/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120430.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, April 30, 2012, Vol. 16, No. 119 Headlines 24/7 FITNESS CLUB: Federal Judge Dismisses Chapter 11 Case ADVANCED MICRO: S&P Raises Corporate Credit Rating to 'BB-' AFA INVESTMENT: Has Until July 27 to Propose Chapter 11 Plan AFA INVESTMENT: Schedules and Statements Due May 24 AFA INVESTMENT: Jones Day Approved as Bankruptcy Counsel AFA INVESTMENT: Pachulski Stang OK'd as Restructuring Co-Counsel ALION SCIENCE: M. Alber Resigns as CFO, B. Broadus Takes Over ALIXPARTNERS LLP: S&P Puts 'BB' Corp. Credit Rating on Watch Neg ALLY FINANCIAL: Chrysler Won't Renew; Deal Expires April 2013 ALLY FINANCIAL: Reports $310 Million Net Income in Q1 AMERICAN AIRLINES: Committee Wants to Participate in CBA Trial AMERICAN AIRLINES: Non-Union PSAs Insist Changes Not Allowed AMERICAN AIRLINES: Brinks Hofer Approved as Corporate Counsel AMERICAN AXLE: Reports $50.3 Million Net Income in First Quarter AMERICAN PATRIOT: Expects Reelection of CEO Randal to Board AMG PATTERSON: Involuntary Chapter 11 Case Summary ANIXTER INC: S&P Rates $350-Mil. Sr. Unsecured Notes 'BB' APRIA HEALTHCARE: S&P Lowers Corporate Credit Rating to 'B+' ARCAPITA BANK: Milbank Advising Official Creditors' Committee ARCH COAL: S&P Puts 'BB-' Corp. Credit Rating on Watch Negative ATTACHMATE CORP: S&P Affirms 'B' Corporate Credit Rating ATTACHMATE GROUP: Moody's Affirms 'B2' CFR; Outlook Negative AVAYA INC: Moody's Says Executive Departures No Impact on B3 CFR B & T OLSON: Files for Chapter 11 in Seattle BANK OF THE EASTERN SHORE: Closed; No Bank Assumes Deposits BERNARD L. MADOFF: Liquidation Has Cost SPIC $1.3 Billion BG'S GROUP: Case Summary & 20 Largest Unsecured Creditors BICENT POWER: Meeting to Form Creditors' Panel on May 3 BIONOL CLEARFIELD: Ethanol Plant Sold for $9.4 Million BUFFETS INC: Suggestion of Bankruptcy Doesn't Stay EEOC Suit CANO PETROLEUM: Has 871 (BOE/Day) Total Net Production in March CANO PETROLEUM: Court Approves June 12 Auction of Assets CANO PETROLEUM: James Latimer OK'd as Chief Restructuring Officer CANYON HOLDINGS: Can Use Lenders' Cash Collateral Until April 30 CANYON HOLDINGS: Creditor Gets Order Declaring Debtor in Default CANYON HOLDINGS: Files Sale-Based Joint Reorganization Plan CAPITOL INFRASTRUCTURE: Files for Chapter 11 to Sell Business CATALENT PHARMA: S&P Rates $605M Incremental Loan 'BB-' CDC CORP: Fending Off Dismissal by Subsidiary China.com CELL THERAPEUTICS: Has $7.1 Million Net Loss in March CHATHAM MILLS: Exits Bankruptcy; To Pay Bank Debt in 35 Yrs CHESAPEAKE ENERGY: Fitch Affirms 'BB' IDR & Sr. Unsec. Debt Rating CLARE AT WATER: Illinois Finance Wants 5th Amended Plan Modified CLEARWIRE CORP: Incurs $181.8 Million Net Loss in First Quarter CLEARWIRE CORP: Files Form 10-Q, Incurs $181.8MM Net Loss in Q1 CLIFFS CLUB: Moves Forward With Sale to Carlile-Led Group COLORADO-FAYETTE: Plans to File for Chapter 11 Bankruptcy COMMUNITY MEMORIAL: Wants to Reopen Emergency Department CPM HOLDINGS: S&P Retains 'B+' Corp. Credit Rating; Outlook Stable CROW PARTNERS: Deal Granting JPMorgan Chase Relief from Stay OK'd CROWNROCK LP: S&P Raises Corp. Credit Rating to 'B-' DELPHI CORP: DPH Files Bankruptcy Report for First Quarter DELPHI CORP: Court Denies LAWS Director's Bid Over 1999 Spinoff DELPHI CORP: BoNY Mellon Appeals Denial Order DESIGNERWARE LLC: Bankruptcy Filing Halts Cyber-Spying Suit DEWEY & LEBOEUF: Greenberg Talks End; Patton Boggs Next DEWEY & LEBOEUF: 90 to 120-Day Extension of Bank Loan Sought DEX MEDIA WEST: Bank Debt Trades at 36% Off in Secondary Market DEX ONE: Reports $57.5 Million Net Income in First Quarter DR HORTON: S&P Rates Proposed $300-Mil. Senior Notes 'BB-' DRSK1 LLC: Case Summary & 11 Largest Unsecured Creditors DUNE ENERGY: Amends $29.2 Million Resale Prospectus EASTMAN KODAK: Asks for Aug. 16 Deadline to Decide on Leases EASTMAN KODAK: Deadline to File Removal Notices Moved to Aug. 16 EASTMAN KODAK: Shutterfly Acquiring Kodak Gallery for $23.8-Mil. EASTMAN KODAK: Seeks Nod of New ORIC Policy Terms EASTMAN KODAK: Proposes to Assume Pacts With Hitchcock, OAI EASTMAN KODAK: 1st Quarter Results Show Improvement ELEPHANT TALK: Files Form S-3, Registers 7.5MM Common Shares EMMIS COMMUNICATIONS: Enters Into NY 98.7FM Programming Deal ENEA SQUARE: Reorganization Case Converted to Chapter 7 ETHAN ALLEN: Case Summary & 9 Largest Unsecured Creditors FEDERAL-MOGUL: Calif. Court Rules in Bankhead v. Pneumo Abex FGIC CORP: Court Enters Plan Confirmation Order FILENE'S BASEMENT: Committee Says Creditors Should Be Paid in Full FRANCISCAN COMMUNITIES: Wins Court OK of $18.8-Mil. Sale FRANNCY HOLDINGS: Marshfield Offers $2.75 Million at Auction FUSION TELECOMMUNICATIONS: Has $15MM Investment from Private Funds GARLOCK SEALING: December Hearing on Mesothelioma Claims GENESCO INC: S&P Hikes Corp. Credit Rating to 'BB'; Outlook Stable GEORGIA GULF: S&P Ups Corp. Credit Rating to 'BB-'; on Watch Pos GIBSON ENERGY: Moody's Upgrades CFR to 'Ba3'; Outlook Stable GMX RESOURCES: To Swap $4.7MM Conv. Notes for 2.7MM Common Shares GRAND BEAR LODGE: Court Approves Plan of Reorganization GREENWAY 37: Voluntary Chapter 11 Case Summary HALE MOKU: Case Summary & 3 Largest Unsecured Creditors HAMPTON ROADS: To Relocate Corporate Offices to Virginia Beach HARBOR FREIGHT: S&P Rates Proposed $1-Bil. Term Loan 'B+' HARVEST BANK OF MARYLAND: Closed; Sonabank Assumes All Deposits HAWKER BEECHCRAFT: Suspending Filing of Reports with SEC HAWKER BEECHCRAFT: Bank Debt Trades at 36% Off in Secondary Market HAYDEL PROPERTIES: Has Access to People's Bank's Cash Collateral HAYDEL PROPERTIES: Court Approves Christy Pickering as Accountant HAYDEL PROPERTIES: Files Schedules of Assets and Liabilities HAYDEL PROPERTIES: May 17 Hearing Set for BancorpSouth Lift Stay HAZRO ENTERPRISES: Case Summary & 10 Largest Unsecured Creditors HCA HOLDINGS: Extends Maturity of A-1 & B-1 Term Loans to 2016 HEARTHSTONE HOMES: To Sell Off Assets on Piecemeal Basis HERCULES OFFSHORE: Incurs $38.3 Million Net Loss in First Quarter HERCULES OFFSHORE: DOJ Completes FCPA Inquiry, Takes No Action IMAGEWARE SYSTEMS: Amends Form S-1 for 44.1-Mil. Shares Offering INDIANAPOLIS DOWNS: Files Plan for Sale or Debt Swap INERGY LP: Moody's Affirms 'Ba2' CFR; Outlook Developing INFUSYSTEM HOLDINGS: Deal With Investors Changes Leadership INFUSYSTEM HOLDINGS: Names Ryan Morris as Executive Chairman INFUSYSTEM HOLDINGS: Signs Fifth Amendment to BOA Credit Pact INNER CITY MEDIA: Lender Selling Station in South Carolina INTELSAT SA: Amends Tender Offers, Posts Early Offer Results INTELSAT SA: Unit Issues $1.2 Billion of 7-1/4% Senior Notes INTERBANK FSB: Closed; Great Southern Bank Assumes All Deposits INTERLEUKIN GENETICS: Extends President's Contract Until Nov. 30 INTERNATIONAL MEDIA: Lease Decision Period Extended Until Aug. 6 ISTAR FINANCIAL: Swings to $46 Million Net Loss in First Quarter JACKSON HEWITT: Court Nixes National Tax Network's Counterclaims JATCO INCORPORATED: Case Summary & 20 Largest Unsecured Creditors JEFFERIES GROUP: Moody's Issues Summary Credit Opinion KERSKI ASSOCIATES: Case Summary & 4 Largest Unsecured Creditors KURRANT MOBILE: To Reduce Authorized Common Shares to 15 Billion LAM RESEARCH: S&P Raises Ratings From 'BB+'; Outlook Positive LANTHEUS MEDICAL: Moody's Cuts Corporate Family Rating to 'Caa2' LARSON LAND: Owner Stopped From Cash Use; Trustee Takes Over LAW ENFORCEMENT ASSOC: To Liquidate Assets Under Chapter 7 LEFKARA GROUP: Involuntary Chapter 11 Case Summary LEHMAN BROTHERS: LVH Says Notes Investors Have Poor Recovery LEVI STRAUSS: Has $385MM Purchase Agreement with Merrill Lynch LIGHTSQUARED INC: Some Lenders Want Falcone to Step Aside LODGENET INTERACTIVE: Incurs $2.1-Mil. Net Loss in First Quarter LODGENET INTERACTIVE: Mast Capital Discloses 7.8% Equity Stake LOUISVILLE ORCHESTRA: Musicians Reach New Deal With Management MAUI LAND: Six Directors Elected at Annual Meeting MCCLATCHY CO: Incurs $2.1 Million Net Loss in First Quarter MECHEL OAO: Gets OK on Waivers and Amendments to Credit Facilities MOMENTIVE PERFORMANCE: Expects to Record $595-Mil. Sales in Q1 MOMENTIVE SPECIALTY: Expects to Report $1.2 Billion Sales in Q1 MONEYGRAM INT'L: Reports $10.3-Mil. Net Income in First Quarter MONTANA ELECTRIC: Yellowstone's Bid to Resume Lawsuit Set Aside MOOD MEDIA: Moody's Affirms 'B2' CFR; Outlook Positive MOUNTAIN PROPERTY: Case Summary & 4 Largest Unsecured Creditors MOUNTAIN PROVINCE: Shareholders OK Kennady Diamonds Spin-Out MUSCLEPHARM CORP: Board OKs 100-Mil. Shares Repurchase Program NASDAQ OMX: Moody's Issues Summary Credit Opinion NEONODE INC: Common Stock to Trade on NASDAQ Starting May 1 NET ELEMENT: Mike Zoi's Equity Stake Increased to 93.3% NET ELEMENT: Rakishev Can No Longer Join Equity-Based Financing NEWPAGE CORP: Creditors Must Sue Lenders by May 4 NEWPAGE CORP: Economic Woes Halt Plans to Build Refinery NEXSTAR BROADCASTING: Moody's Affirms 'B3' CFR; Outlook Positive PACIFIC MONARCH: Approved Sale Still Not Completed PALM DESERT NB: Closed; Pacific Premier Bank Assumes All Deposits PISTOL PETE'S: To Auction Off Restaurant at Bankruptcy PITTSBURGH CORNING: Corning Inc. Has $462MM Net Income in Q1 PLANTATION FB: Closed; First Federal Bank Assumes All Deposits POST PROPERTIES: S&P Affirms 'BB' Rating on Preferred Stock QUANTUM FUEL: Unit Buys New Wind Farm in Ontario REDDY ICE: Kessler Says $1MM Class Settlement in Bankr. Court RENEGADE HOLDINGS: Auction of Chinqua Penn Assets Nets $2MM+ REPUBLIC MORTGAGE: Under Supervision From NC Dept. of Insurance REVLON CONSUMER: Reports $10 Million Net Income in First Quarter REVLON INC: Reports $8.5 Million Net Income in First Quarter RIVER ROAD: High Court Focuses on "Indubitable Equivalence" RYLAND GROUP: Incurs $5.1 Million Net Loss in First Quarter RYLAND GROUP: Seven Directors Elected at Annual Meeting SABRE HOLDINGS: S&P Affirms 'B' Corp. Credit Rating; Outlook Pos SEALY CORP: H Partners Wants KKR-Affiliated Directors Replaced SOLAR TRUST: Mason Capital, Not NextEra, is the DIP Lender SOLYNDRA LLC: Court Extends Solicitation Period Until Sept. 23 SPANISH TRAIL: Resolves Chapter 11 Case by Ceding Ownership SUBURBAN PROPANE: Moody's Affirms 'Ba2' CFR; Outlook Negative TALON THERAPEUTICS: Amends 4.1 Million Resale Prospectus TELKONET INC: Tim Ledwick Appointed to Board of Directors TENET HEALTHCARE: Buys Back $299-Mil. of Conv. Preferred Stock TENET HEALTHCARE: Moody's Rates $141MM Senior Secured Notes 'B1' THERMON INDUSTRIES: S&P