3525 Old Conejo Rd Suite 111 Newbury Park, CA 91320 Bankruptcy Case No.: 12-20349 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court District of Idaho (Coeur dAlene) Judge: Terry L. Myers Debtor's Counsel: Stephen Brian McCrea, Esq. P.O. Box 1501 Coeur d'Alene, ID 83816-1501 Tel: (208) 666-2594 E-mail: mccreaecf@cda.twcbc.com Scheduled Assets: $3,700,256 Scheduled Liabilities: $3,116,651 The petitions were signed by Eric Winslow, managing member. BVI Assured LLC's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/idb12-20349.pdf BVI Sleep Inn list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/idb12-20352.pdf Affiliate that filed separate Chapter 11 petition Petition Case No. Date -------- ---- BVI Sleep Inn, LLC 12-20352 04/12/2012 Assets: $3,700,256 Liabilities: $3,055,202 The petition was signed by Eric Winslow, managing member. C. B. & H.: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: C. B. & H. Parts Corporation dba Tudors Biscuit World P.O. Box 247 Wayne, WV 25570 Bankruptcy Case No.: 12-30204 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Southern District of West Virginia (Huntington) Judge: Ronald G. Pearson Debtor's Counsel: Frederick L. Delp, Esq. P.O. Box 727 Barboursville, WV 25504 Tel: (304) 736-7727 E-mail: fldelp@comcast.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wvsb12-30204.pdf The petition was signed by Cledis B. Tooley, Jr., president. CDC CORP: Maples and Calder Approved as Cayman Islands Counsel -------------------------------------------------------------- The Hon. Paul W. Bonapfel of the U.S. Bankruptcy Court for the Northern District of Georgia authorized CDC Corporation to employ Maples and Calder as corporate Cayman Islands counsel for limited purposes and its affiliated services company, Maples Corporate Services Limited, as registered office provider in the ordinary course of business to provide services including making filings with the Cayman Islands Registrar of Companies and related matters and inconnection therewith to pay prepetition and postpetition claims. As reported in the Troubled Company Reporter on March 20, 2012, James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes, Ellis & Nason, P.A., the attorney for Debtor, said that in order to administer this case in a proper, efficient, and economical manner, the Debtor needs the services of a registered office provider in connection with the Cayman Islands corporate registration requirements. Prior to the Petition Date, Maples Corporate served as a registered office provider and provided the registered office, prepared and filed Annual Returns, maintained statutory records, including the updating and filing of the register of officers and directors, and obtained good standing certificates. Prior to the Petition Date, Maples and Calder acted as Cayman Islands corporate counsel to the Debtor, CDC Software Corporation, and several of their affiliates. In light of the conflict of interest in connection with this Chapter 11 case, following the Petition Date, Maples and Calder ceased to act as Cayman Islands corporate counsel to Debtor in respect of matters connected with the Chapter 11 case. Mr. Cifelli said that in order to continue properly to operate as a company incorporated in the Cayman Islands, the Debtor seeks specific authority to pay the invoices for legal fees and administrative services, including in connection with the annual fees and annual filings which were required in the Cayman Islands in January of 2012. In respect of the annual fees for 2012, and certain other administrative expenses incurred, Maples has issued an invoice in the amount of $5,180.56. "As Maples served as the provider of the Debtor's registered office in the Cayman Islands prior to the bankruptcy case and the firm filed the required annual reports and other filings with the Cayman Islands Registrar of Companies prior to the bankruptcy case, it is necessary and appropriate for the Debtor to pay the prepetition amounts owing to Maples so that Maples can continue to act on behalf of the Debtor without any change in the Debtor's registered office. This is the best way to streamline and insure that the Debtor can obtain good standing certificates on a timely basis so as to be able to close the sale contemplated by the sale motion scheduled to be heard by the Court at the hearing on March 20, 2012. The only possible alternative would be to attempt to identify (and pay) a different registered office provider in the Cayman Islands -- which would likely result in additional costs and delays occasioned by an unnecessary hand-over," Mr. Cifelli says. The Debtor sought authorization to retain and compensate Maples without the necessity of formal fee applications. The Debtor sought authority to pay the invoices for 2012 registration matters and to pay Maples in the ordinary course of business for future necessary filings with the Cayman Islands Registrar of Companies and related matters. The services of Maples and Calder as corporate Cayman Islands counsel for the Debtor are expected to be limited to providing advice with regard to necessary corporate updates and filings and related matters and will not be duplicative of the services performed by the firm of Solomon Harris. Maples and Calder is owed $38,793.75 for professional services rendered prior to the Petition Date. Maples and Calder is further owed $5,793.75 for professional services rendered after the Petition Date. Debtor seeks authority to pay these invoices. Matthew Gardner, associate partner at Maples, assures the Court that his firm does not hold or represent interest adverse to the Debtors' estates, and that it is a "disinterested person" under Section 101(14) of the Bankruptcy Code. About CDC Corp. Based in Atlanta, CDC Corp. (Nasdaq: CHINA) -- http://www.cdccorporation.net/-- is the parent company of CDC Software (Nasdaq: CDCS). CDC Software is based dually in Shanghai, China, and Atlanta and produces enterprise software applications, IT consulting services, outsourced applications development and IT staffing. The company's owners include Asia Pacific Online Ltd., Xinhua News Agency and Evolution Capital Management. CDC Corporation, doing business as Chinadotcom, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011. James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA, in Atlanta, Georgia, serves as counsel. Moelis & Company LLC serves as its financial advisor and investment banker. Marcus A. Watson at Finley Colmer and Company serves as chief restructuring officer. The Debtor estimated assets and debts at $100 million to $500 million as of the Chapter 11 filing. The Official Committee of Equity Security Holders of CDC Corporation is represented by Troutman Sanders. The Committee tapped Morgan Joseph TriArtisan LLC as its financial advisor. CDC CORP: Plan Disclosure Hearing Continued Until April 26 ---------------------------------------------------------- The Hon. Paul W. Bonapfel of the U.S. Bankruptcy Court for the Northern District of Georgia has continued until April 26, 2012, at 10:00 a.m., the hearing to consider adequacy of the Disclosure Statement explaining CDC Corporation's Chapter 11 Plan. As reported in the Troubled Company Reporter on March 9, 2012, the Plan was proposed by the Debtor and the Official Committee of Equity Security Holders in the Debtor's case. According to Disclosure Statement, the Plan contemplates the liquidation of all of the Debtor's assets, for the benefit of the Debtor's creditors and equity security holders. The purchase price for the CDC Software Shares is $249,788,301. The Debtor estimates that an additional $41,000,000, after expenses, will be realized from the disposition of Trust Assets, other than the sale proceeds of the CDC Software Shares, for total proceeds from asset sales of approximately $290,788,301. After payment of all Allowed Claims, including Fee Claims, and the expenses of liquidation, the Debtor estimates $194,860,662 will be available for distribution to holders of Allowed Equity Interests. Through the filing of the sale motion, the Debtor seeks approval of the sale of the CDC Software Shares to the stalking horse purchaser or other purchaser with the highest or best bid at the auction. Under the Plan, chief restructuring officer Marcus A. Watson will act as the Disbursing Agent and reserve from the sale proceeds $110 million to pay all Allowed Claims in full. The remaining Sale Proceeds will be transferred to the Liquidation Trust for the benefit of Allowed Equity Interests. Under the Plan, all other assets of the Debtor will be transferred to the Liquidation Trust to be liquidated for the benefit of holders of Allowed Equity Interests pursuant to the Plan. The Plan Effective Date is anticipated to occur before May 1, 2012. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/CDC_CORPORATION_ds.pdf According to the Debtor's case docket, if the Disclosure Statement is approved on schedule, the hearing to consider the confirmation of Debtor's Chapter 11 Plan will be held April 26, at 10:00 a.m. About CDC Corp. Based in Atlanta, CDC Corp. (Nasdaq: CHINA) -- http://www.cdccorporation.net/-- is the parent company of CDC Software (Nasdaq: CDCS). CDC Software is based dually in Shanghai, China, and Atlanta and produces enterprise software applications, IT consulting services, outsourced applications development and IT staffing. The company's owners include Asia Pacific Online Ltd., Xinhua News Agency and Evolution Capital Management. CDC Corporation, doing business as Chinadotcom, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011. James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA, in Atlanta, Georgia, serves as counsel. Moelis & Company LLC serves as its financial advisor and investment banker. Marcus A. Watson at Finley Colmer and Company serves as chief restructuring officer. The Debtor estimated assets and debts at $100 million to $500 million as of the Chapter 11 filing. The Official Committee of Equity Security Holders of CDC Corporation is represented by Troutman Sanders. The Committee tapped Morgan Joseph TriArtisan LLC as its financial advisor. In March 2012, CDC Corp. won approval to sell its 87% stake in CDC Software Inc. to Vista Equity Partners affiliate Archipelago Holdings Inc. for nearly $250 million. CHINQUA PENN: April 25 & 26 Auction for Property Assets ------------------------------------------------------- The U.S. Bankruptcy Court of the Middle District of NC has ordered that the personal property assets of Chinqua Penn Plantation be sold at Absolute Public Auction. The auction has been ordered in the matter of Renegade Holdings, Inc. Leland Little Auction & Estate Sales, Ltd. and Iron Horse Auction Company, Inc. have been ordered to conduct this auction to be held April 25 and 26, at the Greensboro Coliseum Complex: Special Events Center, West Wing. Previews will be held April 22, 23, and 24, at the Chinqua Penn Plantation in Reidsville, N.C. Those wishing to attend the previews, or auction, are required to purchase a color catalogue, which grants admittance to two individuals. Catalogues are available for purchase, and will be available for purchase on-site at the previews and the auction. The auction will be conducted by live public auction, with the options of bidding in-person, by telephone, or by absentee bid form, and by bidding online with a live video and audio feed, using http://www.liveauctioneers.com/ Thomas McInnis of Iron Horse Auction Company, Inc. states, "This auction represents a collection of one of America's premier industrial families. Never again in this century will such an offering be available in NC. We are truly honored to be able to bring these rare and unique items to the marketplace." Leland Little of Leland Little Auction & Estate Sales, Ltd. states, "This collection speaks to a national and international audience; offering over 1,000 lots with a broad spectrum of history and culture that represents the Penn's love of the rare and exotic. Come and enjoy one of the few original collections that revisits the era of the Great Gatsby and harkens back to a time when men of substance traveled the world in search of rarities." CHRISTOPHER GARNER: Court Conditionally Approves Hiring of Counsel ------------------------------------------------------------------ Bankruptcy Judge Randy D. Doub issued an order conditionally approving the request of Christopher B. Garner and Tandra L. Garner to employ George Mason Oliver, Esq., and the law firm of Oliver Friesen Cheek, PLLC, as the Debtors' counsel. The Bankruptcy Administrator objected to the Debtors' request, saying the firm is not "disinterested" within the meaning of 11 U.S.C. Sec. 101(14) and as required by Sec. 327(a). An affidavit executed by Mr. Oliver revealed the compensation arrangement between the Debtors and OFC. The affidavit stated that OFC was paid a $2,000 retainer on June 14, 2010, and $8,000 on Jan. 17, 2012, for a total retainer of $10,000. Prior to the filing of the case, OFC was paid $9,976 for its pre-petition services and expenses. The affidavit stated that nothing was owed to OFC at the time the case was filed. In order to secure fees for services rendered during the pendency of the case, the affidavit states that the Debtors granted OFC two future advance deeds of trust on tracts of land owned by the Debtors. The first deed of trust was a second lien on three tracts of land in Davidson County, North Carolina. The first tract of land is located at 104 Wrenn Road, Lexington, North Carolina. It has a scheduled value of $60,000 and is subject to a first lien in the amount of $43,885. The second tract of land is located at 1483 Norman Shoaf Rd., Lexington. It has a scheduled value of $125,000 and is subject to a first lien in the amount of $65,824. The third tract of land is located at 1683 Turner Rd., Lexington. It has a scheduled value of $90,000 and is subject to a first lien in the amount of $61,333. The second deed of trust granted to OFC is secured by a lot located at Old Pond Subdivision in Boone, North Carolina. It has a scheduled value of $40,000 and has no encumbrances. The Bankruptcy Administrator asserted that OFC held an interest that is materially adverse to a class of creditors. The Bankruptcy Administrator stated that the proposed fee arrangement of securing future fees on the Debtors' tracts of real estate is detrimental to all other administrative creditors that hold claims or future claims in the case. The Bankruptcy Administrator further argued that if a trustee was appointed, the case converted to Chapter 7, or the case became administratively insolvent, the proposed fee arrangement provided OFC a super-priority secured administrative claim over all other administrative claims and the fee arrangement effectively had rewritten 11 U.S.C. Sec. 507. The Court agreed with the Bankruptcy Administrator. The proposed fee arrangement ensures that OFC will have its claim paid while other administrative creditors are at risk of receiving partial or no payment, Judge Doub pointed out. He also said the proposed fee arrangement rearranges the priorities set forth in Sections 507 and 726(b), and effectively ensures that OFC will be paid over any other administrative creditor in the event that a trustee is appointed, the case converts to a Chapter 7, or the case becomes administratively insolvent. Nevertheless, Judge Doub granted the Debtors' application to employ OFC on the condition that OFC will amend the two future advance deeds of trust to be in favor of all priority claims allowed under Sec. 503(b) in the case, and that in the event that the collateral securing administrative claims should be liquidated during the pendency of the Chapter 11 proceeding, all proceeds shall be distributed ratably to the Administrative Class. In the event a trustee is appointed during the Chapter 11 proceeding or the case is converted to a Chapter 7 proceeding, the Administrative Class shall cancel the deeds of trust if the trustee makes such request. A copy of the Court's April 6, 2012 Order is available at http://is.gd/ixMlh6from Leagle.com. Christopher Brian Garner and Tandra Leonard Garner filed for Chapter 11 bankruptcy (Bankr. E.D.N.C. Case No. 12-00399) on Jan. 17, 2012. COMMUNITY FIRST: Bank Closes Assets Sale to Southern Community -------------------------------------------------------------- Community First Bank and Trust, a wholly-owned subsidiary of Community First Inc., completed the sale of certain assets and transferred certain liabilities relative to the Bank's branch office located at 1950 Old Fort Parkway, Murfreesboro, Tennessee 37129, pursuant to the Purchase and Assumption Agreement, dated Dec. 28, 2011, between the Bank and Southern Community Bank, a Tennessee state-chartered bank. Pursuant to the Agreement, the Bank sold approximately $7.1 million in loans and approximately $298,000 in other assets associated with the operation of the Murfreesboro Branch. Southern Community also assumed substantially all of the deposit liabilities associated with the Murfreesboro Branch (which totaled approximately $34.3 million at the time of the closing) and assumed the Bank's lease on the Murfreesboro Branch location. The final amounts of assets sold and liabilities transferred are subject to a customary post-closing adjustment, which is expected to be determined within 30 days from the date of closing and is not expected to be material. Southern Community paid a premium of 4% on the deposit liabilities assumed. About Community First Columbia, Tennessee-based Community First, Inc., is a registered bank holding company under the Bank Holding Company Act of 1956, as amended, and became so upon the acquisition of all the voting shares of Community First Bank & Trust on Aug. 30, 2002. An application for the bank holding company was approved by the Federal Reserve Bank of Atlanta (the "FRB") on Aug. 6, 2002. The Company was incorporated under the laws of the State of Tennessee as a Tennessee corporation on April 9, 2002. The Company reported a net loss of $15.0 million on $19.6 million of net interest income (before provision for loan losses) in 2011, compared with a net loss of $18.2 million on $21.0 million of net interest income (before provision for loan losses) in 2010. Total non-interest income was $3.4 million for 2011, compared with $4.7 million for 2010. The Company's balance sheet at Dec. 31, 2011, showed $616.8 million in total assets, $607.2 million in total liabilities, and stockholders' equity of $9.6 million. Crowe Horwath LLP, in Brentwood, Tennessee, expressed substantial doubt about Community First's ability to continue as a going concern. The independent auditors noted that the the Company's bank subsidiary, Community First Bank & Trust, is not in compliance with a regulatory enforcement action issued by its primary federal regulator requiring, among other things, a minimum Tier 1 Leverage capital ratio at the Bank of not less than 8.5%, a minimum Tier 1 capital to risk-weighted assets ratio of not less than 10.0% and a minimum Total capital to risk-weighted assets ratio of not less than 12.0%. "The Bank's Tier 1 Leverage capital ratio was 4.92%, its Tier 1 capital to risk-weighted assets ratio was 7.22% and its Total-capital to risk weighted assets ratio was 8.51% at Dec. 31, 2011. Continued failure to comply with the regulatory enforcement action may result in additional adverse regulatory action." CONNECTICUT LIGHT: Moody's Cuts Preferred Stock Ratings to 'Ba1' ---------------------------------------------------------------- Moody's Investors Service on April 9 downgraded the long-term ratings of NSTAR and NSTAR Electric Company (NSTAR Electric), including their senior unsecured ratings to A3 (from A2) and A2 (from A1), respectively. Moody's downgraded NSTAR's short-term rating for commercial paper to Prime-2 from Prime-1 and affirmed NSTAR Electric's Prime-1 short term commercial paper rating. These rating actions conclude the review for possible downgrade that commenced on February 16, 2012. The rating outlooks of NSTAR and NSTAR Electric are stable. Moody's also downgraded the ratings of Connecticut Light & Power Company (CL&P), including the senior unsecured rating to Baa2 from Baa1. The rating outlook is stable. Concurrently, Moody's affirmed the ratings of Northeast Utilities (NU; sr unsecured: Baa2), Public Service Company of New Hampshire (PSNH; Issuer rating: Baa2), Western Massachusetts Electric Company (WMECO; sr unsecured (Baa2) and Yankee Gas Services (YGS; Issuer rating: Baa2). The outlook is stable. The downgrade of the ratings of NSTAR and NSTAR Electric is triggered by the anticipated completion this week of the stock- for-stock merger of equals between NU and NSTAR announced in October 2010. This follows approval last week by the Connecticut Public Utility Regulatory Administration (PURA) and the Massachusetts Department of Public Utilities (MDPU) of settlement agreements relating to the merger that were entered into earlier this year between several of the entities within the merged group and various constituencies in Connecticut and Massachusetts. Ratings Rationale "While acknowledging that the transaction has not resulted in incremental leverage and the complementary nature of the operations amid the group's substantial capital expenditure program in distribution and transmission rate base, the rating action is largely driven by Moody's opinion that the combined company will operate as one system from a liquidity and a capital deployment standpoint" said Natividad Martel, an Assistant Vice President at Moody's. "This opinion is underpinned by the absence of restrictions under the Massachusetts comprehensive settlement agreements that would limit NSTAR's ability to upstream dividend distributions to NU or other terms that would encourage separateness." NSTAR and NSTAR Electric will now become key components of a financially weaker organization, narrowing the gap between the ratings of the entities within the newly combined NSTAR and NU corporate family. Further supporting this view is Moody's expectation that NSTAR and NSTAR Electric will use their short-term debt arrangements to aid the merged group in funding its capital requirements. That said, the stable outlook reflects Moody's expectation that NSTAR and NSTAR Electric will remain free cash flow positive and exhibit credit metrics that are commensurate with the low and mid-range of the A-rating category, respectively, despite the 44 month base distribution rate freeze in place for NSTAR Electric under the terms of the Massachusetts settlement agreements. The downgrade of CL&P's ratings reflects the significant deterioration recorded in its credit metrics at year-end 2011, with CFO pre-W/C to debt and CFO pre-W/C interest coverage of 16.1% and 4.4x, respectively, and Moody's view that the utility will continue to report credit metrics that are more commensurate with the Baa2 rating category. The affirmation of the ratings of NU, PSNH, WMECO and YGS reflects Moody's opinion that the transaction is generally credit supportive for NU and its other subsidiaries since NU can benefit from NSTAR group's positive free cash flows. This somewhat reduces the group's anticipated reliance on debt to fund its investment program amid Moody's expectation that those subsidiaries will maintain their pre-merger historical target dividend payout ratio of 60%. As a result, Moody's expects NU will report better consolidated credit metrics despite lower metrics at CL&P, better positioning the NU holding company at its current rating Baa2 category. NU's Baa2 senior unsecured rating also takes into consideration the structural subordination that will exist upon completion of the merger for parent level debt-holders relative to the existing debt outstanding at the utility subsidiaries, particularly at the largest companies within the merged group, namely CL&P and NSTAR. The stable outlooks reflect Moody's expectation that each of the entities will report credit metrics that are commensurate with their current rating category. Following the downgrades of the ratings of NSTAR, NSTAR Electric and CL&P limited prospects exist for an upgrade of their respective ratings as well as NU's ratings over the near term. Additional negative pressure on the ratings of NSTAR and NSTAR Electric could be triggered if a more aggressive financial policy is implemented following the completion of their merger and/or if their prospective credit metrics decline significantly and become less well positioned in the low and mid-range of the A rating category, particularly in light of the expected expiration this year of tax savings associated with bonus depreciation. Specifically the ratings could be downgraded if they report CFO Pre-W/C to debt, CFO pre-W/C interest coverage and RCF to debt below 22%, 4.5x, and 17%, on a sustainable basis. CL&P's rating could experience additional negative momentum if over the medium term it exhibits further deterioration in its credit metrics such that it records CFO pre-W/C to debt, CFO pre- W/C interest coverage and RCF to debt below 15%, 3.0x, and 11%, respectively, on a sustainable basis. NU's rating could come under pressure if the ratings of any of its largest subsidiaries is downgraded again in the future given the structural subordination embedded in its ratings. A downgrade could be also triggered by a substantial deterioration in the consolidated credit metrics as a result of the implementation of aggressive financial policies after the merger, such that it reports consolidated CFO pre-W/C to debt, CFO pre-W/C interest coverage, RCF to debt below 15%, 3.0x, 11%, respectively, for an extended period of time. The ratings of PSNH, WMECO and YGS could be upgraded if they are able to achieve a significant improvement in their financial profiles, such that they report CFO pre-W/C to debt, interest coverage and RCF to debt in excess of 20%, 4.0x, and 15%, respectively, on a sustainable basis, after excluding the cash savings associated with bonus depreciation. The ratings of PSNH, WMECO and YGS could be downgraded if they record a substantial deterioration in their credit metrics, such that they report CFO pre-W/C to debt, CFO pre-W/C interest coverage and RCF to debt falls below 15%, 3.0x, 12%, respectively, for an extended period of time. The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in August 2009. Downgrades: Issuer: Connecticut Development Authority Senior Secured Revenue Bonds, Downgraded to A3 from A2 Senior Unsecured Revenue Bonds, Downgraded to Baa2 from Baa1 Issuer: Connecticut Light and Power Company Issuer Rating, Downgraded to Baa2 from Baa1 Pref. Stock Preferred Stock, Downgraded to Ba1 from Baa3 Pref. Stock Preferred Stock, Downgraded to Ba1 from Baa3 Senior Secured First Mortgage Bonds, Downgraded to A3 from A2 Senior Secured First Mortgage Bonds, Downgraded to A3 from A2 Senior Secured First Mortgage Bonds, Downgraded to A3 from A2 Senior Secured Shelf, Downgraded to (P)A3 from (P)A2 Issuer: New Hampshire (State of) Business Fin. Auth. Senior Unsecured Revenue Bonds, Downgraded to Baa2 from Baa1 Issuer: New Hampshire St. Business Finance Authority Senior Unsecured Revenue Bonds, Downgraded to Baa2 from Baa1 Issuer: NSTAR Issuer Rating, Downgraded to A3 from A2 Senior Unsecured Bank Credit Facility, Downgraded to A3 from A2 Senior Unsecured Commercial Paper, Downgraded to P-2 from P-1 Senior Unsecured Regular Bond/Debenture, Downgraded to A3 from A2 Senior Unsecured Shelf, Downgraded to (P)A3 from (P)A2 Issuer: NSTAR Electric Company Issuer Rating, Downgraded to A2 from A1 Multiple Seniority Shelf, Downgraded to (P)A2, (P)Baa1 from (P)A1, (P)A3 Multiple Seniority Shelf, Downgraded to (P)A2, (P)Baa1 from (P)A1, (P)A3 Pref. Stock Preferred Stock, Downgraded to Baa1 from A3 Senior Unsecured Bank Credit Facility, Downgraded to A2 from A1 Senior Unsecured Regular Bond/Debenture, Downgraded to A2 from A1 Senior Unsecured Shelf, Downgraded to (P)A2 from (P)A1 Outlook Actions: Issuer: Connecticut Light and Power Company Outlook, Changed To Stable From Negative Issuer: NSTAR Outlook, Changed To Stable From Rating Under Review Issuer: NSTAR Electric Company Outlook, Changed To Stable From Rating Under Review Confirmations: Issuer: NSTAR Electric Company Commercial Paper, Confirmed at P-1 After completion of the merger between Northeast Utilities (NU) and NSTAR, shareholders will hold around 56% and 44%, respectively, of the post-transaction company. NU will be the surviving corporate entity and maintain dual headquarters in Hartford and Boston, while NSTAR LLC, the successor entity of NSTAR, will become a wholly-owned subsidiary ranking second largest within the consolidated group with total assets of around $8.1 billion as of December 31, 2011. NSTAR LLC will be the parent holding company of the regulated electric transmission and distribution utility, NSTAR Electric Company, as well as the local gas distribution utility, NSTAR Gas Company (not rated). NSTAR LLC also owns some other small non- regulated subsidiaries, including a telecommunication company (NSTAR Com) and liquefied natural gas service (Hopkinton) operations. As of December 31 2011, NSTAR Electric reported consolidated assets approximated $6.8 billion. Headquartered in Berlin, Connecticut Light and Power Company with more than 1.2 million customers is the state's largest regulated electric transmission and distribution utility. After completion of the merger CL&P will rank as the group's largest subsidiary with total assets of approximately $8.8 billion at year-end 2011, closely followed by NSTAR that reported assets of around US$ 8.1 billion at the end of 2011. Headquartered in Manchester, Public Service Company of New Hampshire is the largest utility in New Hampshire (NH) serving approximately 70% of the retail customers in the state (about 500,000). This vertically integrated regulated electric utility has an installed generating capacity of 1,200MW. PSNH will rank as the group's third largest subsidiary with total assets of approximately $3.1 billion. Headquartered in Springfield, Western Massachusetts Electric Company is a regulated electric transmission and distribution (T&D) utility serving over 200,000 retail customers in 59 communities in western Massachusetts. WMECO will remain the group's smallest electric utility with total assets of approximately $1.5 billion at year-end 2011. Headquartered in Berlin, Yankee Gas Services Company is Connecticut's largest local gas distribution company with over 200,000 customers. At year-end 2011, YGS recorded assets of $1.5 billion. NU's subsidiaries are regulated at the state level by their respective public utility commissions in Connecticut (PURA), Massachusetts (MDPU), and New Hampshire (NHPUC), and are also subject to the Federal Energy Regulatory Commission (FERC) purview which oversees the group's transmission business and PSNH's hydro- electric license conditions. DEAN WARREN: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Dean Warren Associates, Inc. 7350 North Dobson Road Suite 135 Scottsdale, AZ 85256 Bankruptcy Case No.: 12-06939 Chapter 11 Petition Date: April 3, 2012 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: George B. Nielsen Jr. Debtor's Counsel: Hilary L. Barnes, Esq. THE CAVANAGH LAW FIRM 1850 N. Central Ave., #2400 Phoenix, AZ 85004 Tel: (602) 322-4040 Fax: (602) 322-4100 E-mail: hbarnes@cavanaghlaw.com Estimated Assets: $500,001 to $1,000,000 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 Caroline Wylie, president. DELTA INVESTMENTS: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Delta Investments & Development, LLC dba Grand Station Casino, Vicksburg, MS 1310 Mulberry Street Vicksburg, MS 39180 Bankruptcy Case No.: 12-01160 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Southern District of Mississippi (Jackson Divisional Office) Judge: Neil P. Olack Debtor's Counsel: Craig M. Geno, Esq. CRAIG M. GENO, PLLC 587 Highland Colony Pkwy. P.O. Box 3380 Ridgeland, MS 39157 Tel: (601) 427-0048 Fax: (601) 427-0050 E-mail: cmgeno@cmgenolaw.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 J. Michael Caldwell, member. DETROIT, MI: Moody's Cuts Ratings on Water & Sewerage Debt ---------------------------------------------------------- Moody's Investors Service has downgraded to Baa1 from A1 the ratings on the City of Detroit's water and sewage disposal revenue debt secured by a senior lien pledge of net revenues of each system. Concurrently, Moody's has downgraded to Baa2 from A2 the ratings on the city's outstanding rated water and sewage disposal debt secured by a second lien pledge of net revenues of each system. The ratings remain on review for downgrade. Summary Rating Rationale The downgrade reflects heightened risk of default and bankruptcy by the City of Detroit (GO rated B2/rating under review for downgrade) and the potential negative impact those events would have on the water and sewage disposal bonds. Should the city file for bankruptcy, the assets of the water and sewage disposal systems would not likely be subject to an automatic stay, however, the water and sewage disposal systems' assets and finances may not be immune from additional pressure given the city's deteriorating fiscal condition. The rating action also reflects the risk that both systems could possibly be liable for some portion of the city's liability following the recent trigger of a termination event for the city's Certificates of Participation interest rate swap agreements. The water and sewage disposal system ratings remain under review for downgrade pending Moody's receipt and review of the consent agreement approved by city council on April 4, 2012; the ability of the city to implement an orderly termination of its outstanding sewerage disposal system interest rate swap agreements; and review of recent financial performance of the water and sewage systems. On an audited basis, debt service coverage levels for senior, second and junior lien sewage disposal debt totaled 0.77 times for fiscal 2011. Sewage disposal coverage calculations for fiscal 2011 increases to 0.92 times if certain non-cash items are excluded, but still below sum sufficient and below the required rate covenant. The system raised rates in fiscal 2012. STRENGTHS: - Large metropolitan service area - New model wholesale contract in process of implementation - Ample water supply and capacity - Approved annual rate increases CHALLENGES - The system maintains a leveraged debt profile with ongoing capital needs that could lead to pressured debt service coverage - Diminished unrestricted net assets and narrow debt service coverage - Weak legal covenants What could change the rating - UP - Moderation of above average debt levels - Increases in absolute current net revenue and improvement to current debt service coverage levels - A material improvement in the system's unrestricted cash and investment position such that the city is better positioned to meet unplanned draws on liquidity What could change the rating - DOWN - Weak operating performance resulting in decreased debt service coverage levels - Further increased debt ratio - Weakening of the service area through economic forces or wholesale contract changes - City defaulting on debt or filing for bankruptcy The principal methodology used in this rating was Analytical Framework For Water And Sewer System Ratings published in August 1999. Deal Near Dow Jones' Daily Bankruptcy Review reported early this month that the city of Detroit moved closer toward reaching an agreement with the state of Michigan that would help end a financial crisis and avoid a state takeover. DORACON INC: Response Deadline Extended to April 24 --------------------------------------------------- Bankruptcy Judge Nancy V. Alquist signed off on a stipulation between Manufacturers and Traders Trust Company, on the one hand and Marc Baer, the trustee for Doracon Inc., and Potts & Callahan, Inc. on the other hand, extending to April 24, 2012, the deadline for the filing of a responsive pleading to the Objection to Motion for Approval of Compromise of Controversy. A copy of the April 6, 2012 Stipulation is available at http://is.gd/3SvD7Afrom Leagle.com. Zvi Guttman, Esq. -- zvi@zviguttman.com -- at The Law Offices of Zvi Guttman, P.A., in Baltimore, Maryland, represents Potts & Callahan, Inc. David v. Fontana, Esq. -- dfont@gebsmith.com -- at Gebhardt & Smith, LLP, in Baltimore, argues for Manufacturers and Traders Trust Company. Michael G. Rinn, Esq. -- mrinn@rinn-law.com -- at the Law Office of Michael G. Rinn, in Cockeysville, Maryland, represents the Trustee for Doracon. Doracon, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 10-31707) in 2010. DREIER LLP: BDO USA OK'd to Handle Solvency Related Issues ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Sheila M. Gowan, Chapter 11 trustee for Dreier LLP, to employ BDO USA, LLP as special financial advisor in connection with solvency related issues, nunc pro tunc to Jan. 23, 2012. As reported in the Troubled Company Reporter on Feb. 22, 2012, in the fourth quarter of 2010, the trustee, through Diamond McCarthy LLP and her special counsel ASK Financial LLP, commenced approximately 50 adversary proceedings to recover fraudulent and preferential transfers. In many of the Adversary Proceedings, the solvency of the Debtor has been raised as a defense. The trustee and various defendants in the Adversary Proceedings have entered into scheduling stipulations which require, inter alia, that the parties make the expert witness disclosures required by Bankruptcy Rule 7026(a)(2) no later than May 13, 2012. The trustee explained that prosecution of the Adversary Proceedings requires the trustee to present expert testimony on the Debtor's insolvency, and DSI has informed the trustee that it does not wish to act as a testifying expert on that issue. The trustee therefore applied for an order authorizing the employment of BDO as special financial advisor in connection with solvency related issues for the purposes set for. The trustee submitted that it is necessary to retain BDO to, inter alia: a. provide assistance in reviewing and analyzing financial information and other relevant data relating to the Debtor; b. perform forensic and financial analyses, including but not limited to the evaluation of solvency, avoidance actions, fraudulent conveyances and related party claims; c. provide an expert report and possible testimony regarding the financial condition of the Debtor at all relevant times; and d. assist counsel in preparing for any depositions and court hearings as requested. BDO's hourly rates for calendar year 2012 range from $150 to $795 per hour. BDO has agreed to cap its fees for its highest billed professional at $625 per hour for the engagement. To the best of the trustee's knowledge, Dreier LLP is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Marc Dreier and Dreier LLP Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On Dec. 8, 2008, the U.S. Securities and Exchange Commission filed a suit, alleging that Mr. Dreier made fraudulent offers and sales of securities in several cities, selling fake promissory notes to hedge and other private investment funds. The SEC asserted that Mr. Dreier also distributed phony financial statements and audit opinions, and recruited accomplices in connection with that scheme. Mr. Dreier, currently in prison, was charged by the U.S. government for conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No. 09-cr-00085). Dreier LLP sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, was tapped as counsel. The Debtor estimated assets of $100 million to $500 million, and debts between $10 million and $50 million in its Chapter 11 petition. Sheila M. Gowan, a partner with Diamond McCarthy, was appointed Chapter 11 trustee for the Dreier law firm. Ms. Gowan is represented by Jason Porter, Esq., at Diamond McCarthy LLP. Wachovia Bank National Association, the Dreier LLP Chapter 11 trustee, and Steven J. Reisman as post-confirmation representative of the bankruptcy estate of 360networks (USA) Inc. signed a petition that put Mr. Dreier into bankruptcy under Chapter 7 on Jan. 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier, 60, pleaded guilty to fraud and other charges in May 2009. The scheme to sell $700 million in fake notes unraveled in late 2008. Mr. Dreier is serving a 20-year sentence in a federal prison in Minneapolis. DRI CORP: Sec. 341 Creditors' Meeting Set for April 25 ------------------------------------------------------ The U.S. Trustee will convene a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a) in the Chapter 11 cases of DRI Corp. and its affiliates on April 25, 2012, at 10:00 a.m. at Raleigh 341 Meeting Room. Proofs of claim are due in the case by July 24, 2012. Government proofs of claim are due Sept. 21, 2012. About DRI Corp. DRI Corp. (OTCQB:TBUS) -- http://www.digrec.com/-- a provider of digital signs for transportation systems, filed a Chapter 11 petition in Wilson, North Carolina (Bankr. E.D.N.C. Case No. 12-02298) on March 25, 2012. DRI intends to sell its assets and operations under Section 363 of Chapter 11 of the U.S. Bankruptcy Code. Dallas, Texas-based DRI disclosed assets of $42.8 million and liabilities totaling $31.4 million. Debt includes $9.6 million owing to Interim Funding III LP, a secured lender with liens on all assets. Affiliates Digital Recorders, Inc., TwinVision of North America, Inc., and Robinson Turney International, Inc., also sought bankruptcy protection (Case Nos. 12-02299, 12-02300 and 12-02302). The cases are jointly administered. Judge Randy D. Doub presides over the case. The petition was signed by David L. Turney, chairman and CEO. Northen Blue, LLP, serves as the Debtors' counsel. Elaine T. Rudisill and The Finley Group, Inc., serve as chief restructuring officer and financial consultants. Morgan Keegan & Company, Inc., serves as marketing consultants. Wyrick Robbins Yates & Ponton, LLP, serves as special counsel with respect to corporate law matters. DRYDOCKS WORLD: Adviser Says Monarch Unlikely to Back Debt Deal --------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Drydocks World hopes to secure the backing of creditors holding 94% of its debt for a $2.2 billion restructuring plan, but doesn't expect to receive support from U.S. hedge fund Monarch Capital, according to an adviser to the Dubai ship-building and repair company. Drydocks World is a Dubai-based ship-building and repair company. DYNEGY INC: Brower Piven Looking to Participate in Class Suit ------------------------------------------------------------- Brower Piven, A Professional Corporation said a class action lawsuit has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of the common stock of Dynegy Inc. during the period between Sept. 2, 2011 and March 9, 2012, inclusive. Brower Piven is calling out to entities who "have suffered a net loss for all transactions in Dynegy common stock during the Class Period," saying they "may obtain additional information about this lawsuit and your ability to become a lead plaintiff by contacting Brower Piven at http://www.browerpiven.com/by email at hoffman@browerpiven.com , by calling 410/415-6616 or at Brower Piven, A Professional Corporation, 1925 Old Valley Road, Stevenson, Maryland 21153." The complaint accuses the defendants of violations of the Securities Exchange Act of 1934 by virtue of the Company's failure to disclose during the Class Period that Dynegy's wholly-owned subsidiary fraudulently transferred direct ownership in one of Dynegy's indirectly owned subsidiaries to the Company. According to the complaint, after, on March 9, 2012, a bankruptcy-court examiner disclosed that Dynegy improperly acquired direct ownership of the indirectly owned subsidiary through a fraudulent transfer and a Wall Street Journal article revealed that this "asset reshuffling" specifically benefited billionaire Carl Icahn and other shareholders at the expense of creditors, the value of Dynegy shares declined significantly. No class has yet been certified in the action. Members of the Class will be represented by the lead plaintiff and counsel chosen by the lead plaintiff. "If you wish to choose counsel to represent you and the Class, you must apply to be appointed lead plaintiff no later than May 29, 2012 and be selected by the Court. The lead plaintiff will direct the litigation and participate in important decisions including whether to accept a settlement and how much of a settlement to accept for the Class in the action. The lead plaintiff will be selected from among applicants claiming the largest loss from investment in the Company during the Class Period. You are not required to have sold your shares to seek damages or to serve as a Lead Plaintiff," the firm's statement reads. "If you choose to retain counsel, you may retain Brower Piven without financial obligation or cost to you, or you may retain other counsel of your choice. You need take no action at this time to be a member of the class." Brower Piven said attorneys at the firm have combined experience litigating securities and class action cases of over 60 years. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7 to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16, 2011. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000). EASTERN LIVESTOCK: Amends Schedules of Assets and Liabilities ------------------------------------------------------------- Eastern Livestock Co., LLC, filed with the Southern District of Indiana amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $59,366,230 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $592,179 E. Creditors Holding Unsecured Priority Claims $10,970 F. Creditors Holding Unsecured Non-priority Claims $39,551,548 ----------- ----------- TOTAL $59,366,230 $40,154,697 The Debtor previously disclosed personal property of $81,237,865 in its schedules. A full-text copy of the amended schedules is available for free at: http://bankrupt.com/misc/EASTERN_LIVESTOCK_sal_amended.pdf About Eastern Livestock Eastern Livestock Co., LLC, was one of the largest cattle brokerage companies in the United States, with operations and assets located in at least 11 states. ELC was headquartered in New Albany, Indiana, with branch locations across several states. It shut operations in November 2010. On Dec. 6, 2010, creditors David L. Rings, Southeast Livestock Exchange, LLC, and Moseley Cattle Auction, LLC, filed an involuntary Chapter 11 petition (Bankr. S.D. Ind. Case No. 10-93904) for the Company. The creditors asserted $1.45 million in claims for "cattle sold," and are represented by Greenebaum Doll & McDonald PLLC. The Court entered an Order for Relief on Dec. 28, 2010. Judge Basil H. Lorch III, at the behest of the creditors, appointed a trustee to operate Eastern Livestock's business. The Chapter 11 trustee has tapped James M. Carr, Esq., at Baker & Daniels LLP, as counsel and Katz, Sapper & Miller, LLP, as accountants. BMC Group Inc. is the claims and notice agent. The Debtor has disclosed $81,237,865 in assets and $40,154,698 in papers filed in Court. An affiliate, East-West Trucking Co., LLC, filed a Chapter 7 petition (Bankr. S.D. Ind. Case No. 10-93799) on Nov. 23, 2010, estimating assets and debts of $1 million to $10 million. The petition was signed by Thomas P. Gibson, as manager. Michael J. Walro, appointed as Chapter 7 Trustee for East-West Trucking, has tapped James T. Young, Esq., at Rubin & Levin, P.C., in Indianapolis as counsel. Mr. Gibson, together with his spouse, Patsy M. Gibson, pursued a personal bankruptcy case (Bankr. S.D. Ind. Case No. 10-93867) in 2010. Kathryn L. Pry, the court-appointed trustee for the Gibson's Chapter 7 case, tapped Dale & Eke, P.C., as counsel. James A. Knauer was appointed as Chapter 11 trustee for the Debtor's estate. The trustee is represented by Faegre Baker Daniels, LLP. EASTERN LIVESTOCK: Ken Byrd OK'd as Ch. 11 Trustee's Auctioneer --------------------------------------------------------------- The Hon. Basil H. Lorch III authorized, on a final basis, James A. Knauer, the chapter 11 trustee for Eastern Livestock Co., LLC, et al., to employ Ken Byrd Realty & Auction, Inc., as auctioneer. To the best of the trustee's knowledge, Ken Byrd (a) holds no interest adverse to the Debtor or its estate in the matters upon which it is sought to be engaged; and (b) is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Court also ordered that for purposes of Rule B-6005-1 of the Local Rules of the Bankruptcy Court, the "date of the sale" will be the earlier of i) the date that Ken Byrd Auction receives the gross sales proceeds; and ii) the date the trustee receives his share of the net sales proceeds (if Peoples Bank & Trust Company of Pickett County submits the successful bid at the auction). The bond requirements of Local Rule B-6005-1 are hereby waived. About Eastern Livestock Eastern Livestock Co., LLC, was one of the largest cattle brokerage companies in the United States, with operations and assets located in at least 11 states. ELC was headquartered in New Albany, Indiana, with branch locations across several states. It shut operations in November 2010. On Dec. 6, 2010, creditors David L. Rings, Southeast Livestock Exchange, LLC, and Moseley Cattle Auction, LLC, filed an involuntary Chapter 11 petition (Bankr. S.D. Ind. Case No. 10-93904) for the Company. The creditors asserted $1.45 million in claims for "cattle sold," and are represented by Greenebaum Doll & McDonald PLLC. The Court entered an Order for Relief on Dec. 28, 2010. Judge Basil H. Lorch III, at the behest of the creditors, appointed a trustee to operate Eastern Livestock's business. The Chapter 11 trustee has tapped James M. Carr, Esq., at Baker & Daniels LLP, as counsel and Katz, Sapper & Miller, LLP, as accountants. BMC Group Inc. is the claims and notice agent. The Debtor has disclosed $81,237,865 in assets and $40,154,698 in papers filed in Court. An affiliate, East-West Trucking Co., LLC, filed a Chapter 7 petition (Bankr. S.D. Ind. Case No. 10-93799) on Nov. 23, 2010, estimating assets and debts of $1 million to $10 million. The petition was signed by Thomas P. Gibson, as manager. Michael J. Walro, appointed as Chapter 7 Trustee for East-West Trucking, has tapped James T. Young, Esq., at Rubin & Levin, P.C., in Indianapolis as counsel. Mr. Gibson, together with his spouse, Patsy M. Gibson, pursued a personal bankruptcy case (Bankr. S.D. Ind. Case No. 10-93867) in 2010. Kathryn L. Pry, the court-appointed trustee for the Gibson's Chapter 7 case, tapped Dale & Eke, P.C., as counsel. James A. Knauer was appointed as Chapter 11 trustee for the Debtor's estate. The trustee is represented by Faegre Baker Daniels, LLP. EASTERN LIVESTOCK: Kroger Gardis OK'd to Prosecute Estate Claims ---------------------------------------------------------------- The Hon. Basil H. Lorch III authorized, on a final basis, James A. Knauer, the Chapter 11 trustee in the cases of Eastern Livestock Co., LLC, et al., to employ Kroger Gardis & Regas, LLP as special counsel. As reported in the Troubled Company Reporter on March 21, 2012, KGR's primary role as special counsel to the trustee will be to investigate and prosecute claims of the estate in the collection of certain Promissory Notes payable to the Debtors which remain unpaid, and the bringing of actions to avoid and subsequently recover prepetition preferential transfers pursuant to Sections 547 an 550 of the Bankruptcy Code. To the best of the trustee's knowledge, KGR is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Eastern Livestock Eastern Livestock Co., LLC, was one of the largest cattle brokerage companies in the United States, with operations and assets located in at least 11 states. ELC was headquartered in New Albany, Indiana, with branch locations across several states. It shut operations in November 2010. On Dec. 6, 2010, creditors David L. Rings, Southeast Livestock Exchange, LLC, and Moseley Cattle Auction, LLC, filed an involuntary Chapter 11 petition (Bankr. S.D. Ind. Case No. 10-93904) for the Company. The creditors asserted $1.45 million in claims for "cattle sold," and are represented by Greenebaum Doll & McDonald PLLC. The Court entered an Order for Relief on Dec. 28, 2010. Judge Basil H. Lorch III, at the behest of the creditors, appointed a trustee to operate Eastern Livestock's business. The Chapter 11 trustee has tapped James M. Carr, Esq., at Baker & Daniels LLP, as counsel and Katz, Sapper & Miller, LLP, as accountants. BMC Group Inc. is the claims and notice agent. The Debtor has disclosed $81,237,865 in assets and $40,154,698 in papers filed in Court. An affiliate, East-West Trucking Co., LLC, filed a Chapter 7 petition (Bankr. S.D. Ind. Case No. 10-93799) on Nov. 23, 2010, estimating assets and debts of $1 million to $10 million. The petition was signed by Thomas P. Gibson, as manager. Michael J. Walro, appointed as Chapter 7 Trustee for East-West Trucking, has tapped James T. Young, Esq., at Rubin & Levin, P.C., in Indianapolis as counsel. Mr. Gibson, together with his spouse, Patsy M. Gibson, pursued a personal bankruptcy case (Bankr. S.D. Ind. Case No. 10-93867) in 2010. Kathryn L. Pry, the court-appointed trustee for the Gibson's Chapter 7 case, tapped Dale & Eke, P.C., as counsel. James A. Knauer was appointed as Chapter 11 trustee for the Debtor's estate. The trustee is represented by Faegre Baker Daniels, LLP. EASTMAN KODAK: Asks Court for Retired Workers' Committee -------------------------------------------------------- Eastman Kodak Co. and its debtor affiliates asked Judge Allan Gropper of the U.S. Bankruptcy Court in Manhattan to approve the formation of a committee of retired workers pursuant to Section 1114 of the Bankruptcy Code. The committee will serve as representative of Kodak retired workers in connection with any future proposal to modify or terminate their medical benefits. Eastman Kodak said in court papers that it has been doing a review of the medical benefits program as part of its plan to maintain benefits which it considers "critical" while significantly reducing costs. The company and its affiliated debtors' consolidated liability for the medical benefits is approximately $1.2 billion. In connection with the formation of a committee, Eastman Kodak proposed that the committee be subject to an initial fee cap of $50,000 per month until the company serves a notice of its proposal to modify or terminate the medical benefits. The committee's fee cap would increase to $100,000 per month during the period between receipt of the notice and a written copy of Eastman Kodak's proposal. A court hearing on Eastman Kodak's request is scheduled for April 16. Objections are due by April 12. EKRA Praises Kodak Over Committee Formation EKRA Ltd., an organization of retirees, praised Eastman Kodak's move to form a retiree committee, according to an April 6 report by CBS News. The group said it would submit the names of about 50 retirees to be considered for appointment by the U.S. Trustee. "These decisions by Kodak give retirees a chance to directly interact with Kodak to try to find win-win solutions for the resolution of all of our health and survivor benefits," CBS News quoted EKRA Vice-President Art Roberts as saying. In a related development, Eastman Kodak dropped its motion to end health care benefits for about 16,000 Medicare-eligible retirees, according to a statement posted in EKRA's Web site. As a result of this decision, retirees for now do not need to switch health care coverage or find new coverage, according to the statement. 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: Proposes $13.5-Mil. in Employee Bonuses ------------------------------------------------------ Eastman Kodak Co. and its debtor affiliates sought court approval to pay a total of $13.5 million in bonuses to about 300 executives and other employees it hopes to retain as it restructures under Chapter 11 protection. Under the proposed bonus plan, about $8.5 million of the bonuses would go to a group of 119 middle managers, excluding insiders. They would receive between 35% and 50% of their base salaries. The remaining $5 million would be shared by the remaining 200 employees, each receiving 25% of his base salary or less, according to court papers. Eastman Kodak's lawyer, Andrew Dietderich, Esq., at Sullivan & Cromwell LLP, in New York, said the employees have knowledge and skills critical to help the company restructure and would be difficult to replace if they left to pursue other employment opportunities. A court hearing to consider the request is scheduled for April 18. Objections are due by April 13. 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: To Sell Lease on Times Square Billboard ------------------------------------------------------ Eastman Kodak Co. and its debtor affiliates seek approval from the U.S. Bankruptcy Court in Manhattan to sell a lease to its giant digital billboard overlooking New York's Times Square. The lease on the billboard, which is owned by Clear Channel Spectacolor LLC, allows Eastman Kodak to advertise its digital capture devices on a 40-foot video screen overlooking Times Square. Eastman Kodak originally planned to end the contract, citing significant savings from the termination. The company, however, did not push through with that plan after it received offers from Orange Barrel Media and other firms to acquire the lease. Earlier, Eastman Kodak hammered out a deal with OBM, which offers to pay the company $3.7 million. The advertising firm will receive a $200,000 break-up fee should its deal with Eastman Kodak is terminated or one of the competing bids wins. The deal is formalized in a 12-page agreement, a copy of which is available without charge at: http://bankrupt.com/misc/Kodak_OrangeAgreement.pdf OBM's offer will serve as the "stalking horse" or the starting bid. Rival bidders are required to submit their proposals, which must be received by Eastman Kodak's legal counsel by May 1. A copy of the proposed order detailing the bid process is available without charge at: http://bankrupt.com/misc/Kodak_BidProcessOBMLease.pdf As part of the proposed sale of the lease, Eastman Kodak sought a court ruling striking a provision in the lease, which limits the billboard to Kodak ads. A deal with Orange Barrel and other interested buyers could collapse if Eastman Kodak fails to convince the bankruptcy court to strike the lease provision. "Kodak's ongoing business operations do not require the advertising made available to Kodak on the billboard and the billboard lease is not essential to the reorganization," said the company's lawyer, Andrew Dietderich, Esq., at Sullivan & Cromwell LLP, in New York. The bankruptcy court will hold a hearing on April 16 to consider approval of the Kodak-OBM deal and the proposed bid process. A court hearing to consider the proposed sale of the lease to OBM or to the winning bidder is set for April 18. 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: Amends Terms of Photo Business Sale -------------------------------------------------- Eastman Kodak Co., Kodak Imaging Network Inc. and Shutterfly Inc. made revisions to the agreement governing the sale of the KODAK Gallery online photo services business. Under the revised agreement, Shutterfly will receive a $250,000 break-up fee should its deal with Eastman Kodak is terminated. The initial deal called for the payment of $600,000 break-up fee. The revised agreement also prohibits Kodak Imaging from using the "Kodak Gallery" name in the U.S. and Canada on a certain period for its own account or on behalf of another entity engaged in any online business that duplicates the KODAK Gallery business. A copy of the document detailing the revisions made and its accompanying exhibits is available without charge at: http://bankrupt.com/misc/Kodak_Amendment1ShutterflyDeal.pdf Earlier, Judge Allan Gropper of the U.S. Bankruptcy Court in Manhattan authorized Eastman Kodak to hold bidding in connection with the sale. The company will hold an auction on April 26 if it receives an offer from other bidders. A court hearing will be convened on April 30 to consider the sale of the business to the winning bidder. Objections to the sale are due by April 23. 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: U.S. Trustee Opposes Equity Committee ---------------------------------------------------- The U.S. Trustee, a Justice Department agency overseeing bankruptcy cases, filed court papers opposing the proposed appointment of a committee of Eastman Kodak equity security holders. The shareholders, who claimed no one is advocating their interests, want their own committee where the cost of professionals will be paid by Eastman Kodak. The appointment would allow the shareholders to participate actively in the company's restructuring. In court papers, the U.S. Trustee said Eastman Kodak and its affiliated debtors "appear to be insolvent at this time" contrary to the Kodak shareholders' claim. The agency also argued the shareholders failed to demonstrate that the appointment of their own committee is necessary in light of the circumstance that their interests appear to be aligned with the interests of the unsecured creditors, which are represented by the Official Committee of Unsecured Creditors. Meanwhile, the proposed appointment drew support from a certain Gregory Armstrong, a shareholder of Eastman Kodak. "As a shareholder of Eastman Kodak, the fact that only one-third of my company has filed for bankruptcy should be reason enough, in and of itself, to justify the appointment of an equity committee to oversee my interests in this case," Mr. Armstrong said in a letter to Judge Allan Gropper. 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). EC DEVELOPMENT: Schulman Wolfson Raises Going Concern Doubt ----------------------------------------------------------- EC Development, Inc., filed on April 6, 2012, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011. Schulman Wolfson & Abruzzo, LLP, in New York, New York, expressed substantial doubt about EC Development's ability to continue as a going concern. The independent auditors noted that the Company has operating losses, negative working capital, no operating cash flow and future losses are anticipated. "The Company's plan of operations, even if successful, may not result in cash flow sufficient to finance and expand its business which raises substantial doubt about its ability to continue as a going concern." The Company reported a net loss of $1.77 million on $463,971 of revenues for 2011, compared with a net loss of $1.13 million on $1.70 million of revenues for 2010. The Company's balance sheet at Dec. 31, 2011, showed $5.86 million in total assets, $1.81 million in total liabilities, and stockholders' equity of $4.04 million. A copy of the Form 10-K is available for free at: http://is.gd/yTPrHV Shawnee, Oklahoma-based EC Development, Inc., markets and sells, casino-management systems in the form of a suite of cutting-edge technology solutions under the brand name "Tahoe". EDIETS.COM INC: Kevin Richardson Assumes PFO and PAO Roles ---------------------------------------------------------- The Board of Directors of eDiets.com, Inc., appointed Kevin A. Richardson, II, to perform the functions of Principal Financial Officer and Principal Accounting Officer. Mr. Richardson, 43, has served as Chairman of the Company's Board of Directors since 2006. He is the managing member of Prides Capital LLC, the general partner of Prides Capital Fund I, L.P., the Company's largest stockholder. He was formerly a partner at Blum Capital Partners, an investment firm, an analyst with Tudor Investment Corporation, an investment management firm, and an assistant portfolio manager of the Fidelity Contra Fund, a registered investment company. Mr. Richardson will not receive additional compensation in connection with his assumption of these additional responsibilities. There are no family relationships between Mr. Richardson and any of the Company's directors or executive officers. On Feb. 15, 2012, Prides issued an unconditional guarantee of certain Company payment obligations to Paymentech, LLC, the Company's credit card payments processor. The maximum amount of Company indebtedness guaranteed by Prides is $260,000. Also as of Feb. 15, 2012, the Company entered into a letter agreement with Prides pursuant to which the Company undertook certain obligations in consideration of the Guarantee. Among other things, the Letter Agreement obligates the Company to pay Prides (i) an annual credit support fee equal to 10% of the maximum amount of Company indebtedness guaranteed by Prides under the Guarantee and (ii) a monthly credit support fee equal to 0.4167% of the maximum amount of Company indebtedness guaranteed by Prides under the Guarantee. The Company's obligations under the Letter Agreement will terminate upon expiration or termination of the Guarantee. On Feb. 7, 2011, the Company executed Subscription Agreements with with BBS Capital Fund, L.P., Haus Capital Fund, L.P., and two of its directors, Mr. Richardson and Lee S. Isgur. Under the terms of the Subscription Agreements, the Purchasers agreed to purchase an aggregate of 762,364 shares of the Company's common stock, par value $0.001 per share, in exchange for an aggregate of $1,572,375 in cash in a private placement. The purchase price of the shares was $2.0625 per share, above the closing price of the Company's common stock on the prior business day, which was February 4, 2011. Mr. Richardson purchased an aggregate of 387,879 shares of the Company's common stock for $800,000 in the private placement. As part of the transaction, the Company issued four Warrants for the Purchase of Shares of Common Stock, one Warrant to each of the Purchasers, to purchase an aggregate of 381,182 shares of the Company's common stock at an exercise price of $1.7675 per share, also above the closing price of the Company's common stock on Feb. 4, 2011. Each Warrant has a three-year expiration date, is exercisable beginning immediately and provides for a cashless "net" exercise under certain conditions. The exercise price of each Warrant is subject to adjustment under certain circumstances; however, no adjustment to the exercise price will operate to reduce the exercise price to a price less than the closing price of the Company's common stock on Feb. 4, 2011. The Warrant issued to Mr. Richardson entitles him to purchase 193,940 shares of the Company's common stock. On Nov. 12, 2010, the Company issued the following promissory notes: (i) a promissory note to Mr. Richardson, pursuant to which the Company borrowed $600,000; (ii) a promissory note to Lee S. Isgur, one of the Company's directors, pursuant to which the Company borrowed $200,000; and (iii) a promissory Note to Kevin N. McGrath, at that time one of the Company's directors and its President and Chief Executive Officer, pursuant to which the Company borrowed $200,000. The entire outstanding principal balance of the Director Notes, together with all accrued and unpaid interest, was originally due and payable on Dec. 31, 2011. Interest accrues on the Director Notes at a rate of 5% per annum. In the event the principal is not paid in full within three business days of the due date, or any other default occurs thereunder, then interest will accrue on the outstanding principal balance of the Director Notes at a rate of 10% per annum. On Dec. 30, 2011, the Company executed amendments to each of the Director Notes to extend their maturity date to Dec. 31, 2012. All other terms and provisions of the Director Notes remain unchanged. All principal and accrued interest remains outstanding under the Director Notes, including Director Note issued to Mr. Richardson. About eDiets eDiets.com, Inc. is a leading provider of personalized nutrition, fitness and weight-loss programs. eDiets currently features its award-winning, fresh-prepared diet meal delivery service as one of the more than 20 popular diet plans sold directly to members on its flagship site, http://www.eDiets.com eDiets.com reported a net loss of $43.3 million in 2010 and a net loss of $12.1 million in 2009. The Company also reported a net loss of $2.73 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $3.96 million in total assets, $4.27 million in total liabilities, and a $314,000 total stockholders' deficit. Ernst & Young LLP, in Boca Raton, Florida, expressed substantial doubt about eDiets.com's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. The Company said that in light of the results of its operations, management has and intends to continue to evaluate various possibilities, including raising additional capital through the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt, selling one or more lines of business, or all or a portion of the Company's assets, entering into a business combination, reducing or eliminating operations, liquidating assets, or seeking relief through a filing under the U.S. Bankruptcy Code. EDIETS.COM INC: Incurs $1.65 Million Net Loss in Fourth Quarter --------------------------------------------------------------- eDiets.com, Inc., reported a net loss of $1.65 million on $4.64 million of total revenues for the three months ended Dec. 31, 2011, compared with a net loss of $1.26 million on $6.89 million of total revenues for the same period a year ago. The Company reported a net loss of $4.39 million on $22.06 million of total revenues for the twelve months ended Dec. 31, 2011, compared with a net loss of $43.27 million on $23.35 million of total revenues during the prior year. The Company's selected balance sheet data at Dec. 31, 2011, showed $2.69 million in total assets, $1 million in debt and a $1.34 million stockholders' deficit. "I'm excited about the opportunity to lead eDiets and am committed to addressing the challenges and maximizing our brand potential," said Tom Connerty, President and CEO, eDiets.com. "Having been in the direct marketing industry for over 25 years and as a member of eDiets' board of directors for the past year, I have a strong understanding of our core competencies and the steps necessary to build a market leading meal delivery service. Over the past several years, the company has significantly improved the cost structure and operations and we are now focusing all of our efforts on growing our customer base at an acceptable cost level to achieve profitability." A copy of the press release is available for free at: http://is.gd/rsvQls About eDiets eDiets.com, Inc. is a leading provider of personalized nutrition, fitness and weight-loss programs. eDiets currently features its award-winning, fresh-prepared diet meal delivery service as one of the more than 20 popular diet plans sold directly to members on its flagship site, http://www.eDiets.com eDiets.com reported a net loss of $43.3 million in 2010 and a net loss of $12.1 million in 2009. The Company also reported a net loss of $2.73 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $3.96 million in total assets, $4.27 million in total liabilities, and a $314,000 total stockholders' deficit. Ernst & Young LLP, in Boca Raton, Florida, expressed substantial doubt about eDiets.com's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. The Company said that in light of the results of its operations, management has and intends to continue to evaluate various possibilities, including raising additional capital through the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt, selling one or more lines of business, or all or a portion of the Company's assets, entering into a business combination, reducing or eliminating operations, liquidating assets, or seeking relief through a filing under the U.S. Bankruptcy Code. ENDURANCE INTERNATIONAL: S&P Gives 'B' Rating on $535MM Term Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' issue-level rating and '3' recovery rating to Burlington, Mass.-based Endurance International Group, Inc's. $535 million new term loan. The '3' recovery rating indicates that lenders can expect meaningful (50%-70%) recovery in the event of a payment default. The company intends to use the proceeds primarily to redeem its existing term loan and preferred stock, with minimal effect on leverage. "Our 'B' corporate credit rating and stable outlook on Endurance remain unchanged. Our existing 'B' issue-level rating with a '3' recovery rating on the company's revolving credit facility remain unchanged as well. Standard & Poor's expects that Endurance will generate good free operating cash flow 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 market in a weak economy, and what we view as an 'aggressive'," S&P said. RATINGS LIST Endurance International Group Inc. Corporate Credit Rating B/Stable/-- New Ratings Endurance International Group Inc. $535 mil term loan B Recovery Rating 3 ENERGY FOCUS: Continued Losses Cue Going Concern Doubt ------------------------------------------------------ Energy Focus, Inc., filed on March 30, 2011, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011. Plante & Moran, PLLC, in Cleveland, Ohio, expressed substantial doubt about Energy Focus's ability to continue as a going concern. The independent auditors noted that the Company incurred net losses of $6,055,000, $8,517,000, and $11,015,000 during the years ended Dec. 31, 2011, 2010, and 2009. The Company reported a net loss of $6.06 million on $25.75 million of revenue for 2011, compared with a net loss of $8.52 million on $35.13 million of revenue for 2010. The Company's balance sheet at Dec. 31, 2011, showed $13.78 million in total assets, $12.31 million in total liabilities, and stockholders' equity of $1.47 million. A copy of the Form 10-K is available for free at: http://is.gd/wL2pya Solon, Ohio-based Energy Focus, Inc., designs, develops, manufactures, and markets energy-efficient lighting products, and is a provider of turnkey, energy-efficient, lighting solutions in the governmental and public sector market, general commercial market, and the pool market. ENERGY FUTURE: Files Post-Effective Amendment to Form S-1 --------------------------------------------------------- Energy Future Holdings Corp. filed with the U.S. Securities and Exchange Commission a post-effective amendment no. 1 to Form S-1 registration statement relating to a combined offering of: -- $1,060,757,000 10.000% Senior Secured Notes due 2020; -- $115,446,000 9.75% Senior Secured Notes due 2019; -- $928,564,000 5.55% Series P Senior Notes due Nov. 15, 2014; -- $750,000,000 6.50% Series Q Senior Notes due Nov. 15, 2024; -- $750,000,000 6.55% Series R Senior Notes due Nov. 15, 2034; -- $1,786,546,000 10.875% Senior Notes due 2017; and -- $3,221,526,485 11.250%/12.000% Senior Toggle Notes due 2017. Interest on the 10.000% Senior Secured Notes due 2020 is payable on January 15 and July 15 of each year. The 10.000% Notes accrue interest at the rate of 10.000% per annum. The 10.000% Notes will mature on Jan. 15, 2020. Energy Future Holdings Corp. may redeem any of the 10.000% Notes beginning on Jan. 15, 2015, at the redemption prices set forth in this prospectus. EFH Corp. may also redeem any of the 10.000% Notes at any time prior to Jan. 15, 2015, at a price equal to 100% of their principal amount, plus accrued and unpaid interest and a "make-whole" premium. In addition, before Jan. 15, 2013, EFH Corp. may redeem up to 35% of the aggregate principal amount of the 10.000% Notes using the proceeds from certain equity offerings at the redemption price set forth in this prospectus. The 10.000% Notes are senior obligations of EFH Corp. and rank equally in right of payment with all senior indebtedness of EFH Corp. The 10.000% Notes are effectively subordinated to any indebtedness of EFH Corp. secured by assets of EFH Corp. to the extent of the value of the assets securing such indebtedness and structurally subordinated to all indebtedness and other liabilities of EFH Corp.'s non-guarantor subsidiaries and any other unrestricted subsidiaries. The 10.000% Notes are senior in right of payment to any future subordinated indebtedness of EFH Corp. A copy of the post-effective amendment is available for free at: http://is.gd/30wtAI About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. Energy Future reported a net loss of $1.91 billion in 2011 and a net loss of $2.81 billion in 2010. The Company's balance sheet at Dec. 31, 2011, showed $44.07 billion in total assets, $51.83 billion in total liabilities and a $7.75 billion total deficit. * * * In April 2011, Moody's Investors Service affirmed the 'Caa2' Corporate Family Rating, 'Caa3' Probability of Default Rating and SGL-4 Speculative Grade Liquidity Ratings of EFH. Outlook is stable. EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed company with limited financial flexibility; its capital structure appears to be untenable, calling into question the sustainability of the business model; and there is no expectation for any meaningful debt reduction over the next few years, beyond scheduled amortizations. At the end of February 2011, Fitch Ratings it does not expect to take any immediate rating action on EFH's Texas Competitive Electric Holdings Company LLC or their affiliates based on recent default allegations from lender Aurelius. EFH carries a 'CCC' corporate rating, with negative outlook, from Fitch. FAIRGROUNDS PROPERTIES: Court Confirms Bankruptcy-Exit Plan ----------------------------------------------------------- Bankruptcy Chief Judge William T. Thurman confirmed the Plan of Reorganization dated Dec. 8, 2011, proposed by Fairgrounds Properties, Inc., pursuant to a Findings of Fact and Conclusions of Law dated April 5, 2012, available at http://is.gd/MGSEalfrom Leagle.com. The Court held, among others, that the Plan is feasible and is not likely to be followed by a liquidation or further financial reorganization. The Debtor has presented credible and persuasive evidence that it will be able to make all payments required to be made under the Plan, and will otherwise be able to satisfy all of its obligations under the Plan. The confirmation hearing was held April 5. St. George, Utah-based Fairgrounds Properties, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Utah Case No. 11-26803) on May 10, 2011. estimating $1 million to $10 million in assets and debts. The petition was signed by Robert Stevens, president. Attorneys for the Debtor are: Andres Diaz, Esq. Thomas D. Neeleman, Esq. Geoffrey L. Chesnut, Esq. RED ROCK LEGAL SERVICES, P.L.L.C. St. George, UT Tel: (435) 634-1000 Fax: (435) 634-1001 E-mail: courtmailrr@expresslaw.com FILENE'S BASEMENT: May 3 Auction for Intellectual Property ---------------------------------------------------------- Filene's Basement, LLC and Syms Corp scheduled a May 3 auction for their intellectual property assets. To participate in the auction, interested parties must submit initial bids by May 1, 2012. A sale hearing to approve the sale of the assets to the successful bidder is scheduled for May 10, 2012. Objections to the sale of the IP assets must be sent by May 7. The assets being offered for sale include the Syms(R) and Filene's Basement(R) trade names as well as some of their house brands such as Stanley Blacker(R) and Maine Bay(R). Also for sale is the IP in connection with the world-famous Running of the Brides(R) event. The sale process is being conducted by Hilco Streambank, the companies' Bankruptcy Court-approved advisory firm. The initial procedural order entered by the Bankruptcy Court on April 9, 2012, says that the Debtors are authorized to enter into one or more stalking horse agreements prior to the auction. "Numerous parties have expressed an interest in these famous brands," said David Peress, Executive Vice President with Hilco Streambank. "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." About Syms Corp. Massachusetts-based Filene's Basement, also called The Basement, is the oldest off-price retailer in the United States. The Basement focuses on high-end goods and is known for its distinctive, low-technology automatic markdown system. Filene's Basement first filed for Chapter 11 bankruptcy protection in August 1999. Filene's Basement was bought by a predecessor of Retail Ventures, Inc., the following year. Retail Ventures in April 2009 transferred the unit to Buxbaum. Filene's Basement, Inc. and its affiliates filed for Chapter 22 (Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy Solutions serves as claims and notice agent. The Debtors estimated $50 million to $100 million in assets and $100 million to $500 million in debts. The 2009 Debtor was formally renamed FB Liquidating Estate, following the sale of all of its assets to Syms Corp. in June 2009. Pursuant to the Liquidating Plan confirmed in January 2010, secured creditors in the Chapter 11 case have been paid in full, and holders of priority, administrative and convenience class claims have received 100% of their allowed claims. As reported by the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen, Chairman of Abacus Advisors LLC and Chief Restructuring Officer for FB Liquidating Estate disclosed that a second distribution of dividend checks to Filene's unsecured creditors amounting to 12.5% of approved claims has been made, bringing the cumulative distributions on unsecured claims to 62.5%. On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-13511 to 11-13514) after a failed bid to sell the business. The two units are Syms Clothing Inc. and Syms Advertising Inc. Judge Kevin J. Carey presides over the case. Lawyers at Skadden Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The Debtors tapped Rothschild Inc. as investment banker and Cushman and Wakefield Securities, Inc., as real estate financial advisors. Syms shuttered its namesake and Filene's Basement outlets upon the bankruptcy filing and tapped a joint venture of Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC to run the going-out-of-business sales. The sale may continue until Jan. 31, 2012. Filene's Basement estimated $1 million to $10 million in assets and $50 million to $100 million in debts. The petitions were signed by Gary Binkoski, authorized representative of Filene's Basement. The official committee of unsecured creditors appointed in the 2011 case has retained Hahn & Hessen LLP as legal counsel. Holders of equity in Syms Corp. pushed for an official shareholders' committee and separation of the Syms and Filene's Basement bankruptcy estates. Gordon Brothers and Hilco are represented by Goulston & St FIRST NATIONAL: Court OKs Modification of Adequate Protection ------------------------------------------------------------- The Hon. Niles Jackson of the U.S. Bankruptcy Court for the Western District of Oklahoma authorized First National Building I, LLC, and First National Building II, LLC, to enter into (i) a stipulation regarding relief from automatic stay; and (ii) a stipulation regarding receiver with Capmark Bank and Capmark CDF Subfund VI LLC. The Court ordered that the automatic stay arising under Section 362 of the Bankruptcy Code is modified so that, in the event the Debtors fail to meet their obligations set forth in the Settlement Agreement, the automatic stay is immediately terminated as to the property without further notice, hearing or action of the Court. About First National Sherman Oaks, California-based First National Building I, LLC, and First National Building II, LLC, are the co-owners of the real property commonly known as the First National Center and located at 120 N. Robinson Avenue in Oklahoma City. The property is a 33- story historic office building located in the central business district in Oklahoma City and contains approximately 950,000 square feet of rentable space. The Honorable Geraldine Mund entered an order directing the transfer of the Chapter 11 cases of First National Building I, LLC, and First National Building II, LLC, from the Central District of California to the Western District of Oklahoma. Lender Capmark Bank and Capmark CDF Subfund VI LLC made the request, and Judge Mund agreed to the venue change. First National Building I, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 10-22745) in Woodland Hills, Calif., on Oct. 7, 2010, and the case was transferred (Bankr. W.D. Okla. Case No. 10-16334) to Oklahoma City on Oct. 13, 2010. First National Building II, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 10-22747) in Woodland Hills, Calif. on Oct. 7, 2010, and the case was transferred (Bankr. W.D. Okla. Case No. 10-16335) to Oklahoma City on Oct. 13, 2010. Keith M. Aurzada, Esq., and John C. Leininger, Esq., at Bryan Cave LLP, in Dallas, Tex., and Rob F. Robertson, Esq., at GableGotwals, in Oklahoma City, Okla., represent Capmark as counsel. The Debtors each estimates assets and debts at $10 million to $50 million. The Debtors are affiliated with Roosevelt Lofts, LLC (Bankr. C.D. Calif. Case No. 09-14214). David L. Neale, Esq., and Juliet Y. Oh, Esq., at Levene, Neale, Bender, Yoo & Brill L.L.P., in Los Angeles; and Mark B. Toffoli, Esq., at Andrews Davis, P.C., in Oklahoma City, Okla., represent the Debtors as counsel. FIRST NATIONAL: Has Access to Cash Collateral Until May 31 ---------------------------------------------------------- The Hon. Niles Jackson of the U.S. Bankruptcy Court for the Western District of Oklahoma approved a stipulation authorizing First National Building I, LLC, and First National Building II, LLC's continued use cash collateral until May 31, 2012. The stipulation was entered among the Debtors and secured creditors Capmark Bank and Capmark CDF Subfund VI LLC. Pursuant to the stipulation: -- the Debtors are authorized to continue using the rent revenue generated from the lease of space in the property to maintain the property and pay operating expenses relating to the property; -- the Debtors are authorized to deviate from the line items contained in the budget by not more than 5%, on both a line item and aggregate basis, with any unused portion from a week to be carried over into the following week; -- the Debtors will use cash collateral to pay all quarterly fees owing to the Office of the United States Trustee and all expenses owing to the Clerk of the Bankruptcy Court; -- during the months of March, April and May, 2012, the Debtors are authorized to pay managing agent Milbank Real Estate Services, Inc., a management fee equal to 3% of all gross revenues collected from the property during these months, provided that the Debtors have provided the lender with the information regarding certain prepetition insider payments that was requested by counsel for the lender on Aug. 8, 2011, which information provides an explanation that is reasonably satisfactory to the lender. A full-text copy of the stipulation is available for free at http://bankrupt.com/misc/FIRSTNATIONAL_CC_stipulation.pdf About First National Sherman Oaks, California-based First National Building I, LLC, and First National Building II, LLC, are the co-owners of the real property commonly known as the First National Center and located at 120 N. Robinson Avenue in Oklahoma City. The property is a 33- story historic office building located in the central business district in Oklahoma City and contains approximately 950,000 square feet of rentable space. The Honorable Geraldine Mund entered an order directing the transfer of the Chapter 11 cases of First National Building I, LLC, and First National Building II, LLC, from the Central District of California to the Western District of Oklahoma. Lender Capmark Bank and Capmark CDF Subfund VI LLC made the request, and Judge Mund agreed to the venue change. First National Building I, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 10-22745) in Woodland Hills, Calif., on Oct. 7, 2010, and the case was transferred (Bankr. W.D. Okla. Case No. 10-16334) to Oklahoma City on Oct. 13, 2010. First National Building II, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 10-22747) in Woodland Hills, Calif. on Oct. 7, 2010, and the case was transferred (Bankr. W.D. Okla. Case No. 10-16335) to Oklahoma City on Oct. 13, 2010. Keith M. Aurzada, Esq., and John C. Leininger, Esq., at Bryan Cave LLP, in Dallas, Tex., and Rob F. Robertson, Esq., at GableGotwals, in Oklahoma City, Okla., represent Capmark as counsel. The Debtors each estimates assets and debts at $10 million to $50 million. The Debtors are affiliated with Roosevelt Lofts, LLC (Bankr. C.D. Calif. Case No. 09-14214). David L. Neale, Esq., and Juliet Y. Oh, Esq., at Levene, Neale, Bender, Yoo & Brill L.L.P., in Los Angeles; and Mark B. Toffoli, Esq., at Andrews Davis, P.C., in Oklahoma City, Okla., represent the Debtors as counsel. FIRST NATIONAL: Lender's Cash for Elevator Modernization OK'd ------------------------------------------------------------- First National Building I, LLC, and First National Building II, LLC, ask the U.S. Bankruptcy Court for the Western District of Oklahoma to authorize the continued use of cash collateral to pay the costs set forth in Agreement for Elevator Modernization dated Dec. 13, 2011, entered into by the Debtors and ThyssenKrupp Elevator Corporation. As set forth in detail in the Elevator Modernization Contract, ThyssenKrupp will be providing these services at a total cost of $674,984 (which cost may be subject to further negotiation by the parties): -- complete modernization of three gearless passenger elevators located at First National Center, East Tower -- $461,935, including taxes; and -- complete modernization of one gearless passenger elevator located at First National Center, East Tower -- $213,049, including taxes. Capmark Bank, a Utah industrial bank, and Capmark CDF Subfund VI LLC has consented to the use of cash collateral to pay the Elevator Modernization Contract costs and is in any case adequately protected by the Debtors' continued operation of the property. The Debtors and the lender entered into successive stipulations authorizing the Debtors to continue using cash collateral to pay the Debtors' operating expenses. Pursuant to the most recent stipulation entered into by the Debtors and the lender, which stipulation was approved by the Court on March 5, the Debtors were authorized to use cash collateral to pay operating expenses, through and including May 31, 2012. About First National Sherman Oaks, California-based First National Building I, LLC, and First National Building II, LLC, are the co-owners of the real property commonly known as the First National Center and located at 120 N. Robinson Avenue in Oklahoma City. The property is a 33- story historic office building located in the central business district in Oklahoma City and contains approximately 950,000 square feet of rentable space. The Honorable Geraldine Mund entered an order directing the transfer of the Chapter 11 cases of First National Building I, LLC, and First National Building II, LLC, from the Central District of California to the Western District of Oklahoma. Lender Capmark Bank and Capmark CDF Subfund VI LLC made the request, and Judge Mund agreed to the venue change. First National Building I, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 10-22745) in Woodland Hills, Calif., on Oct. 7, 2010, and the case was transferred (Bankr. W.D. Okla. Case No. 10-16334) to Oklahoma City on Oct. 13, 2010. First National Building II, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 10-22747) in Woodland Hills, Calif. on Oct. 7, 2010, and the case was transferred (Bankr. W.D. Okla. Case No. 10-16335) to Oklahoma City on Oct. 13, 2010. Keith M. Aurzada, Esq., and John C. Leininger, Esq., at Bryan Cave LLP, in Dallas, Tex., and Rob F. Robertson, Esq., at GableGotwals, in Oklahoma City, Okla., represent Capmark as counsel. The Debtors each estimates assets and debts at $10 million to $50 million. The Debtors are affiliated with Roosevelt Lofts, LLC (Bankr. C.D. Calif. Case No. 09-14214). David L. Neale, Esq., and Juliet Y. Oh, Esq., at Levene, Neale, Bender, Yoo & Brill L.L.P., in Los Angeles; and Mark B. Toffoli, Esq., at Andrews Davis, P.C., in Oklahoma City, Okla., represent the Debtors as counsel. GALP CYPRESS: Court Dismisses Chapter 11 Case --------------------------------------------- At the behest of Judy A. Robbins, the U.S. Trustee for the Southern District of Texas, the Bankruptcy Court dismissed the Chapter 11 case of GALP Cypress Limited Partnership. The Court held that the Debtor's failure to pay appropriate fees due to the U.S. Trustee and submit an appropriate affidavit of disbursement will be treated as a contempt of the Court. The U.S. Trustee sought conversion or dismissal of the Debtor's cases in light of the Court's order allowing a secured creditor to proceed with foreclosure of the real estate owned by the Debtor, which asset is necessary for the Debtor to have any prospect at reorganization. About GALP Cypress GALP Cypress Limited Partnership owns an apartment complex in Houston, Texas. The Debtor filed for Chapter 11 bankruptcy (Bankr. S.D. Tex. Case No. 11-40427) on Dec. 6, 2011. Judge Letitia Z. Paul presides over the case. The Debtor estimated assets of $10 million to $50 million and debts of $1 million to $10 million. Gary Gray signed the petition as president of Cypress-1 GP, Inc., general partner of Cypress GP, L.P. The Debtor is represented by Matthew Hoffman, Esq., at Law Offices of Matthew Hoffman, P.C. This is the second case filed by the Debtor. The Debtor's previous case was filed on Oct. 4, 2010, under Bankruptcy Case Number 10-38991, and was dismissed Sept. 29, 2011, on an unopposed motion of the US Trustee. GIORDANO'S ENTERPRISES: Apostolous Suit to Proceed in State Court ----------------------------------------------------------------- District Judge Samuel Der-Yeghiayan affirmed a bankruptcy court ruling that sent a lawsuit by former Giordano's pizza owners John and Eva Apostolou back to state court. The District Court said the bankruptcy court properly concluded that the claims in the lawsuit are direct and personal state law claims and that the claims do not interfere with the business of Giordano's which is in bankruptcy. The District Court also held that the lawsuit did not violate the bankruptcy court's May 12, 2011 order appointing a trustee to oversee the chain and placing the assets and business of the Debtors under the trustee's control. John and Eva Apostolou are trustees of trusts that allegedly own 100% of certain common stock and limited partnership interests of Giordano's pizza restaurants. On Aug. 3, 2011, an action was filed in state court by John Apostolou, Eva Apostolou, Basil Apostolou, George Apostolou, and Joanna Apostolou. The Apostolous assert that certain non-debtor third parties, such as the Chief Financial Officer of the Debtors, owed the Apostolous certain personal duties. The Apostolous bring claims, such as breach of fiduciary duty claims, premised upon alleged personal duties owed uniquely to the Apostolous. The Apostolous are seeking to obtain relief based upon the relationships of certain individuals and entities with the Apostolous and are not seeking to obtain funds from the Estate. On Aug. 12, Fifth Third Bank filed a notice of removal, removing the Apostolous Action to federal court. On Aug. 15, FTB filed a motion in the Bankruptcy Proceedings, contending that the Apostolous Action violated the bankruptcy automatic stay and violated the May 12 Order. FTB also filed a motion for sanctions against the Apostolous and their counsel. On Aug. 19, the Trustee filed a motion to enforce the automatic stay against the Apostolous and to stay the Apostolous Action. On Aug. 23, the Apostolous filed a motion to remand the Apostolous Action to state court. On Sept. 21, 2011, the bankruptcy court granted in part the Trustee's motion to enforce the automatic stay. The bankruptcy court held that certain portions of the complaint in the Apostolous Action violated the automatic stay and that those portions of the complaint were stricken. The bankruptcy court also found that the proposed amended complaint by the Apostolous complied with the court's order and did not violate the automatic stay. The bankruptcy court further granted in part and denied in part FTB's motion for sanctions, denying the request that the Apostolous and their counsel be held in contempt of court. On Sept. 28, the bankruptcy court remanded the Apostolous Action to state court, prompting FTB to appeal. The case before the District Court is, Fifth Third Bank, Appellant, v. John Apostolou, et al., Appellees, No. 11 C 8117 (N.D. Ill.). A copy of the District Court's April 3, 2012 Memorandum Opinion is available at http://is.gd/SSH7LRfrom Leagle.com. Fifth Third Bank is represented by Ronald S. Barliant, Esq. -- ronald.barliant@goldbergkohn.com -- at Goldberg Kohn Ltd. The Apostolous are represented by James B. Sowka, Esq. -- jsowka@seyfarth.com -- at Seyfarth Shaw LLP. About Giordano's Enterprises Chicago, Illinois-based Giordano's Enterprises, Inc., was founded in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren and Joseph Boglio. In 1988, John and Eva Apostolou purchased control of Giordano's. Although this casual dining eatery offers a broad array of fine Italian cuisine, it is primarily know for its "Chicago's World Famous Stuffed Pizza". At present, Giordano's operates six company owned stores in Chicagoland, four joint venture stores, and thirty-five franchisee locations. In addition, Giordano's operates Americana Foods, Inc., located in Mount Prospect, Illinois, that serves as the commissary for the majority of food products purchased by the Illinois locations. An affiliated real estate holding company, Randolph Partners, LP, owns 12 restaurant buildings that are leased to four of the company-owned locations, two of the joint venture locations and six of the franchisee locations. The other 33 locations are leased from third party landlords; two for the Giordano's locations, two for the joint venture locations and 29 for the franchise locations. Giordano's is the lessee and subleases the restaurant facility for 22 of the 29 franchise third party leases. JBA Equipment Finance, Inc, another affiliated entity, leases restaurant equipment packages to eight franchisee locations. Giordano's Enterprises and 26 affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on Feb. 16, 2011. Six additional affiliates filed for Chapter 11 protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A. Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at Arnstein & Lehr, LLP, in Chicago, serve as the Debtors' bankruptcy counsel. Giordano's Enterprises disclosed $59,387 in assets and $45,538,574 in liabilities as of the Chapter 11 filing. Certain of the Debtors owe Fifth Third Bank about $13,560,662, pursuant to loans and financial accommodations, and $31,927,998 under a business loan as of the Petition Date. Fifth Third provided DIP financing of up to $35,983,563. Philip V. Martino was appointed as Chapter 11 trustee in the Debtors' bankruptcy cases, at the behest of the U.S. Trustee. Mr. Martino filed a $3,000,000 bond. The pizza chain was auctioned on Nov. 16, 2011, and ultimately sold for $61.6 million to an investor group led by Chicago-based private equity firm Victory Park Capital. GMX RESOURCES: To Exchange 2.2MM Shares for $4.1MM Conv. Notes -------------------------------------------------------------- GMX Resources Inc. entered into an exchange agreement with an investment manager on behalf of seven holders of its 5.00% Convertible Senior Notes due 2013. Pursuant to this agreement, as consideration for the surrender by the holders of $4,120,000 aggregate principal amount of the 2013 Convertible Notes, GMXR will issue to the holders an aggregate of 2,245,400 shares of GMXR common stock, par value $0.001 per share, along with cash consideration relating to accrued and unpaid interest. This issuance of the Common Stock is being effected pursuant to Section 3(a)(9) of the Securities Act of 1933, and accordingly such Common Stock is exempt from registration as securities exchanged by the issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange. About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. The Company's strategy is to significantly increase production, revenues and reinvest in increasing production. GMXR's goal is to grow and build shareholder value every day. The Company reported a net loss of $206.44 million in 2011, a net loss of $138.29 million in 2010, and a net loss of $181.08 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $542.20 million in total assets, $474.92 million in total liabilities and $67.27 million in total equity. * * * In November 2011, Moody's downgraded the rating of GMX Resources' corporate family rating (CFR) to 'Caa3' from 'Caa1', the Probability of Default (PDR) rating to 'Ca' from 'Caa1', and the Speculative Grade Liquidity (SGL) rating to SGL-4 from SGL-3. The outlook is negative. The downgrade of GMX's PDR and note ratings reflect the company's announcement that greater than 50% of the holders of the notes due 2019 have accepted a proposed exchange offer, which Moody's views as a distressed exchange. The lowering of the CFR and SGL ratings reflects Moody's expectation of potential liquidity issues through the first quarter of 2013, as well as elevated leverage following the issuance of at least $100 million of proposed secured notes under the exchange offer and a proposed $55 million volumetric production payment (VPP), both of which the company expects to be executed before the end of 2011. Moody's treats VPPs as debt in Moody's leverage calculations. The negative outlook reflects the potential for the CFR and note ratings to be lowered if liquidity deteriorates further. As reported by the TCR on Dec. 21, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on GMX Resources Inc. to 'SD' (selective default) from 'CC'. "We also lowered the company's issue-level ratings to 'D' from 'CC', reflecting its completion of an exchange offer for a portion of its $200 million 11.375% senior notes due 2019," S&P said. "The rating actions follow the company's announcement that it has completed the exchange offer for its 11.375% senior notes due 2019," said Standard & Poor's credit analyst Paul B. Harvey. "The exchange offer included $53 million principle of 11.375% senior notes that accepted an exchange of $1,000 principle for $750 principle of new 11% senior secured notes due 2017. We consider the completion of such an exchange, at a material discount to par, to be a distressed exchange and, as such, tantamount to a default under our criteria." GREDE HOLDINGS: S&P Gives 'B+' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Southfield, Mich.-based casting supplier Grede Holdings LLC. The outlook is stable. "At the same time, we assigned a 'BB' issue-level rating and '1' recovery rating to Grede's $200 million five-year senior secured term loan. The '1' recovery rating indicates our expectation that lenders would receive very high (90% to 100%) recovery in the event of a payment default. All previous ratings were preliminary," S&P said. "The ratings reflect what we consider to be Grede's weak business risk profile and aggressive financial risk profile, according to our criteria," said Standard & Poor's credit analyst Nishit Madlani. "Our business risk assessment incorporates the multiple industry risks facing companies supplying the light vehicle and commercial vehicle markets, including volatile demand, high fixed costs, competition and pricing pressures, and potential raw material recovery risk." "We assume Grede's revenue growth in 2012 and 2013 will be determined by the pace of stabilizing auto production in North America and some ongoing recovery in commercial-truck and industrial demand. In the U.S. light-vehicle market, we expect 2012 and 2013 sales to increase 11% and 5% to 14.1 million and 14.8 million units. Sales in recent months have been higher than our 2012 estimate, but we also believe production could return to more historical levels of volatility, now that inventories seem fully restocked and prospects for higher gas prices begin to more strongly influence consumer vehicle mix preferences and potentially sales volumes," S&P said. GRUBB & ELLIS: Colliers Int'l Snags Eight Brokers ------------------------------------------------- Mary Ann Azevedo at Silicon Valley/San Jose Business Journal reports that Colliers International has hired eight former Grubb & Ellis brokers to work out of its San Jose and Redwood City offices. The report notes four former Grubb & Ellis brokers will be joining Colliers' downtown office on 450 W. Santa Clara St. in San Jose. Another four will be working out of its Redwood City location on 203 Redwood Shores Parkway. Another five have joined Colliers' Sacramento office. According to the report, specifically, in San Jose, investment sales specialist Mark Bruening and his associate, Drew Brown, will be working out of Colliers' downtown location. John Serex, who specializes in industrial/R&D leasing, and financial services and asset management consultant Howard Berry have also joined the firm's San Jose office. Meanwhile, former Grubb & Ellis brokers Mike Davis, J.P. Custodio, Michael Draeger and Aaron Levinger have joined Colliers' Peninsula office in Redwood City. They all specialize in industrial leasing and sales. The report notes, in addition, Mike Kennedy, a former independent broker/developer whose focus is on representing emerging tech and venture capital companies will be working out of the Redwood City office. The report relates Richard Scott, managing director of the San Jose office of Grubb & Ellis, said of the announcement: "The four Silicon Valley local agents (Bruening, Brown, Serex, Berry) are all solid guys and and I'm happy they landed at a good organization like Colliers International." The report further relates Jeff Fredericks, managing partner of Colliers' San Jose office, said of the new hires: "We filled important niches, added experience as well as youth to our ranks and most importantly we added some fine individuals who fit our culture like a glove." 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. GRUBB & ELLIS: Brokers Object to Asset Purchase Deal Supplement --------------------------------------------------------------- BankruptcyData.com reports that Grubb & Ellis' ad hoc committee of brokers filed with the U.S. Bankruptcy Court a response and objection and reservation of rights to the Debtors' motion to approve a transition services supplement for the second amended and restated asset purchase agreement. Documents filed with the Court assert, "Time and time again, the Brokers have requested answers and certainty as to their future income and their future livelihood, whether it be with BGC or not. Not only have BGC and the Debtors failed to provide such answers and certainty, but they continue to make promises that are false and continue to take actions - the latest, the Transition Agreement - that create pronounced uncertainty and handcuff the Brokers to an unbearable situation. What is clear from the Motion and the Transition Agreement is that BGC was not - and is not - able to close on the sale. Despite the many 'drop dead' milestones dates that BGC included in the Purchase Agreement - all of which have passed - it may now actually be months before the sale closes." 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. GRUBB & ELLIS: Alvarez & Marsal OK'd as Financial Advisor --------------------------------------------------------- The Hon. Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York authorized Grubb & Ellis Company, et al., to employ Alvarez & Marsal North America, LLC and Alvarez & Marsal Securities, LLC as financial advisor and investment banker. About Grubb & Ellis Company 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. GRUBB & ELLIS: Files Schedules of Assets and Liabilities -------------------------------------------------------- Grubb & Ellis Company filed with the U.S. Bankruptcy Court for the Southern District of New York its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $36,287,114* C. Property Claimed as Exempt D. Creditors Holding Secured Claims $30,913,056* E. Creditors Holding Unsecured Priority Claims $9,800,400* F. Creditors Holding Unsecured Non-priority Claims $122,732,170* ----------- ----------- TOTAL $36,287,114* $163,445,626* * plus undetermined amount A full-text copy of the schedules are available for free at http://bankrupt.com/misc/GRUBB_&_ELLIS_sal.pdf About Grubb & Ellis Company 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. GRUBB & ELLIS: Taps Kurtzman Carson Consultants as Admin. Agent --------------------------------------------------------------- The Hon. Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York authorized Grubb & Ellis Company, et al., to employ Kurtzman Carson Consultants LLC as administrative agent in the Debtors' chapter 11 cases. As reported in the Troubled Company Reporter on March 21, 2012, the Debtors anticipate that there will be in excess of 5,000 creditors and other parties in interest to be noticed. In view of the number of anticipated creditors and parties in interest and the complexity of the Debtors' business, the Debtors submit that the appointment of KCC as the administrative agent is both necessary and in the best interests of the Debtors, their estates and other parties in interest. As part of the overall compensation payable to KCC under the terms of the KCC Agreement, the Debtors have agreed to certain indemnification and contribution obligations. The KCC Agreement provides that the Debtors will indemnify and hold harmless KCC, its officers, employees and agents under certain circumstances specified in the KCC Agreement, except in circumstances of gross negligence or willful misconduct. To the best of the Debtors' knowledge KCC is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About Grubb & Ellis Company 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. GRUBB & ELLIS: Togut Segal Approved as Bankruptcy Counsel --------------------------------------------------------- The Hon. Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York authorized Grubb & Ellis Company, et al., to employ Togut, Segal & Segal LLP as counsel. As reported in the Troubled Company Reporter on Feb. 24, 2012, Togut, Segal & Segal LLP, will be led by Frank A. Oswald, Esq., Scott E. Ratner, Esq., and Jonathan P. Ibsen, Esq., as their general bankruptcy counsel. The Togut Firm was engaged on Jan. 31, 2012, to assist the Debtors with evaluating its restructuring options and to prepare for a chapter 11 case should a filing become necessary or desirable. To date, the Company has paid an aggregate of $850,000 as a retainer to the Togut Firm. The Debtors propose to compensate the Togut Firm on an hourly basis at its customary hourly rates for services rendered, plus reimbursement of actual, necessary expenses incurred by the Togut Firm. The current standard hourly rates for the Togut Firm are (i) partners $800 to $935; (ii) associates and counsel $185 to $715; (iii) paralegals and law clerks $145 to $285. Mr. Oswald, a member of the Togut Firm, attests that the Firm does not represent or hold any interest adverse to the Debtors or their estates with respect to the matters on which the firm is to be employed. The Togut Firm also does not have any connection with any creditors or other parties in interest, or their attorneys or accountants, or the United States Trustee or any of its employees. To the best of the Debtor's knowlegde, Togut Firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Grubb & Ellis Company 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. GRUBB & ELLIS: Zukerman Gore Approved as Corporate Counsel ---------------------------------------------------------- The Hon. Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York authorized Grubb & Ellis Company, et al.,to employ Zukerman Gore Brandeis & Crossman, LLP to act as corporate counsel in the Chapter 11 cases. About Grubb & Ellis Company 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. HARLAY HOSPITALITY: Case Summary & 9 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Harlay Hospitality, Ltd. 5710 Industry Park Dr. San Antonio, TX 78212 Bankruptcy Case No.: 12-51068 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Western District of Texas (San Antonio) Judge: Leif M. Clark Debtor's Counsel: Jessica L. Hanzlik, Esq. TIWARI + BELL, PLLC 12002 Bandera Rd., Suite 102 Helotes, TX 78023 Tel: (210) 485-2104 Fax: (210) 485-2122 E-mail: jhanzlik@texaslegalpros.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 nine largest unsecured creditors is available for free at http://bankrupt.com/misc/txwb12-51068.pdf The petition was signed by Harlay Lodging, LLC, general partner. HARRELSON UTILITIES: Court Won't Reopen Chapter 11 Case ------------------------------------------------------- Bankruptcy Judge Randy D. Doub denied a request filed by Blue Ridge Site Development of NC to reopen the Chapter 11 case of Harrelson Utilities, Inc. On Feb. 23, 2011, the Court entered the Final Decree in the Harrelson case after finding the plan of reorganization was substantially consummated pursuant to 11 U.S.C. Sec. 1101(2). Blue Ridge was hired by 1st AB Inc. to perform construction work on a project called Ashford Village. Blue Ridge subcontracted a portion of the work to the Debtor. Blue Ridge's payments to the Debtor were subject to a claim of lien on funds by Ferguson Enterprises, Inc. of Virginia for materials and labor provided to the Debtor. On Oct. 1, 2010, Ferguson and Financial Federal Credit Inc. -- now People's United Equipment Finance Corp. -- filed a Joint Motion to Approve Settlement and Compromise, which among other things, allowed Ferguson and FFCI to each take a 50% share of a $115,379.34 bond deposited by 1st AB Inc. to discharge Ferguson's claim of lien on real property on the Ashford Village project. On Nov. 22, 2010, the Court approved the Settlement and Compromise, subject to certain limitations. The November Order allowed Ferguson and FFCI to split the $115,379.34 bond amount. On Aug. 17, 2011, Ferguson and Peak City Partners, LLC, filed the Joint Motion to Reopen Case for Clarification and Enforcement of Order Approving Settlement and Compromise to address issues related to the settlement of the Schiefflin Industrial Park project, which was also discussed in the November Order. Though the Ferguson and Peak City joint motion did not address payment on the Ashford Village project, Blue Ridge filed a response to it on Oct. 3, 2011. Blue Ridge asserted the actual amount it owed the Debtor for the Ashford Village project was $90,171.19 instead of the $115,379.24 bond amount deposited by 1st AB Inc. Blue Ridge also asserted it was entitled to a $3,079.85 material credit for materials returned to Ferguson in July 2009. Subtracting the $3,079.85 material credit from the $90,171.19 actual indebtedness, Blue Ridge claimed the November Order's payment of the $115,379.24 bond amount resulted in a $28,287.90 overpayment to Ferguson and FFCI that should be refunded to Blue Ridge. On Oct. 14, 2011, prior to the hearing on the Ferguson and Peak City joint motion, the parties withdrew the motion. Based on the withdrawal, the Court neither heard Blue Ridge's Oct. 3, 2011 response nor addressed the issue of the $28,287.90 overpayment. A copy of the Court's April 6, 2012 Order is available at http://is.gd/671aPrfrom Leagle.com. Based in Zebulon, North Carolina, Harrelson Utilities, Inc. filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.C. Case No. 09-02815) on April 6, 2009. Assets and liabilities are listed as less than $10 million. A Chapter 11 Plan was confirmed by order dated April 16, 2010. HARRISBURG, PA: Seeks Hearing on Receiver's Resignation ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that city officials at Harrisburg, Pennsylvania, called for the state court to hold a hearing into the reasons surrounding the resignation of the receiver two days after he called for state and federal investigations into "possible illegal activities" in connection with financing for the incinerator at the core of the state capital's financial problems. Receiver David Unkovic said in his resignation letter that he found himself in "an untenable position in the political and ethical crosswinds." About Harrisburg, Pennsylvania The city of Harrisburg, in Pennsylvania, is coping with debt related to a failed revamp of an incinerator. The city is $65 million in default on $242 million owing on bonds sold to finance an incinerator that converts trash to energy. The Harrisburg city council voted 4-3 on Oct. 11, 2011, to authorize the filing of a Chapter 9 municipal bankruptcy (Bankr. M.D. Pa. Case No. 11-06938). The city claims to be insolvent, unable to pay its debt and in imminent danger of having tax revenue seized by holders of defaulted bonds. Judge Mary D. France presided over the Chapter 9 case. Mark D. Schwartz, Esq. and David A. Gradwohl, Esq., served as Harrisburg's counsel. The petition estimated $100 million to $500 million in assets and debts. Susan Wilson, the city's chairperson on Budget and Finance, signed the petition. Harrisburg said in court papers it is in imminent jeopardy through six pending legal actions by creditors with respect to a number of outstanding bond issues relating to the Harrisburg Materials, Energy, Recycling and Recovery Facilities, which processes waste into steam and electrical energy. The owner and operator of the incinerator is The Harrisburg Authority, which is unable to pay the bond issues. The city is the primary guarantor under each bond issue. The lawsuits were filed by Dauphin County, where Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and Covanta Harrisburg Inc. The Commonwealth of Pennsylvania, the County of Dauphin, and Harrisburg city mayor Linda D. Thompson and other creditors and interested parties objected to the Chapter 9 petition. The state later adopted a new law allowing the governor to appoint a receiver. Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg, P.C., represented Mayor Thompson in the Chapter 9 case. Counsel to the Commonwealth of Pennsylvania was Neal D. Colton, Esq., Jeffrey G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor. In November 2011, the Bankruptcy Judge dismissed the Chapter 9 case because (1) the City Council did not have the authority under the Optional Third Class City Charter Law and the Third Class City Code to commence a bankruptcy case on behalf of Harrisburg and (2) the City was not specifically authorized under state law to be a debtor under Chapter 9 as required by 11 U.S.C. Sec. 109(c)(2). Dismissal of the Chapter 9 petition was upheld in a U.S. District Court. That same month, the state governor appointed David Unkovic as receiver for Harrisburg. Mr. Unkovic is represented by the Municipal Recovery & Restructuring group of McKenna Long & Aldridge LLP, led by Keith Mason, Esq., co-chair of the group. Mr. Unkovic resigned as receiver March 30, 2012. HARRINGTON WEST: Bankruptcy Case Converted to Chapter 7 ------------------------------------------------------- BankruptcyData.com reports that the U.S. Bankruptcy Court entered an order converting the Harrington West Financial case from Chapter 11 reorganization to Chapter 7 liquidation status. The docket entry reads, "Hearing Held re order to show cause re conversion to Chapter 7, converted to 7." "At a hearing held September 14, 2011, debtor's First Amended Plan was not confirmed due to lack of creditor support. Since that time, no new plan has been proposed, and no progress has been made toward reorganization....It does not appear to the court that any reorganization is in process," documents filed with the Court and obtained by BankruptcyData.com, explained. Harrington West Financial Group Inc. filed a voluntary petition to liquidate its assets under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Calif. Case No. 10-14677) on Sept. 10, 2010. The holding company filed under Chapter 11 after its banking unit, Los Padres Bank FSB, was taken over by regulators in August 2010. Sharon M. Kopman, Esq., at Landau Gottfried & Berger LLP, in Los Angeles, serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $579,282 in assets and $26,004,000 in liabilities. HD SUPPLY: Completes Sale of Interest in IPVF to Shale-Inland ------------------------------------------------------------- HD Supply, Inc., completed the previously reported sale to Shale- Inland Holdings, LLC, of all of the issued and outstanding equity interests in its Industrial Pipes, Valves and Fittings (IPVF) business. The transaction closed on March 26, 2012, resulting in $469 million of sale proceeds. The IPVF business contributed $696 million of revenue and $61 million of Adjusted EBITDA for the fiscal year ended Jan. 29, 2012. Pro forma for the divestiture, HD Supply would have had Adjusted EBITDA of $508 million for the year ended Jan. 29, 2012. About HD Supply HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the largest North American wholesale distributors supporting residential and non-residential construction and to a lesser extent electrical consumption and repair and remodeling. HDS also provides maintenance, repair and operations services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates through approximately 800 locations throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. The Company reported a net loss of $543 million for the year ended Jan. 29, 2012, a net loss of $619 million for the year ended Jan. 30, 2011, and a net loss of $514 million on $6.94 billion of net sales for the year ended Jan. 31, 2010. The Company's balance sheet at Jan. 29, 2012, showed $6.73 billion in total assets, $7.16 billion in total liabilities, and a $428 million total stockholders' deficit. * * * HD Supply carries 'Caa2' probability of default rating and corporate family rating, with negative outlook, from Moody's Investors Service, and a 'B' corporate credit rating, with negative outlook, from Standard & Poor's Ratings Services. In April 2010, when Moody's downgraded the ratings to 'Caa2' from 'Caa1', it said, "The downgrade results from Moody's views that the construction industry, the main driver of HDS' revenues, will continue to be weak for the foreseeable future, pressuring the company's ability to generate meaningful levels of earnings and free cash flow relative to its debt." HD SUPPLY: Plans to Offer Senior Secured Notes ---------------------------------------------- HD Supply, Inc., intends to commence a private offering of Senior Secured First Priority Notes due 2019 and Senior Secured Second Priority Notes due 2020. HD Supply also intends to concurrently refinance its ABL credit facility and senior secured term loan facility. There can be no assurance that the private offering of Notes or the other financings will be completed. In addition to refinancing its ABL credit facility and senior secured term loan facility, HD Supply intends to use the estimated $1,850 million of aggregate proceeds from the sale of the First Priority Notes and first lien term loan borrowings under new credit facilities together with borrowings under a new ABL credit facility, the estimated $775 million of proceeds from the sale of the Second Priority Notes and the incurrence of other indebtedness to refinance its 12.0% Senior Cash Pay Notes due 2014. The Notes will be offered in a private offering exempt from the registration requirements of the United States Securities Act of 1933, as amended. The Notes will be offered only to qualified institutional buyers pursuant to Rule 144A and to certain persons outside the United States pursuant to Regulation S, each under the Securities Act. The Notes will not be and have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. About HD Supply HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the largest North American wholesale distributors supporting residential and non-residential construction and to a lesser extent electrical consumption and repair and remodeling. HDS also provides maintenance, repair and operations services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates through approximately 800 locations throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. The Company reported a net loss of $543 million for the year ended Jan. 29, 2012, a net loss of $619 million for the year ended Jan. 30, 2011, and a net loss of $514 million on $6.94 billion of net sales for the year ended Jan. 31, 2010. The Company's balance sheet at Jan. 29, 2012, showed $6.73 billion in total assets, $7.16 billion in total liabilities, and a $428 million total stockholders' deficit. * * * HD Supply carries 'Caa2' probability of default rating and corporate family rating, with negative outlook, from Moody's Investors Service, and a 'B' corporate credit rating, with negative outlook, from Standard & Poor's Ratings Services. In April 2010, when Moody's downgraded the ratings to 'Caa2' from 'Caa1', it said, "The downgrade results from Moody's views that the construction industry, the main driver of HDS' revenues, will continue to be weak for the foreseeable future, pressuring the company's ability to generate meaningful levels of earnings and free cash flow relative to its debt." HEBB BUILDERS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Hebb Builders, Inc. P.O. Box 1093 Littleton, MA 01460 Bankruptcy Case No.: 12-41260 Chapter 11 Petition Date: April 3, 2012 Court: United States Bankruptcy Court District of Massachusetts (Worcester) Judge: Melvin S. Hoffman Debtor's Counsel: David B. Madoff, Esq. MADOFF & KHOURY LLP 124 Washington Street - Suite 202 Foxboro, MA 02035 Tel: (508) 543-0040 Fax: (508) 543-0020 E-mail: madoff@mandkllp.com Scheduled Assets: $372,119 Scheduled Liabilities: $5,923,463 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mab12-41260.pdf The petition was signed by Brian E. Hebb, president. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Brian Hebb 11-43863 09/13/11 HESPERIA RDA: S&P Removes 'BB+' Rating on Tax Bonds Off Watch ------------------------------------------------------------- Standard & Poor's Ratings Services removed the 'BB+' rating on Hesperia Redevelopment Agency, Calif.'s series 2005B tax allocation bonds from CreditWatch and assigned it a negative outlook. "In addition, we affirmed the rating at 'BB+'," S&P said. "We had previously placed the bonds on CreditWatch due California's abolishment of redevelopment agencies and the potential loss of access to unpledged revenues to make debt service payments," said Standard & Poor's credit analyst Alda Mostofi. "It is our understanding that the agency does not have access to unpledged revenues," added Mr. Mostofi. "Based on Assembly Bill 1X 26, the agency reports that the city will be the successor agency. The agency also reports that it has received its December 2011 county tax increment disbursement, which it used for the March interest payment, and that it has designated the remainder for the remaining year's debt service payment. The agency has placed approximately $3.5 million on its January to June enforceable obligation payment schedule, which should be sufficient to meet its September principal and interest payments on the bonds," S&P said. "The total project area encompasses 51% of the total acreage of Hesperia (population 75,000) in the high desert of San Bernardino County, 35 miles north of the city of San Bernardino. Given Hesperia's relatively limited local economy, many residents commute south to the Inland Empire and greater San Bernardino County area for job opportunities," S&P said. HINSON MANAGEMENT: Case Summary & 2 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Hinson Management Group, Inc. 4590 Lake Lane Atlanta, GA 30331-6311 Bankruptcy Case No.: 12-58962 Chapter 11 Petition Date: April 3, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Judge: C. Ray Mullins Debtor's Counsel: Paul Reece Marr, Esq. PAUL REECE MARR, P.C. 300 Galleria Parkway, N.W., Suite 960 Atlanta, GA 30339 Tel: (770) 984-2255 Fax: (770) 984-0044 E-mail: pmarr@mindspring.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb12-58962.pdf The petition was signed by Robert DeJon Hinson, CEO. HMC/CAH: Wants Continued Use of Cash Collateral Until Sept. 28 -------------------------------------------------------------- As previously reported by the TCR on Dec. 27, 2011, the Bankruptcy Court, in a final order, authorized HMC/CAH Consolidated, Inc., et al., to use cash collateral securing the Debtors' obligations to their prepetition lenders. The period during which the Cash Collateral Order remains effective expired on April 6, 2012. The Debtors seek the Court's order extending and continuing the terms of the Cash Collateral Order through Sept. 28, 2012. The Debtors tell the Court that the need continues to exist, for them to have access to the Prepetition Lenders' Cash Collateral in order to continue their operations, meet their payroll and other necessary, ordinary course business expenditures, administer and preserve the value of their estates, and maintain adequate access to cash in order to maintain customer and vendor confidence. The Debtors believe it is in the best interest of the bankruptcy estates and their creditors to continue the terms of the cash collateral Order while the Debtors continue to operate in these Chapter 11 proceedings and work towards the formulation of a plan or plans of reorganization. The Debtors maintain that without the continued use of cash collateral, they will not be able to continue their operations. As of March 23, 2012, Gemino, First Liberty Bank, CFG, Citizens, and Fidelity have all consented to the requested extension. The Debtors and Midland/HUD are continuing to discuss Midland/HUD's consent to the relief requested in the Motion and the Debtors hope to have received that consent in advance of the hearing. Pursuant to the Final Order, and as adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant the prepetition lenders: 1. replacement liens; 2. a superpriority administrative expense claim status; 3. these monthly adequate protection payments: (i) to Gemino Healthcare Finance, L.L.C., $75,000, which was paid upon the entry of an Agreed Interim Order, for the Petition Date through the entry of the Agreed Interim order; and $90,000 payable on or before the 5th day of each month, which started on Dec. 5, 2011; (ii) to First Liberty Bank, $61,767 per month, which started on Nov. 11, 2011; (iii) to CFG Community Bank, $26,293 which was paid immediately upon the entry of the Agreed Interim Order, and which will continue on the first (1st) day of each month thereafter (starting on Dec. 1, 2011) during the term of the Final Order; (iv) to Citizens Bank, N.A., $14,766 per month on loan No. 23467017, which was to begin upon the entry of the Agreed Interim Order and $8,831 per month on Loan No. 23467018, beginning Dec. 15, 2011, and continue on the 15th day of each month thereafter; (v) to Midland Loan Services, Inc., $50,570 (principal and interest only; with taxes and insurance, the total payment is $61,824), which began on Oct. 31, 2011; and (vi) to Fidelity Security Life Insurance Company, et al., $21,083, which will begin on Jan. 6, 2012. The Bankruptcy Court has set May 15, 2012, as the deadline to file proofs of claim in the Debtors' cases. About HMC/CAH Consolidated Kansas City, Missouri-based HMC/CAH Consolidated, Inc., is in the business of acquiring and operating a system of acute care hospitals located in rural communities that are certified by The Centers for Medicare and Medicaid Services as Critical Access Hospitals or CAHs. The core focus of HMC/CAH's business plan is to replace the technologically out of date and operationally inefficient medical facilities of its CAHs with newly constructed state-of-the art facilities. Since its incorporation, HMC/CAH has purchased 12 rural hospitals certified as Critical Access Hospitals. These CAH Hospitals are located in Kansas (3), Oklahoma (5), Missouri (1), Tennessee (1) and North Carolina (2). The CAH Hospitals are the lifeline of the communities that they serve. The CAH Hospitals provide critical health services to rural residents, including emergency medical services. HMC/CAH and 12 affiliates filed for Chapter 11 bankruptcy (Bankr. W.D. Mo. Case Nos. 11-44738 to 11-44750) on Oct. 10, 2011. Judge Dennis R. Dow presides over the case. Mark T. Benedict, Esq., at Husch Blackwell Sanders LLP, represents the Debtors as counsel. In its petition, the Debtors estimated $10 million to $50 million in assets and debts. The petition was signed by Dennis Davis, chief legal officer. Nancy J. Gargula, U.S. Trustee for Region 13, appointed five members to serve on the Official Committee of Unsecured Creditors of HMC/CAH Consolidated, Inc. Kilpatrick Townsend & Stockton LLP serves as the committee's counsel. HMC/CAH: Court Approves CliftonLarsonAllen as Tax Advisor --------------------------------------------------------- HMC/CAH Consolidated, Inc., and its subsidiaries sought and obtained permission from the Bankruptcy Court to employ CliftonLarsonAllen LLP as their tax advisor nunc pro tunc to Feb. 15, 2012. CLA's anticipated services include, but not limited to: (a) preparation of the Debtors' state and federal income tax returns and services related thereto; and (b) tax consulting services that may arise for which the Debtors seek CLA's consultation and advice. To the best of Debtors' knowledge, CLA does not hold or represent an interest adverse to their estates and is disinterested, as that term is defined Section 101(14) of the Bankruptcy Code. CLA holds a prepetition claim against the Debtors in the amount of $65,201. However, CLA has waived its right to any payment for prepetition services in order to avoid having an interest in this proceeding. The hourly rates of the professionals who will be working as the Debtors' tax advisors will be: Professional Rate ------------ ---- Joshua Wilks - Partner $240 Justin Reppy - Manager $215 Stephen Taylor ? Senior $165 Various Audit Staff $130 ? $175 Client service assistants $80 ? $105 Reasonable expenses will be charged as incurred. About HMC/CAH Consolidated Kansas City, Missouri-based HMC/CAH Consolidated, Inc., is in the business of acquiring and operating a system of acute care hospitals located in rural communities that are certified by The Centers for Medicare and Medicaid Services as Critical Access Hospitals or CAHs. The core focus of HMC/CAH's business plan is to replace the technologically out of date and operationally inefficient medical facilities of its CAHs with newly constructed state-of-the art facilities. Since its incorporation, HMC/CAH has purchased 12 rural hospitals certified as Critical Access Hospitals. These CAH Hospitals are located in Kansas (3), Oklahoma (5), Missouri (1), Tennessee (1) and North Carolina (2). The CAH Hospitals are the lifeline of the communities that they serve. The CAH Hospitals provide critical health services to rural residents, including emergency medical services. HMC/CAH and 12 affiliates filed for Chapter 11 bankruptcy (Bankr. W.D. Mo. Case Nos. 11-44738 to 11-44750) on Oct. 10, 2011. Judge Dennis R. Dow presides over the case. Mark T. Benedict, Esq., at Husch Blackwell Sanders LLP, represents the Debtors as counsel. In its petition, the Debtors estimated $10 million to $50 million in assets and debts. The petition was signed by Dennis Davis, chief legal officer. Nancy J. Gargula, U.S. Trustee for Region 13, appointed five members to serve on the Official Committee of Unsecured Creditors of HMC/CAH Consolidated, Inc. Kilpatrick Townsend & Stockton LLP serves as the committee's counsel. HMC/CAH: Wants to Borrow $61,948 from Fuduka to Buy Equipment ------------------------------------------------------------- HMC/CAH Consolidated, Inc., and its affiliates seek permission from the Bankruptcy Court to obtain a secured postpetition financing for $61,948 from Fukuda Denshi USA, Inc., for the purpose of financing the purchase of certain medical equipment. Debtor, CAH Acquisition Company 6, LLC, d/b/a I-70 Community Hospital seeks to purchase certain medical telemetry equipment for use in its facility. Medical telemetry is generally used to monitor patient physiological parameters over a distance between a transmitter worn by the patient and a central monitoring station. Those systems allow for hospital personnel to constantly oversee and record the ongoing status of patients in their hospital rooms as well as allowing patients to move around early in their recovery while still being monitored for adverse symptoms. Additionally, with those devices, one health care worker can continually monitor several patients remotely - increasing the intensity of patient care and oversight while simultaneously decreasing health care costs. The loan will mature 12 months from loan inception, upon Bankruptcy Court approval. The interest rate is 6.5% per annum. About HMC/CAH Consolidated Kansas City, Missouri-based HMC/CAH Consolidated, Inc., is in the business of acquiring and operating a system of acute care hospitals located in rural communities that are certified by The Centers for Medicare and Medicaid Services as Critical Access Hospitals or CAHs. The core focus of HMC/CAH's business plan is to replace the technologically out of date and operationally inefficient medical facilities of its CAHs with newly constructed state-of-the art facilities. Since its incorporation, HMC/CAH has purchased 12 rural hospitals certified as Critical Access Hospitals. These CAH Hospitals are located in Kansas (3), Oklahoma (5), Missouri (1), Tennessee (1) and North Carolina (2). The CAH Hospitals are the lifeline of the communities that they serve. The CAH Hospitals provide critical health services to rural residents, including emergency medical services. HMC/CAH and 12 affiliates filed for Chapter 11 bankruptcy (Bankr. W.D. Mo. Case Nos. 11-44738 to 11-44750) on Oct. 10, 2011. Judge Dennis R. Dow presides over the case. Mark T. Benedict, Esq., at Husch Blackwell Sanders LLP, represents the Debtors as counsel. In its petition, the Debtors estimated $10 million to $50 million in assets and debts. The petition was signed by Dennis Davis, chief legal officer. Nancy J. Gargula, U.S. Trustee for Region 13, appointed five members to serve on the Official Committee of Unsecured Creditors of HMC/CAH Consolidated, Inc. Kilpatrick Townsend & Stockton LLP serves as the committee's counsel. HMC/CAH: Court Rejects Application for Royal Blue as Consultant --------------------------------------------------------------- The Bankruptcy Court denied the application of HMC/CAH Consolidated, Inc., and its affiliates to employ Royal Blue Capital, LLC, as their capital investment consultant and sustained the objection of the Official Committee of Unsecured Creditors. The Debtors sought to employ RBC to, among other things: (a) identify the Debtors' opportunities for financial transactions; (b) advise the Debtors concerning opportunities for financial transactions; and (c) as requested in writing, participate on the Debtors' behalf in negotiations relating to financial transactions. The Debtors proposed that RBC will be entitled to compensation for capital investment consulting and advisory services rendered as follows: (i) fees in such amount or amounts as agreed to, in writing, by RBC and the Debtors in connection with the Financial Transaction; and (ii) expenses actually incurred by RBC provided that all those expenses were agreed to by the Debtors in advance. The Committee opposed the Application for failure to include a proposed arrangement for compensation. Moreover, the Committee maintains, the definitions of Investment Transaction and Lending Transaction are so broad that they might be invoked with respect to any equipment financing or any equity investment. About HMC/CAH Consolidated Kansas City, Missouri-based HMC/CAH Consolidated, Inc., is in the business of acquiring and operating a system of acute care hospitals located in rural communities that are certified by The Centers for Medicare and Medicaid Services as Critical Access Hospitals or CAHs. The core focus of HMC/CAH's business plan is to replace the technologically out of date and operationally inefficient medical facilities of its CAHs with