Retains 'B+' Corporate Credit Rating TOPS HOLDING: S&P Ups Corp. Credit Rating to 'B+'; Outlook Stable TRIBUNE CO: Bank Debt Trades at 32% Off in Secondary Market TRIDENT MICROSYSTEMS: Three Directors Resign from Board TXU CORP: Bank Debt Trades at 44% Off in Secondary Market UNITED STATES OIL: CEO Alex Tawse Resigns; James Crimi Takes Over US FIDELIS: Committee Can Hire GCG as Claims and Notice Agent USEC INC: Ten Directors Elected at Annual Meeting UTSTARCOM HOLDINGS: Swings to $11.7 Million Net Income in 2011 VERSO PAPER: Moody's Says Debt Exchange Offer to Hit 'B1' Rating VIASPACE INC: Director Paul Kim Resigns for Personal Reasons W.R. GRACE: Hikes Net Income to $60.9MM in Q1 2012 W.R. GRACE: Has $19.5-Mil. Settlement of Libby Claimants Disputes W.R. GRACE: May 1 Hearing on Garlock Plea for Plan Rehearing W.R. GRACE: Has Confidential Settlement of Locke Claim W.R. GRACE: Pachulski Discloses Tie-Ups With Kirkland WESTMORELAND COAL: Offering $50 Million Common Shares * Moody's Says US Cable Industry EBITDA Growth to Decelerate * S&P's 2012 Global Corporate Default Tally Rises to 29 * Disregard for IRS Regulations Not Fatal for Exemption * Five Bank Failures Bring Year's Tally to 22 * New Research Paper Calls for 'Repo Resolution Authority' * Matthew Ertman Winner of the M&A Advisor's Recognition Awards * BOND PRICING -- For Week From April 16 to 20, 2012 ********* 24/7 FITNESS CLUB: Federal Judge Dismisses Chapter 11 Case ---------------------------------------------------------- Tyrone Richardson at the Morning Call reports that a federal judge has dismissed Lehigh Valley Racquet and 24/7 Fitness Clubs' Chapter 11 bankruptcy case. According to the report, the regional fitness chain with locations in Bethlehem, Trexlertown and South Whitehall Township, Pa., filed a motion for dismissal after reaching a resolution with its largest creditor, Nova Bank of Philadelphia, earlier this month. The report notes, as part of the resolution with Nova Bank, 24/7 Fitness' founder, John F. Brinson, has agreed to resign as CEO on April 24, turning over the position to Doug Cash, a fitness club consultant based in Chicago, who has been working with 24/7 Fitness Clubs for three years. Mr. Brinson will remain board chairman. The report relates Nova Bank filed a motion this week objecting to the case's dismissal until 24/7 Fitness could negotiate a lower rent for its Trexlertown facility, according to court documents. The bank argued that the club "cannot generate positive cash flow or otherwise operate successfully under the existing lease terms." Jeffrey Kurtzman, a Philadelphia attorney for Nova Bank, withdrew the motion on April 26, saying the bank is confident Mr. Cash will be able to negotiate better lease terms. Lehigh Valley Racquet and 24/7 Fitness Clubs filed for Chapter 11 bankruptcy on March 5, citing about $12 million in debt, including a roughly $8.6 million mortgage to Nova Bank. ADVANCED MICRO: S&P Raises Corporate Credit Rating to 'BB-' ----------------------------------------------------------- Standard & Poor's Rating Services raised its corporate credit and senior unsecured issue ratings on Sunnyvale, Calif.-based Advanced Micro Devices Inc. (AMD) to 'BB-' from 'B+'. "At the same time, we removed the ratings from CreditWatch, where they were placed with positive implications on Jan. 31, 2012. The rating outlook is stable," S&P said. "The upgrade reflects AMD's improved financial profile, along with an improved business risk profile," said Standard & Poor's credit analyst John D. Moore. "It also reflects the company's prospects for further revenue, earnings, and market share stability, given improved execution of wafer supply from GLOBALFOUNDRIES (GF), recent contractual amendments with GF, and AMD's commitment to ample product development spending." "AMD maintains a simple capital structure, composed of a modest amount of capital leases (about $30 million outstanding at March 31, 2012) and about $2.1 billion of senior unsecured notes, due between 2012 and 2020, including two senior unsecured convertible note tranches. We rate AMD's senior unsecured notes at 'BB-' (the same as the corporate credit rating) with a recovery rating of '3', indicating average (30%-50%) of recovery in the event of a payment default," S&P said. "The 'BB-' corporate credit rating on AMD reflects the company's 'weak' business risk profile, characterized by intense competition from Intel Corp. and the threat of competition from ARM-based (a type of computing instruction set) competitors, partly offset by AMD's 'significant' financial risk profile, with considerable support provided by its lightly leveraged balance sheet and 'adequate' liquidity. Our assessment of the company's business risk profile also incorporates AMD's commitment to R&D spending, which we expect will continue to represent about 22% of revenue," S&P said. "The outlook is stable. We expect AMD's financial profile to offset ongoing and considerable business risk. A rating downgrade could result from a number of developments, including sharply lower demand, erosion of market share, or weaker manufacturing execution. Any of these scenarios could weaken the financial profile that supports the rating. Specifically, we would consider a lower rating if liquidity fell below $1 billion or if leverage was on a trajectory to exceed 3x," S&P said. "We would consider a higher rating once AMD builds a track record of stable to growing market share and earnings have been well established, leading us to conclude the leverage could remain over time at or below 2x. Given AMD's competitive and cyclical operating environment, an upgrade is unlikely over at least the next 12 to 18 months," S&P said. AFA INVESTMENT: Has Until July 27 to Propose Chapter 11 Plan ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware extended AFA Investment Inc., et al.'s exclusive periods to file and solicit acceptances for the proposed Chapter 11 Plan until July 27, 2012, and Sept. 25, respectively. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. is one of the largest processors of ground beef products in the United States. The Company has five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA has seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% percent of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings -- BLBT -- affected sales. Judge Mary Walrath presides over the case. Lawyers at Jones Day and Pachulski Stang Ziehl & Jones LLP serve as the Debtors' counsel. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. McDonald Hopkins LLC and Potter Anderson & Corroon LLP represents the Committee. AFA INVESTMENT: Schedules and Statements Due May 24 --------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended until May 24, 2012, AFA Investment Inc., et al.'s time to file their schedules and statements of financial affairs. The Court was advised that the Debtors and the Official Committee of Unsecured Creditors had resolved the Committee's limited objection. Previously, the Committee has asked that the Court to deny the Debtors' request for a June 1 schedules filing extension, and extend the schedules filing only until May 17. According to the Committee, it has a deadline of June 11, 2012, to complete its investigation of the prepetition secured lenders' liens. The Committee added that the Debtors' proposed time frame to file the schedules and statements does not provide the Committee with sufficient time to properly review the schedules and statements and to complete its lien investigation. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. is one of the largest processors of ground beef products in the United States. The Company has five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA has seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% percent of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings -- BLBT -- affected sales. Judge Mary Walrath presides over the case. Lawyers at Jones Day and Pachulski Stang Ziehl & Jones LLP serve as the Debtors' counsel. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. McDonald Hopkins LLC and Potter Anderson & Corroon LLP represents the Committee. AFA INVESTMENT: Jones Day Approved as Bankruptcy Counsel -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized AFA Investment Inc., et al., to employ Jones Day as counsel. As reported in the Troubled Company Reporter on April 19, 2012, the Debtors will pay the firm based on these hourly rates: Jeffrey B. Eliman, partner $800 Tobias S. Keller, partner $775 Robert A. Trodella, partner $725 Aaron L. Agenbroad, partner $700 John E. Mazey, partner $650 Brett J. Berlin, of counsel $625 Timothy W. Hoffmann, associate $625 Daniel J. Merrett, associate $475 Dara R. Levinson, associate $400 Nicholas C. Bowen, paralegal $225 Tobias S. Keller, a partner in Jones Day, assured the Court that Jones Day is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. is one of the largest processors of ground beef products in the United States. The Company has five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA has seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% percent of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings -- BLBT -- affected sales. Judge Mary Walrath presides over the case. Lawyers at Jones Day and Pachulski Stang Ziehl & Jones LLP serve as the Debtors' counsel. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. McDonald Hopkins LLC and Potter Anderson & Corroon LLP represents the Committee. AFA INVESTMENT: Pachulski Stang OK'd as Restructuring Co-Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized AFA Investment Inc., et al., to employ Pachulski Stang Ziehl & Jones LLP as restructuring co-counsel. As reported in the Troubled Company Reporter on April 19, 2012, the principal attorneys and paralegals designated to represent the Debtors and their standard hourly rates are: Laura Davis Jones $955 Timothy P. Cairns $525 Peter J. Keane $395 Monica Molitor $275 Prepetition, PSZ&J has received payments in the amount of $109,414 including the Debtors aggregate filing fees for these cases, in connection with its prepetition representation of the Debtors. PSZ&J is current as of the Petition Date, but has not yet completed a final reconciliation of its prepetition fees and expenses. Upon final reconciliation of the amount actually expended prepetition, any balance remaining from the prepetition payments to the firm will be credited to the Debtors and utilized as PSZ&J's retainer to apply to postpetition fees and expenses pursuant to the compensation procedures approved by this Court in accordance with the Bankruptcy Code. To the best of the Debtors' knowledge, PSZ&J is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. is one of the largest processors of ground beef products in the United States. The Company has five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA has seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% percent of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings -- BLBT -- affected sales. Judge Mary Walrath presides over the case. Lawyers at Jones Day and Pachulski Stang Ziehl & Jones LLP serve as the Debtors' counsel. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. McDonald Hopkins LLC and Potter Anderson & Corroon LLP represents the Committee. ALION SCIENCE: M. Alber Resigns as CFO, B. Broadus Takes Over ------------------------------------------------------------- Michael J. Alber, chief financial officer and a named executive officer of Alion Science and Technology Corporation, has resigned from his positions as Senior Vice President and Chief Financial Officer of the Registrant effective April 23, 2012, to join a large, publicly-traded company. Effective April 23, 2012, Barry M. Broadus has been named (Acting) Chief Financial Officer of the Company. Mr. Broadus has served as Alion's Corporate Vice President, Director of Financial Planning, Analysis & Reporting since joining Alion in September 2008. Mr. Broadus, age 52, brings over 25 years of progressive business and financial management experience with technology-based companies providing products and services to the Federal Government and commercial marketplace. In his previous position as Alion's Corporate Vice President, Director of Financial Planning, Analysis and Reporting, he was responsible for Alion's financial management reporting and systems, budgeting, planning, and forecasting functions. His most significant activities at Alion have been assisting in the preparation for and executing the Company's 2010 bond offering and new credit facility, implementing new financial planning processes and tools, enhancing compliance programs, and implementing a number of new business process improvement initiatives for greater efficiency and effectiveness. Prior to joining Alion, from November 2004 to September 2008 Mr. Broadus served as Vice President and Business Unit Controller at Science Applications International Corporation where he was responsible for the financial oversight of the Energy, Environment & Infrastructure Business Unit. Prior to SAIC, from September 2000 to July 2004 he was the Chief Financial Officer for Brainbench, Inc. Prior to Brainbench, he served for 12 years at EDS, as the Military Systems Business Unit Controller. He also worked for Andersen Consulting. In his earlier career, he was an Officer in the U.S. Army from 1982 to 1985. Mr. Broadus received a Bachelor of Science in Accounting from the University of Alabama and his Certified Public Accountant (CPA) certification from the Commonwealth of Virginia. In connection with his new role, Mr. Broadus will receive a promotion bonus of $25,000 and his salary will be increased to $279,898. About Alion Science Alion Science and Technology Corporation, based in McLean, Virginia, is an employee-owned company that provides scientific research, development, and engineering services related to national defense, homeland security, and energy and environmental analysis. Particular areas of expertise include communications, wireless technology, netcentric warfare, modeling and simulation, chemical and biological warfare, program management. The Company reported a net loss of $44.38 million for the year ended Sept. 30, 2011, compared with a net loss of $15.23 million during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $642.26 million in total assets, $768.24 million in total liabilities, 124.29 million in redeemable common stock, $20.78 million in common stock warrants, $123,000 in accumulated other comprehensive loss and a $270.93 million accumulated deficit. * * * Alion carries 'Caa3' corporate family and probability of default Ratings, with stable outlook, from Moody's. Alion carries a 'B-' corporate credit rating, with stable outlook, from Standard & Poor's. Moody's said in March 2010, "The Caa1 corporate family rating would balance the continued high leverage against a promising business backlog that could sustain the good 2009 revenue growth rate, though credit challenges would remain pronounced." As reported by the TCR on Sept. 8, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on McLean, Va.-based Alion Science and Technology Corp. to 'CCC+' from 'B-'. The rating outlook is negative. "The downgrade of Alion is a result of the company's recent operational weakness," said Standard & Poor's credit analyst Alfred Bonfantini, "and the prospect of further pressure on revenues, which stem from the continuing resolution on the 2011 Federal government budget that wasn't settled until April 2011, the subsequent specter of a U.S. government default during the debt ceiling debate, and the ongoing uncertainty over future budget cuts and levels." ALIXPARTNERS LLP: S&P Puts 'BB' Corp. Credit Rating on Watch Neg ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB' corporate credit rating for Southfield, Mich.-based AlixPartners LLP, along with its 'BB' issue-level rating on the company's senior secured debt, on CreditWatch with negative implications. "The CreditWatch placement is based on AlixPartners' agreement to sell a majority interest to CVC Capital Partners as part of a recapitalization. The company expects to close the transaction in the summer and did not disclose the terms. We are concerned that the recapitalization will likely increase debt leverage and impair credit quality. Following the transaction, AlixPartners' 125 managing directors and Jay Alix (the founder) are expected to maintain their sizable minority stake in the company. In the fourth quarter of 2011, year-over-year revenue and EBITDA growth were fairly healthy, at 4% and 12%, respectively, with a higher average billing rate more than offsetting a slight deterioration in average consultant utilization. At the end of 2011, debt leverage was 3x, down moderately from 3.4x at the end of 2010," S&P said. "We will resolve the CreditWatch listing after discussions with the management on their financial policy and capital structure following the recapitalization and our evaluation of the credit impact," S&P said. ALLY FINANCIAL: Chrysler Won't Renew; Deal Expires April 2013 ------------------------------------------------------------- Ally Financial Inc. is currently party to an agreement with Chrysler Group LLC, pursuant to which Chrysler is obligated to provide Ally with exclusivity privileges related to certain of its retail financing subvention programs. The agreement extends through April 30, 2013, and would automatically extend through April 30, 2014, unless Chrysler notifies Ally of nonrenewal on or before April 30, 2012, in which case, the agreement would expire on April 30, 2013. On April 25, 2012, Chrysler provided Ally with notification of nonrenewal, and as a result the agreement will expire on April 30, 2013. Ally competes in the marketplace for all other parts of the business with Chrysler dealers such as wholesale financing, standard rate consumer financing and leasing. Chrysler and Ally continue to have constructive discussions about the future relationship. Ally expects to continue to play a significant role with Chrysler dealers in the future as the dealer is Ally's direct customer for the majority of business that is conducted. In the first quarter of 2012, the Chrysler subvented business accounted for approximately 5% of Ally's total U.S. consumer originations and comprised approximately 3% of Ally's earning asset base at March 31, 2012. About Ally Financial Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3% stake. Private equity firm Cerberus Capital Management LP keeps 14.9%, while General Motors Co. owns 6.7%. Ally has tapped Goldman Sachs Group Inc. and Citigroup Inc. to advise on a range of issues, including strategic alternatives for the mortgage business and repayment of taxpayer funds. Ally reported a net loss of $157 million in 2011, compared with net income of $1.07 billion in 2010. The Company's balance sheet at Dec. 31, 2011, showed $184.05 billion in total assets, $164.68 billion in total liabilities, and $19.37 billion in total equity. ResCap Residential Capital, LLC, one of the Company's mortgage subsidiaries, continues to be negatively impacted by the events and conditions in the mortgage banking industry and the broader economy that began in 2007. Market deterioration has led to fewer sources of, and significantly reduced levels of, liquidity available to finance ResCap's operations. During the fourth quarter of 2011, ResCap recorded a charge of $212 million for penalties imposed by certain of the Company's regulators and other governmental agencies in connection with mortgage foreclosure- related matters. ResCap remains heavily dependent on Ally and its affiliates for funding and capital support, and there can be no assurance that Ally or its affiliates will continue those actions or that Ally will choose to execute any further strategic transactions with respect to ResCap or that any transactions undertaken will be successful. Consequently, there remains substantial doubt about ResCap's ability to continue as a going concern. Should Ally no longer continue to support the capital or liquidity needs of ResCap or should ResCap be unable to successfully execute other initiatives, it would have a material adverse effect on ResCap's business, results of operations, and financial position. Ally has extensive financing and hedging arrangements with ResCap that could be at risk of nonpayment if ResCap were to file for bankruptcy. At Dec. 31, 2011, Ally had $2.6 billion in funding arrangements with ResCap. This amount included $1.0 billion of senior secured credit facilities, which were fully drawn at Dec. 31, 2011. This amount further included a $1.6 billion line of credit consisting of $1.1 billion in secured capacity, of which $235 million was drawn, and $500 million of unsecured capacity. The unsecured portion is only available after the secured portion has been fully drawn. * * * In February 2012, Fitch Ratings downgraded the long-term Issuer Default Rating (IDR) and the senior