newly constructed state-of-the art facilities. Since its incorporation, HMC/CAH has purchased 12 rural hospitals certified as Critical Access Hospitals. These CAH Hospitals are located in Kansas (3), Oklahoma (5), Missouri (1), Tennessee (1) and North Carolina (2). The CAH Hospitals are the lifeline of the communities that they serve. The CAH Hospitals provide critical health services to rural residents, including emergency medical services. HMC/CAH and 12 affiliates filed for Chapter 11 bankruptcy (Bankr. W.D. Mo. Case Nos. 11-44738 to 11-44750) on Oct. 10, 2011. Judge Dennis R. Dow presides over the case. Mark T. Benedict, Esq., at Husch Blackwell Sanders LLP, represents the Debtors as counsel. In its petition, the Debtors estimated $10 million to $50 million in assets and debts. The petition was signed by Dennis Davis, chief legal officer. Nancy J. Gargula, U.S. Trustee for Region 13, appointed five members to serve on the Official Committee of Unsecured Creditors of HMC/CAH Consolidated, Inc. Kilpatrick Townsend & Stockton LLP serves as the committee's counsel. HORIZON LINES: Delays Filing of 2011 Annual Report -------------------------------------------------- The management of Horizon Lines, Inc., has determined that the Company is unable to timely file its annual report on Form 10-K for the period ended Dec. 25, 2011, without unreasonable effort or expense, because management needs additional time to finalize and analyze the Company's financial statements. As previously disclosed in the Company's filings with the Securities and Exchange Commission, on Oct. 5, 2011, the Company completed a comprehensive $652.8 million refinancing. The refinancing included: (a) the exchange of $327.8 million in aggregate principal amount of the Company's 4.25% Convertible Senior Notes due 2012 for 1.0 million shares of the Company's common stock, warrants to purchase 1.0 million shares of the Company's common stock, $178.8 million in aggregate principal amount of 6.00% Series A Convertible Senior Secured Notes due 2017 and $99.3 million in aggregate principal amount of 6.00% Series B Mandatorily Convertible Senior Secured Notes; (b) the issuance of $225.0 million aggregate principal amount of First-Lien Notes; (c) the issuance of $100.0 million of Second-Lien Notes; and (d) the repayment of $193.8 million in existing borrowings under the Company's prior senior credit facility. The Company also entered into a new $100.0 million asset-based revolving credit facility. The Company additionally completed a mandatory debt to equity conversion of $49.7 million of the Convertible Notes in January 2012. During the third quarter of 2011, the Company began a review of strategic alternatives for its Five Star Express service. On Oct. 24, 2011, the Company announced a decision to terminate the FSX service. The Company ceased all operations related to its FSX service during the fourth quarter of 2011. The entire business component comprising the FSX service has been discontinued and there will not be any significant future commercial cash flows related to these operations. As a result, the Company is required to classify the FSX service as discontinued operations beginning in its fiscal fourth quarter 2011 and to revise all prior periods to conform to this presentation. As a result of these events, additional time is required to complete the preparation, review and analysis of the Company's financial statements, including the accounting and tax treatment and disclosure of the extremely complex refinancing, as well as the discontinued operations and the multi-year reclassification of prior year results. The Company expects to file the Form 10-K as soon as practicable and within the time period permitted by Rule 12b-25. As previously noted, on Oct. 24, 2011, the Company announced that it was discontinuing the FSX service through an orderly transition plan that was implemented beginning on Oct. 31, 2011. Following termination of the FSX service, the Company discontinued the use of five non-Jones Act qualified container vessels that are subject to "hell or high water" charters under which the Company's obligations are absolute and unconditional. The aggregate annual charter hire for the vessels is approximately $32.0 million. For the last several months, the Company has been exploring sub- charter opportunities for the Vessels, and at the same time engaging in discussions regarding a restructuring of the charters for the Vessels in an effort to mitigate ongoing charter expense, lay-up costs, insurance expense and maintenance costs. On March 26, 2012, the Company and approximately 92% of the holders of the First Lien Notes, approximately 98% of holders of the Second Lien Notes, and approximately 100% of the holders of the Convertible Notes, reached an agreement in principle to restructure the Company's balance sheet. More specifically, the Company and the noteholders have entered into one or more restructuring support agreements that provide, among other things, that all of the remaining $228.4 million of the Company's 6.00% Series A and B Convertible Notes would be converted into 90% of the Company's stock or warrants for non-U.S. citizens. The parties' obligations under the Support Agreement are subject to the satisfaction of a number of conditions, including the Company's restructuring of its charter obligations with respect to the Vessels. The remaining 10% of the Company's common stock would be available in connection with the restructuring of the charter obligations relating to the Vessels. If certain of the transactions contemplated in the Support Agreement, together with a restructuring of the obligations with respect to the Vessels, are not consummated before the filing of the 2011 Annual Report on Form 10-K to which this report relates, management believes and anticipates that the independent auditor's report on the Company's financial statements will express substantial doubt about the Company's ability to continue as a going concern. The Company expects, and the restructuring support agreement expressly contemplates, that all necessary aspects of such transactions will be consummated prior to the filing of such 2011 Annual Report on Form 10-K. About Horizon Lines Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the nation's leading domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. The Company provides express trans-Pacific service between the U.S. West Coast and the ports of Ningbo and Shanghai in China, manages a domestic and overseas service partner network and provides integrated, reliable and cost competitive logistics solutions. The Company's balance sheet at Sept. 25, 2011, showed $677.4 million in total assets, $801.7 million in total liabilities, and a stockholders' deficit of $124.3 million. Ernst & Young LLP, in Charlotte, North Carolina, expressed substantial doubt Horizon Lines' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 26, 2010. The independent auditors noted that there is uncertainty that Horizon Lines will remain in compliance with certain debt covenants throughout 2011 and will be able to cure the acceleration clause contained in the convertible notes. "The Company believes the Oct. 5, 2011 refinancing transactions more fully described in Note 18 to these financial statements have resolved the concern as to compliance with debt covenants throughout the remainder of 2011," the Company said in the filing. "In addition, the Company believes it will be in compliance with its debt covenants through 2012." Refinancing The Company was not in compliance with the maximum senior secured leverage ratio and the minimum interest coverage ratio under its Senior Credit Facility at the close of its third fiscal quarter ended Sept. 25, 2011. Non-compliance with these financial covenants constituted an event of default, which could have resulted in acceleration of the maturity. None of the indebtedness under the Senior Credit Facility or Notes was accelerated prior to the completion of a comprehensive refinancing on Oct. 5, 2011. The Senior Credit Facility and 99.3% of the 4.25% Convertible Senior Notes were repaid as part of the refinancing. In addition, as a result of the completion of the refinancing, the short-term obligations under the Senior Credit Facility, the Notes and the Bridge Loan have been classified as long-term debt. As a result of the efforts to refinance the Company's debt and the 2011 amendments to the Senior Credit Facility, the Company paid $17.3 million in financing costs and recorded a loss on modification of debt of $0.6 million during 2011. * * * As reported by the TCR on Aug. 26, 2011, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Horizon Lines Inc. to 'SD' from 'CCC'. The rating action on Horizon Lines follow the company's decision to defer the interest payment on its $330 million senior convertible notes due August 2012, exercising the 30-day grace period. "Under our criteria, we view failure to make an interest payment within five business days after the due date for payment a default, regardless of the length of the grace period contained in an indenture," said Standard & Poor's credit analyst Funmi Afonja. HORIZON RIDGE: Case Summary & 3 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Horizon Ridge Medical & Corporate Center, LLC 2610 W. Horizon Ridge Pkwy Suite 201-G Henderson, NV 89052-2870 Bankruptcy Case No.: 12-13906 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Efrem A. Rosenfeld, Esq. ROSENFELD BAUMAN & FORBES 401 N. Buffalo Dr, #100 Las Vegas, NV 89145 Tel: (702) 386 8637 Fax: (702) 385 3025 E-mail: tsell@lawrosen.com Scheduled Assets: $3,750,000 Scheduled Liabilities: $190,360 A list of the Company's three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb12-13906.pdf The petition was signed by Dr. Rick Adelson, managing member. HOSTESS BRANDS: Proposes Salary Freeze for Union Workers -------------------------------------------------------- Julie Jargon and Mike Spector, writing for The Wall Street Journal, reported earlier this month that Hostess Brands Inc. is proposing a salary freeze for union workers that would save the company $6.1 million annually by 2015, according to court documents. WSJ said the various sides are aiming to reach an agreement in the next couple of weeks or so. If they fail, they will face off in a trial this month over whether Hostess can scrap its labor contracts as part of its second trip through bankruptcy. WSJ reported that the unions say Hostess failed to innovate and pursued failing strategies. Dennis Raymond, leader of Hostess's Teamsters workers, in a statement, said the Teamsters want to make sure that additional "sacrifices are not made in vain again due to mismanagement." During its first trip through Chapter 11, Hostess tried restricting costs by getting labor concessions that changed how products were delivered in some markets and reduced workers' base pay, saving the company roughly $80 million a year. According to WSJ, a spokesman for Hostess said most drivers have recovered their lost base pay "and then some because of price increases and higher route volume." According to WSJ, analysts say the previous changes didn't go far enough to compete with rivals. Hostess's work rules require workers to deliver bread and cakes on separate trucks, adding additional costs. Today, selling, delivery and administrative costs eat up 43% of Hostess's sales, compared with 36% at rival Flowers Foods Inc., maker of Nature's Own bread and Tastykake Krimpets, WSJ noted. "Other companies operate lean models, investing in bakeries to automate them" and "rely less on human labor," says Akshay Jagdale, an analyst with KeyBanc Capital Markets, according to WSJ. Hostess couldn't do so, he said, because, "you can't make investments when you're barely hanging on." Meanwhile, on March 23, the Bankruptcy Court entered an order, at the behest of the Bakery Drivers Local 194 Pension Fund, lifting the automatic stay in the case to the extent necessary to permit the Fund to serve a notice of cessation of benefit accruals to employees of the Debtors that are Fund beneficiaries. The Fund withdrew portions of its request seeking to compel the Debtors' compliance with Section 1113 of the Bankruptcy Code and for allowance of an administrative expense claim. On April 6, the Debtors presented a stipulation and agreed order it entered into with the Philadelphia Bakery Employees' and Food Driver Salesmen's Union Local No. 463 and the Teamsters' Union Local No. 676 Pension Fund, which purports to grant the Fund limited relief from the automatic stay solely to the extent necessary to permit the Fund to serve a notice of cessation of accruals of pension credits to participants covered by a collective bargaining agreement between Teamsters Local 463 and the Debtors because Hostess has not made contributions to the Fund since June 2011. The Debtors do not take a position with respect to the lifting of the Stay for such limited purpose. The Philadelphia Bakery Employees' and Food Driver Salesmen's Union Local No. 463 and the Teamsters' Union Local No. 676 Pension Fund are represented by: Regina C. Hertzig, Esq. CLEARY, JOSEM & TRIGIANI LLP One Liberty Place, 51st Floor 1650 Market Street Philadelphia, PA 19103 Telephone: (215) 735-9099 Facsimile: (215) 640-3201 E-mail: RHertzig@clearyjosem.com About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. HOSTESS BRANDS: Claim Buyers Circle Bankruptcy Case --------------------------------------------------- Sierra Liquidity Fund, LLC, TRC Master Fund LLC, ASM Capital IV, L.P., ASM SIP, L.P., Sonar Credit Partners II, LLC, and Fulcrum Distressed Opportunities Fund I, LP, were actively buying unsecured trade claims held by creditors of Hostess Brands Inc. during the past month. Sierra's haul included portions of scheduled claims of Mincing Overseas Spice Co. (Scheduled Amount $18,590.27); Lozier Oil Company (Scheduled Amount $88,348.23); and Majesty Bakeries, LLC (Scheduled Amount $35,343.85). Sierra may be reached at: Sierra Liquidity Fund, LLC 2699 White Rd., Ste 255 Irvine, CA 92614 Tel: 949-660-1144 Fax: 949-660-0632 E-mail: saugust@sierrafunds.com Fulcrum acquired claims including those of Kendall Packaging Inc. (Scheduled Amount $146,253.96); and Red Star Yeast Company LLC (Scheduled Amount $228,956.74). Fulcrum may be reached at: Matthew W. Hamilton Fulcrum Distressed Opportunities Fund I, LP Wells Fargo Building 111 Congress Ave., Suite 2550 Austin, TX 78701 Tel: (512) 473-2771 Fax: (512) 473-277 E-mail: info@fulcruminv.com TRC Master Fund bought the claim of Calise & Sons Bakery, Inc. (Scheduled Amount $416,258.26). It may be reached at: Terrel Ross TRC Master Fund LLC 336 Atlantic Avenue, Suite 302 East Rockaway, NY 11518 E-mail: tross@trcmllc.com ASM Capital IV bought claims including a portion of AMF Automation Technologies LLC's (Scheduled Amount $152,756.96). ASM SIP acquired the claim of Markem-Imaje (Scheduled Amount $101,753.50). ASM may be reached at: Adam Moskowitz Managing General Partner ASM CAPITAL 7600 Jericho Turnpike, Suite 302 Woodbury, NY 11797 Tel: (516) 422-7100 Fax: (516) 422-7118 E-mail: info@ASMCapital.com The buyers did not disclose the amount paid for the claims. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. HOSTESS BRANDS: Won't Disclose Details on Executives' Raises ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Hostess Brands Inc. won't disclose how much its senior executives salaries were raised in contemplation of bankruptcy. Brian J. Driscoll, chief executive when Hostess filed bankruptcy, saw his salary increase from $750,000 to $2.55 million in July, the Wall Street Journal reported last week. At the same time, salaries of executive vice presidents were almost doubled, the Journal said, based on a paper filed in bankruptcy court by the official creditors' committee. Although pertinent information in the committee's filing had been redacted, the Journal reported that some details that were redacted were made visible when the papers were saved to a word processing file, revealing the committee's allegation that Hostess "manipulated" executive salaries to "sidestep" provisions in bankruptcy law regarding officers' compensation. The entire pleading was later removed from the court file once the Journal's reconstruction became known. Dow Jones reported April 9 that Hostess' top four executives below Mr. Rayburn will cut their salaries to $1 until the end of the year or when the company emerges from bankruptcy. Four other executives agreed to lower their salaries to prior levels, the report said. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. ICG REAL ESTATE: Files for Chapter 11 in Detroit ------------------------------------------------ ICG Real Estate Advisors, LLC, filed a Chapter 11 petition (Bankr. E.D. Mich. Case No. 12-48896) in Detroit on April 9, 2012. Wayne, Michigan-based ICG estimated assets of $50 million to $100 million and debts of $10 million to $50 million. According to the case docket, the schedules of assets and liabilities, the statement of financial affairs and other incomplete filings are due April 23, 2012. The Chapter 11 Plan and the explanatory disclosure statement are due Aug. 7, 2012. Kenneth A. Nathan, Esq., at Nathan Zousmer, P.C., in Southfield, Michigan, serves as counsel to the Debtor. ICG Real Estate Advisors -- http://icgreit.com-- manages Inheritance Capital Group, LLC, a private equity commercial real estate firm founded in 2006 with international capabilities based in Southfield, Michigan. ICG Real Estate Advisors claims to be the only minority owned enterprise in the country certified by the Minority Business Development Council (MBDC) to buy and sell corporate sale lease backs. ICG Real Estate Advisors specializes in single tenant net lease real estate nationwide. IDQ HOLDINGS: S&P Gives 'B' Corp. Credit Rating; Outlook Stable --------------------------------------------------------------- Standard & Poor's Rating Services assigned a 'B' corporate credit rating to Garland, Texas-based IDQ Holdings Inc. The outlook is stable. "At the same time, we assigned a 'B' issue rating to the company's proposed $220 million senior secured notes (upsized from the previously announced $210 million) due 2017. The recovery rating on the senior secured credit facility is '4', indicating our expectation for average (30%-50%) recovery in the event of payment default. The notes are to be issued under the SEC's Rule 144a without registration rights, guaranteed by each of the company's existing and future domestic subsidiaries, and subject to incurrence-based covenants. The company will use net proceeds of the notes to refinance existing indebtedness (a term loan and mezzanine debt) of approximately $150 million and to pay a $58.5 million dividend to its financial sponsor, Castle Harlan," S&P said. "The ratings on automotive aftercare market player IDQ Holdings Inc. reflect what we consider to be a 'highly leveraged' financial profile and a 'vulnerable' business profile, as our criteria define the terms," S&P said. "In our opinion, the company's asset protection and cash flow metrics are weak, and its financial policy is aggressive," said Standard & Poor's credit analyst Mark Salierno. "We expect credit measures will improve modestly over the next 12 months, but remain weak." "Standard & Poor's could consider a downgrade if any threat to the IDQ's business were to materialize and weaken operating performance, or if the company were to engage in more aggressive financial policy, such as large shareholder dividends. While unlikely over the next 12 months, we could consider an upgrade if the company were to strengthen its business profile, potentially through diversification, while sustaining solid operating performance," S&P said. IMAGEWARE SYSTEMS: Incurs $3.2 Million Net Loss in 2011 ------------------------------------------------------- Imageware Systems Incorporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $3.18 million on $5.47 million of revenue in 2011, compared with a net loss of $5.05 million on $5.81 million of revenue in 2010. The Company's balance sheet at Dec. 31, 2011, showed $10.78 million in total assets, $16.49 million in total liabilities and a $5.71 million total shareholders' deficit. A copy of the Form 10-K is available for free at: http://is.gd/8HdpdI About ImageWare Systems Headquartered in San Diego, California, ImageWare Systems, Inc. is a leader in the emerging market for software-based identity management solutions, providing biometric, secure credential, law enforcement and enterprise authorization. Its "flagship" product is the IWS Biometric Engine. Scalable for small city business or worldwide deployment, the Company's biometric engine is a multi- biometric platform that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. The Company's identification products are used to manage and issue secure credentials, including national IDs, passports, driver licenses, smart cards and access control credentials. Its law enforcement products provide law enforcement with integrated mug shot, fingerprint LiveScan and investigative capabilities. The Company also provides comprehensive authentication security software. IMPERIAL PETROLEUM: Discloses Re-Structuring & Management Changes ----------------------------------------------------------------- Imperial Petroleum, Inc. changes to its corporate and management structure as follows: -- On April 4, 2012, the Company's wholly-owned subsidiary, e- Biofuels, LLC filed a voluntary petition for protection from creditors under Chapter 7 of Title 11 of the Bankruptcy Code with the United States Bankruptcy Court for the Southern District of Indiana under Case Number 12-03816-FJO-7A. The e-Biofuels subsidiary listed assets of $11,354,800.51 and liabilities of $17,321,036.88. A trustee has been appointed by the Court to oversee the e-Biofuels bankruptcy proceedings. -- On April 4, 2012, Mr. Timothy A. Jones resigned as Chief Executive Officer and Chief Financial Officer of Imperial and all positions with any and all of its subsidiaries, including e- Biofuels. -- On April 5, 2012, Mr. Jeffrey T. Wilson was appointed as President and Chief Executive Officer and Chief Financial Officer of Imperial and all of its subsidiaries until the next regularly scheduled meeting of shareholders. Mr. Greg Thagard remained as Chairman of the Board. The Company will move its corporate offices to 101 NW 1st St, Suite 213, Evansville, IN 47708. -- On April 5, 2012, the Board of Directors approved a resolution to hold an annual meeting of shareholders on June 20, 2012 at 2:00 pm at its corporate offices in Evansville, Indiana. -- On April 6, 2012, The Company's wholly-owned subsidiaries, Arrakis Oil Recovery, LLC and Imperial Chemical Company executed a joint venture agreement with a non-affiliated third party entity, to complete development of the Company's initial tar sand project in Kentucky. Under the terms of the joint venture, our partner will provide $750,000 in development capital to complete the installation of facilities at the Company's site in Kentucky. Our partner and the Company will each own 50% of the joint venture proceeds. The joint venture is now expected to be in production by August 2012. "Obviously the filing by e-Biofuels is a significant blow to the Company's revenues on the short-term, however it will substantially reduce the Company's overall financial liabilities which were exacerbated by the uncertainty in the biofuels business in recent months," said Jeffrey Wilson, President of the Company. "I expect that the Company will have limited revenues until the joint venture begins production which is estimated to occur in August now. We intend to pursue other joint venture projects to utilize the tar sand technology for the benefit of the Company as opportunities arise. I trust that our shareholders will remain supportive as we work through this process of re-structuring." About Imperial Petroleum Headquartered in Evansville, Ind., Imperial Petroleum Inc. (OTC BB: IPMN) operates as a diversified energy and mineral mining company in the United States. Its oil and natural gas properties include the Coquille Bay field located in Plaqumines Parish, Louisiana; the Haynesville field located in Claiborne and Webster Parishes in north Louisiana; the Bastian Bay field located in Plaquemines parish, Louisiana; LulingField located in Guadalupe county, Texas; and the Shrewsbury field in Grayson County and the Claymour field in Todd County, western Kentucky. As reported by the TCR on June 24, 2011, the Company anticipates its current working capital will not be sufficient to meet its required capital expenditures and that the Company will be required to either access additional borrowings from its lender or access outside capital. Currently the Company projects it will require non-discretionary capital expenditures of approximately US$500,000 in the next fiscal year to re-establish and maintain economic levels of production at Coquille Bay. Without access to such capital for non-discretionary projects, the Company's production may be significantly curtailed or shut in and jeopardize its leases. Weaver Martin & Samyn, LLC, in Kansas City Missouri, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and is dependent upon obtaining debt financing for funds to meet its cash requirements. The Company's balance sheet at Oct. 31, 2011, showed $20.64 million in total assets, $20.02 million in total liabilities and $617,446 in total stockholders' equity. INTERFUND CORPORATION: Case Summary & 20 Largest Unsec Creditors ---------------------------------------------------------------- Debtor: Interfund Corporation dba Gordon Financial Services, a NM Corporation P.O. Box 44574 Rio Rancho, NM 87174 Bankruptcy Case No.: 12-11287 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court New Mexico (Albuquerque) Judge: Robert H. Jacobvitz Debtor's Counsel: Don F. Harris, Esq. 1120 Pennsylvania St, NE Albuquerque, NM 87110 Tel: (505) 299-4529 Fax: (505) 299-4524 E-mail: harrislaw@comcast.net - and - James T. Burns, Esq. ALBUQUERQUE BUSINESS LAW, P.C. 1803 Rio Grande Blvd NW, Suite B Albuquerque, NM 87104 Tel: (505) 246-2878 Fax: (888) 235-8229 E-mail: james@abqbizlaw.com Scheduled Assets: $2,313,290 Scheduled Liabilities: $2,796,706 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nmb12-11287.pdf The petition was signed by Stuart Lamb, president. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Stuart J. Lamb and Barbara Lamb 12-11289 04/02/2012 INTERNATIONAL TOBACCO: Portion of USDA Claim Entitled to Priority ----------------------------------------------------------------- Bankruptcy Judge Alan S. Trust ruled on cross motions for summary judgment filed by International Tobacco Partners, Ltd., and the United States Department of Agriculture in a lawsuit involving both parties. Resolution of the Motions turns on three issues: 1. Whether quarterly assessments owed by an importer of tobacco products, such as Debtor, under a federal program designed to wean U.S. tobacco growers off their dependence on government subsidies and price controls constitute excise taxes for purposes of federal law; 2. If those assessments constitute excise taxes, when do then accrue; and 3. Whether quarterly assessments that cover both pre- and postpetition periods are entitled to priority status under Bankruptcy Code Sec. 507(a)(8)(E)(ii) for the prepetition portion and to administrative claim status under Sec. 503(B)(1)(B) for the postpetition portion. Judge Trust ruled that the assessments imposed against the Debtor constitute excise taxes that accrue quarterly; that the USDA's claim for prepetition assessments will be treated as a priority claim under Sec. 507(a)(8)(E)(ii) for amounts that accrued during the three-year period prior to the filing of the Debtor's petition, and as an unsecured claim for assessments that accrued more than three years prior to the petition date; and that the USDA is entitled to file an administrative claim under Sec. 503(b)(1)(B) for assessments that accrue postpetition. "Benjamin Franklin once wrote that 'in this world nothing can be said to be certain, except death and taxes.' This case demonstrates that what constitutes a tax is not always certain," Judge Trust said. On July 19, 2010, USDA filed proof of claim number 3 asserting a priority claim in the amount of $1,297,215.90 reflecting "Unpaid Assessments due in accordance with 7 U.S.C. 518d." Annexed to the USDA Claim is a schedule of quarterly Assessments for each quarter beginning with the first quarter of fiscal year 2005 and ending with the May 31, 2010, which was the month ending prior to the Petition Date. On Dec. 16, 2010, the Debtor filed the complaint, which is essentially an objection to the USDA Claim. The lawsuit is, International Tobacco Partners, Ltd., v. United States Department of Agriculture and Thomas Vilsack as Secretary of the United States Department of Agriculture, Adv. Proc. No. 10-9007 (Bankr. E.D.N.Y.). A copy of the Court's April 6, 2012 Memorandum Opinion is available at http://is.gd/cWCiwUfrom Leagle.com. Based in Great Neck, New York, International Tobacco Partners, Ltd., which is engaged in the business of importing discount and generic cigarettes and cigars and selling them throughout the United States through a network of distributors, filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 10-74894) on June 25, 2010. Judge Alan S. Trust oversees the case. Gary B. Sachs, Esq., at Sachs & Associates, PLLC, serves as the Debtor's counsel. The Debtor scheduled assets of $975,000 and debts of $4,274,650. The petition was signed by Jeffrey Avo Uvezian, company's president. JAPAN INTERNATIONAL: Case Summary & 8 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Japan International Corp. 5200 Rufe Snow Dr. North Richland Hills, TX 76180 Bankruptcy Case No.: 12-41978 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Russell F. Nelms Debtor's Counsel: Eric A. Liepins, Esq. ERIC A. LIEPINS, P.C. 12770 Coit Rd., Suite 1100 Dallas, TX 75251 Tel: (972) 991-5591 E-mail: eric@ealpc.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txnb12-41978.pdf The petition was signed by Mohammad Jawed, president. JDB FARMS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: JDB Farms, LLC 4747 US 264 East Greenville, NC 27834 Bankruptcy Case No.: 12-02548 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: Randy D. Doub Debtor's Counsel: William P. Janvier, Esq. JANVIER LAW FIRM, PLLC 1101 Haynes Street, Suite 102 Raleigh, NC 27604 Tel: (919) 582-2323 Fax: (866) 809-2379 E-mail: bill@janvierlaw.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/nceb12-02548.pdf The petition was signed by Joseph D. Briley, Jr., member/manager. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Briley Enterprises of Greenville, Inc. 12-01290 02/20/12 J.O.C. Farms, L.L.C. 12-01285 02/20/12 Joseph D. Briley, Jr. 12-01284 02/20/12 Pactolus Farms, L.L.C. 12-01291 02/20/12 JEFFERSON COUNTY: Accuses BNY Mellon of Transferring Funds ---------------------------------------------------------- Maria Chutchian at Bankruptcy Law360 reports that Jefferson County, Ala., on Monday accused The Bank of New York Mellon Corp. of improperly transferring more than $584,000 from a construction equity account to itself, asking for a declaration that the funds belong to the county, free of any creditors' interests. Law360 relates that the struggling county launched the counterclaims in response to the adversary proceeding filed by the bank, which is indenture trustee for $3.6 billion in sewer warrants issued by the county, claiming that it is entitled to receive all system revenues outside operating expenses. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. JEFFERSON COUNTY: Workers' Names Erased in Court Files ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Jefferson County, Alabama, realized that filings in bankruptcy court contained names and addresses of current and former county workers. In mid-afternoon on April 6, the county filed papers in bankruptcy court in Birmingham asking the judge to delete the workers' names and address. Less than two hours later, the judge signed an order directing the clerk to delete workers' names and addresses from court filings. The bankruptcy judge will hold a hearing on April 16 to make the deletions permanent. According to the report, the bankruptcy judge will begin a hearing today, April 11, on a dispute between the county and holders of $3.1 billion in defaulted sewer bonds about how much revenue from the sewer system can be withheld from bondholders to fund future costs of maintaining and upgrading the system. There is an interim agreement in place until May where bondholders are receiving $5.5 million a month. The county filed a counterclaim to recover $585,000 from the trustee for the sewer bondholders. The county contends the trustee improperly took money from a construction fund to pay lawyers and expert witnesses. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. KLN STEEL: Taps Mcdermott Will to Aid in Gov't Deal Bid Protest --------------------------------------------------------------- KLN Steel Products Company LLC, et al., ask the U.S. Bankruptcy Court for the Western District Of Texas for permission to employ Mcdermott Will & Emery LLP as special counsel. As special counsel, the firm will provide the Debtors with legal representation respecting ongoing litigation in a bid protest of a government contract pending before the United States Court of Federal Claims, Furniture by Thurston v. United States. The firm represented the Debtors prior to the filing of the Debtors' bankruptcy cases, and has been selected by the Debtors for the proposed postpetition engagement because of its expertise and familiarity with the Debtors. The firm does not hold any interest adverse to the Debtors or their respective estates. The firm will coordinate its efforts with Debtors' general bankruptcy counsel to prevent any duplication of effort, and thereby aid the Debtors in effectuating an effective reorganization. About KLN Steel Products KLN Steel Products Company LLC, Dehler Manufacturing Co. Inc., and Furniture by Thurston manufacture and market high quality furniture for multi-person housing facilities and packaged services for federal government offices and dormitory facilities. They have two manufacturing facilities. One is in San Antonio, Texas, which is consolidated and designed to accommodate high volume fabrication of standard and semi-custom steel furniture and casegoods of high quality for colleges and universities, military quarters, and job corps centers, or wherever high quality, long life, low maintenance furniture is essential. The facility includes a manufacturing facility of more than 170,000 square feet capable of producing substantial projects on a timely basis. The second facility is located in Grass Valley, California, with more than 61,000 square feet dedicated to the manufacturing of wood furniture for military and university housing. KLN Steel filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-12855) on Nov. 22, 2011. Dehler (Case No. 11-12856) and Furniture by Thurston (Case No. 11-12858) filed on the same day. Judge Craig A. Gargotta oversees the case. Patricia Baron Tomasco, Esq., at Jackson Walker LLP, serves as the Debtors' counsel. Horwood Marcus & Berk Chartered serves as their special counsel. Conway MacKenzie, Inc., serves as financial advisor. Each of the Debtors estimated assets and debts of $10 million to $50 million. San Antonio, Texas-based 4200 Pan Am LLC filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-13154) on Dec. 29, 2011. Judge Gargotta oversees the case, taking over from Judge H. Christopher Mott. Patricia Baron Tomasco, Esq., at Jackson Walker LLP, serves as 4200 Pan Am's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Edward J. Herman, manager. 4200 Pan Am sought joint administration of its case with those of affiliates Dehler, Furniture By Thurston, and KLN. The Official Committee of Unsecured Creditors in the Chapter 11 cases of KLN Steel Products Company, LLC, et al., is represented by Hall Attorneys, P.C. The Committee tapped Navigant Consulting (PI), LLC as its financial advisor. KNOWLEDGE UNIVERSE: S&P Cuts Corp. Credit Rating to 'B-', on Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Portland, Ore.-based Knowledge Universe Education LLC (KUE; formerly Knowledge Learning Corp.), including its corporate credit rating, to 'B-' from 'B+', and placed its ratings on CreditWatch with negative implications. "The rating action reflects weaker-than-expected performance, rising debt leverage, and strained liquidity, resulting in its inability to meet maximum debt leverage covenant levels of its revolving credit facility as of Dec. 31, 2011," said Standard & Poor's credit analyst Hal Diamond. "KUE has secured a waiver from its bank lenders of financial covenants through June 29, 2012, and is in the process of amending its revolving credit facility." "In May 2011, KUE separated substantially all of its owned real estate-related assets from its early childhood education-related assets on a substantially tax-free basis by distributing KC Propco Holding II LLC to an entity that is ultimately owned by the same shareholders that own KUE. For analytical purposes, we continue to view KUE and KC Propco Holding II LLC as one entity, given its common ownership, operating interdependence, and linked economic interests, including KUE's considerable operating lease commitments to KC Propco Holding II LLC," S&P said. "Under our base-case scenario, we expect revenues could decline at a low-to-mid-single-digit percentage rate in 2012 and EBITDA could drop at a high single digit pace due to less efficient absorption of fixed overhead, which would result in an increase in lease- adjusted debt leverage to nearly 8x," S&P said. "Consolidated sales in the three months ended Dec. 31, 2011 declined 2%, while EBITDA fell roughly 35% as a result of lower enrollment, declining capacity utilization, and higher general liability insurance costs related to underlying claims activity. The EBITDA margin contracted to 11.6% in 2011 from 13.2% in 2010 because of unfavorable absorption of fixed overhead and charges related to closed centers. Consolidated debt to EBITDA, adjusted for operating leases, increased to 7.1x in 2011 from 6.3x in 2010. Lease-adjusted EBITDA coverage of interest expense declined to 1.8x in 2011 from 2.1x in 2010. Discretionary cash flow declined 15% in 2011 to roughly $45 million reflecting weaker operating performance, though conversion of EBITDA to discretionary cash flow remained stable at around 45% reflecting reduced dividend payments," S&P said. "KUE's $85 million revolving credit facility due June 2014 is used to back up letters of credit. As of Dec. 31, 2011, letters of credit totaled $46 million, of which $36.9 million was secured for self-insurance collateral obligations. KUE has not borrowed under the facility since it was put in place in June 2010. We see a risk that KUE would need to use cash balances to support letters of credit if it does not successfully amend the credit agreement in a timely manner. The company had $53.9 million of cash balances as of Dec. 31, 2011, a level we believe is barely sufficient for near-term operating needs and collateral obligations if the revolving credit facility is not amended," S&P said. "KUE is the largest U.S. child care center operator, and has a relatively small presence in workplace-based childcare centers, which have experienced less volatility than its retail centers. Revenue visibility is fairly limited, as clients generally pay tuition one week in advance. Adverse effects of economic down cycles, together with the fixed-cost structure of KUE's child care center network, undermine revenue and earnings resilience. In our view, still-relatively high unemployment will continue to hurt operating performance, particularly in the first half of this year, as a rebound in enrollment levels usually lags an economic recovery," S&P said. "We will consider lowering our rating on KUE again if the company does not obtain a satisfactory amendment to its credit agreement by mid-June. We may still lower the rating if an amendment only provides short-term covenant relief in light of the uncertain prospects for a turnaround in operating performance," S&P said. LACK'S STORES: Court Confirms Reorganization Plan ------------------------------------------------- The Hon. Jeff Bohm of the U.S. Bankruptcy Court for the Southern District of Texas, in an April 3 hearing, confirmed the First Amended Joint Plan of Reorganization of Lack's Stores Incorporated, et al. The Plan is designed to accomplish three primary objectives: (1) the collection of Lack's Customer Notes portfolio in the ordinary course of business; (2) the sale of remaining real and personal property that is not necessary to the continued collection of Customer Notes; and (3) the use of proceeds from collection of Customer Notes and sales of the Debtors' other remaining assets to satisfy Claims in accordance with the Plan. About Lack's Stores Victoria, Texas-based Lack's Stores, Incorporated, is one of the largest, independently-owned retail furniture chains in the United States. Lack's Stores is a chain of 36 retail stores and operates under the trade styles Lacks and Lacks Home Furnishings. The Company sells a complete line of furnishings for the home including furniture, bedding, major appliances and home electronics. The stores are located in South, Central, and West Texas. Lack's Stores filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 10-60149) on Nov. 16, 2010 . Katherine D. Grissel, Esq., Michaela Christine Crocker, Esq., and Richard H. London, Esq., at Vinson & Elkins LLP, assist the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $100 million to $500 million. Affiliates Lack Properties, Inc., Lack's Furniture Centers, Inc., and Merchandise Acceptance Corporation filed separate Chapter 11 petitions. LOS ANGELES DODGERS: Expect to Emerge From Bankruptcy April 30 -------------------------------------------------------------- The Los Angeles Dodgers disclosed that the Dodgers and its related debtors expect to emerge from their chapter 11 bankruptcy reorganization cases on April 30, 2012, following the confirmation hearing with respect to the debtors' amended Plan of Reorganization, which is scheduled for April 13 in the United States Bankruptcy Court, District of Delaware. The Dodgers reported that it and the related debtors are filing with the court, among other documents, an Amended Plan of Reorganization, a Plan Supplement to the Amended Plan of Reorganization, a Proposed Confirmation Order, and a Memorandum in Support of Confirmation of the Amended Plan. The Dodgers stated, "The amended Plan of Reorganization, among other things, provides for the payment of all allowed claims of creditors in full, includes a substantial distribution for debtors' equity interest holder, and provides a solid foundation for the long term success of Los Angeles Dodgers and its affiliates." The Dodgers emphasized, "The centerpiece of the Amended Plan is the agreement by Guggenheim Baseball L.P. to pay $2 billion to acquire the equity of the reorganized debtors. This agreement is the culmination of an auction process that was conducted over several months and reflects the highest and best bid generated by that process. The successful auction process attracted numerous prospective purchasers and numerous proposals, all of which confirmed the substantial value of the Dodgers, the media rights associated with the team, and Dodger Stadium." About Los Angeles Dodgers Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a professional Major League Baseball club in the Los Angeles metropolitan area. Frank McCourt, a Boston real-estate developer who unsuccessfully bid for the Boston Red Sox, bought the Dodgers from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for $330 million. Mr. McCourt also bought the Dodgers Stadium from Fox for $100 million. Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB Commissioner Bud Selig rejected a television deal with News Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for June 30 and July 1. Fox Sports has exclusive cable television rights for Dodgers games until the end of 2013 baseball season. Chapter 11 filings were also made for LA Real Estate LLC, an affiliated entity which owns Dodger Stadium, and three other related holding companies. The petition estimates assets of up to $500 million and debts of up to $1 billion. In its schedules, the LA Dodgers baseball club disclosed $77,963,734 in assets and $4,695,702 in liabilities. LA Real Estate LLC disclosed $161,761,883 in assets and $0 in liabilities. According to Forbes, the team is worth about $800 million, making it the third most valuable baseball team after the New York Yankees and the Boston Red Sox. Judge Kevin Gross presides over the case. Lawyers at Young, Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Public relations specialist Kekst and Company has been hired for crisis support. Covington & Burling LLP serves as special counsel. An official committee of unsecured creditors has been appointed in the case. The panel has tapped Lazard Freres & Co. as financial adviser and investment banker, and Morrison & Foerster LLP and Pinckney, Harris & Weidinger, LLC as counsel. The LA Dodgers is the 12th sports team in North America to have sought bankruptcy protection. The reorganization is being financed with a $150 million unsecured loan from the Commissioner of Major League Baseball. The loan gives the Commissioner few of the controls lenders often demanded from bankrupt companies. MARICOPA SOLAR: Assets to be Auctioned on April 17 -------------------------------------------------- On behalf of Maricopa Solar, LLC, Heritage Global Partners will conduct a global webcast bulk auction of company assets, in partnership with Hilco Industrial and BidItUp, and in collaboration with Auction AZ. The approval of Debtor's Motion to engage Heritage Global Partners is currently pending in the U.S. Bankruptcy Court for the District of Arizona. Following approval, the auction will be staged on Tuesday, April 17, 2012, beginning at 9 am MT via live global webcast at http://www.hgpauction.com/ and onsite at 8475 N. 75th Ave. in Peoria, AZ. Prior to the auction, a one-day open to the public inspection will take place on Monday, April 16, from 9:00am -- 4:00pm MT at the plant location in Peoria, AZ. This bulk and piecemeal offering of Maricopa Solar will feature a complete 1.5 MW Solar Thermal Farm to include 60 Stirling Energy SunCatcher(TM) Solar Dish Engine Systems and related support equipment including Switchgear and telecom assets. "This sale is truly an exceptional opportunity for buyers to realize a unique technology and prospect to acquire a high-quality renewable power source," said David Barkoff, Director of Sales, Heritage Global Partners. As a pilot project of Stirling Energy Systems in 2010, The Maricopa Solar Thermal Farm utilized concentrated solar power (CSP) systems which use mirrors or lenses to concentrate a large area of sunlight, or solar thermal energy onto a small area. Led by auction industry pioneers Ross and Kirk Dove, Heritage Global Partners, is one of the country's leading asset advisory and auction services firms, which assists large and small companies with buying and selling of assets. A Counsel RB Capital company, Heritage Global Partners offers asset brokerage, asset inspection, asset valuations, industrial equipment and real estate auctions, as well as enterprise auctions combining tangible and intangible assets. MELROSE CONSTRUCTION: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Melrose Construction, Inc. 102 Valley View Street Glenrose, TX 76043 Bankruptcy Case No.: 12-41990 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: D. Michael Lynn Debtor's Counsel: Joyce W. Lindauer, Esq. 8140 Walnut Hill Ln. Ste. 301 Dallas, TX 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 E-mail: courts@joycelindauer.