unsecured debt rating of Ally Financial and its subsidiaries to 'BB-' from 'BB'. The Rating Outlook is Negative. The downgrade primarily reflects deteriorating operating trends in ResCap, which has continued to be a drag on Ally's consolidated credit profile, as well as exposure to contingent mortgage-related rep and warranty and litigation issues tied to ResCap, which could potentially impact Ally's capital and liquidity levels. ALLY FINANCIAL: Reports $310 Million Net Income in Q1 ----------------------------------------------------- Ally Financial Inc. reported net income of $310 million for the first quarter of 2012, compared to a net loss of $206 million in the prior quarter and net income of $146 million for the first quarter of 2011. "Ally's auto finance business posted strong and steady results for the quarter, and we are encouraged by the diversification we have been able to achieve with our product mix and dealer customers," said Ally Chief Executive Officer Michael A. Carpenter. "The business continues to see earning asset growth even amid one of the most competitive periods for auto financing assets." Carpenter continued, "The Ally Bank franchise is gaining momentum in the marketplace, and we crossed a key threshold of exceeding one million customer accounts in the first quarter, which is an increase of about 30 percent year-over-year. "Our objective with respect to the mortgage business is unchanged. We continue to have a keen focus on taking steps to reduce risk in that business, while protecting the remaining Ally franchises and enabling them to thrive," said Carpenter. "This will be critical toward our longer-term efforts to maximize value for our shareholders and continue to repay the U.S. Treasury's investment in full." Ally's consolidated cash and cash equivalents were $13.1 billion as of March 31, 2012, compared to $13.0 billion at Dec. 31, 2011. Ally Financial's balance sheet at March 31, 2012, showed $186.35 billion in total assets, $166.68 billion in total liabilities and $19.66 billion in total equity. A copy of the press release is available for free at: http://is.gd/P51b8M About Ally Financial Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3% stake. Private equity firm Cerberus Capital Management LP keeps 14.9%, while General Motors Co. owns 6.7%. Ally has tapped Goldman Sachs Group Inc. and Citigroup Inc. to advise on a range of issues, including strategic alternatives for the mortgage business and repayment of taxpayer funds. Ally reported a net loss of $157 million in 2011, compared with net income of $1.07 billion in 2010. ResCap Residential Capital, LLC, one of the Company's mortgage subsidiaries, continues to be negatively impacted by the events and conditions in the mortgage banking industry and the broader economy that began in 2007. Market deterioration has led to fewer sources of, and significantly reduced levels of, liquidity available to finance ResCap's operations. During the fourth quarter of 2011, ResCap recorded a charge of $212 million for penalties imposed by certain of the Company's regulators and other governmental agencies in connection with mortgage foreclosure- related matters. ResCap remains heavily dependent on Ally and its affiliates for funding and capital support, and there can be no assurance that Ally or its affiliates will continue those actions or that Ally will choose to execute any further strategic transactions with respect to ResCap or that any transactions undertaken will be successful. Consequently, there remains substantial doubt about ResCap's ability to continue as a going concern. Should Ally no longer continue to support the capital or liquidity needs of ResCap or should ResCap be unable to successfully execute other initiatives, it would have a material adverse effect on ResCap's business, results of operations, and financial position. Ally has extensive financing and hedging arrangements with ResCap that could be at risk of nonpayment if ResCap were to file for bankruptcy. At Dec. 31, 2011, Ally had $2.6 billion in funding arrangements with ResCap. This amount included $1.0 billion of senior secured credit facilities, which were fully drawn at Dec. 31, 2011. This amount further included a $1.6 billion line of credit consisting of $1.1 billion in secured capacity, of which $235 million was drawn, and $500 million of unsecured capacity. The unsecured portion is only available after the secured portion has been fully drawn. * * * In February 2012, Fitch Ratings downgraded the long-term Issuer Default Rating (IDR) and the senior unsecured debt rating of Ally Financial and its subsidiaries to 'BB-' from 'BB'. The Rating Outlook is Negative. The downgrade primarily reflects deteriorating operating trends in ResCap, which has continued to be a drag on Ally's consolidated credit profile, as well as exposure to contingent mortgage-related rep and warranty and litigation issues tied to ResCap, which could potentially impact Ally's capital and liquidity levels. AMERICAN AIRLINES: Committee Wants to Participate in CBA Trial -------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in AMR Corp.'s Chapter 11 case insists that it has broad standing to appear and be heard on any issue in AMR's Chapter 11 cases, including the trial involving the Debtors' proposal to reject collective bargaining agreements under Section 1113 of the Bankruptcy Code. The Transport Workers Union of America's request to exclude the Creditors' Committee from participating in the Sec. 1113 trial "can only be understood as a tactical effort in the context of a Section 1113 contested hearing to further the self-interest of a labor organization," counsel to the Creditors' Committee, John Wm. Butler, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Chicago, Illinois, asserts. Mr. Butler relates that the Creditors' Committee duly formed the labor subcommittee in January to deal with the Debtors' Sec. 1113 process. The Creditors' Committee determined that it was not appropriate for its labor organization members to serve on the Labor Subcommittee. On April 19, the Labor Subcommittee reported to the full Creditors' Committee that it had authorized the Creditors' Committee's counsel to participate at the Sec. 1113 trial generally in support of the Debtors' efforts to reject the CBAs. Notably, the TWU filed its motion to exclude the Creditors' Committee a day after the Labor Committee's decision, he states. He further contends that the Creditors' Committee's role as a participant in the Section 1113 trial has been no secret. The April 2, 2012 pre-trial scheduling order, which was agreed to by the TWU, specifically identified the Creditors' Committee as a Section 1113 party, he adds. In support of the Creditors' Committee's response, William Derrough, managing director of Moelis & Company LLC, relates that in the course of its deliberations, the Labor Subcommittee has met with only three outside parties: the Debtors and two labor organizations who are members of the Creditors' Committee. Neither Moelis nor the Creditors' Committee's financial advisor has presented materials separately to the Labor Subcommittee, he states. Bev Goulet Reuters reports that four witnesses, including AMR restructuring head Bev Goulet have testified before the Court with respect to proposed rejection of the CBAs. After the hearing, the company and its unions are given two weeks to negotiate consensual deals, Reuters noted. The Transport Workers Unions, which represents 26,000 ground workers at AMR, plans to send the business plan to its members for a vote, according to Reuters' sources. If no new deals have been reached within the two-week period, the unions will present their case in May, said the report. Judge Lane is expected to issue a ruling in June. Still, both sides must ultimately attempt to reach consensual deals, Reuters noted. If granted, the unilateral terms would be imposed in the interim, the report added. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Non-Union PSAs Insist Changes Not Allowed ------------------------------------------------------------ AMR Corp. and its affiliates have opposed a motion by the Ad Hoc Committee of Passenger Service Agreements to enjoin the Debtors from making unilateral changes in the terms and conditions of employment of their non-union passenger service agents. As reported in the April 4, 2012 edition of the Troubled Company Reporter, Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, counsel to the Debtors, noted, among other things, that the Railway Labor Act does not require a carrier to maintain the status quo in terms and conditions of employment in the absence of an initial CBA or a subsequently operative CBA, neither of which exists in the AMR case. Counsel to the Ad Hoc Committee of Passenger Service Agents, Thomas M. Kennedy, Esq., at Kennedy, Jennik & Murray, P.C., in New York, asserts that the case law cited by the Debtors permitting unilateral changes in employment conditions before the adoption of a collective bargaining agreement are all outside the context of Chapter 11. He argues that those cases occurred outside of the Chapter 11 context when an employer like American as defined under the Railway Labor Act has unlimited rights to establish conditions of labor. There is no dispute that the more general RLA principle that an employer can make unilateral changes in its conditions of employment before a collective bargaining agreement is reached is controlled by Section 1113 of the Bankruptcy Code once a Chapter 11 proceeding has begun, he points out. More importantly, the PSAs maintain that there is no compelling justification for changes to the terms and conditions set unilaterally by the Debtors. Indeed, the group believes that American's announcement of changing the employment terms is precisely to retaliate against employees for seeking union representation and to discourage employees from supporting the the Communication Workers of American, AFL-CIO, which filed a petition for union representation. "It is hardly inequitable to prevent American from loading further concessions on the backs of the PSAs while their petition for union representation is pending," he tells the Court. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Brinks Hofer Approved as Corporate Counsel ------------------------------------------------------------- AMR Corp. and its affiliates obtained the Bankruptcy Court's permission to employ Brinks Hofer Gilson & Lione as their corporate counsel, nunc pro tunc to the Petition Date. No objections were filed to the application. Brinks Hofer has served as counsel for the Debtors on a variety of matters since 2005. Brinks Hofer's duties have included assisting the Debtors with intellectual property law matters, including patent, trademark, copyright, and trade secret matters, including: (a) trademark clearance and filing activities including trademark and service mark applications and maintenance of registrations in the U.S. Patent and Trademark Office and oversight of the worldwide procurement and maintenance of all trademarks and service marks involving the Debtors; (b) opposition and cancellation proceedings before the U.S. Patent and Trademark Office and oversight of worldwide opposition and cancellation proceedings, as well as other domestic and international trademark enforcement actions and adversarial court proceedings involving the enforcement or defense of registered or common law trademarks or service marks of the Debtors, including any appeals related thereto, to the extent not stayed by the Debtors' Chapter 11 cases; (c) intellectual property opinion and procurement activities, including domestic and international trademark and service mark renewals and payment of annuities to maintain current trademark and service mark registrations; (d) negotiation and drafting of contracts and licenses involving intellectual property rights and settlement of adversarial proceedings involving same; (e) continuing negotiations related to the attempted resolution of trademark and related disputes, and (f) other matters as may arise in connection with those services. Brinks Hofer was authorized to continue representing the Debtors under the OCP Order. However, Brinks Hofer's postpetition fees and expenses have exceeded the $50,000 monthly cap under the OCP Order. The Debtors have determined that Brinks Hofer is likely to continue billing in amounts exceeding the cap imposed by the OCP Order by an estimated $40,000 per month. Accordingly, the Debtors are seeking permission to employ Brinks Hofer as special counsel under Section 327(e) of the Bankruptcy Code. Brinks Hofer's professionals will charge for their services on an hourly basis. Brinks Hofer's current standard hourly rates range from: $650 to $435 for shareholders, $385 to $230 for associates, and $210 to $110 for paraprofessionals. Brinks Hofer also intends to seek reimbursement for reasonable expenses incurred. Bradley G. Lane, Esq., shareholder at Brinks Hofer Gilson & Lione, in Chicago, Illinois -- blane@brinkshofer.com -- discloses that his firm currently represents or has represented certain parties-in-interest in matters unrelated to the Debtors, a schedule of which is available for free at: http://bankrupt.com/misc/AmAir_BrinksClients.pdf Mr. Lane further discloses that as of the Petition Date, Brinks Hofer holds a prepetition claim for approximately $151,051 for services rendered to the Debtors. Notwithstanding those disclosures, Mr. Lane maintains that Brinks Hofer is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AXLE: Reports $50.3 Million Net Income in First Quarter ---------------------------------------------------------------- American Axle & Manufacturing Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $50.30 million on $751.50 million of net sales for the three months ended March 31, 2012, compared with net income of $36.60 million on $645.60 million of net sales for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $2.50 billion in total assets, $2.87 billion in total liabilities and a $376.40 million total stockholders' deficit. "AAM achieved solid financial results in the first quarter of 2012, with strong sales growth driving higher earnings. These results reflect the favorable impact of increased production volumes across many of our major product programs and sustained improvements in capacity utilization," said AAM's Co-Founder, Chairman of the Board and Chief Executive Officer, Richard E. Dauch. "During 2012 and continuing through the year 2013, AAM is energized to support numerous new global product and process launches, many of which feature exciting new advanced driveline technologies and enhance the diversification of our customer base, product profile and global market concentrations." A copy of the Form 10-Q is available for free at: http://is.gd/7IlDmQ About American Axle Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- manufactures, engineers, designs and validates driveline and drivetrain systems and related components and chassis modules for light trucks, sport utility vehicles, passenger cars, crossover vehicles and commercial vehicles. AXL has financial support from GM, its largest customer which accounted for 78% of sales in 2009. * * * In June 2011, Standard & Poor's Ratings Services raised its corporate credit rating on American Axle & Manufacturing Holdings Inc. to 'BB-' from 'B+'. The outlook is stable. "At the same time, we raised our issue-level ratings on the company's senior secured debt to 'BB' from 'BB-' and on the unsecured debt to 'B' from 'B-'. All the recovery ratings on the debt remain unchanged," S&P stated. "The upgrade reflects our opinion that American Axle's credit measures will improve further over the next 12 months under the gradual recovery in North American auto demand, and that the company's leverage will decline to 3.5x," said Standard & Poor's credit analyst Lawrence Orlowski. As reported by the TCR on June 3, 2011, Moody's Investors Service raised American Axle's Corporate Family Rating and Probability of Default Rating to 'B1' from 'B2'. The raising of American Axle's CFR to B1 incorporates Moody's expectation that the company's improved year-over-year EBIT margin will largely be sustained over intermediate-term despite potential temporary automotive production disruptions and high gasoline prices. AMERICAN PATRIOT: Expects Reelection of CEO Randal to Board ----------------------------------------------------------- The appointment of James Randal Hall as a member of the Board of Directors of American Patriot Financial Group, Inc., was approved by the Company's regulators on July 28, 2011. Under Tennessee law, Mr. Hall's term as a director of the Company will expire at the Company's next Annual Meeting of Shareholders expected to be held in July 2012, and the Company expects the Board will nominate Mr. Hall for election to the Board at the Annual Meeting in the class of directors with a term to expire at the Company's Annual Meeting of Shareholders to be held in 2014. Mr. Hall has served as the Chief Executive Officer and President of the Company and American Patriot Bank, a wholly-owned subsidiary of the Company, since June 2011. Prior to that time, he served as the Bank's Senior Vice President -- Senior Lender and Chief Credit Officer since August 2010. Before coming to the Bank, he served as Senior Vice President -- Lending, Chief Lending Officer with Clayton Bank and Trust in Knoxville, Tennessee from May 2008 to August 2010 and Senior Vice President of Commercial Lending with Citizens Bank in Morristown, Tennessee from December 2001 to May 2008. The Board believes that Mr. Hall's extensive banking experience and his experience managing the day to day operations of the Company's business as the Company's and the Bank's Chief Executive Officer provide the Board with knowledge and insight into the Company's operations and make him a valuable member of the Board. About American Patriot Based in Greenville, Tenn., American Patriot Financial Group, Inc. is a one-bank holding company formed as a Tennessee corporation to own the shares of American Patriot Bank. The Bank is the only subsidiary of the Corporation. American Patriot Bank commenced operations as a state chartered bank on July 9, 2001. The Bank had total assets of roughly $118 million at Dec. 31, 2009. The Bank is not a member of the Federal Reserve System. The Bank's customer base consists primarily of small to medium- sized business retailers, manufacturers, distributors, land developers, contractors, professionals, service businesses and local residents. On Aug. 18, 2010, the Company received from the Federal Deposit Insurance Corporation, a Supervisory Prompt Corrective Action Directive, dated August 17, 2010, due to American Patriot Bank's "significantly undercapitalized" status. The Directive requires that the Bank submit an acceptable capital restoration plan on or before August 31, 2010, providing that, among other things, at a minimum, the Bank will restore and maintain its capital to the level of "adequately capitalized." The Company reported a net loss of $1.18 million in 2011, compared with a net loss of $2.29 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $94.21 million in total assets, $93.18 million in total liabilities and $1.02 million in total stockholders' equity. For 2011, Hazlett, Lewis & Bieter, PLLC, in Chattanooga, Tennessee, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses for the past five years resulting in a retained deficit of $7,148,851 at Dec. 31, 2011. At Dec. 31, 2011 and 2010, the Company and its subsidiary were significantly undercapitalized based on regulatory standards and has consented to an Order to Cease and Desist with its primary federal regulator that requires, among other provisions, that it achieve regulatory capital thresholds that are significantly in excess of its current actual capital levels. The Company's nonperforming assets have increased significantly during 2011 and 2010 related primarily to deterioration in the credit quality of its loans collateralized by real estate. The Company, at the holding company level, has a note payable that was due Feb. 28, 2011, which is now in default. This note is securitized by 100 percent of the stock of the subsidiary. AMG PATTERSON: Involuntary Chapter 11 Case Summary -------------------------------------------------- Alleged Debtor: AMG Patterson, LLC 1118 N. Patterson Avenue Santa Barbara, CA 93111 Bankruptcy Case No.: 12-11617 Involuntary Chapter 11 Petition Date: April 24, 2012 Court: U.S. Bankruptcy Court Central District of California (Santa Barbara) Judge: Robin Riblet Creditor who signed the Chapter 11 petition: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ F. Michael Brovsky Consulting Fees $25,000 1237 S. Victoria Avenue, #440 Oxnard, CA 93035 ANIXTER INC: S&P Rates $350-Mil. Sr. Unsecured Notes 'BB' --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' issue-level rating to Glenview, Ill.-based Anixter Inc.'s $350 million senior unsecured notes due 2020. "The recovery rating on this debt is '4', indicating our expectation of average (30%-50%) recovery for lenders in the event of a payment default," S&P said. "The 'BB' corporate credit rating on parent Anixter International Inc., the guarantor of the notes, remains unchanged. The ratings on Anixter reflect the company's 'significant' financial risk profile and somewhat aggressive financial policy. Anixter's business risk profile is 'fair,' reflecting a good position in its primary markets and consistent profitability. The company is a leading distributor of specialty wire and cable systems and industrial fasteners. It benefits from its global capabilities, despite deriving about half of its revenues from a relatively narrow market segment. Its liquidity is 'adequate'," S&P said. RATINGS LIST Anixter International Inc. Corporate Credit Rating BB/Stable/-- New Ratings Anixter Inc. Senior Unsecured $350 mil notes due 2020 BB Recovery Rating 4 APRIA HEALTHCARE: S&P Lowers Corporate Credit Rating to 'B+' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Lake Forest, Calif.-based Apria Healthcare Group Inc. to 'B+' from 'BB-'. The outlook is stable. "We also lowered our issue-level ratings on the $700 million A-1 notes to 'BB' from 'BB+'. The recovery rating on the notes is '1' remains unchanged and indicates our expectation of very high (90%- 100%) recovery of principal in the event of payment default. In addition, we lowered our rating on the $317 million A-2 notes to 'B' from 'BB-', and revised our recovery rating on those notes to '5' from '4'. The '4' recovery rating indicates our expectation of average (30%-50%) recovery of principal in the event of payment default. This is mainly the result of the increased availability on the $250 million asset-based loan (ABL) revolver, by $100 million in 2011," S&P said. "We assess Apria's financial risk profile as 'aggressive,' reflecting our expectation that adjusted leverage will remain above 4x over the near term," said Standard & Poor's credit analyst Tahira Wright. "In our opinion we expect its free operating cash flow (FOCF) to remain negative in 2012. The 'weak' business risk profile considers Apria's exposure to third-party reimbursement, operating in a highly fragmented industry, and its ongoing challenges with managing the on-shoring of its billing and customer service functions. The business profile is bolstered by its leading position in providing specialized home health care services and equipment." "Our stable rating outlook on Apria reflects our expectation that adjusted EBITDA will improve modestly as the company resolves its billing problems, but that free cash flow will remain negative in 2012. A higher rating is possible if we believe adjusted leverage will drop to a sustained level below 4x, if cash flow is positive, and if Apria fully resolves its billing issues," S&P said. "We could lower our rating if we believe Apria's efforts to on- shore its billing function falls short of our expectations, and/or anticipated revenue growth is impeded by contract losses, unfavorable pricing, or Medicare cuts that are not mitigated with cost reductions. These actions could threaten Apria's weak business risk profile and result in weaker credit measures. Specifically, if debt leverage, adjusted for one-time occurrences, rises above 5x, and we believe it will remain at that level or higher, or if cash flows are more negative than we expect, we would consider a lower rating," S&P said. ARCAPITA BANK: Milbank Advising Official Creditors' Committee ------------------------------------------------------------- The bankruptcy filing of Arcapita Bank, the $7 billion Bahrain- based private equity fund, is the first test of how Shari'ah- compliant investment structures will be treated under the U.S. Bankruptcy Code. Arcapita, whose investors include a number of sovereign wealth funds, high-net worth individuals, and other financial institutions in the Persian Gulf region, has a portfolio of some 39 companies, including Caribou Coffee and women's retailer J. Jill as well as investments in real estate, energy, healthcare, manufacturing, homebuilding and business services. A significant portion of its holdings are in the U.S., along with substantial investments in Europe and Asia. Arcapita sought Chapter 11 protection in March after failing to refinance a $1.1 billion loan that was maturing. The case is pending before U.S. Bankruptcy Judge Sean Lean in New York's Southern District. There are also insolvency proceedings in the Cayman Islands and elsewhere. Law firm Milbank, Tweed, Hadley & McCloy is advising Arcapita's Official Creditors' Committee. Committee members include Barclays and Commerzbank, as well as several hedge funds and Gulf-based banks and regulatory bodies. Creditors are expected to assert billions of dollars in claims. Reflecting its roots as the first Islamic investment bank originally formed in 1996, Arcapita was structured in adherence to Shari'ah law, which forbids investment in any businesses that offer credit or charge interest, as well as other restrictions consistent with Islamic law. Arcapita's debt was likewise designed to be Shari'ah-compliant. Milbank New York partner Dennis Dunne, who co-chairs the firm's bankruptcy and restructuring practice, is leading the creditor engagement, along with New York partners Abhilash Raval and Evan Fleck, also members of the bankruptcy group. 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. Milbank, Tweed, Hadley & McCloy LLP, in New York, N.Y., and Washington, D.C., is the proposed counsel to the Official Committee of Unsecured Creditors. 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 provisional liquidator. ARCH COAL: S&P Puts 'BB-' Corp. Credit Rating on Watch Negative --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'BB-' corporate credit rating, on St. Louis-based Arch Coal Inc. on CreditWatch with negative implications. "The CreditWatch listing reflects our view that Arch Coal is increasingly likely to fall short of our previous sales and EBITDA estimates in 2012 and 2013," said Standard & Poor's credit analyst James Fielding. "Operating conditions for domestic producers of thermal coal and, to a lesser extent, metallurgical coal remain very difficult due to a mild winter, natural gas substitution in the U.S., and slowing steel production overseas. In our view, these conditions are likely to decrease demand and hurt contract pricing into 2013," S&P said. "We expect to resolve the CreditWatch listing within the next few weeks after we update our operating assumptions, including 2012 and 2013 sales and pricing estimates, and assess the effect these will have on Arch's overall financial risk profile. In addition, we will speak with management concerning its near to intermediate business and financial strategies in light of the weak market conditions. The range of likely outcomes include an affirmation of the current rating if we determine the company is likely to maintain leverage near 5x to a one-notch downgrade if we determine leverage will meaningfully exceed 5x," S&P said. ATTACHMATE CORP: S&P Affirms 'B' Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services affirmed its existing 'B' corporate credit rating on Houston-based host connectivity and systems and security management provider Attachmate Corp. The outlook remains stable. Attachmate is one of four business units in a privately held enterprise software holding company named The Attachmate Group Inc. The other three business units are Novell, NetIQ, and SUSE. The senior secured facilities are secured by substantially all the assets of The Attachmate Group. "Additionally, we assigned our 'BB-' issue-level rating to the company's $1.14 billion senior secured first-lien credit facility (co-issued by NetIQ Corp. & Novell Inc.), which includes a $1.1 billion first-lien term loan due 2018 and a $40 million revolving credit facility due 2017. The recovery rating is '1', indicating our expectation of very high (90%-100%) recovery in the event of a payment default," S&P said. "The company also has a $400 million second-lien term loan that we do not rate," S&P said. "Attachmate intends to use the proceeds from the first- and second-lien term loan facilities, after the repayment of existing credit facilities, along with about $276 million of existing cash, to pay dividends of $585 million to the sponsors," S&P said. "The ratings reflect our expectation that Attachmate will generate good free operating cash flow (FOCF) and the substantial progress made in its integration of Novell, which it acquired in April 2011," said Standard & Poor's credit analyst David Tsui. "Attachmate had identified substantial operational and end-market synergies and expects to fully realize the planned benefits by June 2012, the most considerable of which is from reduction-in- force, which the company already implemented by September 2011. However, the rating reflects its aggressive financial policy, with the proposed dividend recapitalization at about a year after a transformative acquisition, while still facing the challenge of reversing the negative revenue trend at Novell." "The stable outlook reflects our expectation that Attachmate's operating performance will continue to improve following the integration of the Novell acquisition. We could raise the rating if Attachmate can grow organically by improving its Novell and NetIQ businesses without significantly affecting the company's profitability, while sustaining their leverage at its current level. We could consider a downgrade if the reduced headcount contributes to higher-than-expected revenue declines, or if the company engages in additional shareholder-friendly initiatives, leading to depressed FOCF and leverage sustained above 8x," S&P said. ATTACHMATE GROUP: Moody's Affirms 'B2' CFR; Outlook Negative ------------------------------------------------------------ Moody's Investors Service affirmed Attachmate Group Inc.'s B2 corporate family and probability of default ratings and assigned B1 ratings to the company's proposed first lien loan revolver and term loan. The rating outlook remains negative. The proposed facilities along with an unrated $400 million second lien term loan will be used to finance a $584 million shareholder distribution and refinance existing debt. Ratings Rationale The distribution transaction is similar to the one proposed and rated in January 2012 (but subsequently