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 four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txnb12-41990.pdf The petition was signed by James G. Burkhart, president. MERIDIAN MORTGAGE: Judge Orders $140-Mil. Judgment for Founder -------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that U.S. District Judge Richard A. Jones on Friday ordered $140 million in restitution against the bankrupt founder of Meridian Mortgage Investors, who's been sentenced to 18 years in prison for stealing $100 million in an investment fraud scheme. According to Law360, Frederick Darren Berg had asked a judge for leniency in February, saying the scheme was the result of desperation and not intentional. Judge Jones sentenced him to 216 months in prison, and Friday's amended judgment adds the restitution portion of the sentence. About Meridian Mortgage In November 2010, a federal grand jury in Seattle has indicted Frederick Darren Berg on 12 counts of wire fraud, money laundering and bankruptcy fraud in connection with the demise of his Meridian Group of investment funds. Prosecutors believe Mr. Berg took in more than $280 million, with the losses attributed to the ponzi scheme estimated to be approximately $100 million. Hundreds of victims have lost money in the scheme between 2001 and 2010. Mr. Berg commenced a personal Chapter 11 case on July 27, 2010 (Bankr. W.D. Wash. Case No. 10-18668), estimating assets of more than $10 million and liabilities between $1 million and $10 million. The filing came after lawyers for one group of investors, armed with a court order and accompanied by sheriff's deputies, began seizing personal possessions at Mr. Berg's Mercer Island home and downtown Seattle condo. Diana K. Carey, trustee for F. Darren Berg's estate, filed on Jan. 27, 2011 voluntary Chapter 11 petitions for Mortgage Investors Fund I LLC (Bankr. W.D. Wash. Case No. 11-10830) estimating assets of up to $50,000 and debts of up to $50,000,000, and Meridian Mortgage Investors Fund III LLC (Case No. 11-10833), estimating up to $50,000 in assets and up to $100,000,000 in liabilities. Michael J. Gearin, Esq., at K&L Gates LLP, in Seattle, serves as counsel to the Debtors. Creditors filed an involuntary Chapter 11 petition for Meridian Mortgage Investors Fund II LLC (Bankr. W.D. Wash. Case No. 10- 17976) on July 9, 2010. The petitioners are represented by Jane E. Pearson, Esq., at Foster Pepper PLLC, in Seattle. Creditors filed involuntary Chapter 11 petitions for Meridian Mortgage Investors Fund VIII, LLC (Bankr. W.D. Was. Case No. 10- 17958) and Meridian Mortgage Investors Fund V, LLC (Bankr. W.D. Wash. Case No. 10-17952) on July 9, 2010. The petitioners are represented by John T. Mellen, Esq., at Keller Rohrback LLP, in Seattle, and Cynthia A. Kuno, Esq., at Hanson Baker Ludlow Drumheller PS, in Bellevue, represent the petitioners. MINOR FAMILY: Judge Approves Sale Protocol for Landmark Hotel ------------------------------------------------------------- Samantha Koon at the Daily Progress reports that Judge William E. Anderson granted a motion to approve sale procedures for the Landmark Hotel, which was originally scheduled to be completed in 2009. The report, citing new court documents filed last week, says lawyers representing the hotel's various creditors have reached an agreement as to the auction. According to the report, Milwaukee- based businessman Timothy J. Dixon offered to buy the Landmark Hotel for $2.8 million earlier this year. However, several potential bidders have expressed interest in the property, and threaten to outbid him at auction. The property is currently owned by CNET co-founder Halsey Minor's company, Minor Family Hotels. According to the report, the auction will be held at bankruptcy court's scheduled meeting in the U.S. District Courthouse June 18 at 11 a.m. Any party interested in participating in the auction must submit an opening bid to Rich Maxwell, the attorney representing Minor Family Hotels, by 3 p.m. on June 8. The report notes bidders also must submit a deposit of at least $200,000. Losing bidders will have their deposit returned at the end of the auction. The top two bidders' deposits will be held until the winning bidder closes on the property. If the winning bidder does not close on the property within 30 days, then the "back-up bidder" will be bound to purchase the hotel. Otherwise, the back-up bidder will get his deposit back at the time of close. The report says the auction will start using the highest qualified bid submitted as the opening bid. Each subsequent bid must be at least $50,000 more than the previous. Information related to the property was made available Monday, and will be accessible up to the deadline to submit a bid. The report says Judge Anderson is scheduled to hear a few last minute matters related to the case in May. The report adds the sale proceeds will go towards paying off the over $17 million in liens against the property. About Minor Family Charlottesville, Virginia-based Minor Family Hotels, LLC, is the owner of the Landmark Hotel project in downtown Charlottesville, Virginia. Minor Family filed for Chapter 11 bankruptcy protection (Bankr. W.D. Va. Case No. 10-62543) on September 1, 2010. Benjamin Webb King, Esq., at Woods Rogers Hazlegrove, serves as bankruptcy counsel. Minor Family estimated assets and debts at $10 million to $50 million in its Chapter 11 petition. Minor Family Hotels filed for Chapter 11 protection to resolve "burdensome" lawsuits that have delayed the hotel's construction. Eight lawsuits have been filed in connection with the project. MOUNTAIN CITY: Secured Lender Opposes Plan Confirmation ------------------------------------------------------- Fifth Third Bank objects to confirmation of Mountain City Meat Co. Inc.'s Liquidating Chapter 11 Plan of Reorganization dated Feb. 13, 2012. Fifth Third asserts that the Plan cannot be confirmed because (i) it is currently not feasible as required by Section 1129(a)(11) of the Bankruptcy Code; (ii) it fails to comply with the cram-down requirements; and (iii) it fails to comply with the applicable provisions of the Bankruptcy Code by failing to adequately protect its security interest and lien in the Debtors' property. The Debtor was indebted to Fifth Third for $18.64 million as of Aug. 11, 2011. Counsel for Fifth Third spoke with counsel for the Debtor to discuss the objection. Fifth Third hopes that discussions and a potential resolution can be reached at or before the scheduled confirmation hearing for April 16, 2012. About Mountain City Meat Denver, Colorado-based Mountain City Meat Co., Inc. -- http://www.mountaincitymeat.com/-- is one of the largest portion control beef processors in the United States. Through its headquarters and manufacturing facility in Denver, and its second manufacturing facility in Nashville, Tennessee, Mountain City supplies high quality ground beef and portion control steak cuts through several channels, including retail stores, chain restaurants and broadline food service distributors. On Aug. 9, 2011, Mountain City's board of directors appointed BGA Management LLC d/b/a Alliance Management, through its agent, Alex G. Smith as the company's Chief Restructuring Officer until the need for a CRO no longer existed. Immediately after appointing Alliance as CRO, the Board resigned. On Aug. 11, 2011, Mountain City's secured lender, Fifth Third Bank commenced a receivership action against the company in Denver District Court. At 5:00 p.m. that same day, the Denver District Court appointed Alliance as receiver for Mountain City's personal property and related operations. However, minutes before the receivership order, certain putative unsecured creditors -- Orleans International, Inc., National Beef Packing, Inc. and XL Four Star Beef, Inc. -- commenced an involuntary Chapter 7 bankruptcy petition (Bankr. D. Colo. Case No. 11-29209) against Mountain City. The Involuntary Chapter 7 petition was filed as a result of, among other reasons, the Debtor (a) ordering and not paying for in excess of $2,400,000 of meat inventory from the Petitioning Creditors; and (b) issuing checks to the Petitioning Creditors for a portion of the inventory, which checks were refused for payment by Fifth Third Bank. The Debtor sought dismissal of the Involuntary Petition on the grounds that it was filed in bad faith because the Petitioning Creditors were motivated solely by their desire to preserve their claims under Section 503(b)((9) of the Bankruptcy Code to have that portion of their claims related to goods sold to the Debtor within 20 days prior to the filing treated as an administrative expense. In the Involuntary Case, the Secured Lender obtained two interim orders annulling the automatic stay to allow the receiver to keep control of the Debtor. Mountain City filed a voluntary Chapter 11 petition (Bankr. D. Colo. Case No. 11-32656) on Sept. 24, 2011. Judge Howard R. Tallman presides over the case. Michael J. Pankow, Esq., Daniel J. Garfield, Esq., Heather B. Schell, Esq., at Brownstein Hyatt Farber Schreck, LLP, represent the Debtors as counsel. The Debtor estimated up to $50 million in assets and debts. Attorneys for the Petitioning Creditors are John B. Wasserman, Esq., at Sender & Wasserman, P.C., and Howard S. Sher, Esq., and Michele L. Walton, Esq., at Jacob & Weingarten, P.C. Fifth Third is represented in the case by James T. Markus, Esq., and John F. Young, Esq., at Markus Williams Young & Zimmermann LLC. An official committee of unsecured creditors has been appointed in the case. The panel is represented by Harold G. Morris, Jr., Esq., and John C. Smiley, Esq., at Lindquist & Vennum PLLP. NAB HOLDINGS: Moody's Assigns 'B1' Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service assigned the following first-time ratings to the debt of NAB Holdings, LLC ("NAB", the parent company of North American Bancard Holdings, Inc.): B1 corporate family rating ("CFR"), B2 probability of default rating ("PDR"), and Ba3 ratings to the $10 million revolving credit facility and $150 million first lien term loan. The rating outlook is stable. Ratings Rationale NAB's B1 CFR reflects the company's relatively moderate financial leverage (about 2.5x on a Moody's adjusted basis at closing) compared to other companies at the same rating level, solid recurring transaction-based revenue stream supported by multi-year merchant contracts, and Moody's expectation of continued revenue and profit growth of at least high single digits. The predictable revenue stream, arising from the contracts of a diverse merchant base with minimal customer concentration by size or vertical industry, should lead to good cash flow generation and liquidity given the debt level. The ratings also consider the favorable macro environment for electronic payment processing industry as the secular shift from cash/check payment to electronic payments continues. At the same time, NAB has relatively modest scale compared to larger and financially stronger payment processors in the highly competitive merchant acquirer space. In addition, with a focus towards the small and medium sized business market, NAB can be more susceptible to higher attrition rates and chargeback liabilities during an economic downturn than with larger-scale merchants. Moody's also believes that some of its similarly-sized rated peers (e.g., First American Payment Systems and Mercury Payment Systems, both rated B1) have a scaling advantage that could support greater future profitability on similar levels of revenue growth due to their investments in developing an in-house hosted payment processing platform. While Moody's ascribes "key man" risk to the sole owner and founder, who will be receiving a substantial dividend payment funded by the new debt, Moody's believes the proposed debt covenants mitigate any potential leveraging risk. Specifically, Moody's B1 rating is premised on the expectation that the following restrictions will be included in the final credit agreement: 1) an incremental $50 million term loan will be subject to a 2.5x total pro forma leverage requirement (as defined in the agreements), and 2) restricted payments baskets of $5 million and $10 million per annum will be subject to leverage ratio thresholds of less than 2.25x and 2.00x, respectively. The stable outlook incorporates Moody's view that NAB will likely benefit from an improved economic environment with the continued resumption of consumer spending. Moody's expects the company to generate at least high single digit revenue growth and steady cash flow as its merchant base expands and the secular growth of payment cards continue with a recovering U.S. economy. The ratings could be upgraded if the company were to maintain conservative financial policies and demonstrate a meaningful growth in market share and free cash flow over time. A downgrade could occur if NAB were to incur a revenue, profit, or cash flow decline, or if the ratio of free cash flow (net of customer acquisition costs) to debt falls below 10%. The following ratings were assigned: Corporate Family Rating -- B1 Probability of Default Rating -- B2 $10 million secured revolving credit facility due 2017 -- Ba3 (LGD-2, 29%) $150 million 1st lien Term Loan due 2018 -- Ba3 (LGD-2, 29%) The rating outlook is stable. The principal methodology used in rating NAB Holdings, LLC was Moody's Global Business and Consumer Services 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. North American Bancard (NAB), with projected annual gross revenues over $375 million, provides merchant acquiring services to small and mid-sized business merchants located throughout the United States. NAB HOLDINGS: S&P Assigns Preliminary 'BB-' Corp. Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'BB-' corporate credit rating to Troy, Mich.-based NAB Holdings LLC, the indirect parent of the primary operating company North American Bancard LLC. The outlook is stable. "At the same time, we assigned our preliminary 'BB+' issue-level rating and preliminary '1' recovery rating to the company's proposed $160 million first-lien senior secured credit facility, consisting of a $10 million revolver and $150 million term loan. The preliminary '1' recovery rating indicates our expectation for very high (90%-100%) recovery in the event of a payment default," S&P said. "Our ratings on NAB reflect its 'weak' business risk profile due to modest scale and market position in a highly competitive industry, and its 'significant' financial risk profile," S&P said. "However, the company has a strong growth trajectory," said Standard & Poor's credit analyst Alfred Bonfantini, "supported by good secular growth trends, consistent profitability, and positive free cash flow." "Founded in 1992, NAB is a U.S. merchant acquirer focused primarily on small-to-midsized businesses (SMBs). According to the 'Nilson Report' (Issue 990, March 2012), NAB was the 30th-largest U.S. merchant acquirer ranked on a dollar volume basis. The company provides end-to-end payment processing services for credit, debit, and prepaid cards, EBT, ATM, and online transactions, along with customer service and back-office support services, such as fraud detection, reporting, and chargeback systems, to merchants. The majority of the company's merchant relationships are sourced through independent sales organizations (ISOs), but it also has a direct sales force and corporate partnerships. The processing of merchant transactions is outsourced to a select number of payment processors," S&P said. NAB's services and sales channels are fairly standard among its competitors and the company attempts to differentiate itself by providing free point of sale (POS) terminals to merchants, customizable Web user interfaces for merchants and ISOs, marketing services for ISOs, and free proprietary mobile card readers and applications (PayAnywhere/Phone Swipe). The mobile card reader market is in its infancy and already has a formidable host of competitors, but it is quickly becoming a fast-growing, profitable vertical for the company. "Although we believe that the company is a second-tier merchant acquirer lacking significant operating scale," added Mr. Bonfantini, "it has seen strong top-line growth (albeit from a low base) over the past five years, with a compound annual revenue growth rate above 25%. The company closed 2011 with gross revenue of about $375 million. NAB has achieved its growth primarily by focusing on increasing its ISO relationships and thus merchant count and transaction volume, and to a lesser extent, by adding vertical-oriented brands (Point&Pay and Humboldt merchant services) and new products (PayAnywhere/Phone Swipe)." "Our outlook on NAB is stable, supported by the company's strong revenue growth trends, consistent profit margins, and positive free operating cash flow even through the recent recession, and leverage currently low for the rating. The company's modest position in the highly competitive payments processing industry and its lack of a track record of managing the business with material amounts of debt in the capital structure limit a possible upgrade over the near term," S&P said. "We could lower the rating to 'B+' if leverage is sustained at or above 4x as a result of additional debt-funded dividends or acquisitions, or increased competition leading to higher merchant attrition and pricing pressure and a drop in margins of over 500 basis points," S&P said. NATIONAL HOLDINGS: Enters Into $3.3-Mil. Securities Purchase Pact ----------------------------------------------------------------- National Holdings Corporation, on March 30, 2012, entered into a Securities Purchase Agreement with National Securities Growth Partners LLC, pursuant to which the Company issued and sold to the Investor a 6% Convertible Subordinated Promissory Note in the original principal amount of $3.3 million. The issuance and sale of the Note was the first step of a three- step private placement of the Company's securities. The second step of the private placement involved the issuance and sale to the Investor of an additional 6% Convertible Subordinated Promissory Note in the original principal amount of $700,000 on April 4, 2012. The third and final step of the private placement will involve the issuance and sale to the Investor of an aggregate of 120,000 shares of the Company's newly created Series E Convertible Preferred Stock, par value $0.01 per share at a purchase price of $50.00 per share, and a warrant to purchase an aggregate of 12,000,000 shares of the Company's common stock, par value $0.02 per share, at an exercise price of $0.50 per share, for an aggregate purchase price of $6,000,000. The Equity Sale is expected to occur upon receipt of approval of the private placement by the Financial Industry Regulatory Authority, Inc. The proceeds of the First Note were used to satisfy outstanding indebtedness held by affiliates of St. Cloud Partners, L.P., evidenced by the 10% senior subordinated convertible promissory note in the principal amount of $3,000,000 issued pursuant to that certain Purchase Agreement, dated as of March 31, 2008, by and between the Company and St. Cloud. The remaining proceeds and the proceeds from the sale of the Second Note will be used for general corporate purposes. As part of this transaction, the Board of Directors of the Company voted to expand the size of the Board to nine members. Also, Jorge A. Ortega and Paul J. Coviello resigned as directors of the Company and Mark Klein and Robert Fagenson were named to fill their vacancies, and Bryant Riley was named to fill the vacancy created by the expansion of the Board. In addition, upon payment on March 30, 2012, of the indebtedness to St. Cloud with the proceeds of the First Note, Kacy R. Rozelle resigned as a director of the Company. The Investor is entitled to appoint a fourth director to fill the existing vacancy on the Board. Each of these four new directors are designated as the Investor?s nominees pursuant to the terms of the Purchase Agreement. In addition, the Company agreed that the Board (recently expanded from eight members to nine members) would remain at nine members. A copy of the Form 8-K is available for free at: http://is.gd/BvbAIl About National Holdings New York, N.Y.-based National Holdings Corporation is a financial services organization, operating primarily through its wholly owned subsidiaries, National Securities Corporation, Finance Investments, Inc., and EquityStation, Inc. The Broker-Dealer Subsidiaries conduct a national securities brokerage business through their main offices in New York, New York, Boca Raton, Florida, and Seattle, Washington. The Company had a net loss of $4.7 million on $126.5 million of total revenues for fiscal year ended Sept. 30, 2011, compared with a net loss of $6.6 million on $111.0 million on total revenues for fiscal 2010. The Company's balance sheet at Dec. 31, 2011, showed $15.43 million in total assets, $17.45 million in total liabilities, $20,000 in noncontrolling interest, and a $2.04 million total National Holdings Corporation stockholders' deficit. Sherb & Co., LLP, in Boca Raton, Florida, expressed substantial doubt about National Holdings' ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses and has a working capital deficit as of Sept. 30, 2011. NATIONAL HOLDINGS: Agrees to Transfer 50% Interest in OPN to Opus ----------------------------------------------------------------- National Holdings Corporation entered into an Agreement Transferring Ownership of OPN Holdings, LLC, Joint Venture, by and between Michael S. Weiss, Opus Point Partners, LLC, Opus Point Healthcare Innovations Fund, L.P., and its Off-shore equivalent, Opus Point Healthcare (Low Net) Fund, L.P., and its Off-shore equivalent, and the Company, pursuant to which the Company agreed to transfer its 50% interest in OPN Holdings, LLC, to Opus or its designees. Under the terms of the Unwinding Agreement the Company also agreed to repay an outstanding $550,000 obligation due and owing to the JV. Furthermore, upon the Transfer of Assets, the OPN Joint Venture Limited Liability Operating Agreement dated Jan. 14, 2011, and the Interim Funding and Services Agreement dated Jan. 14, 2011, between the Company, National Securities Corporation, Opus, Michael S. Weiss, Lindsay Rosenwald and their affiliated entities were terminated. In connection with the Unwinding Agreement, Michael S. Weiss resigned from the Board of Directors of the Company. In addition, all rights and obligations described in the Stock Purchase Agreement for Series D Preferred Stock of the Company, dated Sept. 29, 2010, relating specifically to board representation or observation, the Executive Management Committee and to the JV were terminated. The Unwinding Agreement also contained provisions relating to the continued relationship between Opus, the Company and its affiliated brokers. Until the earlier of: (i) Opus owning less than 20% of its original equity position in the Company; (ii) two years from the date of the Unwinding Agreement; (iii) Opus giving written notice of termination of the Veto Period; or (iv) the Company's common stock achieving a certain per share price, OPP will be the exclusive provider of biotech/life sciences, specialty pharm and medical device investment banking services for the Company's retail distribution channel, with Opus having the right to veto any private or public financing for a Life Sciences issuer contemplated by the Company or the Company's majority owned broker-dealer affiliates to be distributed through our retail distribution channel, other than offerings pursuant to which the Company or its affiliated broker-dealers participate in a syndicated offering of common stock, or offerings in which the issuer's sole or main business is in healthcare services. In addition, during the Veto Period, the Company and Opus have agreed on certain minimum commissions and allocations of commissions for transactions involving an Opus investment banking client offering through the Company's National Securities retail network, and the Company has also agreed to cooperate and inform Opus of Life Sciences opportunities that originate with the Company's investment bankers, so that they may have an opportunity to participate in any transaction. A copy of the Agreement is available for free at: http://is.gd/OVv157 About National Holdings New York, N.Y.-based National Holdings Corporation is a financial services organization, operating primarily through its wholly owned subsidiaries, National Securities Corporation, Finance Investments, Inc., and EquityStation, Inc. The Broker-Dealer Subsidiaries conduct a national securities brokerage business through their main offices in New York, New York, Boca Raton, Florida, and Seattle, Washington. The Company had a net loss of $4.7 million on $126.5 million of total revenues for fiscal year ended Sept. 30, 2011, compared with a net loss of $6.6 million on $111.0 million on total revenues for fiscal 2010. The Company's balance sheet at Dec. 31, 2011, showed $15.43 million in total assets, $17.45 million in total liabilities, $20,000 in noncontrolling interest, and a $2.04 million total National Holdings Corporation stockholders' deficit. Sherb & Co., LLP, in Boca Raton, Florida, expressed substantial doubt about National Holdings' ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses and has a working capital deficit as of Sept. 30, 2011. NORD RESOURCES: Nedbank Refuses to Extend Forbearance Anew ---------------------------------------------------------- Nedbank declined to extend a forbearance agreement regarding the scheduled principal and interest payments that were due between March 31, 2010, and Dec. 31, 2011, under Nord Resources Corporation's $25 million secured term-loan facility. The company has therefore been in default of its obligations under the Credit Agreement with Nedbank since May 14, 2010. The outstanding principal balance of the credit facility amounting to $23,257,826 is now included in the company's current liabilities. As at Dec. 31, 2011, the company has reclassified $1,776,643 of senior long- term debt to current liabilities within the consolidated balance sheet. The accrued interest related to the Credit Agreement of $4,621,153 and $1,689,181 as of Dec. 31, 2011, and 2010, respectively, is included within accrued interest on the consolidated balance sheets. Nedbank Capital has also declined to extend the forbearance agreement regarding Nord's failure to make timely payments for monthly settlements due under the copper derivatives agreements between the parties beginning in March 2010 through Dec. 31, 2011, in the aggregate amount of $16,106,691. As of Dec. 31, 2011, 100% of the related copper derivatives have matured. In addition, in July 2010, the Company reached an agreement with Fisher Sand & Gravel Company, the Company's mining contractor and largest unsecured trade creditor, to convert approximately $8.2 million of payables to a two-year unsecured note bearing interest on the outstanding principal at the rate of 6% per annum, which matures on July 31, 2012. Nedbank and Nedbank Capital have not exercised their respective rights to note the Company in default. However, the Company's continuation as a going concern is dependent upon its ability to refinance the obligations under its Credit Agreement with Nedbank, its Copper Hedge Agreement with Nedbank Capital and its note payable to Fisher Industries, raise approximately $20 million dollars in additional capital, and on the Company's ability to produce copper to sell at a level where the Company becomes profitable and generates cash flows from operations, all of which is uncertain. If the Company is unable to obtain financing, it expects to be able to continue its residual leaching and solvent extraction/electro-winning operations for the foreseeable future, assuming that neither Nedbank nor Nedbank Capital exercises its rights to note the Company in default, that Fisher Industries does not exercise its rights under its promissory note when it matures in July 2012, its vendors continue to provide the Company goods and services in accordance with existing terms and conditions, both copper prices and its costs remain at or near current levels, and its copper recovery rate and copper production trends remain consistent with the average recovery rate and production trends that the Company has experienced for the last twelve months. If the Company's residual leaching and solvent extraction/electro- winning operations become economically unviable, the Company would be forced to terminate its operations, significantly reduce its workforce, place the Johnson Camp Mine on a care and maintenance program, and, perhaps, sell some its assets. If Nedbank or Nedbank Capital elect to note the Company in default and enforce their security interests, or if Fisher Industries elects to enforce its rights to payment upon maturity of its unsecured note in July 2012, the Company will not be able to continue as a going concern. About Nord Resources Based in Tuczon, Arizona, Nord Resources Corporation (TSX:NRD/OTCBB:NRDS.OB) -- http://www.nordresources.com/-- is a copper mining company whose primary asset is the Johnson Camp Mine, located approximately 65 miles east of Tucson, Arizona. Nord commenced mining new ore on February 1, 2009. On June 2, 2010, Nord Resources appointed FTI Consulting to advise on refinancing structures and strategic alternatives. Nord Resources reported a net loss of $10.31 million on $14.48 million of net sales in 2011, compared with a net loss of $21.20 million on $28.64 million of net loss in 2010. The Company's balance sheet at Dec. 31, 2011, showed $56.14 million in total assets, $64.02 million in total liabilities and a $7.88 million total stockholders' deficit. NORTHAMPTON GENERATING: Has Until July 2 to Exclusively File Plan ----------------------------------------------------------------- The Hon. J. Craig Whitley of the U.S. Bankruptcy Court for the Western District of North Carolina has extended Northampton Generating Company, L.P.'s exclusive period to file a plan of reorganization until July 2, 2012, and the exclusive period to solicit acceptances of the plan until Aug. 31, 2012. In their request for an extension, the Debtor noted that since the Petition Date, it has focused on ensuring an orderly transition into Chapter 11, which has included, among other things obtaining use of cash collateral, completion of the requisite schedules of assets and liabilities and statements of financial affairs, and communication with parties in interest, including the Debtor?s secured lenders and contract counterparties Metropolitan Edison Company and PPL Electric Utilities Corporation. Ben Hawfield, Esq., at Moore & Van Allen PLLC, the attorney for the Debtor, said that the Debtor has been diligent in discharging its duties as debtor-in-possession and is making progress toward a consensual Chapter 11 plan. During the initial period of this Chapter 11 case, the Debtor has focused on maintaining profitable business operations as it made the transition into Chapter 11 and laying the groundwork to achieve the principal purpose of this Chapter 11 case, which is a reorganization of its contracts and obligations. "In the two months since the Petition Date, the Debtor has made good progress toward this central goal and is conducting ongoing negotiations with its contract counterparties and secured lenders," Mr. Hawfield stated. The Debtor assured the Court that the requested extension is relatively brief, is customary and typical in large Chapter 11 cases such as these proceedings, and will not harm creditors. In addition, the extension would allow additional time for the Debtor to negotiate with PPL, the secured lenders and other creditors to formulate a confirmable plan. The Debtor wants to submit a proposed plan as soon as possible in order to expedite emergence from Chapter 11. The Debtor said that the 90-day extension requested herein is appropriate under the circumstances. About Northampton Generating Northampton Generating Co. LP is the owner of a 112 megawatt electric generating plant in Northampton, Pennsylvania. The plant is fueled with waste products, including waste coal, fiber waste, and tires. The power is sold under a long-term agreement to an affiliate of FirstEnergy Corp. Northampton Generating filed for Chapter 11 bankruptcy (Bankr. W.D.N.C. Case No. 11-33095) on Dec. 5, 2011. Hillary B. Crabtree, Esq., and Luis Manuel Lluberas, Esq., at Moore & Van Allen PLLC, in Charlotte, N.C., serve as counsel to the Debtors. Houlihan Lokey Capital, Inc., is the financial advisor. The Debtor estimated assets and debts of up to $500 million. Debt includes $73.4 million owing on senior bonds issued through the Pennsylvania Economic Development Financing Authority. No request for the appointment of a trustee or examiner has been made, and no statutory committee or trustee has been appointed in this case. NORTHAMPTON GENERATING: Can Decide on Leases Until July 2 --------------------------------------------------------- The Hon. J. Craig Whitley of the U.S. Bankruptcy Court for the Western District of North Carolina has extended, at the behest of Northampton Generating Company, L.P., the deadline for the Debtor to assume or reject unexpired lease until July 2, 2012. Northampton Generating Co. LP is the owner of a 112 megawatt electric generating plant in Northampton, Pennsylvania. The plant is fueled with waste products, including waste coal, fiber waste, and tires. The power is sold under a long-term agreement to an affiliate of FirstEnergy Corp. Northampton Generating filed for Chapter 11 bankruptcy (Bankr. W.D.N.C. Case No. 11-33095) on Dec. 5, 2011. Hillary B. Crabtree, Esq., and Luis Manuel Lluberas, Esq., at Moore & Van Allen PLLC, in Charlotte, N.C., serve as counsel to the Debtors. Houlihan Lokey Capital, Inc., is the financial advisor. The Debtor estimated assets and debts of up to $500 million. Debt includes $73.4 million owing on senior bonds issued through the Pennsylvania Economic Development Financing Authority. No request for the appointment of a trustee or examiner has been made, and no statutory committee or trustee has been appointed in this case. NORTHCORE TECHNOLOGIES: Launches New Web Site for CHPCA ------------------------------------------------------- Northcore Technologies Inc. announced the launch of a new customer web presence delivered through its wholly owned subsidiary, Envision Online Media Inc. As previously announced Northcore has acquired Envision, an Ottawa based software development company and Microsoft Partner. With more than 3,500 members, Canadian Hospice Palliative Care Association is the national voice for Hospice Palliative Care in Canada. Advancing and advocating for quality end-of-life/hospice palliative care in Canada, its work includes public policy, public education and awareness. Through the new Web site (www.chpca.net), CHPCA is able to connect with more than 500 hospice palliative care programs and services across Canada, as well as tens-of-thousands of paid and non-paid staff working in home care programs, nursing homes, free-standing hospices, and hospitals. "We are pleased to see such early evidence of the execution capability of our Envision team," said Amit Monga, CEO of Northcore Technologies. "We expect this trend to continue as our customer base grows and we focus on joint opportunities. Congratulations to Todd Jamieson and his team at Envision for the delivery of another quality product." Further disclosure on Envision's portfolio and capabilities can be found on their web presence located at www.Envisiononline.ca. Northcore develops solutions to support the evolving needs of industry and provides comprehensive platforms for the management of capital equipment and the implementation of Social Commerce business models. These products are proven, effective and in use by some of the world's most successful corporations. Companies interested in effective software solutions should contact Northcore at 416-640-0400 or 1-888-287-7467, extension 395 or via email at Sales@northcore.com. About Northcore Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC BB: NTLNF) -- http://www.northcore.com/-- provides a Working Capital Engine(TM) that helps organizations source, manage, appraise and sell their capital equipment. Northcore offers its software solutions and support services to a growing number of customers in a variety of sectors including financial services, manufacturing, oil and gas and government. Northcore owns 50% of GE Asset Manager, LLC, a joint business venture with GE. Together, the companies work with leading organizations around the world to help them liberate more capital value from their assets. The Company reported a loss and comprehensive loss of C$3.93 million for the year ended Dec. 31, 2011, compared with a loss and comprehensive loss of C$3.03 million during the prior year. The Company's balance sheet at Dec. 31, 2011, showed C$2.91 million in total assets, C$415,000 in total liabilities and C$2.49 million in total shareholders' equity. NUPATHE INC: Needs to Raise Additional Funds to Continue -------------------------------------------------------- Dow Jones' DBR Small Cap reports that NuPathe Inc. said it needs to raise additional funds to continue as a going concern. In its annual report, filed with the Securities and Exchange Commission, the pharmaceutical company said it believes its existing cash and cash equivalents will be sufficient to fund its operations and debt payments through the third quarter, according to the report. Beyond that, the report says that NuPathe said it will need fresh capital. "There is no assurance that such capital will be available when needed or on acceptable terms," the company said in the filing obtained by the news agency. The report notes that NuPathe said it had $23.1 million in cash as of Dec. 31, 2011. The report relates that the company said the covenants of its term loan facility and the pledge of its assets as collateral limits its ability to line up additional debt financing. NuPathe, based in Conshohocken, Pa., is developing drugs to treat neurological disorders such as migraines, Parkinson's disease, schizophrenia and bipolar disorder. NYTEX ENERGY: Whitley Penn Raises Going Concern Doubt ----------------------------------------------------- Nytex Energy Holdings, Inc., filed on April 5, 2012, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011. Whitley Penn LLP, in Dallas, Texas, expressed substantial doubt about Nytex Energy's ability to continue as a going concern. The independent auditors noted that the Company is not in compliance with certain loan covenants related to two debt agreements. The Company reported net income of $16.75 million on $85.26 million of revenues for 2011, compared with a net loss of $19.65 million on $7.87 million of revenues for 2010. The Company's balance sheet at Dec. 31, 2011, showed $81.94 million in total assets, $66.71 million in total liabilities, and stockholders' equity of $15.23 million. A copy of the Form 10-K is available for free at: http://is.gd/Usuqqp Located in Dallas, Texas, Nytex Energy Holdings, Inc., is an energy holding company with operations centralized in two subsidiaries, Francis Drilling Fluids, Ltd. ("FDF") and NYTEX Petroleum, Inc. ("NYTEX Petroleum"). FDF is a 35 year old full- service provider of drilling, completion and specialized fluids and specialty additives; technical and environmental support services; industrial cleaning services; equipment rentals; and transportation, handling and storage of fluids and dry products for the oil and gas industry. NYTEX Petroleum, Inc., is an exploration and production company focusing on early stage development of minor oil and gas resource plays within the United States. OILSANDS QUEST: Closes Eagles Nest Asset Sale, Signs DIP Financing ------------------------------------------------------------------ Oilsands Quest Inc. closed the previously disclosed sale of the Company's non-core Eagles Nest asset to Cavalier Energy Inc., an unrelated third party, on March 23, 2012, for C$7.005 million. On March 26, 2012, Oilsands Quest signed the definitive loan agreements for the previously announced debtor-in-possession financing in the amount of C$2.85 million. Funds from the DIP Facility are now available to the Company for the purposes of funding operating costs and other expenses while proceeding with the solicitation process. The DIP Facility will terminate on the earlier of March 26, 2013 or the termination of the Order from the Alberta Court of Queen's Bench providing creditor protection under the Companies' Creditors Arrangement Act (Canada). On March 19, 2012, Oilsands Quest received notice that the United States District Court for the District of Colorado approved the settlement relating to the derivative lawsuit captioned Make a Difference Foundation, Inc. v. Hopkins, et al., # 10-cv-00498 WYD- MJW (D. Colo.), which is substantially similar to the proposed settlement that was disclosed on Nov. 9, 2011. Oilsands Quest continues to operate under the protection of the CCAA with the assistance of a Court-appointed monitor. The Company's common shares remain halted from trading until either a delisting occurs or until the NYSE permits the resumption of trading. About Oilsands Quest Oilsands Quest Inc. is exploring and developing oil sands permits and licenses, located in Saskatchewan and Alberta, and developing Saskatchewan's first commercial oil sands discovery. PACKAGING SYSTEMS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Packaging Systems LLC 207 Mac Lane Keasbey, NJ 08832 Bankruptcy Case No.: 12-18864 Chapter 11 Petition Date: April 3, 2012 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Raymond T. Lyons Jr. Debtor's Counsel: Bruce J. Wisotsky, Esq. Melissa A. Pena, Esq. NORRIS, MCLAUGHLIN & MARCUS 721 Route 202-206 North Bridgewater, NJ 08807 Tel: (908) 722-0700 Fax: (908) 722-0755 E-mail: bwisotsky@nmmlaw.com mapena@nmmlaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/njb12-18864.pdf The petition was signed by Robert T. Harmon, managing member. PDQ COOLIDGE: Files for Chapter 11 in Miami ------------------------------------------- PDQ Coolidge Formad, LLC, filed a bare-bones Chapter 11 petition (Bankr. S.D. Fla. Case No. 12-18495) in its home-town in Miami on April 8. According to myfloridalicense.com, the Debtor is doing business as Peppertree Shores Apartment and has an Orange, Florida license to operate apartments. The Debtor estimated assets and debts of $10 million to $50 million. It projects that funds will be available for distribution to unsecured creditors. PEMCO WORLD: Has Final Approval for Sun Capital Financing --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Pemco World Air Services Inc. was given final approval for $6 million in financing provided by venture-capital investor Sun Capital Partners Inc. On April 4, the Bankruptcy Court approved bidding procedures that will govern the sale of the Debtors' assets. Sun is under contract to make the first bid. Sun is offering to credit bid the pre-bankruptcy debt and financing it's providing for the Chapter 11 case. A Sun affiliate acquired the $31.8 million senior secured debt from Merrill Lynch Credit Products LLC and is also the holder of a $5.6 million subordinated secured loan. In addition to the debt-for-ownership swap, Sun will pay ordinary- course-of-business trade payables incurred during bankruptcy that aren't already paid. Competing bids are due May 23. If bids are received, an auction will be held May 30. The sale hearing is set for June 1. Objections to the sale may be filed by May 25. About Pemco World Air Services Headquartered in Tampa, Florida, Pemco World Air Services -- http://www.pemcoair.com/-- performs large jet MRO services, and has operations in Dothan, Alabama (military MRO and commercial modification), Cincinnati/Northern Kentucky (regional aircraft MRO), and partner operations in Asia. Pemco filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 12-10799) on 5, 2012, with a $37.8 million DIP financing and a "stalking horse" bid from an affiliate of its current owner, Sun Aviation Services, LLC. Young Conaway Stargatt & Taylor, LLP has been tapped as general bankruptcy counsel; Kirkland & Ellis LLP as special counsel for tax and employee benefits issues; AlixPartners, LLP as financial advisor; Bayshore Partners, LLC as investment banker; and Epiq Bankruptcy Solutions LLC as notice and claims agent. PETER HENZE: Court Directs Appointment of Chapter 11 Trustee ------------------------------------------------------------ At the behest of Luxury Travel Holidays, LLC, Bankruptcy Judge Alan Jaroslovsky directed the U.S. Trustee to appoint a Chapter 11 trustee to oversee the bankruptcy estate of Peter and Paula Henze. The Court held that the Henzes' statement of financial affairs was misleading after the Debtors failed to disclose the transfer of at least $803,000 to their wholly owned corporation during the 11 months before bankruptcy as well as other significant transfers during that time. These transfers came to light during extensive discovery conducted by Luxury Travel, the Henzes' largest creditor. The Henzes admit that their original statement of affairs was false, but argue that it was due to honest confusion; they say they confused "transfers" with "income"; since the source of the funds was various testamentary trusts and therefore not income, the Henzes explain that they thought they did not have to disclose their transfers of the funds. "The court is unable to say if the failure to complete the statement of affairs truthfully was the result of dishonesty or mistake. On the one hand, the Henzes have a business background and come from families of some wealth, so they ought to have known that a transfer had to be disclosed even if the source of the funds was not income. On the other hand, Peter Henze appeared somewhat befuddled while testifying in court," Judge Jaroslovsky said. A copy of the Court's April 6, 2012 Memorandum is available at http://is.gd/RKbBLEfrom Leagle.com. Peter and Paula Henze filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 11-13543) on Sept. 26, 2011. PHOENIX DINER: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Phoenix Diner Corp. 200 White Horse Pike Absecon, NJ 08201 Bankruptcy Case No.: 12-18819 Chapter 11 Petition Date: April 3, 2012 Court: United States Bankruptcy Court District of New Jersey (Camden) Judge: Judith H. Wizmur Debtor's Counsel: Anthony Sodono, III, Esq. Joao Ferreira Magalhaes, Esq. TRENK, DIPASQUALE, ET AL. 347 Mt. Pleasant Avenue, Suite 300 West Orange, NJ 07052 Tel: (973) 243-8600 Fax: (973) 243-8600 E-mail: asodono@trenklawfirm.com jmagalhaes@trenklawfirm.com Scheduled Assets: $78,330 Scheduled Liabilities: $5,481,630 A list of the Company's 13 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/njb12-18819.pdf The petition was signed by Perry Stamelos, sole shareholder. PILGRIM PINES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Pilgrim Pines L.D., LLC P.O. Box 1093 Littleton, MA 01460 Bankruptcy Case No.: 12-41261 Chapter 11 Petition Date: April 3, 2012 Court: United States Bankruptcy Court District of Massachusetts (Worcester) Judge: Melvin S. Hoffman Debtor's Counsel: David B. Madoff, Esq. MADOFF & KHOURY LLP 124 Washington Street - Suite 202 Foxboro, MA 02035 Tel: (508) 543-0040 Fax: (508) 543-0020 E-mail: madoff@mandkllp.com Scheduled Assets: $0 Scheduled Liabilities: $6,177,483 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mab12-41261.pdf The petition was signed by Brian E. Hebb, president. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Brian Hebb 11-43863 09/13/11 Hebb Builders, Inc. 12-41260 04/03/12 PINNACLE AIRLINES: Court Order Restricts Trading in Equity ---------------------------------------------------------- Pinnacle Airlines Corp. disclosed that the United States Bankruptcy Court for the Southern District of New York has entered an order that imposes substantial restrictions on trading in equity interests in and debt claims against Pinnacle Airlines Corp. and affiliates. A copy of the order may be found at the following internet address: http://dm.epiq11.com/PinnacleAirlines. Questions regarding the order may be directed to representatives of the debtors at the following telephone number: 212-450-4000. The case number for the bankruptcy action is 12-11343. Davis Polk & Wardwell LLP and Akin Gump Strauss Hauer & Feld LLP are serving as the company's legal advisors in the restructuring. Barclays Capital and Seabury Group LLC are serving as financial advisors. About Pinnacle Airlines Corp. Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems - Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. PONCE TRUST: Files List of 20 Largest Unsecured Creditors --------------------------------------------------------- Ponce Trust, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Florida a list of creditors holding the 20 largest unsecured claims: Name of creditor Nature of claim Amount of Claim ---------------- --------------- --------------- 1300 Ponce Holdings, LLC Lots 5 through 14, c/o MUNB Loan Holdings, LLC inclusive, in Block 1221 Brickell Avenue, Suite 28, Revised Plat of 1140 Coral Gables Miami, FL 33131 Douglas Section, as recorded in Plat $37,346,026 Book 25, Page 69 of ($21,250,000 the Public Records secured) Dayco HC, LLC 8950 SW 74 Ct., #2213 Miami, FL 33156 Mezzanine Lender $3,586,829 Infracommerce International Ltd., BVI c/o Arazoza & Fernandez-Fraga 2100 Salzedo Street, #300 Miami, FL 33134 Mezzanine Lender $3,586,829 Miami-Dade County Tax Lots 5 through 14, Collector inclusive, in Block 28, Revised Plat of Coral Gables $612,114 Douglas Section, as ($21,250,000 recorded in Plat secured) Book 25, Page 69 of (37,819,716 the Public Records senior lien) Miami-Dade County Tax Lots 5 through 14, Collector inclusive, in Block 28, Revised Plat of Coral Gables $473,690 Douglas Section, as ($21,250,000 recorded in Plat secured) Book 25, Page 69 of ($37,346,026 the Public Records senior lien) Dayco Properties, Ltd. Loan $365,949 Milton Construction Company Pre-petition Litigation $330,942 1300 Ponce Condominium Assn, Inc. $284,680 Merrick Trust, LLC $161,983 Southern Hill Real Estate Vendor - 90 day Payables $98,936 Mostrenco, LLC/Lenox 359 LLC Final Judgment entered on October 5, 2011 $45,071 American National Realty Vendor - 90 day Corp. Payables $43,867 Nationwide Management Services $20,625 Gerson Preston Robinson, PA Accountant Fees $7,500 Biscayne Engineering Vendor - 90 day Company, Inc. Payables $5,184 Chicago Title Ins. Co/Commonwealth Title Insurance $4,125 Withers Worldwide Vendor - 90 day Payables $3,853 Florida Classic Closets Vendor - 90 day Payables $4,047 Forch & Associates Vendor - 90 day Payables $3,000 InStyle Window Decor Vendor $3,815 About Ponce Trust Ponce Trust LLC, the developer and owner of the luxury residential condominium development known as 1300 Ponce, in Coral Gables, Florida, filed for Chapter 11 bankruptcy (S.D. Fla. Case No. 12- 14247) on Feb. 22, 2012. Judge Robert A. Mark presides over the case. Joel L. Tabas, Esq., and Mark S. Roher, Esq., at Tabas, Freedman, Soloff, Miller & Brown, P.A., serve as the Debtor's counsel. In its petition, the Debtor estimated assets and debts of $10 million to $50 million. The petition was signed by Luis Lamar, vice president and manager. Ponce Trust sought Chapter 11 because of (a) the declining real estate market, (b) its inability to reduce condominium prices in response to changing market conditions, and (c) its inability, due to circumstances beyond the Debtor's control, to renew, repay, or refinance its secured mortgage debt owed to MUNB Loan Holdings, LLC, which matured in 2011. Prior to the Petition Date, MUNB initiated a foreclosure action against the Property in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida. On July 21, 2011, the State Court entered an Order Appointing Receiver, which inter alia appointed Jeremy S. Larkin as receiver. Mr. Larkin is the President of NAI Miami Commercial Real Estate Services, Worldwide. 1300 Ponce contains 125 residential condominium units. As of the bankruptcy filing date, the Debtor has a remaining inventory of about 83 units and rented about 40 of those units. The Debtor intends to market the remaining Condominium Units for both sale and rental. The residential condominium unit is worth $19 million. MUNB is owed $37.3 million. 1300 Ponce Holdings LLC, assignee of MUNB, is represented by Carlton Fields, P.A. POTOMAC SUPPLY: Committee Wants Final Cash Use Order Amended ------------------------------------------------------------ The Official Committee of Unsecured Creditors in the Chapter 11 case of Potomac Supply Corporation asks the U.S. Bankruptcy Court for the Eastern District Virginia to amend the final order authorizing the Debtor's use of cash collateral. The Committee relates that immediately upon its organization and selection of counsel on Feb. 9, 2012, the Committee and its professionals have engaged in discussions with the Debtor and its lender to craft a revised cash collateral order that most reasonably balances the competing interests of the Debtor, its secured lender, and the unsecured creditors. While progress has been made, an agreed upon revised order has not yet been reached. The Committee has concerns about several issues, including, the protections granted to the secured lender under the Final Order well as the Debtor's proposed budget. Further, while the Committee has had access to some information regarding the Debtor's current operations and its "plan" to try to operate consistent with the cash collateral order, it has not received enough information to formulate an opinion whether the use of cash collateral must be permitted at all. At the hearing on Feb. 8, 2012, counsel for Potomac and Regions orally represented to the Court the terms of an agreement permitting the Debtor's use of cash collateral for approximately 50 days or until March 31. In this relation, the Debtor asserted that, according to appraisals commissioned by Regions Bank and estimates of the Debtor, the value of its collateral subject to Regions' lien was approximately $30,860,000. About Potomac Supply Corp. Kinsale, Virginia-based building-supply manufacturer Potomac Supply Corporation filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case No. 12-30347) on Jan. 20, 2012, estimating assets and debts of $10 million to $50 million. Potomac in mid-January announced it was suspending manufacturing operations in Kinsale after its lender refused to provide financing without additional investment. Judge Douglas O. Tice, Jr. presides over the case. Patrick J. Potter, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in Washington, D.C., serve as the Debtor's bankruptcy counsel. The petition was signed by William T. Carden, Jr., chief executive officer. LeClairRyan, A Professional Corporation is representing the Official Committee of Unsecured Creditors. POTOMAC SUPPLY: Court OKs Adequate Assurance Payment to Dominion ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District Virginia approved a stipulation regarding adequate assurance of payment under Section 366 of the Bankruptcy Code. The stipulation was entered between Potomac Supply Corporation and Virginia Electric and Power Company doing business as Dominion Virginia Power. Pursuant to the stipulation, among other things: -- The Debtor will provide a one-month cash deposit of $39,085 to Dominion as adequate assurance, and send it to the this person and address: Virginia Electric and Power Company d/b/a Dominion Virginia Power Attn: Sherry Ward P.O. Box 26666 Richmond, VA 23261-6666 -- If the Debtor fails to tender the deposit payment required by the stipulation, Dominion can terminate service to the Debtor after providing the Debtor and its counsel with notice of the deposit payment default and five business days to cure the default. If the Debtor cures the Deposit payment default within the Cure Period, Dominion cannot terminate service for the deposit payment default. The notices required by the paragraph will be sent via email to: Jerry Hall, Esq. PILLSBURY WINTHROP SHAW PITTMAN LLP 2300 N Street, NW Washington, DC 20037 E-mail: jerry.hall@pillsburylaw.com Rich Gouldin, COO Potomac Supply Corporation 1398 Kinsale Road Kinsale, VA 22488 E-mail: rgouldin@potomacsupply.com -- the Debtor will pay all undisputed postpetition bills received from Dominion for postpetition utility charges by the applicable due date on the invoice, which is a due date in accordance with applicable state laws, regulations and/or tariffs. -- If the Debtor no longer requires service at an account, it will contact Dominion and request that service be terminated to that account. Dominion will promptly terminate service as requested. After all postpetition bills for that closed account are paid in full, Dominion will promptly (i.e., within ten (10) business days of delivery of payment by the Debtor) refund any remaining cash Deposit on that account to the Debtor. -- Upon Court approval of the stipulation, the Utility Motion will be deemed settled as to Dominion, and Dominion will be bound by the terms of the Final Utility Order, except as provided herein. To the extent of any conflict between the stipulation and the Final Utility Order, the stipulation will govern. About Potomac Supply Corp. Kinsale, Virginia-based building-supply manufacturer Potomac Supply Corporation filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case No. 12-30347) on Jan. 20, 2012, estimating assets and debts of $10 million to $50 million. Potomac in mid-January announced it was suspending manufacturing operations in Kinsale after its lender refused to provide financing without additional investment. Judge Douglas O. Tice, Jr. presides over the case. Patrick J. Potter, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in Washington, D.C., serve as the Debtor's bankruptcy counsel. The petition was signed by William T. Carden, Jr., chief executive officer. LeClairRyan, A Professional Corporation is representing the Official Committee of Unsecured Creditors. PREGIS CORP: S&P Withdraws 'B-' Corporate Credit Rating at Request ------------------------------------------------------------------ Standard & Poor's Ratings Services withdrew all its ratings on Pregis Corp., including the 'B-' corporate credit rating, at the company's request. QUALTEQ INC: Wants Access to Cash Collateral Until June 15 ---------------------------------------------------------- Qualteq, Inc., et al., ask the U.S. Bankruptcy Court for the Northern District of Illinois to enter a revised agreed amended final order authorizing use of cash collateral in which Amalgamated Bank of Chicago asserts an interest. The motion has been agreed to in form and substance by both Amalgamated Bank of Chicago and the Official Committee of Unsecured Creditors appointed in the Debtors' Chapter 11 cases. The parties have agreed to revise the Amended cash collateral order to: 1) include an approved extended budget until June 15, 2012; 2) memorialize ABOC's acknowledgment that its prepetition liens do not extend to certain assets and their respective proceeds, if any; 3) extend the Committee's deadline with respect to the prepetition ABOC liens on certain assets to the effective date of any plan of reorganization that is confirmed by an order of the Bankruptcy Court in the Chapter 11 Cases; and 4) incorporate the terms of the amended cash collateral order As of the Petition Date, the principal amount outstanding from the Fulfillment Xcellence, Inc., and Versatile Card Technology, Inc. (Cash Collateral Debtors) to ABOC was approximately $3,983,982, plus accrued and accruing interest, fees and costs. Also as of the Petition Date, the total combined eligible collateral (excluding the pledged real estate) under the Borrowing Base was approximately $6,447,559, placing ABOC in an oversecured position. To secure the amount outstanding, pursuant to the CSAs, the Cash Collateral Debtors each granted ABOC a first priority security interest in substantially all of the Cash Collateral Debtors' assets. To further secure the amount outstanding, FXI entered into a Commercial Pledge Agreement pursuant to which it pledged all of its rights and interests in two promissory notes, the first for $150,000 from Unique Embossing Services and the second for $970,000 from VCT. A full-text copy of the motion is available for free at http://bankrupt.com/misc/QUALTEQINC_cashcoll.pdf 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. As reported in the Troubled Company Reporter on Feb. 23, 2012, Bankruptcy Judge Kevin J. Carey in Delaware granted the request of Bank of America, N.A., to transfer the venue of the Chapter 11 cases of Qualteq, Inc., et al., to the U.S. Bankruptcy Court for the Northern District of Illinois. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed four unsecured creditors to serve on the Official Committee of Unsecured Creditors. R & J HOLDINGS: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: R & J Holdings, LLC P.O. Box 1719 Sherman, TX 75091 Bankruptcy Case No.: 12-40861 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: Bill F. Payne, Esq. THE MOORE LAW FIRM, L.L.P. 100 North Main Street Paris, TX 75460-4222 Tel: (903) 784-4393 ext. 40 E-mail: lgarner@moorefirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txeb12-40861.pdf The petition was signed by Rodney L. Matejowsky, managing member. RCC DALLAS: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: RCC Dallas Transportation, Ltd. c/o Realty Capital Partners II Inc. 8333 Douglas Ave., Ste 110 Dallas, TX 75225 Bankruptcy Case No.: 12-32159 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Robert Yaquinto, Jr., Esq. SHERMAN & YAQUINTO, LLP 509 N. Montclair Ave. Dallas, TX 75208-5498 Tel: (214) 942-5502 E-mail: ryaquinto@syllp.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 Richard A. Myers, president of Realty Capital Partners II, Inc., Debtor's general partner. ROG CHURCH: Case Summary & 4 Largest Unsecured Creditors -------------------------------------------------------- Debtor: ROG Church, Inc. aka River of Glory Church, Inc. aka River of Glory 501 Accent Dr. Plano, TX 75075 Bankruptcy Case No.: 12-40852 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtor's Counsel: Bill F. Payne, Esq. THE MOORE LAW FIRM, L.L.P. 100 North Main Street Paris, TX 75460-4222 Tel: (903) 784-4393 ext. 40 E-mail: lgarner@moorefirm.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 four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txeb12-40852.pdf The petition was signed by Scott Baker, elder. ROOMSTORE INC: Rooms To Go Pays $2 Million for 10 Texas Stores -------------------------------------------------------------- Larry Thomas at Furniture Today, citing court documents, reports that Rooms To Go has agreed to pay at least $2 million for 10 Texas stores being shuttered by RoomStore Inc. According to the report, Rooms To Go also would pay RoomStore 100% of the value of each store's inventory, but will keep proceeds from the sale of any of the leases and conduct going-out-of- business sales at the stores. The report relates, in a motion asking the court to approve the transaction, RoomStore said the agreement with Rooms To Go "presents the highest and best offer" for the assets of the Texas stores. RoomStore said it had received three other offers for the store leases since filing for Chapter 11 bankruptcy protection on Dec. 12, but the highest was $700,000. The report notes the court has scheduled a hearing for 2:30 p.m. on April 10 to rule on the proposed transaction. The report says Rooms To Go has agreed to pay $1.7 million to acquire RoomStore's leases on the 10 stores; an additional $275,000 for the rights to use its name, trademarks and logo in Texas; and another $25,000 for customer lists. The proposed sale agreement gives Rooms To Go the right to force RoomStore to assume leases on seven of the stores prior to June 5, and can exercise the same rights on the other three stores before Oct. 5. If Rooms To Go decides to exercise any of these rights, the retailer will have to pay the "cure amount" of the leases, which is the amount owed to the landlord to bring the lease payments current. The report says if the deal is approved, it would leave RoomStore with 28 stores -- 11 in Maryland, including a clearance center, 10 in Virginia, five in North Carolina and two in South Carolina. About RoomStore Inc. Richmond, Virginia-based RoomStore, Inc., operates retail furniture stores and offers home furnishings through Furniture.com, a provider of Internet-based sales opportunities for regional furniture retailers. RoomStore was founded in 1992 in Dallas, Texas, with four retail furniture stores. With more than $300 million in net sales for its fiscal year ending 2010, RoomStore was one of the 30 largest furniture retailers in the United States. RoomStore filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case No. 11-37790) on Dec. 12, 2011, following store-closing sales at four of its retail stores, located in Hoover, Alabama; Fayetteville, North Carolina; Tallahassee, Florida; and Baltimore, Maryland. When it filed for bankruptcy, the Company operated a chain of 64 retail furniture stores, including both large-format stores and clearance centers in eight states: Pennsylvania, Maryland, Virginia, North Carolina, South Carolina, Florida, Alabama, and Texas. It also had five warehouses and distribution centers located in Maryland, North Carolina, and Texas that service the Retail Stores. RoomStore also owns 65% of Mattress Discounters Group LLC, which operates 83 mattress stores (as of Aug. 31, 2011) in the states of Delaware, Maryland and Virginia and in the District of Columbia. RoomStore acquired the Mattress Discounters stake after it filed its second bankruptcy in 2008. Mattress Discounters sought Chapter 11 relief on Sept. 10, 2008 (Bankr. D. Md. Case Nos. 08-21642 and 08-21644). It filed the first Chapter 11 bankruptcy on Oct. 23, 2002 (Bankr. D. Md. Case No. 02-22330), and emerged on March 14, 2003. Judge Douglas O. Tice, Jr., presides over RoomStore's case. Lawyers at Lowenstein Sandler PC and Kaplan & Frank, PLC serve as the Debtor's bankruptcy counsel. FTI Consulting, Inc., serves as the Debtor's financial advisors and consultants. RoomStore's balance sheet at Aug. 31, 2011, showed $70.4 million in total assets, $60.3 million in total liabilities, and stockholders' equity of $10.1 million. The petition was signed by Stephen Girodano, president and chief executive officer. Liquidator Hilco Merchant Resources, Inc., is represented in the case by Gregg M. Galardi, Esq., at DLA Piper LLP (US); and Robert S. Westermann, Esq., and Sheila de la Cruz, Esq., at Hirschler Fleischer, P.C. The U.S. Trustee for Region 4 named seven members to the official committee of unsecured creditors in the case. ROSEMARY MARSH: Dist. Court Rejects Age Discrimination Suit ----------------------------------------------------------- District Judge Julian Abele Cook, Jr., granted motions for summary judgment filed by defendants in the lawsuit, Rosemary Marsh, v. Associated Estates Realty Corp. et al., Case No. 10-14120 (E.D. Mich.). Ms. Marsh has accused the Defendants of wrongfully terminating her employment for reasons of age in violation of the Age Discrimination in Employment Act, 29 U.S.C. Sec. 621 et seq., and the Elliott-Larsen Civil Rights Act, Mich. Comp. Laws Sec. 37.2101 et seq. Ms. Marsh was hired as a leasing consultant by AERC of Michigan in March 2004. Her tenure of employment was shortened when her employment was involuntarily terminated in December 2007 as her performance had not met Company standards. Ms. Marsh was 60 years old when she was initially hired, 61 years old when she was rehired, and 63 years old when she was terminated. The District Court, however, held that Ms. Marsh has not presented direct evidence of age discrimination. A copy of the District Court's April 5, 2012 Order is available at http://is.gd/lnRf1rfrom Leagle.com. Ms. Marsh filed for Chapter 11 bankruptcy in 2004. S & Y ENTERPRISES: Court Confirms Reorganization Plan ----------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York, on March 9, 2012, confirmed S&Y Enterprises, LLC's Third Amended Plan of Reorganization dated March 2, 2012. According to the Disclosure Statement, the Plan proposes that in accordance with the Amended CAB Sale Agreement, upon the Effective Date, the Debtors will transfer the property, free and clear of all liens and claims, to CAB Bedford in exchange for the purchase consideration. CAB Bedford will deposit $1,000,000.00 in the Purchase Escrow prior to the Confirmation Hearing. As consideration for transfer of the property, upon the Effective Date, CAB Bedford will release the purchase escrow and tender the balance to the Debtors to be distributed pursuant to the terms of Article VI of the Third Amended Plan. As of the Effective Date, pursuant to the Rejection Stipulation, CAB Bedford will be deemed to have waived all claims arising from and in connection with the rejection of the Original Sale Agreement. Under the Plan, the Debtor proposes to treat claims as follows: * Classes 1-3. Secured claims will be paid in full. * Class 4. Priority unsecured claims will be paid in full in cash on the Initial Distribution Date * Class 5. All non-insider general unsecured claims, to the extent allowed on the Effective Date, will be paid in full in cash on the Initial Distribution Date. To the extent a Class V Claim is not allowed or constitutes a disputed claim as of the Effective Date, an amount equal to the disputed portion of any the claim will be held in the Disputed Claims Reserve pending resolution of the claim. The allowed amount of the claim will be paid in full in cash to the holder of the claim within 10 days of entry of a final order providing for the allowance. * Class 6. All Insider general unsecured Claims will be allowed in the amounts set forth in the Debtor's schedules and statements on the Effective Date and will be paid in full in cash on the Initial Distribution Date. Upon the Effective Date, the holders of Class VII Equity Interests will retain their interests in Reorganized S&Y. A full-text copy of the Third Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/S&Y_ENTERPRISES_ds_thirdamended.pdf About S & Y Enterprises, LLC Brooklyn, New York-based S & Y Enterprises, LLC, own and maintain real estate. The Company filed for Chapter 11 protection (Bankr. E.D.N.Y. Case No. 10-50623) on Nov. 11, 2010. David Carlebach, Esq., who has an office in New York, assists the Debtor in its restructuring effort. In its amended schedules, the Company disclosed $20.2 million in assets and $8.71 million in liabilities. SBA SENIOR: Moody's Assigns 'Ba2' Rating to New $200MM Term Loan ---------------------------------------------------------------- Moody's Investors Service has assigned a Ba2 (LGD3-40%) rating to the new $200 million Term Loan A due 2017 to be issued by SBA Senior Finance II LLC (SBAF), an indirect wholly owned subsidiary of SBA Communications Corporation ("SBAC" or "the company"). The term loan proceeds are expected to be utilized to repay existing outstanding revolving credit loans and for general corporate purposes. The company is also increasing its revolver capacity to $700 million from $500 million and is extending its maturity to 2017 as part of the financing. As part of the rating action, Moody's changed the ratings on the senior unsecured notes at SBA Telecommunications, Inc. (SBAT), an indirect wholly-owned subsidiary of SBAC to B1 (LGD5-75%) from B1 (LGD4-69%). The change is based on worsening Loss Given Default ("LGD") expectations at the SBAT level given the new debt raised in SBAC's capital structure that ranks above the SBAT notes and a partial prepayment of SBAT notes from the recent equity offering. Moody's also changed the LGD point estimates on the company's existing senior secured facilities to Ba2(LGD3-40%) from Ba2(LGD3-37%) to reflect the additional debt load at SBAF. Issuer: SBA Senior Finance II, LLC US$200M Senior Secured Bank Credit Facility, Assigned Ba2 - LGD3, 40% Ratings Rationale SBAC's Ba3 CFR reflects the company's high adjusted Debt/EBITDA leverage relative to peers, which is due in large part to debt- financed acquisitions, capital expenditures and increasing stock buy-backs. The rating does consider the company's scale as well as the stability of much of its revenues and cash flow generation, which are predominantly derived from contractual relationships with the largest wireless operators in the U.S. Moody's believes that the fundamentals of the wireless tower sector are likely to remain favorable through the next several years. SBAC's demonstrated strong earnings and cash flow momentum enabled it to maintain a consistent leverage profile over the last two years even as the company continued to add new debt. Finally, the rating reflects Moody's view that SBAC will likely remain acquisitive over the rating horizon. Early April 2012, SBAC closed the acquisition of Mobilitie, LLC for $1.1 billion in cash and stock. Moody's estimates that SBA's Debt to EBITDA leverage (as per Moody's standard adjustments) will increase slightly following the acquisition. However, due to the equity financing component of the transaction, other credit metrics, such as interest coverage and cash flow to debt, remains neutral. Nevertheless, the instrument ratings of the senior secured debt could come under pressure to converge with the Ba3 CFR if the company issues additional senior secured debt. On the other hand, the future revenue losses from site decommissions by Sprint-Nextel are likely to be offset in the near term by the firm contracts that SBAC has with the carriers and by increasing revenue from carriers upgrading and augmenting their cell site equipment as they upgrade to fourth generation (4G) wireless networks. Moody's expects SBAC to have good liquidity characterized by approximately $75 million of cash balances at year end 2011, more than $400 million in undrawn revolver after the proposed upsized financing and strong operating cash flow that should be sufficient to fund the anticipated capital expenditures, acquisitions and ongoing stock buyback activity. Moody's also expects the company to have ample head room in its maintenance covenants. A significant portion of SBAC's debt resides in special purpose securitization vehicles ("SPV"). The significant cash flow that is generated by tower assets that are encumbered by the SPVs could affect the ultimate recoveries for the traditional corporate creditors. As a result, SBAC's Loss Given Default ("LGD") framework includes the effect of the SPVs in its capital structure, and these instruments are included in SBAC's consolidated waterfall of debts. The new term loan is rated Ba2 (LGD3-40%) in line with the existing credit facility and one notch higher than the CFR due to the collateral coverage of these debt obligations. The senior unsecured notes at SBA Telecommunications, Inc. are rated B1 (LGD5-75%). Moody's notes that while in 2011 SBAC moved about 1,200 towers out of the restricted group securing the credit facilities, it is adding more assets to the amended credit facility collateral pool. Moody's also note that as the company raises more senior secured debt at the SBAF level and repays junior debt at the parent level, it could put pressure on the ratings of the existing senior unsecured debt and also converge the ratings of the SBAF senior secured debt towards the Ba3 corporate family rating. Rating Outlook The outlook is stable as Moody's believes that the fundamentals of the wireless tower sector are likely to remain favorable through the next several years and SBAC's good market position will enable its strong earnings and cash flow momentum to enable it to be in a position to organically delever, as it benefits from a full year's contribution of the cash flows from the acquired towers. In addition, the outlook reflects Moody's view that SBAC will likely remain acquisitive over the ratings horizon, and will target adjusted Debt/EBITDA leverage of around 8x. What Could Change the Rating - Up The ratings may be considered for an upgrade if SBAC delivers the following adjusted key credit metrics on a sustained basis: Debt/EBITDA of 7x, (EBITDA-Capex)/Interest approaching 2x, Free Cash Flow/Debt greater than 5%. What Could Change the Rating - Down The ratings may face downward ratings pressure if weakening industry fundamentals or the Company's aggressive expansion plans result in the following adjusted key credit metrics on a sustained basis: Debt/ EBITDA over 8.5x, (EBITDA-Capex)/ Interest coverage remaining in the 1.0x range and Free Cash Flow/ Debt in the low single digits on a sustained basis. The principal methodology used in rating SBA Communications was the Global Communications Infrastructure Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. SEALY CORP: Reports $1.2 Million Net Income in Fiscal Q1 2012 ------------------------------------------------------------- Sealy Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $1.23 million on $312.29 million of net sales for the three months ended Feb. 26, 2012, compared with a net loss of $902,000 on $305.53 million of net sales for the three months ended Feb. 27, 2011. The Company reported a net loss of $9.88 million for the 12 months ended Nov. 27, 2011, and a net loss of $13.74 million during the prior year. The Company reported a net loss of $15.20 million for the three months ended Nov. 27, 2011. The Company's balance sheet at Feb. 26, 2012, showed $936.26 million in total assets, $999.50 million in total liabilities, and a $63.24 million total stockholders' deficit. "We delivered positive financial and operational performance in the first quarter of 2012," stated Larry Rogers, Sealy's President and Chief Executive Officer. "Our positive sales, gross margin and Adjusted EBITDA performance for the quarter were driven by the success of our Next Generation Stearns & Foster line, which began shipping in Q4, 2011." A copy of the Form 10-Q is available for free at: http://is.gd/hFgNDZ About Sealy Corp. Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) -- http://www.sealy.com/-- is the largest bedding manufacturer in the world with sales of $1.5 billion in fiscal 2008. The Company manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), including SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns & Foster(R), and Bassett(R) brands. Sealy operates 25 plants in North America, and has the largest market share and highest consumer awareness of any bedding brand on the continent. In the United States, Sealy sells its products to approximately 3,000 customers with more than 7,000 retail outlets. * * * Sealy carries 'B' local and issuer credit ratings from Standard & Poor's. SEJWAD HOTELS: Has OK to Hire Michael G. Spector as Bankr. Counsel ------------------------------------------------------------------ Sejwad Hotels & Development LLC sought and obtained permission from the U.S. Bankruptcy Court for the Central District of California to employ The Law Offices of Michael G. Spector as bankruptcy counsel. The firm will, among other things, advise the Debtor with respect to their rights, powers, duties and obligations as debtor-in- possession in the administration of this case, the management of their financial affairs and the management of its income and property, for these hourly rates: Michael G. Spector, Attorney $410 Vicki L. Schennum, Attorney $380 Paralegal $100 Law Clerk $100 Headquartered in Artesia, California, Sejwad Hotels & Development, LLC, owns a retail center in Artesia Boulevard. Its prior tenants included Hollywood Video and Borders book store, both of which have filed bankruptcy. The property is vacant. The Debtor was in the process of redeveloping the property into a hotel/retail property, but the redevelopment has been delayed. In the meantime, the Debtor defaulted on its loan to Evertrust Bank, who had scheduled a foreclosure sale for Feb. 9, 2012. On Feb. 8, 2012, the Debtor filed for Chapter 11 protection (Bankr. C. Calif. Case No. 12-14521). The petition was signed by Ashvin Patel, managing member. Judge Julia W. Brand presides over the case. In its schedules, the Debtor disclosed $13,001,015 in total assets and $8,728,483 in total liabilities. No Creditor's Committee has been appointed. SIMMONS FOODS: S&P Raises Corporate Credit Rating to 'CCC+' ----------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Siloam, Ark.-based Simmons Foods Inc., including its corporate credit rating to 'CCC+' from 'CCC'. The outlook is positive. "At the same time, we raised the issue-level rating on the company's $265 million second-lien notes due 2017 to 'CCC-' (two notches below the corporate credit rating) from 'CC', with an unchanged recovery rating of '6', indicating our expectations for negligible (0%-10%) recovery in the event of a payment default. Simmons foods had about $466 million in reported debt outstanding as of Dec. 31, 2011," S&P said. "The upgrade reflects our belief that the company's liquidity improved following its obtainment of an amendment that waived the company's financial covenant defaults incurred to date, and relaxed financial covenant schedules sufficiently to allow the company to restore adequate covenant cushion as it steadily improves fiscal 2012 earnings," said Standard & Poor's credit analyst Chris Johnson. "The positive outlook reflects our belief that EBITDA will improve in fiscal 2012, resulting in positive cash flow generation, further debt repayment, and improved financial covenant cushion. We could raise the ratings if the company can sustain meaningful EBITDA growth in its key poultry and pet food segments in the coming quarters, and maintain adequate financial covenant cushion. We believe this could occur if feed inflation stays at low-single- digit rates in 2012 and poultry prices remain at current levels (if not improve), while pet food margins return to more normalized levels following the company's price increases. Alternatively, we could revise the outlook to negative if EBITDA does not substantially improve as expected in fiscal 2012 and financial covenant cushion falls below 10% in the coming quarters. We believe this could occur if feed cost inflation returns to 2011 levels, including corn prices approaching $7 per bushel, while commodity poultry prices do not increase sufficiently to offset the higher feed costs," S&P said. SINO-FOREST CORP: Shares Delisted from Toronto Stock Exchange ------------------------------------------------------------- Sino-Forest Corporation disclosed that the Continued Listings Committee of the Toronto Stock Exchange has determined to delist the Company's common shares effective at the close of market on May 9, 2012. The delisting was imposed due to Sino-Forest's failure to meet the continued listing requirements of the TSX as a result of the commencement of proceedings under the Companies' Creditors Arrangement Act on March 30, 2012 and for failure to file on a timely basis its interim financial statements for the three and nine months ended Sept. 30, 2011 and its audited annual financial statements for the year ended Dec. 31, 2011. Sino-Forest continues to be subject to a cease trade order of the Ontario Securities Commission which prohibits trading in the Company's securities. About Sino-Forest Sino-Forest Corporation -- http://www.sinoforest.com/-- is a commercial forest plantation operator in China. Its principal businesses include the ownership and management of tree plantations, the sale of standing timber and wood logs, and the complementary manufacturing of downstream engineered-wood products. Sino-Forest also holds a majority interest in Greenheart Group Limited, a Hong-Kong listed investment holding company with assets in Suriname (South America) and New Zealand and involved in sustainable harvesting, processing and sales of its logs and lumber to China and other markets around the world. Sino-Forest's common shares have been listed on the Toronto Stock Exchange under the symbol TRE since 1995. Sino-Forest Corporation on March 30, 2012, obtained an initial order from the Ontario Superior Court of Justice for creditor protection pursuant to the provisions of the Companies' Creditors Arrangement Act. Under the terms of the Order, FTI Consulting Canada Inc. will serve as the Court-appointed Monitor under the CCAA process and will assist the Company in implementing its restructuring plan. Gowling Lafleur Henderson LLP is acting as legal counsel to the Monitor. During the CCAA process, Sino-Forest expects its normal day-to- day operations to continue without interruption. The Company has not planned any layoffs and all trade payables are expected to remain unaffected by the CCAA proceedings. SINO-FOREST: Ernst & Young Resigns as Auditor --------------------------------------------- Sino-Forest Corporation disclosed that Ernst & Young LLP has notified the Company that it has resigned as the Company's auditor effective April 4, 2012. In its resignation letter to the Company, E&Y noted that the Company had not prepared December 31, 2011 consolidated financial statements for audit and that, in the Company's March 30, 2012 filing under the Companies' Creditors Arrangement Act, Sino-Forest said that it remained unable to satisfactorily address outstanding issues in relation to its 2011 annual financial statements. About Sino-Forest Sino-Forest Corporation -- http://www.sinoforest.com/-- is a commercial forest plantation operator in China. Its principal businesses include the ownership and management of tree plantations, the sale of standing timber and wood logs, and the complementary manufacturing of downstream engineered-wood products. Sino-Forest also holds a majority interest in Greenheart Group Limited, a Hong-Kong listed investment holding company with assets in Suriname (South America) and New Zealand and involved in sustainable harvesting, processing and sales of its logs and lumber to China and other markets around the world. Sino-Forest's common shares have been listed on the Toronto Stock Exchange under the symbol TRE since 1995. Sino-Forest Corporation on March 30, 2012, obtained an initial order from the Ontario Superior Court of Justice for creditor protection pursuant to the provisions of the Companies' Creditors Arrangement Act. Under the terms of the Order, FTI Consulting Canada Inc. will serve as the Court-appointed Monitor under the CCAA process and will assist the Company in implementing its restructuring plan. Gowling Lafleur Henderson LLP is acting as legal counsel to the Monitor. During the CCAA process, Sino-Forest expects its normal day-to- day operations to continue without interruption. The Company has not planned any layoffs and all trade payables are expected to remain unaffected by the CCAA proceedings. SINO-FOREST: Receives Enforcement Notice From OSC ------------------------------------------------- Sino-Forest Corporation disclosed the Ontario Securities Commission publicly stated that it had commenced an investigation in relation to the Company. The investigation arose out of a "report" prepared by Muddy Waters LLC that was publicly disclosed on June 2, 2011. On Aug. 26, 2011, the Commission issued a temporary cease trade order in respect of the Company's securities and in respect of Allen Chan ("Chan"), Albert Ip ("Ip"), Alfred Hung ("Hung"), George Ho ("Ho") and Simon Yeung ("Yeung"). The temporary cease trade order was made after the Independent Committee of the Board of Directors of the Company, established in response to the allegations made by Muddy Waters, provided staff of the OSC with documents and briefings arising from the work of the Independent Committee and its advisors. In recitals to the temporary cease trade order, the OSC said that "Sino-Forest, through its subsidiaries, appears to have engaged in significant non-arm's length transactions which may have been contrary to Ontario securities laws and the public interest", that "Sino-Forest and certain of its officers and directors appear to have misrepresented some of its revenue and/or exaggerated some of its timber holdings by providing information to the public in documents required to be filed or furnished under Ontario securities laws which may have been false or misleading in a material respect contrary to section 122 or 126.2 of the [Ontario Securities] Act and contrary to the public interest" and that "Sino-Forest and certain of its officers and directors including Chan appear to be engaging or participating in acts, practices or a course of conduct related to its securities which it and/or they know or reasonably ought to know perpetuate a fraud on any person or company contrary to section 126.1 of the Act and contrary to the public interest". On Aug. 28, 2011, the Company announced that Mr. Chan had voluntarily resigned as Chairman, Chief Executive Officer and Director but would continue with the Company as Founding Chairman Emeritus, a non-executive position. The Company announced that Judson Martin had, at the request of the Board, accepted an appointment as Chief Executive Officer, and that he would continue to serve as Executive Director and Vice-Chairman of the Company and as Chief Executive Officer of Greenheart Group Limited, the Company's controlled subsidiary listed on the Hong Kong Stock Exchange. The Company also announced that it had placed three employees on administrative leave, and that a fourth senior employee had been requested to act solely on the instructions of Mr. Martin. The three employees placed on administrative leave were Messrs. Hung, Ho and Yeung. Mr. Ip was the employee requested to act solely on the instructions of Mr. Martin. In making this announcement, the Company said that these actions were undertaken after certain information was uncovered during the course of the review being undertaken by the Independent Committee The temporary cease trade order made on Aug. 26, 2011 was later extended and continues in force. The OSC's investigation in relation to the Company continued into 2012. The Company believes that it has cooperated with staff of the Commission in connection with the investigation. On March 30, 2012, the Company announced that Mr. Ip had resigned from the Company for health reasons but had agreed to serve as a consultant to Sino-Forest on a part-time basis. On April 5, 2012 the Company received an "Enforcement Notice" from staff of the Commission. The Company has learned that Enforcement Notices also were received that day by Messrs. Chan, Ip, Hung, Ho and Yeung, and by David Horsley, the Company's Chief Financial Officer. Enforcement Notices typically are issued by staff of the Commission at or near the end of an investigation, identify issues that have been the subject of investigation, and advise that staff contemplate commencing formal proceedings in relation to those issues. Enforcement Notices afford recipients an opportunity to make representations before a decision is taken by staff of the Commission to commence formal proceedings. The Enforcement Notice received by Sino-Forest alleges conduct contrary to ss. 122 and 126.1 of the Ontario Securities Act and contains allegations of a serious nature consistent with the recitals to the temporary cease trade order quoted above. The Enforcement Notice raises conduct issues in relation to the Company and in relation to the individuals who also received Enforcement Notices. The Company is considering what steps it will take, including in relation to Company personnel, as a result of the Enforcement Notice. About Sino-Forest Sino-Forest Corporation -- http://www.sinoforest.com/-- is a commercial forest plantation operator in China. Its principal businesses include the ownership and management of tree plantations, the sale of standing timber and wood logs, and the complementary manufacturing of downstream engineered-wood products. Sino-Forest also holds a majority interest in Greenheart Group Limited, a Hong-Kong listed investment holding company with assets in Suriname (South America) and New Zealand and involved in sustainable harvesting, processing and sales of its logs and lumber to China and other markets around the world. Sino-Forest's common shares have been listed on the Toronto Stock Exchange under the symbol TRE since 1995. Sino-Forest Corporation on March 30, 2012, obtained an initial order from the Ontario Superior Court of Justice for creditor protection pursuant to the provisions of the Companies' Creditors Arrangement Act. Under the terms of the Order, FTI Consulting Canada Inc. will serve as the Court-appointed Monitor under the CCAA process and will assist the Company in implementing its restructuring plan. Gowling Lafleur Henderson LLP is acting as legal counsel to the Monitor. During the CCAA process, Sino-Forest expects its normal day-to- day operations to continue without interruption. The Company has not planned any layoffs and all trade payables are expected to remain unaffected by the CCAA proceedings. SK FOODS: District Court Moves Hearing in Collins Case to April 18 ------------------------------------------------------------------ Senior District Judge Lawrence K. Karlton postponed a hearing in a lawsuit commenced involving the Chapter 11 trustee of SK Foods, L.P., and SSC Farms 1 LLC et al. The hearing on the matter is removed from the Court's regular law and motion calendar of April 9, 2012, and is now set for hearing on April 18, 2012 at 10:00 a.m. The case is, Bradley D. Sharp, Chapter 11 Trustee, v. SSC FARMS 1, LLC, et al., Civ. No. S-12-0775 LKK (E.D. Calif.). Judge Karlton held that the temporary stay previously entered in the case is continued until further Court order. The judge said continuance is necessitated by several factors. First, Cary Collins and Collins and Associates seek an "emergency" stay of a Bankruptcy Court reconsideration order that does not compel them to do anything or to refrain from doing anything; it simply denies their motion for reconsideration. This has forced the District Court, and the Chapter 11 Trustee in his opposition, to guess about which order Cary Collins and Collins and Associates actually want stayed. Cary Collins and Collins and Associates have failed to submit to the District Court the bankruptcy court order denying their motion for a stay pending appeal (or even to make reference to it), the final reconsideration order itself (including instead a string of seven "Tentative Rulings" and continuation orders in its appeal papers), the order on which reconsideration was denied, the order of contempt (which is the predicate for the "emergency"), or any other relevant orders or documents, thus forcing the District Court to pore over 679 docket entries from the Bankruptcy Court in search of the relevant orders and documents. The failure of the asserted holder of the privilege at stake in the case -- that is, the defendants -- to participate in the motion that purports to seek "emergency" protection for its own attorney-client privilege, adds an additional level of uncertainty to the determination of this matter. In addition, this absence leads the District Court to wonder if Cary Collins and Collins and Associates and the defendants plan a continuation of the "tag team" delay tactics the Bankruptcy Court found they had engaged in prior to this appeal, and which so exasperated the Bankruptcy Court. A copy of Judge Karlton's April 4, 2012 Order is available at http://is.gd/NFqhPafrom 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. SOLAR TRUST: Plans to Hold Auction on April 30 ---------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Solar Millennium Inc. has filed proposed auction procedures to sell the assets. Although no buyer is under contract, the company has said that an affiliate of NextEra Energy Inc. is a prospective buyer. Proposed sale procedures would permit NextEra to pay for the assets in exchange for debt financing the bankruptcy. If the bankruptcy court agrees with the timetable at an April 20 hearing, bids would be due on April 27, followed by an auction on April 30 and a May 2 hearing for approval of the sale. NextEra agreed to finance the bankruptcy reorganization with a $3.9 million term loan and an $18.4 million letter of credit facility. The NextEra financing requires approval of the sale by May 4. NextEra is parent of Florida Power & Light Co. According to the report, Solar also filed papers last week for approval of a $1.5 million bonus program for nine company executives. The bonuses would be earned if the assets are sold for enough to pay off the Chapter 11 financing and other expenses of the bankruptcy. The request for approval of the bonus program is also on the court's calendar for April 20. About Solar Trust Solar Trust of America LLC, Solar Millennium Inc., and nine affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11136) on April 2, 2012. Solar Trust is a joint venture created by Solar Millennium AG and Ferrostaal AG to develop solar projects at locations in California and Nevada. Located in the "Solar Sun Belt" of the American Southwest, the project sites have extremely high solar radiation levels, and allow the Debtors' projects to harness high levels of solar power generation. Projects include the rights to develop one of the world's largest permitted solar plant facilities with capacity of 1,000 MW in Blythe, California. Two other projects contemplated 500 MW solar power facilities in Desert Center, California and Amargosa Valley, Nevada. Although the Debtors have obtained highly valuable transmission right and permits, each project is only in the developmental phase and does not generate revenue for the Debtors. Ferrostaal ceased providing funding two years ago and SMAG, due to its own deteriorating financial condition, stopped providing funding after December 2011. NextEra Energy Resources LLC has committed to provide a postpetition secured credit facility and has expressed an interest in serving as stalking horse purchaser for certain of the Debtors' assets. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. SOLAR TRUST: No Taxpayer Funds Loaned ------------------------------------- Solar Trust of America, in a press release announcing its bankruptcy filing, clarified that contrary to inaccurate media reports, no taxpayer funds were loaned to Solar Trust. The company withdrew from the Department of Energy's Loan Guarantee Program in August 2011 foregoing any government funding for the Blythe Solar Power Project. Solar Trust said the Bankruptcy Court has approved an interim funding facility to ensure an orderly and comprehensive sale of the Debtors' assets. About Solar Trust Solar Trust of America LLC, Solar Millennium Inc., and nine affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11136) on April 2, 2012. Solar Trust is a joint venture created by Solar Millennium AG and Ferrostaal AG to develop solar projects at locations in California and Nevada. Located in the "Solar Sun Belt" of the American Southwest, the project sites have extremely high solar radiation levels, and allow the Debtors' projects to harness high levels of solar power generation. Projects include the rights to develop one of the world's largest permitted solar plant facilities with capacity of 1,000 MW in Blythe, California. Two other projects contemplated 500 MW solar power facilities in Desert Center, California and Amargosa Valley, Nevada. Although the Debtors have obtained highly valuable transmission right and permits, each project is only in the developmental phase and does not generate revenue for the Debtors. Ferrostaal ceased providing funding two years ago and SMAG, due to its own deteriorating financial condition, stopped providing funding after December 2011. NextEra Energy Resources LLC has committed to provide a postpetition secured credit facility and has expressed an interest in serving as stalking horse purchaser for certain of the Debtors' assets. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. ST CATHERINE'S HOSPITAL: Files for Chapter 11 Bankruptcy -------------------------------------------------------- John E. Usalis at republicanherald.com reports that Saint Catherine's Hospital of Pennsylvania LCC, which owns Saint Catherine Medical Center Fountain Springs, filed for relief under Chapter 11 of the U.S. Bankruptcy Code on April 9, 2012. According to the report, attorney William G. Schwab has been appointed by the U.S. Trustee to be the Chapter 11 trustee of the medical center and will be actively taking charge of the hospital facilities as soon as possible. A Chapter 11 trustee is an independent person appointed by the government to run and reorganize failing businesses in an effort to rehabilitate them for the benefit of their creditors. The report relates Mr. Schwab said the federal court was expected to appoint a health care ombudsman on April 9. He explained the ombudsman is appointed to protect patient rights and records. Mr. Schwab said future steps will be determined after what is found in his investigation what can be done to turn the situation around if it can be done. According to the report, Mr. Schwab said that as part of his appointment, he would also handle inquiries if an outside party would show interest in purchasing the facility. According to the report, Jennifer M. Pisarchick, administrative director, Strategic Planning and Marketing at Saint Catherine's, said all inquiries into the bankruptcy filing should be directed to Mr. Schwab in the future. STAR BUFFET: Files Full-Payment Reorganization Plan --------------------------------------------------- Star Buffet, Inc. disclosed that on March 26, 2012, the Company and its wholly-owned Summit Family Restaurants Inc. subsidiary filed a with the Bankruptcy Court a proposed Joint Plan of Reorganization and related Disclosure Statement in accordance with the Bankruptcy Code. The Plan represents a important step in the Company's efforts to emerge from Chapter 11. According to Bloomberg News, Star Buffet scheduled a May 10 hearing for approval of a disclosure statement explaining the Plan. The Plan, the report relates, is designed to pay all creditors in full with interest over periods ranging from four to seven years. Payments required when the plan is approved will be made with a $300,000 secured loan from the company's chief executive who has about 45 percent of the stock. Bloomberg relates that projections attached to the disclosure statement show revenue of $39 million and a $1.5 million net profit in fiscal 2013, growing to a $2.2 million net profit on $40 million revenue in fiscal 2016. The latest financial statements for 28 weeks ended in August 2010 show a net loss of $1.3 million on revenue of $33.4 million. The operating loss for the period was $1.6 million. For the fiscal year ended in January 2010, the net loss was $2 million on revenue of $78 million. Bankruptcy law does not permit solicitation of acceptances of a plan of reorganization until the Bankruptcy Court approves the related Disclosure Statement. The Plan will become effective only if, among other requirements, it receives the requisite votes in favor of acceptance and is confirmed by the Bankruptcy Court. There can be no assurance that: (a) the Court will approve the Disclosure Statement, (b) those entitled to vote on the Plan will accept it, or (c) that the Court will confirm it. About Star Buffet Based in Arizona, Star Buffet, Inc. filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 11-27518) on Sept. 28, 2011. Judge George B. Nielsen Jr. presides over the case. S. Cary Forrester, Esq., at Forrester & Worth, PLLC, represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. None of the Company's subsidiaries were included in the bankruptcy filing except for Summit Family Restaurants, Inc. STATE FAIR OF VIRGINIA: Case Converted to Chapter 7 --------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Virginia converted the Chapter 11 case of The State Fair of Virginia, Inc., to a case under Chapter 7 of the Bankruptcy Code. The Debtor's authorization to use cash collateral terminated on March 7, 2012, and was not permitted to make further use or consumption of cash collateral. As a result, the Debtor's operation has ceased. As reported by the TCR on March 23, 2012, Lynn Tavenner, Esq., at Tavenner & Beran PLC, has been named interim trustee for the SFVA Inc. bankruptcy case. Ms. Tavenner is charged with overseeing the liquidation of assets and working out how much various creditors will be paid. About State Fair of Virginia State Fair of Virginia Inc. -- http://www.statefair.com/-- owns and operates a state fairgrounds facility known as the "The Meadow Event Park" located in Doswell, Caroline County, Virginia. SFVA filed for Chapter 11 bankruptcy (Bank. E.D. Va. Case No. 11-37588) on Dec. 1, 2011. Jonathan L. Hauser, Esq., at Troutman Sanders LLP, served as the Debtor's counsel. The Debtor estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. Curry A. Roberts signed the Petition as president. The U.S. Trustee for Region 4 appointed five unsecured creditors to serve on the Official Committee of Unsecured Creditors of State Fair of Virginia Inc. At the onset of the case, SFVA officials said they hope to emerge on a better financial footing and to do so within 60 days to 90 days. STRATEGIC AMERICAN: Now Known as "Duma Energy Corp." ---------------------------------------------------- Strategic American Oil Corporation effected a name change on the OTC Bulletin Board to Duma Energy Corp. effective April 4, 2012, This name change was effective under Nevada corporate law as of April 4, 2012, pursuant to Articles of Merger that were previously filed with the Nevada Secretary of State on March 23, 2012. Pursuant to such Articles of Merger, the Company merged with its wholly-owned subsidiary, Duma Energy Corp. The merger is in the form of a parent/subsidiary merger, with the Company as the surviving corporation. In accordance with Section 92A.180 of the Nevada Revised Statutes, shareholder approval of the merger/name change was not required. The Articles of Merger provided that, upon completion of the merger effective on April 4, 2012, the Company's Articles of Incorporation would be amended as of that date to change the Company's name to "Duma Energy Corp." Also effective April 4, 2012, the Company effected a reverse stock split of its authorized and issued and outstanding shares of common stock on a one new share for twenty-five old share basis (1:25). As a result of the Reverse Split, the Company's authorized share capital decreased from 500,000,000 shares of common stock to 20,000,000 shares of common stock and correspondingly, the Company's issued and outstanding share capital decreased from 269,742,986 shares of common stock to 10,789,712 shares of common stock. The Reverse Split became effective with the OTC Bulletin Board at the opening for trading on April 4, 2012, under the stock symbol "SCGAD", and the "D" in the Company's symbol (which signifies a stock split) will be removed 20 business days from April 4, 2012. The Company's new CUSIP number is 264567108. About Strategic American Corpus Christi, Tex.-based Strategic American Oil Corporation (OTC BB: SGCA) -- http://www.strategicamericanoil.com/-- is a growth stage oil and natural gas exploration and production company with operations in Texas, Louisiana, and Illinois. The Company's team of geologists, engineers, and executives leverage 3D seismic data and other proven exploration and production technologies to locate and produce oil and natural gas in new and underexplored areas. Strategic American a net loss of $10.28 million on $3.41 million of revenue for the year ended July 31, 2011, compared with a net loss of $3.49 million on $531,736 of revenue for the same period during the prior year. The Company's balance sheet at Jan. 31, 2012, showed $24.35 million in total assets, $11.59 million in total liabilities and $12.75 million in total stockholders' equity. The Company reported a net loss of $4.49 million on $3.40 million of revenue for the six months ended Jan. 31, 2012, compared with a net loss of $1.62 million on $229,100 of revenue for the same period a year ago. T-L BRYWOOD: Gets Interim Okay to Use Private Bank Cash ------------------------------------------------------- T-L Brywood LLC obtained interim authorization from the Hon. Donald R. Cassling of the U.S. Bankruptcy Court for the Northern District of Illinois to use cash collateral during the period March 20, 2012, through April 30, 2012. As reported by the Troubled Company Reporter on March 20, 2012, the Debtor sought authorization to use certain cash and cash equivalents that allegedly serve as collateral for mortgage claims asserted against the Debtor and its property by The PrivateBank and Trust Company. The cash collateral relate to rents generated at the Debtor's commercial shopping center and the funds on deposit in accounts maintained by the Debtor. The Lender asserts a senior position mortgage lien and claim against the property which purportedly secures a senior mortgage debt of $11,800,000. In addition to its mortgage liens on the property, the Lender asserts a security interest in and lien upon the rents being generated at the property. In return for the Debtor's continued interim cash collateral use, The Lender is granted adequate protection for its purported secured interests. The Lender can inspect, upon reasonable notice, the Debtor's books and records. The Debtor will maintain and pay premiums for insurance to cover all of its assets from fire, theft and water damage. The Debtor will, upon reasonable request, make available to the Lender evidence of that which constitutes its collateral or proceeds. The Debtor will reserve sufficient funds for the payment of current real estate taxes relating to the property. The Debtor will properly maintain the properties in good repair and properly manage the property. The Lender will be granted valid, perfected, enforceable security interests in and to the Debtor's post-petition assets, including all proceeds and products which are now or hereafter become property of the estate to the extent and priority of its alleged pre-petition liens, if valid, but only to the extent of any diminution in the value of the assets during the period from the commencement of the Debtor's Chapter 11 case through April 30. A final hearing on the Debtor's request for cash collateral use will be held on April 24, 2012, at 10:00 a.m. About T-L Brywood T-L Brywood LLC filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No.12-09582) on March 12 , 2012. T-L Brywood owns and operates a commercial shopping center known as the "Brywood Centre" -- http://www.brywoodcentre.com/-- in Kansas City, Missouri. The Property encompasses roughly 25.6 acres and comprises 183,159 square feet of retail space that is occupied by 12 operating tenants. The occupancy rate for the Property is approximately 80%. The Debtor and lender The PrivateBank and Trust Company reached an impasse over the terms and conditions of another extension of a mortgage loan on the Property. As a result, the Debtor filed the Chapter 11 case to protect the Property from foreclosure while the Debtor formulates an exit strategy from the reorganization case. As of the Petition Date, no foreclosure relating to the Property had been filed by the Lender. Judge Donald R. Cassling oversees the case. The Debtor is represented by David K. Welch, Esq., Arthur G. Simon, Esq., and Jeffrey C. Dan. Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago. The Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Richard Dube, president of Tri-Land Properties, Inc., manager. PrivateBank is represented by William J. Connelly, Esq., at Hinshaw & Culbertson LLP. TAXMASTERS INC: Moving to Trustee or Chapter 7 Liquidation ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that TaxMasters Inc. may have its Chapter 11 reorganization taken over by a trustee, or the case may be converted to liquidation in Chapter 7 where a trustee is also appointed. The U.S. Trustee in Houston, where the case is pending, filed papers last week for appointment of a trustee. The U.S. Trustee said a bankruptcy trustee is proper because the company has been shown by a jury to have committed "actual fraud and dishonesty." In papers filed in state court, TaxMasters said it expects the Chapter 11 case to be converted to Chapter 7. The hearing in bankruptcy court for appointment of a Chapter 11 trustee or conversion to Chapter 7 will take place April 20. About TaxMasters Inc. TaxMasters filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-32064) in Houston. Johnie J. Patterson, Esq., at Walker & Patterson, P.C., in Houston, serves as counsel. The Debtor estimated up to $50,000 in assets and up to $10 million in liabilities. On March 30, 2012, a state-court jury assessed a $195 million judgment against the Debtor and Patrick Cox at the behest of the state attorney general. The jury found 110,000 violations, calling for $113 million in restitution, $81 million in civil penalties, and $1 million for attorneys' fees. The attorney general said TaxMasters "misled and defrauded their customers." TAYLOR BEAN: Creditors' Objections Missed Deadline, Judge Says -------------------------------------------------------------- Amanda Bransford at Bankruptcy Law360 reports that the Florida judge overseeing Taylor, Bean & Whitaker Mortgage Corp.'s bankruptcy said Friday that the almost $16 million settlement between Taylor Bean's plan trust and Sovereign Bank could go forward over the objection of creditors because they had missed the deadline to file objections. Law360 relates that ten individual creditors, representing themselves pro se, had filed objections March 22, following a March 9 settlement hearing and approval of the settlement on March 12, when U.S. Bankruptcy Judge Jerry A. Funk said it was too late for their objections. About Taylor Bean Taylor, Bean & Whitaker Mortgage Corp. grew from a small Ocala- based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009. Taylor Bean filed the Chapter 11 petition three weeks after federal investigators searched its offices. The day following the search, the Federal Housing Administration, Ginnie Mae and Freddie Mac prohibited the company from issuing new mortgages and terminated servicing rights. Taylor Bean estimated more than $1 billion in both assets and liabilities in its bankruptcy petition Lee Farkas, the former chairman, was sentenced in June to 30 years in federal prison after being convicted on 14 counts of conspiracy and bank, wire and securities fraud in what prosecutors said was a $3 billion scheme involving fake mortgage assets. Jeffrey W. Kelly, Esq., and J. David Dantzler, Jr., Esq., at Troutman Sanders LLP, in Atlanta, Ga., and Russel M. Blain, Esq., and Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Fla., represent the Debtors. Paul Steven Singerman, Esq., and Arthur J. Spector, Esq., at Berger Singerman PA, in Miami, Fla., represent the Committee. BMC Group, Inc., serves as the claims and noticing agent. TRENDMARK HOMES: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Trendmark Homes, Inc. 1544 Bluebird Way Cumming, GA 30041 Bankruptcy Case No.: 12-21256 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Gainesville) Judge: Robert Brizendine Debtor's Counsel: George M. Geeslin, Esq. Eight Piedmont Center, Suite 550 3525 Piedmont Road, N.E. Atlanta, GA 30305-1565 Tel: (404) 841-3464 Fax: (404) 816-1108 E-mail: geeslingm@aol.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 17 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb12-21256.pdf The petition was signed by Gerald Rose, president. TRIBUNE CO: Plan Confirmation Hearing Delayed to June 7 ------------------------------------------------------- Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware entered on April 5, 2012, a supplemental scheduling order relating to the resolution of the allocation disputes and the confirmation of the Third Amended Joint Plan of Reorganization of Tribune Company and its debtor affiliates. On March 30, 2012, the Court convened a status conference to address resolution of the Allocation Disputes and scheduling with respect to the Third Amended DCL Plan. At the conclusion of the status conference, the Court asked the parties to confer and revise the pending scheduling orders relating to plan confirmation. The parties then submitted to the Court a stipulated proposed supplemental scheduling order. The Court signed the proposed order on April 5, 2012. The Court-approved revised deadlines are: * April 16, 2012 -- Hearing on the Solicitation Procedures Motion and Supplemental Disclosure Document. * May 21, 2012 -- Voting Deadline. * May 21, 2012 -- Deadline to object to confirmation of the DCL Plan. * June 1, 2012 -- Deadline to file briefs in support of confirmation of the DCL Plan and to file replies to confirmation objections. Any affidavit or declaration in support of the DCL Plan will also be submitted on or before June 1. It also the deadline to file a joint pre-trial memorandum. * June 7, 2012 -- Hearing on confirmation of the Third Amended DCL Plan. If necessary, the Confirmation Hearing will continue on June 8, 2012 and June 11, 2012. The supplemental order also governs the conduct and scheduling of fact discovery, expert discovery and submission of trial exhibits the parties are offering at the Confirmation Hearing. All other provisions of the Scheduling Order and Supplemental Scheduling Order pertaining to prior events remain in full force and effect. A full-text copy of the supplemental order is available for free at http://bankrupt.com/misc/Tribune_Apr5SchedulingOrder.pdf About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Tribune CRO Don Liebentritt said it is possible the media company could emerge late in the third quarter of 2012. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Court Enters Ruling on Allocation Disputes Under Plan ----------------------------------------------------------------- Bankruptcy Judge Kevin Carey entered on April 9, 2012, a decision regarding allocation disputes under Tribune Co.'s Third Amended DCL Plan. The Third Amended Plan includes an Allocation Dispute Protocol, which proposes to establish reserves for distributions to holders of allowed claims in certain classes that would be impacted by unresolved disputes regarding inter-creditor priorities, particularly with respect to the PHONES Notes and the EGI-TRB LLC Notes. With respect to PHONES Notes issues (subject to, conditioned upon, and for the purpose of obtaining confirmation of a Chapter 11 Plan substantially in the form of the Third Amended Plan), Judge Carey concluded: (1) The subordination provisions in the PHONES Indenture are applicable to distributions of the Settlement Proceeds and the Creditors' Trust proceeds; (2) The claim amount for the PHONES Noteholders should be $759,252,932, known as the low PHONES Amount; (3) The Third Amended Plan's equal treatment of the Senior Noteholders and the Other Parent Claims does not amount to unfair discrimination under Section 11129(b) of the Bankruptcy Code; (4) The EGI-TRB Notes are junior in priority to the PHONES Notes; and (5) The beneficiaries of the PHONES Indenture subordination provisions are not entitled to receive postpetition interest prior to the PHONES Noteholders receiving payment of their claims. As to the EGI Notes issues, Judge Carey concluded: (1) The subordination provisions in the EGI Subordination Agreement are applicable to (i) a distribution of Creditors' Trust proceeds; and (2) The issue of whether beneficiaries of the subordination provisions in the EGI Subordination Agreement are entitled to postpetition prior to payment of the EGI Notes is not ripe for determination. Judge Carey maintained that the Court has jurisdiction to consider the Allocation Disputes. "The matters before me do not implicate application of the PHONES Notes' subordination provisions as to the Litigation Trust proceeds; instead the issues before me require consideration of the applicability of the PHONES subordination provisions to other distributions. The Allocation Disputes do not seek to modify the Reconsideration Decision and my decision on these disputes will not change the Reconsideration Decision," Judge Carey elaborated. Judge Carey determined that the subordination provisions applied to a distribution of the Litigation Proceeds based upon, among other things, the unqualified subordination language of Section 14.02(A) of the PHONES Indenture, the application of subordination provisions to all sources of "payment" in Section 14.02(B), and the catch-all language of the pay-over obligation in the paragraph following Section 14.02(B). A review of the Revised Exchange Procedures also provides that there is only one delivery of the PHONES Notes -- at the beginning of the process when the Exchange Notice is given, Judge Carey found. Rescission is not appropriate when the Tendering Noteholders have an adequate remedy in law for Tribune's breach of contract: a claim for the amount the Tendering Noteholders were entitled to receive if Tribune had complied with the Exchange Notices, Judge Carey determined. The presumption of unfair discrimination does not arise unless the plan's treatment of two classes results in "a materially lower percentage recovery for the dissenting class" or an allocation of "materially greater risk to the dissenting class," Judge Carey explained. The proposed distributions in the Third Amended Plan will result in a decrease to the Senior Noteholders' percentage of recovery of less than 4%, Judge Carey noted. When viewed in terms of a decrease in amount, the decrease in amount of the Senior Noteholders' initial distribution recovery, caused by the forced sharing of the Disputed Allocation, is 6.5%. "The discriminatory effect on the dissenting class is immaterial and, therefore, no rebuttable presumption of unfair discrimination arises here," Judge Carey opined. "The overall purpose of the Subordination Agreement is to ensure that the EGI Notes are at the bottom of Tribune's capital structure," Judge Carey held. EGI's argument that the phrases "of the Company" or "by the Company" should be read as limiting the scope of the Subordination Agreement to reach the Avoidance Proceeds is inconsistent with those provisions and the agreement as a whole and must be rejected, according to the bankruptcy judge. "At this point in Tribune's case, it is far from certain whether senior noteholders, including the PHONES Noteholders will be paid in full," Judge Carey said. In conjunction, Judge Carey determined that, at this time, the senior noteholders have not demonstrated any entitlement to recover postpetition interest before the PHONES Noteholders can receive payment. Indeed, the issue of postpetition interest is an intercreditor issue, rather than a bankruptcy issue, Judge Carey acknowledged. However, this determination is without prejudice to allow the parties to revisit the issue in a court of competent jurisdiction if the Trusts' recoveries reach a level that would cause the solvency exception to become applicable, the bankruptcy judge said. A full-text copy of 50-page opinion dated April 9, 2012 is available for free at http://is.gd/ufi3Kh About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Tribune CRO Don Liebentritt said it is possible the media company could emerge late in the third quarter of 2012. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Panel's Claims vs. Citi, Merrill Severed From JPM Suit ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware issued an order dated March 22, 2012, severing certain claims against Citigroup Global Markets, Inc., and Merrill Lynch, Pierce, Fenner & Smith Incorporated from the case captioned Official Committee of Unsecured Creditors v. JPMorgan Chase Bank, N.A., et al., Adv. Proc. No. 10-53963. Pursuant to the Advisor Claims Order, the Creditors' Committee filed a complaint in a separately created adversary proceeding no. 12-50446. The complaint retains the Advisor Claims in the form in which they were pleaded in the JPMorgan Chase Action. The Creditors' Committee however deleted extraneous allegation and counts from the complaint in the JPMorgan Chase, and has adapted the text of the pleading only as necessary to reflect the fact that the Advisors are the only defendants in the Advisor Claims Action. By the Advisor Complaint, the Creditors' Committee seeks to avoid and recover fraudulent transfers, preferences, and to obtain additional relief against Citigroup and Merrill Lynch arising from their role as advisors to the Tribune Company when the Company participated in a failed leveraged buyout in 2007. "The defendants advised the Company as it obtained debilitating loans made and arranged by non-party banks to fund the LBO," the Creditors' Committee alleged. A blacklined version of the Advisor Complaint is available for free at: http://bankrupt.com/misc/Tribune_AdvisorComplaint_blacklined.pdf The Creditors' Committee intends to file a notice with the Judicial Panel on Multidistrict Litigation that the Advisor Claims Action is a potential tag-along action to MDL No. 2296, the MDL proceeding relating to Tribune pending in the U.S. District Court for the Southern District of New York. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Tribune CRO Don Liebentritt said it is possible the media company could emerge late in the third quarter of 2012. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIDENT MICROSYSTEMS: A&M OK'd as Equity Panel's Fin'l Advisors --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Statutory Committee of Equity Security Holders in the Chapter 11 case of Trident Microsystems, Inc., et al., to retain Alvarez & Marsal North America, LLC as financial advisors. As reported in the Troubled Company Reporter on March 15, 2012, the Equity Committee has decided to retain the services of A&M based upon, among other things, the Equity Committee's need to: (i) Assist in the evaluation and analysis and eventual sale of substantially all of the Debtors' business lines, (ii) monitor and evaluate the Debtors' operations, cash flows and business plans, and (iii) evaluate and monitor Debtors' efforts to reorganize and maximize the value of their estates for creditors and equity holders successfully. The Equity Committee has selected A&M because of its extensive experience and excellent reputation in providing financial advisory services in chapter 11 cases such as these. The Equity Committee is familiar with the professional standing and reputation of A&M and understands and recognizes that A&M has a wealth of experience in providing financial advisory services in restructurings and reorganizations and enjoys an excellent reputation for services it has rendered in large and complex chapter 11 cases on behalf of debtors and creditors throughout the United States. A&M will provide such consulting and advisory services to the Equity Committee and its legal advisors as A&M and the Equity Committee deem appropriate and feasible in order to advise the Equity Committee in the course of these chapter 11 cases, including: (a) Assisting in the review of financial information distributed by the Debtors to the Equity Committee, its advisors and/or creditors and others, including, but not limited to, short term cash flow projections and budgets, cash receipts and disbursement analysis and analysis of various asset and liability accounts, including their intercompany matrix; (b) Assisting counsel to the Equity Committee in support of the financial elements of various Court pleadings filed throughout these proceedings; (c) Assisting with a review of the business model, operations, properties, assets and liabilities, financial condition, tax considerations, feasibility and prospects of the Debtors; (d) Assisting with a review of the Debtors' cost/benefit evaluations with respect to the assumption or rejection of executory contracts and/or unexpired leases; (e) Assisting in the review and monitoring of international operating, intercompany and cash management characteristics, in consideration of their overall impact on the liquidity position and enterprise value of the Debtors; (f) Attending meetings with the Debtors, the Debtors' creditors, the Equity Committee and any other official committees organized in these chapter 11 cases, the U.S. Trustee, other parties in interest and professionals hired by the same, as requested; (g) Assisting with a review of the Debtors' proposed key employee retention and other critical employee/retiree benefit and pension programs; (h) Assisting with the assessment of any potential avoidance actions that could result in unencumbered sources of recovery to the Equity Committee; (i) Assisting in the review and/or preparation of information and analysis necessary for the confirmation of a plan in these chapter 11 cases, including an assessment of liquidation analyses included therein; and (j) Rendering other general business consulting or other assistance as the Equity Committee or its counsel may deem necessary, consistent with the role of a financial advisor and not duplicative of services provided by other professionals in these chapter 11 cases. The terms on which the Equity Committee proposes, subject to Court approval, to retain A&M are as follows: (a) A&M will apply to the Court for allowances of compensation and reimbursement of expenses for its financial advisory support services. (b) A&M will be paid by the Company for the services of the Professionals at their customary hourly billing rates which will be subject to the following ranges: i. Managing Directors $650-850 ii. Directors $450-650 iii. Analysts/Associates $225-450 The rates and ranges will be subject to adjustment annually. (c) In addition, A&M will be reimbursed for the reasonable out-of-pocket expenses of A&M and the A&M Professionals incurred in connection with this assignment, such as travel, lodging, third party duplications, messenger and telephone charges. Reasonable out-of-pocket expenses would include any reasonable legal fees incurred for A&M's defense of its retention application and fee applications submitted in this matter, subject to Court approval. (d) In order for A&M to perform the services, it will be necessary for A&M personnel to have access to certain books, records and reports of the Debtors and to have discussions with the Debtors' personnel. (e) Because of the limitations in this proposed retention, the depth of A&M's analysis and verification of the data are limited. It is understood by the Equity Committee that A&M is not being requested to perform an audit and that A&M is entitled to rely on the accuracy and validity of the data disclosed to A&M or supplied to A&M by, or on behalf of, employees and representatives of the Debtors or the Equity Committee. (f) The Equity Committee understands that the services to be rendered may include a review and assessment or preparation of projections and other forward-looking statements and that numerous factors can affect the actual results of the Debtors' operations, which may materially and adversely differ from those projections and other forward-looking statements. (g) All advice (written or oral) provided by A&M to the Equity Committee in connection with this engagement is intended solely for the benefit and use of the Equity Committee in considering the matters to which this engagement relates. (h) From time to time A&M may utilize the services of the employees of its affiliates in the performance of services. (i) As part of the overall compensation payable to A&M, the Equity Committee has agreed to request that the Debtors indemnify and hold harmless A&M for any claims arising from, related to, or in connection with A&M's engagement and to request that this Court enter an order approving the indemnification obligation. Both the Equity Committee and A&M believe that these provisions are customary and reasonable. (j) The Debtors will have no obligation to indemnify A&M or provide contribution or reimbursement to A&M for any claim or expense that is either (i) judicially determined to have arisen primarily from A&M's bad faith, self-dealing, breach of fiduciary duty, gross negligence or willful misconduct, or (ii) for a contractual dispute in which the Debtors allege the breach of A&M's contractual obligations if the Court determines that indemnification, contribution or reimbursement would not be permissible, or (iii) settled prior to a judicial determination as to A&M's bad faith, gross negligence or willful misconduct but determined by the Court to be a claim or expense for which A&M is not entitled to receive indemnity under the terms of this Application. (k) If, before the earlier of (i) the entry of an order confirming a chapter 11 plan in these cases, and (ii) the entry of an order closing these chapter 11 cases, A&M believes that it is entitled to the payment of any amounts by the Debtors on account of the Debtors' indemnification, contribution and/or reimbursement obligations, including the advancement of defense costs, A&M must file an application therefore in this Court, and the Debtors may not pay any amounts to A&M before the entry of an order by this Court approving the payment. About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $309,992,980 in assets and $39,607,591 in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. The Official Committee of Unsecured Creditors of Trident Microsystems, Inc., et al., tapped Pachulski Stang Ziehl & Jones LLP as its counsel, and Imperial Capital, LLC, as its investment banker and financial advisor. Roberta A. DeAngelis, the U.S. Trustee for Region 3 appointed three members to the Committee of Trident Microsystems, Inc. Equity Security Holders. TRIDENT MICROSYSTEMS: Bayard OK'd as Statutory Panel's Co-Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Statutory Committee of Equity Security Holders in the Chapter 11 case of Trident Microsystems, Inc., et al., to retain Bayard, P.A., as co-counsel. As reported in the Troubled Company Reporter on March 15, 2012, the services Bayard has rendered and may be required to render for the Equity Committee include, without limitation, the following: (a) providing legal advice with respect to its powers and duties as the Equity Committee; (b) assisting in the investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors, the operation of the Debtors' businesses, and any other matter relevant to these cases or to the formulation of a plan or plans of reorganization or liquidation or in connection with any potential sale of the Debtors' assets; (c) preparing on behalf of the Equity Committee necessary applications, motions, complaints, answers, orders, agreements and other legal papers; (d) reviewing, analyzing and responding to all pleadings filed by the Debtors and appearing in Court to present necessary motions, applications and pleadings and to otherwise protect the interests of the Equity Committee; (e) consulting with the Debtors, the Creditors' Committee and the United States Trustee concerning the administration of the Debtors' estates; (f) representing the Equity Committee in hearings and other judicial proceedings; (g) advising the Equity Committee on practice and procedure in the Bankruptcy Court for the District of Delaware; and (h) performing all other legal services for the Equity Committee in connection with these chapter 11 cases. The Equity Committee requests that Bayard be compensated on a hourly basis, plus reimbursement of the actual and necessary expenses that Bayard incurs, in accordance with the ordinary and customary rates which are in effect on the date the services are rendered. Bayard has advised the Equity Committee that Bayard's hourly rates range from: Directors $500 to $890 per hour Associates $310 to $485 per hour Paraprofessionals $195 to $285 per hour The primary attorneys and paralegal expected to represent the Equity Committee, and their respective hourly rates are: (a) Neil B. Glassman $890 per hour (b) Charlene Davis $750 per hour (c) Jamie Edmonson $625 per hour (d) GianClaudio Finizio $475 per hour (e) Justin Alberto $345 per hour (f) Stephanie Breckenridge (paralegal) $285 per hour About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $309,992,980 in assets and $39,607,591 in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. The Official Committee of Unsecured Creditors of Trident Microsystems, Inc., et al., tapped Pachulski Stang Ziehl & Jones LLP as its counsel, and Imperial Capital, LLC, as its investment banker and financial advisor. Roberta A. DeAngelis, the U.S. Trustee for Region 3 appointed three members to the Committee of Trident Microsystems, Inc. Equity Security Holders. TRIDENT MICROSYSTEMS: Dewey & Leboeuf OK'd as Committee's Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Statutory Committee of Equity Security Holders in the Chapter 11 case of Trident Microsystems, Inc., et al., to retain Dewey & Leboeuf as counsel. As reported in the Troubled Company Reporter on March 15, 2012, D&L has extensive experience in the area of corporate transactions, corporate governance, and taxation -- each of which the Equity Committee believes will be of importance in these chapter 11 cases. The Equity Committee anticipates D&L will, in connection with TMI's chapter 11 case and subject to orders of this Court, provide a range of services to the Equity Committee, pursuant to which it will perform all matters necessary to: (a) assist and advise the Equity Committee with respect to the powers and duties of the Equity Committee in TMI's chapter 11 case; (b) assist and advise the Equity Committee in its consultation with the Debtors, the Creditors Committee, and other constituents relative to the administration of the Debtors' chapter 11 cases; (c) attend meetings and negotiate with representatives of the Debtors, the Creditors Committee, and the administration officials presiding over the liquidation governed by Cayman Island law, and other potential Trident entities' insolvency proceedings around the globe; (d) assist and advise the Equity Committee in its examination and analysis of the conduct of the Debtors' affairs and their subsidiaries' affairs, and in the analysis of proposals and pleadings submitted by other parties in interest in these chapter 11 cases; (e) assist the Equity Committee in the formulation, review, analysis, and negotiation of any chapter 11 plans that may be filed and assist the Equity Committee in the formulation, review, and analysis of the disclosure statement accompanying any chapter 11 plans; (f) take all necessary action to protect and preserve the interests of the Equity Committee and equity security holders' interests in the Debtors' estates, including (i) the investigation and possible prosecution of actions on their behalf; (ii) if appropriate, negotiations concerning all litigation in which the Debtors' estates are involved; and (iii) review and analysis of claims filed against the Debtors' estates; (g) generally prepare on behalf of the Equity Committee all necessary motions, applications, answers, orders, reports, and papers in support of positions taken by the Equity Committee; and (h) appear, as appropriate, before this Court, the appellate courts, and the U.S. Trustee, and protect the interests of the Equity Committee before those courts and before the U.S. Trustee. The Equity Committee requests that D&L be compensated in the amount of its normal hourly rates times the hours expended, and reimbursement of its disbursements at cost. If retained, D&L will charge the following rates: (a) the hourly rates for partners range from $775 per hour to $1,200 per hour, based upon a variety of factors, including seniority and distinction and expertise in one's field; (b) the hourly rates for "of counsel" range from $760 per hour to $900 per hour; (c) the hourly rates for associates range from $395 per hour to $675 per hour, based upon year of graduation from law school; and (d) the hourly rates for paraprofessionals range from $200 per hour to $295 per hour. The professionals at D&L currently expected to have primary responsibility for providing services to the Equity Committee in these chapter 11 cases, their position, and their hourly are as follows: Martin J. Bienenstock $1,000 Robert M. Finkel $995 Timothy Q. Karcher $875 Vincent Indelicato $580 Maja Zerjal $395 About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $309,992,980 in assets and $39,607,591 in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. The Official Committee of Unsecured Creditors of Trident Microsystems, Inc., et al., tapped Pachulski Stang Ziehl & Jones LLP as its counsel, and Imperial Capital, LLC, as its investment banker and financial advisor. Roberta A. DeAngelis, the U.S. Trustee for Region 3 appointed three members to the Committee of Trident Microsystems, Inc. Equity Security Holders. TRIDENT MICROSYSTEMS: Pachulski Stang OK'd as Panel's Counsel ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of Trident Microsystems, Inc., et al., to retain Pachulski Stang Ziehl & Jones LLP as its counsel. As reported in the Troubled Company Reporter on Feb 28, 2012, the professionals and paralegals presently designated to represent the Committee and their current standard hourly rates are: (a) Richard M. Pachulski $975 (b) Debra Grassgreen $855 (c) John D. Fiero $745 (d) Bruce Grohsgal $725 (e) Gabrielle A. Rohwer $595 (f) John W. Lucas $525 (g) Peter J. Keane $395 (h) Patricia Jeffries $275 The Debtors will reimburse Pachulski Stang for all other expenses the firm incurred in connection with its representation. John D. Fiero, Esq., a partner of Pachulski Stang Ziehl & Jones LLP, assures the Court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $309,992,980 in assets and $39,607,591 in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. TRIDENT MICROSYSTEMS: Quinn Emanuel Tapped as Committee Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Statutory Committee of Equity Security Holders in the Chapter 11 case of Trident Microsystems, Inc., et al., to retain Quinn Emanuel Urquhart & Sullivan, LLP as conflicts counsel. As reported in the Troubled Company Reporter on March 15, 2012 the Equity Committee seeks to retain Quinn Emanuel for a narrowly- tailored scope of engagement: solely to represent the Equity Committee in matters potentially adverse to NXP B.V. and NXP Semiconductors Netherlands B.V. NXP is purportedly the largest shareholder of Trident Microsystems Inc. (TMI), the largest unsecured creditor of Trident Microsystems Far East (TMFE), the entity that appointed four of the nine directors sitting on the Debtors' board of directors within one year prior to the Petition Date, and TMFE's largest vendor. The Equity Committee's lead bankruptcy counsel represents NXP in matters unrelated to the Debtor's chapter 11 cases. Thus, the Equity Committee submits, out of an abundance of caution, that it is necessary and appropriate to employ and retain Quinn Emanuel to solely render the following services each as appropriate and as directed by the Equity Committee: (a) undertaking an investigation of potential claims the Debtors may have against NXP, including taking discovery pursuant to Bankruptcy Rule 2004; (b) evaluating and discussing the findings of such investigation with the Equity Committee; (c) engaging in any discussions of consensual resolution of such potential claims with the Debtors, NXP, the Creditors' Committee, and other parties-in-interest; (d) seeking to obtain derivative standing to prosecute any such claims; (e) prosecuting any such claims for the benefit of TMI's estate; and (f) other services for which it would be most economical and efficient for Quinn Emanuel to provide to the Equity Committee. Compensation will be payable to Quinn Emanuel on an hourly basis, plus reimbursement of actual, necessary expenses and other charges incurred by the Firm. As is the case with respect to rates charged in non-bankruptcy matters of this type, Quinn Emanuel's rates are subject to periodic adjustment to reflect economic and other market conditions. Currently, hourly rates range from: Partners $810 to $955 Attorneys $350 to $900 Legal assistants $290 to $350 About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $309,992,980 in assets and $39,607,591 in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. The Official Committee of Unsecured Creditors of Trident Microsystems, Inc., et al., tapped Pachulski Stang Ziehl & Jones LLP as its counsel, and Imperial Capital, LLC, as its investment banker and financial advisor. Roberta A. DeAngelis, the U.S. Trustee for Region 3 appointed three members to the Committee of Trident Microsystems, Inc. Equity Security Holders. TRILOGY DEVELOPMENT: 8th Cir. BAP Affirms Lien Ruling ----------------------------------------------------- The United States Bankruptcy Appellate Panel for the Eighth Circuit affirmed a bankruptcy court order dated Jan. 12, 2012, holding that certain funds held by Trilogy Development Company, LLC, constitute sale proceeds which are subject to the liens of J.E. Dunn Construction Company, and other lienholders. The bankruptcy court's decision was not based on clearly erroneous factual findings or erroneous legal conclusions and, therefore, should be affirmed, the BAP said. Trilogy's business consisted of the ownership and operation of a real estate development project located in the "Plaza" area of Kansas City, Missouri, known as the West Edge Project. Construction of the project commenced in January 2006 and continued until shortly before the bankruptcy petition was filed. By the date of the bankruptcy filing, numerous contractors, suppliers, and vendors asserted mechanic lien claims against the project for unpaid balances due. The liens against the project far exceeded its value and on Jan. 24, 2010, Trilogy commenced an adversary proceeding seeking a declaratory judgment as to the validity and priority of all liens against the project. On Jan. 20, 2012, the bankruptcy court entered its Order of Final Judgment in the adversary proceeding which determined the amount, validity, and priority of various consensual liens and the mechanic lien claims. The mechanic lien claims alone totaled more than $17,000,000. On July 8, 2010, Trilogy filed a motion under Sections 105(a) and 363 of the Bankruptcy Code to, inter alia, conduct an auction sale of the project free and clear of liens. The motion was granted and an auction was conducted. On Aug. 31, 2010, the bankruptcy court entered its sale order authorizing Trilogy to close on the sale of the project free and clear of liens to WERC LLC for the sum of $10,000,000 as the prevailing bid at the auction. The sale order also approved the backup bid of VA West Properties, LLC, for $9,500,000 and authorized Trilogy to conclude a sale to VA West in the event the sale to WERC was not consummated. Finally, the sale order provided: "All lien claims and interests shall attach to the sale proceeds to the extent of their validity, perfection, and priority against the Project." Pursuant to the sale order, WERC entered into a purchase agreement under which it posted an earnest money deposit in the amount of $1,000,000 and agreed to close by Sept. 30, 2010. WERC failed to close, the purchase agreement was terminated, and the deposit was retained by Trilogy as liquidated damages. Subsequently, Trilogy closed on the sale of the project to VA West as the approved backup bidder under the sale order. Trilogy currently retains possession of both the net proceeds from the sale to VA West and the deposit. On Dec. 5, 2011, Trilogy filed its motion for determination of secured status under 11 U.S.C. Sec. 506. Under the terms of the motion, Trilogy sought a determination that the mechanic lien claims did not attach to the deposit and that the deposit was an unencumbered asset of Trilogy's Chapter 11 bankruptcy estate. After a hearing on Jan. 11, 2012, the bankruptcy court announced its ruling that the deposit is part of the sale proceeds of the project and, pursuant to the sale order, the deposit is subject to the mechanic lien claims. Trilogy appealed. The appellate case is, Trilogy Development Company, LLC, Debtor- Appellant, v. J.E. Dunn Construction Company; Mark One Electric Company; Walton Construction Co., LLC, Objectors-Appellees, No. 12-6008 (8th Cir. BAP). A copy of the BAP's April 5, 2012 decision is available at http://is.gd/bdxLZufrom Leagle.com. About Trilogy Kansas City, Mo.-based Trilogy Development Company, LLC, was founded by advertising magnate Bob Bernstein to build a mixed-use development at 48th St. and Belleview Ave. The Company sought Chapter 11 protection (Bankr. W.D. Mo. Case No. 09-42219) on May 15, 2009. Jonathan A. Margolies, Esq., and R. Pete Smith, Esq., at McDowell, Rice, Smith & Buchanan represent the Debtor. In its petition, the Debtor estimated its assets and at $100 million to $500 million. UNIVERSAL SOLAR: Incurs $2.7 Million Net Loss in 2011 ----------------------------------------------------- Universal Solar Technology, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $2.70 million on $3.28 million of sales in 2011, compared with a net loss of $593,808 on $2.39 million of sales in 2010. The Company's balance sheet at Dec. 31, 2011, showed $10.34 million in total assets, $13.84 million in total liabilities and a $3.49 million total stockholders' deficiency. Paritz & Company, P.A., in Hackensack, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has not generated cash from its operation, has stockholders' deficiency of $3,498,282 and has incurred net loss of $4,223,671 since inception. A copy of the Form 10-K is available for free at: http://is.gd/azaWrv About Universal Solar Headquartered in Zhuhai City, Guangdong Province, in the People's Republic of China, Universal Solar Technology, Inc., was incorporated in the State of Nevada on July 24, 2007. It operates through its wholly owned subsidiary, Kuong U Science & Technology (Group) Ltd., a company incorporated in Macau, the People's Republic of China on May 10, 2007, and its subsidiary, Nanyang Universal Solar Technology Co., Ltd., a wholly foreign owned enterprise registered on Sept. 8, 2008 under the wholly foreign- owned enterprises laws of the PRC. The Company primarily manufactures, markets and sells silicon wafers to manufacturers of solar cells. In addition, the Company manufactures photovoltaic modules with solar cells purchased from third parties. VANDEMERE LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Vandemere, LLC fdba Vandemere Partnership 4747 U.S. 264 East Greenville, NC 27834 Bankruptcy Case No.: 12-02542 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: Randy D. Doub Debtor's Counsel: William P. Janvier, Esq. JANVIER LAW FIRM, PLLC 1101 Haynes Street, Suite 102 Raleigh, NC 27604 Tel: (919) 582-2323 Fax: (866) 809-2379 E-mail: bill@janvierlaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb12-02542.pdf The petition was signed by Glenda Briley, manager/member. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Briley Enterprises of Greenville, Inc. 12-01290 02/20/12 J.O.C. Farms, L.L.C. 12-01285 02/20/12 Joseph D. Briley, Jr. 12-01284 02/20/12 Pactolus Farms, L.L.C. 12-01291 02/20/12 VEBLEN EAST: Ch. 11 Trustee Wants Reorganization Case Dismissed --------------------------------------------------------------- Lee Ann Pierce, the Chapter 11 trustee in the case of Veblen East Dairy Limited Partnership, asks the U.S. Bankruptcy Court for the District of South Dakota to dismiss the Debtor's case. The trustee explains that: -- all assets of the Debtor have been liquidated; -- no plan of reorganization has been or will be filed; -- the trustee has completed all of her obligations related to the administration of the case; and -- he trustee believes it is in the best interests of the creditors and the estate that the case be dismissed. About Veblen East Veblen, South Dakota-based Veblen East Dairy Limited Partnership operates a operates a "large calf-raising dairy business" in South Dakota. The Company filed for Chapter 11 bankruptcy protection on July 2, 2010 (Bankr. D. S.D. Case No. 10-10146). The Debtor estimated its assets and debts at $50 million to $100 million. Lee Ann Pierce was appointed Chapter 11 trustee. The Company's affiliate, Veblen West Dairy, LLP, filed a separate Chapter 11 petition (Bankr. D. S.D. Case No. 10-10071) on April 7, 2010. Veblen West operates a 4,000-cow milking facility. The two cases are not being jointly administered. VERSO PAPER: S&P Rates $180.2 Million Secured Notes 'BB-' --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' (two notches higher than the corporate credit rating) issue-level rating and a '1' recovery rating to Memphis-based Verso Paper Holdings LLC's proposed $180.2 million 9.75% secured notes due 2019. "The '1' recovery rating indicates our expectation of very high (90% to 100%) recovery in the event of a payment default," S&P said. "We also affirmed all ratings, including the 'B' corporate credit rating, on Verso Paper. The rating outlook is stable," S&P said. "The company intends to issue the new 9.75% notes due 2019 in exchange for any and all of its outstanding $180.2 million floating-rate notes due 2014. We note that the liens securing the floating rate notes and the liens securing the company's $396 million second-lien 8.75% notes due 2019 currently rank pari passu. According to the exchange offer materials, the liens securing the proposed exchange notes would rank ahead of the liens securing the $396 million 8.75% notes. The liens securing the proposed exchange notes would rank junior to the liens securing the company's $345 million 11.75% notes due 2019, as well as the proposed new $150 million ABL facility and $50 million revolving credit facility," S&P said. "If the company issues the proposed exchange notes, we would expect to revise the recovery rating to '4' from '3' on the company's $396 million 8.75% notes due 2019. The '4' recovery rating indicates our expectation of average (30% to 50%) recovery in the event of a payment default. Under our analysis, the $396 million 8.75% notes will have weaker recovery prospects as a result of the debt exchange, since the liens securing these notes will be subordinated to the liens securing the new 9.75% notes. The issue-level rating on the $396 million 8.75% notes due 2019 would remain unchanged at 'B'," S&P said. "The rating action follows Verso Paper's announced exchange offer to issue up to $180.2 million of new 9.75% secured notes due 2019 in exchange for any and all of the $180.2 million of floating-rate notes due 2014," said Standard & Poor's credit analyst Tobias Crabtree. "Verso also commenced a solicitation of consents from the holders of the 2014 floating-rate notes to authorize release from the liens and security interests in the collateral securing the 2014 floating-rate notes." "The 'B' corporate credit rating on Verso Paper reflects Standard & Poor's view of the combination of its 'highly leveraged' financial risk and 'weak' business risk. Our ratings incorporate the company's limited product diversity, substitution risks due to changing customer preferences for greater electronic content, and vulnerability to fluctuations in input costs and selling prices. In addition, despite our expectation that credit measures will remain somewhat weak over the next year, we expect liquidity to remain adequate, attributable to its cash position, proposed new credit facilities, and manageable near-term debt maturity profile following the proposed exchange offer," S&P said. "The stable rating outlook reflects our expectation that Verso's liquidity will remain adequate over the next year, attributable to its cash position, proposed new credit facilities, and manageable near-term debt maturity profile following the proposed exchange offer. Our stable rating outlook incorporates our view that the company will generate positive free cash flow in 2012 based on our EBITDA expectations and be able to successfully repay or refinance Verso Paper Finance Holdings LLC's February 2013 term loan maturity," S&P said. "Based on our EBITDA forecast and outlook for continued demand declines in coated paper end markets, we view a meaningful improvement in credit measures from recent levels and positive rating action as unlikely over the next 12 months," S&P said. "We could take a negative rating action if the secular demand decline in coated paper were to be worse than expected over the coming years leading us to lower our assessment of Verso Paper's business risk to 'vulnerable' from weak. In addition, if Verso Paper's EBITDA generation over the next year is unlikely to be maintained at more than $165 million, a level which approximates our estimated cash interest expense of about $125 million and maintenance capital expenditures of approximately $40 million. Under this scenario, liquidity would likely weaken and the company would likely need to rely on borrowings under its revolving credit facility to fund operating requirements," S&P said. VINASHIN: U.S. Hedge Fund Drops Lawsuit Against Firm ---------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that U.S. hedge fund Elliott Advisers LP has dropped a lawsuit against Vietnamese state shipbuilder Vinashin, according to a person familiar with the matter. VOLUNTEER BANCORP: Crowe Horwath Raises Going Concern Doubt ----------------------------------------------------------- Volunteer Bancorp, Inc., filed on March 30, 2011, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011. Crowe Horwath LLP, in Brentwood, Tennessee, expressed substantial doubt about Volunteer Bancorp's ability to continue as a going concern. The independent auditors noted that the Company has suffered significant losses in recent years and has elevated levels of non-performing assets and its subsidiary bank is not in compliance with minimum regulatory capital requirements required by the consent order with regulatory authorities. The Company reported a net loss of $1.12 million on $4.24 million of net interest income (before provision for loan losses) for 2011, compared with a net loss of $3.57 million on $4.11 million of net interest income (before provision for loan losses) for 2010. The Company's balance sheet at Dec. 31, 2011, showed $128.05 million in total assets, $126.65 million in total liabilities, and stockholders' equity of $1.40 million. A copy of the Form 10-K is available for free at: http://is.gd/2Qbrjm Rogersville, Tenn.-based Volunteer Bancorp, Inc., is a registered bank holding company organized under the laws of Tennessee, chartered in 1985. The Company conducts operations through its subsidiary, The Citizens Bank of East Tennessee ("Bank"), a state bank organized under the laws of the state of Tennessee in April 1906. VUZIX CORP: Defers Payment of $141,666 to LC Capital Until 2014 --------------------------------------------------------------- Vuzix Corporation entered into a Supplemental Agreement dated as of March 23, 2012, with LC Capital Master Fund Ltd. Pursuant to the Supplemental Agreement, payment of principal in the amount of $141,666 payable to the Lender on March 23, 2012, pursuant to a Convertible Loan and Security Agreement dated as of Dec. 23, 2010, between the Lender and the Company was deferred until the maturity of the loan made by the Lender to the Company pursuant to the Loan Agreement. The stated maturity date of that loan is Dec. 23, 2014. Repayment of the loan can be accelerated upon the occurrence of an Event of Default, as described in the Loan Agreement. About Vuzix Corp. Rochester, New York-based Vuzix Corporation (TSX-V: VZX) OTC BB: VUZI) -- http://www.vuzix.com/-- is a supplier of Video Eyewear products in the defense, consumer and media & entertainment markets. The Company reported a net loss of $4.55 million on $12.25 million of total sales for the year ended Dec. 31, 2010, compared with a net loss of $3.25 million on $11.88 million of total sales during the prior year. The Company also reported a net loss of $2.26 million on $9.24 million of total sales for the nine months ended Sept. 30, 2011, compared with a net loss of $4.08 million on $6.70 million of total sales for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $6.90 million in total assets, $12.35 million in total liabilities, and a $5.45 million total stockholders' deficit. As reported by the TCR on April 6, 2011, EFP Rotenberg, LLP, in Rochester, New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred substantial losses from operations in recent years. In addition, the Company is dependent on its various debt and compensation agreements to fund its working capital needs. According to the independent auditors, some of these obligations include financial covenants which the company must comply with. WARNER SPRINGS: Court Wants U.S. Trustee's Objections Addressed --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California denied, in part, Warner Springs Ranchowners Association's motions: -- authorizing payment in the ordinary course of business of accrued but unpaid wages, salaries and other compensation; -- authorizing the payment of payroll and other taxes relating thereto; and -- restraining utility providers from altering, refusing or discontinuing service or, in the alternative, extending time to provide adequate assurance of payment to utility companies. The Court explained that it did not approve the current order format but it will approve the amended order consistent with the clarification provided in reply to the U.S. Trustee's objections. The Court also authorized the Debtor to set up a website to store all pleadings, notices, motions, and other documents on the docket for the case. Each interested party will be able to access the Website to review the filings in the case at no cost to them, and at no anticipated cost to Debtor or its chapter 11 estate. The Website can be accessed at http://bankruptcy.gordonrees.com/WSRA. The Website shall not require the creation of a username or password. About Warner Springs Based in Warner Springs, California, Warner Springs Ranchowners Association dba Warner Springs Ranch filed for Chapter 11 protection (Bankr. S.D. Calif. Case No. 12-03031) on March 1, 2012. Judge Louise DeCarl Adler presides over the case. Daniel Silva, Esq., and Jeffrey D. Cawdrey, Esq., at Gordon & Rees LLP, represent the Debtor. The Debtor disclosed $13,060,419 in assets and $454,060 in liabilities as of the Chapter 11 filing. WARREN SAPP: Former Pro Bowl Lineman Files for Chapter 7 -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Warren Sapp, a retired defensive lineman for the Oakland Raiders and the Tampa Bay Buccaneers of the National Football League, filed for bankruptcy under Chapter 7 (Bankr. S.D. Fla. Case No. 12-17819) in March, saying he owes creditors $6.7 million and has assets of $6.5 million. According to the report, Mr. Sapp has more than $4.1 million in annuities and retirement accounts. He claims that $4.7 million in annuities, retirement accounts and other property are exempt assets he can retain despite bankruptcy. Filings in bankruptcy court say Mr. Sapp's average monthly income is $115,900 and his average monthly expenses are $111,200, including $60,500 in monthly alimony and child support payments. He owes $876,000 to a former wife for alimony and child support, not including child support payments owed to three other women, according to court filings. Mr. Sapp, who was named to seven Pro Bowl teams, has been an analyst for the NFL's television network. Mr. Sapp's contract with the network isn't expected to be renewed, the Boston Globe said, citing unidentified league sources. Mr. Sapp said his home in Hollywood, Florida, is exempt property he can keep. He says the home is worth $575,000 and has a mortgage for $725,000. To retain the home, he must pay the mortgage. WAVE2WAVE COMMUNICATIONS: Verizon Agrees to Continue Services ------------------------------------------------------------- The Bankruptcy Court approved a stipulation between Wave2Wave Communications, Inc., et al., and Verizon Communications Inc. establishing adequate assurance of payment. The Stipulation provides that beginning March 19, 2012, each Monday thereafter, the Debtors will pay to Verizon $194,000, representing one week of the average one month bill provided to the Debtors for various telecommunications facilities and services less one week of the average one month bill provided to Verizon by the Debtors, and constituting an advance weekly payment for the net sum owed to Verizon. The Debtors wire transferred to Verizon on March 19, 2012, the sum of $650,000, representing three quarters of the average one month bill for the Debtor Charges. The terms of the Order establishing the weekly advance payments will be retroactive to the Debtors' Petition Date (Feb. 17, 2012). Therefore, on March 19, 2012, the Debtors also also wire transferred to Verizon $858,000. After the period ending May 31, 2012, and at the end of each three-month interval thereafter, Verizon will true-up the advance weekly payments made during the applicable period against the actual charges billed to the Debtors for that period. In the event that the Debtors fail to comply with any provision of this Order and do not cure that default by 5:00 p.m. on the third business day after the notice by Verizon to the Debtors and their counsel of such default is received, Verizon is authorized to terminate services to the Debtors on the next business day without further notice or order. Separately, the Court approved the Debtors' stipulation with AboveNet Communications, Inc., and AT&T pursuant to which the Debtors agreed to pay $16,500 to AboveNet and $45,000 to AT&T as deposits. In addition to the assurances provided by the deposit, the Debtors agree to pay their post-petition usage that is due and owing in accordance with ordinary and contractual payment terms. The Utilities will be permitted to alter, refuse or discontinue services to the Debtors upon the Debtors' post-petition default in payment. The final hearing, as it pertains to the Debtors' stipulation with IDT Corp. was adjourned to March 29, 2012. About Wave2Wave Communications Wave2Wave Communications Inc., a provider of voice and data services to businesses, filed for bankruptcy (Bankr. D. N.J. Case No. 12-13896) on Feb. 17, 2012. Wave2Wave, which estimated up to $100 million assets and debts, says it sought Chapter 11 protection, after access provider Verizon Communications Inc. threatened to cut off its service. Affiliates RNK Inc. and RNK VA LLC also filed petitions. Wave2Wave was founded in 1999. Judge Donald H. Steckroth presides over the case. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., serves as the Debtors' counsel. The petition was signed by Steven Asman, president and chairman of the Debtors' board. The U.S. Trustee appointed five members to the official committee of unsecured creditors. The Committee is represented by Cooley LLP. WAVE2WAVE COMMUNICATIONS: Can Hire Mintz Levin as Special Counsel ----------------------------------------------------------------- The Bankruptcy Court authorized Wave2Wave Communications Inc., et al., to employ Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., as their special counsel, effective as of Feb. 20, 2012, to among other things: (a) advise the Debtors with respect to any potential financing, acquisitions or mergers or sales of their assets outside of the ordinary course of business; (b) assist in the negotiation, documentation and implementation of any potential financing, acquisitions or mergers or sales of their assets outside of the ordinary course of business; and (c) advise the Debtors on their relationships with stockholders and lenders. The firm's current hourly rates are: Members $540 to $1,100 Associates $270 to $575 Paralegals $180 to $290 About Wave2Wave Communications Wave2Wave Communications Inc., a provider of voice and data services to businesses, filed for bankruptcy (Bankr. D. N.J. Case No. 12-13896) on Feb. 17, 2012. Wave2Wave, which estimated up to $100 million assets and debts, says it sought Chapter 11 protection, after access provider Verizon Communications Inc. threatened to cut off its service. Affiliates RNK Inc. and RNK VA LLC also filed petitions. Wave2Wave was founded in 1999. Judge Donald H. Steckroth presides over the case. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., serves as the Debtors' counsel. The petition was signed by Steven Asman, president and chairman of the Debtors' board. The U.S. Trustee appointed five members to the official committee of unsecured creditors. The Committee is represented by Cooley LLP. WAVE2WAVE COMMUNICATIONS: Committee Taps Cooley LLP as Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors of Wave2Wave Communications, Inc., et al., seeks permission from the Bankruptcy Court to retain Cooley LLP as its counsel. Cooley will, among other things: (a) attend meetings of the Committee; (b) review financial information furnished by the Debtors to the Committee; (c) review and investigate the liens of purported secured parties; (d) confer with the Debtors' management and counsel; and (e) coordinate and assist the Debtors' efforts to obtain debtor-in-possession financing. The Committee is satisfied that (i) Cooley represents no interest adverse to the Committee, the Debtors or their estates in the matters upon which Cooley is to be engaged and that its employment is in the best interest of the estates, (ii) Cooley has no connection with the US Trustee or any other person employed in the office of the US Trustee, and (iii) Cooley has not been paid any retainer against which to bill fees and expenses. Cooley's current hourly rates are: Attorney Hourly Rate -------- ----------- Richard S. Kanowitz $795 Cathy R. Hershcopf $795 Brent Weisenberg $630 Dana S. Katz $445 However, Cooley has agreed with the Committee that it will invoice the Committee for 90% of its accrued fees each month. At the conclusion of these cases, if the Committee is satisfied with Cooley's services and funds are available to pay the balance of Cooley's fees, Cooley will apply to the Court for the remaining 10% of its unbilled fees. Cooley will continue to charge the Committee for all services provided and for other charges and disbursements incurred in rendering services to the Committee. About Wave2Wave Communications Wave2Wave Communications Inc., a provider of voice and data services to businesses, filed for bankruptcy (Bankr. D. N.J. Case No. 12-13896) on Feb. 17, 2012. Wave2Wave, which estimated up to $100 million assets and debts, says it sought Chapter 11 protection, after access provider Verizon Communications Inc. threatened to cut off its service. Affiliates RNK Inc. and RNK VA LLC also filed petitions. Wave2Wave was founded in 1999. Judge Donald H. Steckroth presides over the case. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., serves as the Debtors' counsel. The petition was signed by Steven Asman, president and chairman of the Debtors' board. The U.S. Trustee appointed five members to the official committee of unsecured creditors. The Committee is represented by Cooley LLP. WAVE2WAVE COMMUNICATIONS: Ford Wants to Repossess Motor Vehicles ---------------------------------------------------------------- Ford Motor Credit Company, LLC, has filed papers with the Bankruptcy Court seeking relief from the automatic stay to take back and sell motor vehicles in the possession of Wave2Wave Communications, Inc,. et al. About Wave2Wave Communications Wave2Wave Communications Inc., a provider of voice and data services to businesses, filed for bankruptcy (Bankr. D. N.J. Case No. 12-13896) on Feb. 17, 2012. Wave2Wave, which estimated up to $100 million assets and debts, says it sought Chapter 11 protection, after access provider Verizon Communications Inc. threatened to cut off its service. Affiliates RNK Inc. and RNK VA LLC also filed petitions. Wave2Wave was founded in 1999. Judge Donald H. Steckroth presides over the case. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., serves as the Debtors' counsel. The petition was signed by Steven Asman, president and chairman of the Debtors' board. The U.S. Trustee appointed five members to the official committee of unsecured creditors. The Committee is represented by Cooley LLP. WEBB REAL ESTATE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Webb Real Estate Holdings, LLC 2612 S. English Station Road Louisville, KY 40299 Bankruptcy Case No.: 12-31593 Chapter 11 Petition Date: April 2, 2012 Court: United States Bankruptcy Court Western District of Kentucky (Louisville) Debtor's Counsel: Mark J. Sandlin, Esq. GOLDBERG & SIMPSON, P.S.C. 9301 Dayflower Street Louisville, KY 40059 Tel: 589-4440 Fax: 581-1344 E-mail: msandlin@goldbergsimpson.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/kywb12-31593.pdf The petition was signed by Elizabeth A. Webb, manager. WENDY'S INTERNATIONAL: S&P Rates $1.3-Bil. Credit Facilities 'BB-' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned a 'BB-' issue-level rating and a '2' recovery rating to Wendy's International Inc.'s proposed $1.3 billion bank credit facilities. Wendy's International is owned by The Wendy's Co. "The proposed credit facilities include a $1.125 billion seven-year term loan and a $200 million five-year revolver. The company plans to use the term loan proceeds to refinance its existing bank credit facilities and repurchase its 10% senior secured notes. We expect the revolver to be undrawn at closing," S&P said. "We are also withdrawing the ratings on Arby's. We are affirming all other ratings, including the 'B+' corporate credit rating. The outlook remains stable," S&P said. "The ratings on Dublin, Ohio-based fast food company The Wendy's Co. (Wendy's) reflect our view that credit metrics will remain reflective of a highly leveraged financial risk profile because of what we see as the likelihood for the company to pursue sizeable shareholder initiatives after the completion of its remodeling program, elevated debt levels, and thin cash flow protection measures," said Standard & Poor's credit analyst Andy Sookram. "Our assessment of its business risk profile as 'weak' is characterized by its participation in the highly competitive quick-service restaurant sector and its exposure to volatile commodity costs." "The stable outlook reflects our opinion that credit measures should improve modestly in fiscal 2012. We think the company should benefit from its restaurant remodel initiatives, and a slight increase in menu prices should help to mitigate near-term commodity cost pressures. Our forecast for credit metrics includes EBITDA margins of slightly over 16% and leverage of about 4.7x," S&P said. "A downgrade could occur if Wendy's does not execute menu initiatives (including the breakfast rollout) well, competitive pressures heighten considerably, and commodity cost increases above expectations, leading to a decline in profitability. In this scenario, we would expect EBITDA margins to decline to 13% and leverage to rise to the 6x area. A lower rating could also occur if the company pursues debt-financed shareholder initiatives in a manner that harms credit quality," S&P said. "An upgrade is not a near-term consideration, given our financial forecast and expectations for Wendy's financial policy. Still, in the event that Wendy's adopts a financial policy that would suggest sustained leverage of about 4x and we reassess its business risk profile as 'fair,' we could raise the ratings one notch," S&P said. WJO INC: Court OKs Re-engagement of Ciardi Ciardi as Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Pennsylvania authorized WJO, Inc., to employ Ciardi Ciardi & Astin as counsel for the Debtor. As reported in the Troubled Company Reporter on Feb. 23, 2012, Ciardi Ciardi was previously counsel for the Debtor. The firm withdrew as counsel and was replaced by O'Keily Ernst Bielli & Wallen, LLC. O'Keilly has withdrawn as counsel for the Debtor effective Jan. 19, 2012. The Debtor has re-engaged the services of Ciardi Ciardi as its counsel. To the best of the Debtor's knowledge, Ciardi Ciardi is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About WJO Inc. Bristol, Pennsylvania-based WJO, Inc., operates six family practices located in Newtown, Bristol, Bensalem, Bustleton, South Philadelphia, and Bethlehem, Pennsylvania and consists of Board Certified Osteopathic Physicians specializing in Family Medicine. Prior to the petition date, and to allow the Company to restructure effectively, HyperOx Inc., HyperOx I, LP, HyperOx III, LP, and East Coast TMR, Inc., were merged into WJO. WJO filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 10-19894) on Nov. 15, 2010. The Debtor disclosed $19,923,802 in assets and $6,805,255 in liabilities as of the Chapter 11 filing. Holly Elizabeth Smith, Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., serve as the Debtor's bankruptcy counsel. Pond Lehocky Stern Giordano serves as the Debtor's special counsel to represent it in worker's compensation proceedings pertaining to the Therapeutic Magnetic Resonance treatments. Patrick Yun serves as the Debtor's financial advisor. Attorneys at Keifer & Tsarouhis LLP serve as counsel to the official committee of unsecured creditors. ParenteBeard LLC serves as the Committee's accountant and financial advisor. The United States Trustee has appointed David Knowlton as patient care ombudsman in the case. The Ombudsman is represented in the case by Karen Lee Turner, Esq., at Eckert Seamans Cherin & Mellott, LLC, as counsel. Tristate Capital Bank, the cash collateral lender, is represented in the case by lawyers at Benesch Friedlander Coplan & Aronoff LLP. * Homeowners Win Punitive Award Over Wells Fargo Overcharges ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Wells Fargo Bank NA was hit with $3.17 million in punitive damages for what a U.S. bankruptcy judge in New Orleans called the bank's "clandestine" conduct in overcharging homeowners by violating both bankruptcy law and the governing note and mortgage. The case is Jones v. Wells Fargo Home Mortgage Inc. (In re Jones), 06-1093, U.S. Bankruptcy Court, Eastern District Louisiana (New Orleans). * Circuit Court Stands Behind In Pari Delicto Defense ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in Chicago declined an invitation by a bankruptcy trustee and the National Association of Bankruptcy Trustees to rule that the so-called in pari delicto defense doesn't apply to lawsuits filed by bankruptcy trustees. The case before the 7th Circuit involved a suit by a trustee for a bankrupt Ponzi scheme. The suit charged that the company's accountants with negligence in not detecting fraud. The district court dismissed the suit, based on the in pari delicto defense. According to the report, as explained in the April 3 opinion by Chief Circuit Judge Frank H. Easterbrook, the defense is based on the principle that a participant in a fraud can't be a victim of its own fraud. Because the trustee steps into the shoes of the company that was conducting the fraud, the trustee can't sue for fraud against co-conspirators in the scheme. Judge Easterbrook said it isn't the province of the courts to refuse to enforce the in pari delicto rule based on notions of "public policy." The judge said that state-law defenses must be enforced under the 1979 U.S. Supreme Court decision in Butner v. U.S. By continuing invocation of in pari delicto defense, Judge Easterbrook said the 7th Circuit joins every other circuit to address the issue. The case is Peterson v. McGladrey, 10-3770, 7th U.S. Circuit Court of Appeals (Chicago). * Divorce Settlement Upheld Regardless of Madoff Fraud ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the highest court in New York State ruled early this month that a customer of Bernard L. Madoff Investment Securities Inc. who believed he had a $5.4 million account isn't allowed to recover money paid to a former wife before the fraud was discovered. The case involved a New York lawyer who entered into a martial property and support agreement where the former wife received $6.25 million cash and other specified property. Two years later, the Madoff Ponzi scheme blew up, and the former husband sued to reform the property settlement. The Court of Appeals said that the case wasn't an "exceptional situation" warranting a "reformation or rescission of a divorce settlement." The case is Simkin v. Blank, 48, New York Court of Appeals (Albany). * Amount of Mortgage Can't Be Fixed in Chapter 13 Plan ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that, U.S. District Judge Robert E. Blackburn in Denver ruled at the end of March that individuals may not use a Chapter 13 plan to modify a secured creditor's claim. The case is Bank of America NA v. Gordon (In re Gordon), 11-01340, U.S. District Court, District of Colorado (Denver). * Unjust Enrichment Is Core When Paired With Fraudulent Transfer ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Peter J. Walsh in Delaware ruled on March 30 that when a claim for unjust enrichment is "essentially an alternate grounds for recovery" on an allegedly fraudulent transfer, the claim is "core." When a claim for unjust enrichment was in essence an alternative grounds for relief on a claim for violation of federal securities laws, Judge Walsh concluded that the claim is "non-core." The case is Zazzali v. AFA Financial Group LLC (In re DBSI Inc.), 10-54524, U.S. Bankruptcy Court, District of Delaware (Wilmington). * Investors Watch Pricing of J.P. Morgan Rialto Distressed CMBS --------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that J.P. Morgan Chase & Co. may sell $132 million of commercial mortgage-backed securities supported by delinquent loans at a discount of about 99 cents on the dollar, according to an investor considering the first distressed debt CMBS since the 1990s. * Moody's Says Global Speculative Grade Default Rate Up to 2.3% --------------------------------------------------------------- Moody's trailing 12-month global speculative-grade default rate rose to 2.3% at the end of March 2012, up from 1.8% at the end of 2011, said Moody's Investors Service in its monthly default report. A year ago, the rate was 2.6%. A total of 20 Moody's-rated corporate debt issuers have defaulted so far this year, eleven of which defaulted in March. In the US, the speculative-grade default rate ended the first quarter at 2.8%, up from 1.9% in the previous quarter, while in Europe the comparable rate edged lower to 2.3% from 3.0%. At this time last year, the US rate was 2.9% and the European default rate was 2.6%. Based on its forecasting model, Moody's expects the global speculative-grade default rate to rise to 3.0% by the end of 2012. Moody's expects default rates to be highest in the Media: Advertising, Printing & Publishing sector in the US and the Energy: Oil & Gas sector in Europe. "March saw a jump in the number of defaults, but it remains to be seen whether this is a trend," said Albert Metz, Managing Director of Credit Policy Research. "Quite a few of the defaults were related to the same corporate family, or represented the second defaults from issuers which had previously defaulted in the last couple of years." By dollar volume the global speculative-grade bond default rate closed at 1.7% in the first quarter, down slightly from 1.8% the previous quarter. Last year, the global dollar-weighted default rate stood at 1.6%. In the US, the dollar-weighted speculative-grade bond default rate ended the first quarter at 1.5%. The comparable rate was 1.1% in the previous quarter and 1.5% a year ago. In Europe, the dollar-weighted speculative-grade bond default rate fell to 2.3% in the first quarter of 2012, from 4.3% in the last quarter of 2011. This drop was primarily driven by Allied Irish Bank's move out of the trailing twelve month window. At this time last year, the European speculative-grade bond default rate was 2.0%. Moody's distressed index declined to 17.2% at the end of the first quarter, down from 24.1% in the previous quarter. A year ago, the index was lower at 7.7%. The distressed index is a measure of the percentage of high-yield issuers that have debt trading at distressed levels. The trailing 12 month US leveraged loan default rate ended the first quarter at 2.1%, up from 0.6% in the prior quarter. A year ago, the loan default rate was 1.7%. A total of ten Moody's-rated loan issuers defaulted so far this year, all from the US. Last year, only one issuer defaulted in the first quarter. Moody's "March Default Report" is now available, as are Moody's other default research reports, in the Ratings Analytics section of Moodys.com. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 14, 2011 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Tampa Convention Center, Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. __, 2011 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Dublin, Ireland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 25-27, 2011 TURNAROUND MANAGEMENT ASSOCIATION Hilton San Diego Bayfront, San Diego, CA Contact: http://www.turnaround.org/ Nov. 28, 2011 BEARD GROUP, INC. 18th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York City Contact: 1-240-629-3300 Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ April 3-5, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Grand Hyatt Atlanta, Atlanta, Ga. Contact: http://www.turnaround.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***