canceled) when Moody's revised the ratings outlook to negative from stable. The negative outlook reflects the increase in debt and decrease in liquidity as a result of the dividend at a time when the company is still integrating the Novell acquisition and revenues remain under pressure. To fund the distribution the company will use approximately $276 million of its existing in cash on hand. While the company has taken considerable costs out of the combined companies, it is still too early to determine the impact of the restructuring on the business. Pro forma revenues have declined on a year-over-year basis since closing and it is too soon to determine if management can stem the declines at the Novell and NetIQ businesses. Of further concern per the terms of the new facilities is the ability for additional dividends from proceeds of certain asset sales and legal settlements. The B2 corporate family rating reflects the leverage pro forma for the proposed dividend, a full year of the Novell acquisition and its cost reductions enacted to date (approximately 3.8-4.0x pro forma) and by the challenges of reversing declines in Novell's and NetIQ's revenues as well the competitive positioning of the combined company's product lines. While the combined Attachmate and Novell businesses has meaningful scale and breadth, outside of the mainframe business (approximately 19% of sales), the company does not have any market leading offerings in the competitive collaboration and systems and security management software sectors. The rating also recognizes the recurring nature of revenues and cash flows as well as strong customer retention rates of Attachmate's mainframe terminal emulation software business as demonstrated by its relative strength through the last downturn. The ratings could be downgraded if the business does not show signs of stabilizing over the next several quarters or leverage is not on track to get below 3.5x over the next twelve months on an actual basis. Given the financial policies of the company and early stage of the Novell integration, an upgrade is not likely over the near to medium term. The following ratings were affirmed: Corporate family rating: B2 Probability of default: B2 The following ratings were assigned: $40 million senior secured first lien revolver, B1 LGD3 (35%) $1,100 million senior secured first lien term loan, B1 LGD3 (35%) Ratings outlook: negative The individual debt instrument ratings were assigned using Moody's Loss Given Default Methodology and based the relative position in the capital structure. The B1 rating on the first lien debt is driven by its senior most position in the capital structure and the support of a $400 million second lien term loan (unrated). The principal methodology used in rating Attachmate was the Global Software Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Attachmate is a leading independent provider of software connectivity products primarily for the legacy, mainframe computing user base as well as a niche participant in the larger, more fragmented systems and security management market. Revenues pro forma for a full year of Novell ownership are approximately $1.1 billion. The company is headquartered in Seattle, Washington. AVAYA INC: Moody's Says Executive Departures No Impact on B3 CFR ---------------------------------------------------------------- Moody's Investors Service says Avaya Inc.'s turnover in its management ranks is of concern but the numbers are relatively small in comparison to the approximate 3000 overall headcount reduction that has taken place since acquiring Nortel in December 2009. The restructuring following the Nortel acquisition served to reduce a significant number of duplicate positions including executives. The B3 corporate family rating is unaffected at this time. Avaya is a global leader in enterprise telephony systems with $5.6 billion of revenues for the LTM period ended December 31, 2011. The principal methodology used in rating Avaya was the Global Communications Equipment Methodology pubished in June 2008. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. B & T OLSON: Files for Chapter 11 in Seattle -------------------------------------------- Snohomish, Washington-based B & T Olson Family LLC filed for Chapter 11 protection (Bankr. W.D. Wash. Case No. 12-14352) on April 26, 2012, in Seattle on April 26, 2012. B & T Olson disclosed $18.3 million in assets and $17.5 million in assets in its schedules, which is available at: http://bankrupt.com/misc/wawb12-14352.pdf The Debtor owns six properties in Lake Stevens, Stanwood, and Camano Island, Washington. Four properties worth $16 million secure $12 million of debt to Opus Bank. According t o the statement of financial affairs, the Debtor had $889,000 of gross income in 2010, $1.14 million in 2011, and $284,000 year to date. Brett T. Olson and Christina L. Olson own the Debtors. BANK OF THE EASTERN SHORE: Closed; No Bank Assumes Deposits ----------------------------------------------------------- Bank of the Eastern Shore of Cambridge, Md., was closed on Friday, April 27, 2012, by the Maryland Commissioner of Financial Regulation, which appointed Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC created the Deposit Insurance National Bank of Eastern Shore (DINB), which will remain open until May 25, 2012, to allow depositors access to their insured deposits and time to open accounts at other insured institutions. At the time of closing, the receiver immediately transferred to the DINB all insured deposits of Bank of the Eastern Shore, except for brokered deposits, certificates of deposits (CDs) and individual retirement accounts (IRAs). The receiver also transferred to the DINB all secured deposits by public entities. The FDIC will mail checks directly to customers with CDs and IRAs. For the brokered deposit customers, the FDIC will pay the brokers directly for the amount of their insured funds. Customers with brokered deposits should contact their brokers directly for information concerning their money. The main office and all branches of Bank of the Eastern Shore will reopen during normal business hours. The DINB will maintain Bank of the Eastern Shore's normal business hours thereafter, until May 25, 2012. Banking activities, such as writing checks and using ATM and debit cards, can continue normally for former customers of Bank of the Eastern Shore until May 14, 2012. Direct Deposit, however, will end on May 18, 2012. Bank of the Eastern Shore official checks will continue to clear and will be issued to customers closing accounts. All insured depositors of Bank of the Eastern Shore are encouraged to transfer their insured funds to other banks during this transitional period. They may do so by asking their new bank to electronically transfer their deposits from the DINB or by writing checks for the amount in their accounts. For depositors who have not closed or transferred their accounts on or before May 25, 2012, the FDIC will mail checks to the address of record for the amount of the insured funds. Under the FDI Act, the FDIC may create a deposit insurance national bank to ensure that depositors have continued access to their insured funds where no other bank has agreed to assume the insured deposits. This arrangement allows for uninterrupted direct deposits and automated payments from customers' accounts and allows them time to find another institution with which to do business. As of Dec. 31, 2011, Bank of the Eastern Shore had $166.7 million in total assets and $154.5 million in total deposits. At the time of closing, the amount of deposits exceeding the insurance limits were undetermined. Uninsured deposits were not transferred to the DINB. The amount of uninsured deposits will be determined once the FDIC obtains additional information from those customers. Customers with accounts in excess of $250,000 should contact the FDIC toll-free at 1-800-591-2817 to set up an appointment to discuss their deposits. Customers who would like more information on the transaction should visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/easternshore.html Beginning April 30, depositors of Bank of the Eastern Shore with more than $250,000 at the bank, to determine their insurance coverage, may visit the FDIC's Web page "Is My Account Fully Insured?" at http://www2.fdic.gov/dip/Index.asp The FDIC as receiver will retain all the assets from Bank of the Eastern Shore for later disposition. Loan customers should continue to make their payments as usual. The cost to the FDIC's Deposit Insurance Fund is estimated to be $41.8 million. Bank of the Eastern Shore is the 18th FDIC-insured institution to fail in the nation this year, and the first in Maryland. The last FDIC-insured institution closed in the state was K Bank, Randallstown, on Nov. 5, 2010. BERNARD L. MADOFF: Liquidation Has Cost SPIC $1.3 Billion --------------------------------------------------------- Irving H. Picard, the trustee liquidating Bernard L. Madoff Investment Securities Inc., said in his seventh interim report that through prepetition litigation and other settlements, he has successfully recovered, or reached agreements to recover, more than $9 billion -- over 50% of the principal lost in the Ponzi scheme by those who filed claims -- for the benefit of all customers of BLMIS. A copy of the report for the six months ended March 31, 2012, is available for free at http://is.gd/RRZK1Y Bill Rochelle, the bankruptcy columnist for Bloomberg News, notes that according to Mr. Picard's report, the liquidation has so far has cost the Securities Investor Protection Corp. $1.3 billion, including $791 million to pay a portion of customers' claims. The remainder of SIPC advances, $536 million, covered administrative costs such as legal and accounting fees. Recovery Mr. Picard is required to submit an interim report every six months. Mr. Picard said he recovered almost $400 million during the six months ended March 31, 2012. As of March 31, he was holding cash or cash equivalents of $184 million and securities worth another $2.5 billion. The trustee said he entered into several significant settlements, including a $326 million settlement with the Internal Revenue Service without litigation. The $9 billion doesn't include an additional $2.2 billion that the estate of Jeffrey M. Picower agreed to forfeit to the U.S. government. That money will go to customers, the government said. The government hasn't decided yet whether it will use Mr. Picard to make the distribution, Mr. Rochelle points out. Mr. Rochelle notes that the bankruptcy court is yet to rule on whether customer claims can be enhanced under a formula taking into account the time value of money. In other words, the courts still must decide if customers who made their investments in earlier years can recover more, and if so how much more, than customers who invested shortly before the fraud blew up. Appeals Mr. Picard has so far made only one distribution in October of $325 million for 1,232 customer accounts. Including the $791 million of advances made by the SIPC, customers have received $1.1 billion to date. Uncertainty created by the appeals has limited Mr. Picard's ability to distribute recovered funds. Outstanding appeals include the $5 billion Picower settlement and the $1.025 billion settlement. There's also a request that the U.S. Supreme Court review the August opinion where the Court of Appeals in New York upheld the bankruptcy court by ruling that customers' claims only include the "net equity", i.e. the difference between cash invested and cash taken out. If the ruling is affirmed, customers won't have customer claims for what Mr. Picard refers to as fictitious profits. Aside from the net equity issue, additional matters contingent upon the ruling include financial enhancements such as dollar interest and the time value of money, according to the trustee's report. The trustee did say that several significant settlements were determined in his favor during the past six months. United States District Judge John G. Koeltl affirmed the Court's decision approving the settlement with Jeffry Picower, upholding both the $5 billion settlement and the permanent injunction. Similarly, an attempt to overturn a $220 million settlement with the heirs of Norman F. Levy was also rejected by United States District Judge Deborah A. Batts. Judge Batts held that the Court was well within its discretion in approving the settlement and rejecting attempts to vacate the Court's prior order. The report doesn't say when the trustee will make another distribution or how much it may be. He says that he is committed to resolve the outstanding issues expeditiously in order to make additional distributions to BLMIS customers as soon as possible. Lawsuits The trustee currently has 1,000 lawsuits pending. Mr. Picard last filed a $329.7 million lawsuit in bankruptcy court April 26 against Standard Chartered Financial Services (Luxembourg) SA to recover money taken out of the Madoff Ponzi scheme through a feeder fund. BG'S GROUP: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: BG's Group, Inc. dba Econo Lodge 3220 N. Cocoa Boulevard Cocoa, FL 32926 Bankruptcy Case No.: 12-05432 Chapter 11 Petition Date: April 23, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: R. Scott Shuker, Esq. LATHAM SHUKER EDEN & BEAUDINE, LLP P.O. Box 3353 Orlando, FL 32802 Tel: (407) 481-5800 Fax: (407) 481-5801 E-mail: bankruptcynotice@lseblaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-05432.pdf The petition was signed by Dinesh C. Gandihi, president. BICENT POWER: Meeting to Form Creditors' Panel on May 3 ------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, will hold an organizational meeting on May 3, 2012, at 10:30 a.m. in the bankruptcy case of Bicent Holdings LLC. The meeting will be held at: The Sheraton Suites Hotel 422 Delaware Avenue Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Bicent Power Bicent Holdings LLC and 12 of its affiliates sought bankruptcy protection under Chapter 11 (Bankr. D. Del. Lead Case No. 12-11304) on April 23, 2012. Bicent, based in Lafayette, Colorado, owns and operates two generating facilities: Hardin, a 120-megawatt coal-fired plant about 40 miles southeast of Billings, Montana, and San Joaquin, a 48-megawatt natural gas- fired facility about 70 miles east of San Francisco in Lathrop, California. Bicent Holdings is owned by non-debtor Bicent Prime Holdings, which is 87.1%-owned by Natural Gas Partners VIII LP, Natural Gas Partners IX LP and NGP IX Offshore Holdings LP and 12.9 percent- owned by Beowulf (Bicent) LLC. In their petitions, Bicent Holdings estimated under $50,000 in assets and $50 million to $100 million in debts. Bicent Power estimated $100,000 to $500,000 in assets and $500 million to $1 billion in debts. The petitions were signed by Christopher L. Ryan, chief financial officer. The Debtors began negotiations with lenders for a bankruptcy filing six months ago. The parties have agreed to the terms of a Chapter 11 plan pursuant to a restructuring support agreement. The Chapter 11 plan negotiated by the parties contemplates that allowed administrative claims, fee claims, and priority claims will be paid in full upon the effective date of the Plan. Holders of allowed first lien credit facility claims will receive substantially all of the equity of the post-emergence company. Holders of second lien debt will receive warrants to obtain equity so long as the class votes to accept the Plan. Pursuant to the RSA, the Debtors are required to seek approval of the Disclosure Statement within the first 55 days of the Chapter 11 cases and obtain confirmation of the Plan within the first 105 days after the Petition Date. The Plan must be consummated within 120 days of the Petition Date. The Plan also contemplates the potential sale of the non-debtor brush entities and their assets outside the Chapter 11 cases. Judge Kevin Gross oversees the case. The Debtors have tapped Young Conaway Stargatt & Taylor, LLP as bankruptcy counsel; Moelis & Company LLC, as financial advisor, and Paul, Weiss, Rikfind, Wharton & Garrison LLP as corporate counsel. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. BIONOL CLEARFIELD: Ethanol Plant Sold for $9.4 Million ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Bionol Clearfield LLC, the owner of an ethanol plant in Clearfield, Pennsylvania, didn't even try to reorganize. The company's trustee sold the assets for about $9.4 million to Pennsylvania Grain Processing LLC. Secured lenders, with TD Bank NA as agent, consented to the sale. Together, all secured creditors were owed $204.8 million, according to the company's list of assets and debt. Bionol Clearfield filed for Chapter 7 liquidation (Bankr. D. Del. Case No. 11-_____) in July 2011. The Company estimated assets between $50 million and $100 million and liabilities between $100 million and $500 million. The Company owned a plant that produces bio-based chemicals and fuels from renewable feedstock. BUFFETS INC: Suggestion of Bankruptcy Doesn't Stay EEOC Suit ------------------------------------------------------------ District Judge Martin Reidinger ruled that the Suggestion of Bankruptcy filed by Fire Mountain Restaurants, LLC, d/b/a Ryan's Family Steakhouse, does not result in a stay of the lawsuit filed by the Equal Employment Opportunity Commission pursuant to 11 U.S.C. Sec. 362 unless and until a judgment is entered and thereafter sought to be enforced. The judge also denied the EEOC's motion for entry of a default judgment. The EEOC initiated the action on Oct. 19, 2011, pursuant to the Age Discrimination in Employment Act on behalf of Viola Brown. Ms. Brown, who worked as a server in a restaurant operated by Ryan's, was allegedly discriminated against in her employment based on her age, then 79, by the reduction of her work hours, disciplinary action, suspension and termination. The EEOC seeks injunctive relief, an award of back wages, liquidated damages, reinstatement, and compensatory and punitive damages. On Jan. 9, 2012, the EEOC moved for entry of default because the Defendant, although served, had not filed Answer or other response. The case is Equal Employment Opportunity Commission v. Fire Mountain Restaurants, LLC, d/b/a Ryan's Family Steakhouse, Civil Case No. 1:11cv275 (W.D.N.C.). A copy of the Court's April 24, 2012 Order is available at http://is.gd/9mJtvVfrom Leagle.com. 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. In April 2012, Buffets Inc. filed an amended bankruptcy exit plan that proposes to pay $4 million to a pool of unsecured creditors who are owed more than $44 million. Unsecured creditors are expected to recover about 9% of their claims. A hearing to consider approval of the explanatory disclosure statement is set for April 30, 2012. CANO PETROLEUM: Has 871 (BOE/Day) Total Net Production in March --------------------------------------------------------------- Cano Petroleum, Inc., disclosed that the unaudited total net production for its properties in Panhandle, Cato, Nowata, Davenport, and Desdemona in March 2012 was 871 barrels of oil per day. A copy of the filing is available for free at: http://is.gd/v8lSs9 About Cano Petroleum Cano Petroleum, Inc. (NYSE Amex: CFW), an independent Texas- based energy producer with properties in the mid-continent region of the United States, filed for Chapter 11 bankruptcy (Bank. N.D. Tex. Lead Case No. 12-31549) on March 7, 2012. Other affiliates also sought bankruptcy protection: Cano Petro of New Mexico, Ladder Companies, Inc., Square One Energy, Inc., Tri-Flow, Inc., W.O. Energy of Nevada, Inc., W.O. Operating Company, Ltd., W.O. Production Company, Ltd., and WO Energy, Inc. The cases are jointly administered. The Debtors filed for bankruptcy to pursue a sale under a joint plan of reorganization filed on the petition date. Cano Petroleum have entered into a Stalking Horse Stock Purchase Agreement with NBI Services Inc., pursuant to which NBI would purchase all of the shares of common stock that would be issued by Reorganized Cano under the Plan for $47.5 million. The deal is subject to higher and better offers and a possible auction. The petitions were filed by James R. Latimer, III, chief executive officer. Judge Barbara J. Houser oversees the case. The Debtors are represented by lawyers at Thompson & Knight LLP, in Dallas Texas. Cano Petroleum's consolidated balance sheet at Sept. 30, 2011, showed $63.37 million in total assets, $116.25 million in total liabilities, and a $52.88 million total stockholders' deficit. In schedules filed with the Court, Cano Petroleum disclosed $1.16 million in assets and $82.5 million in liabilities. Union Bank of California, the administrative agent and issuing lender under the Debtors' prepetition senior credit facility; and UnionBanCal Equities, Inc., the administrative agent and issuing lender, under the junior credit facility, are represented by: William A. "Trey" Wood III, Esq., at Bracewell & Giuliani LLP. CANO PETROLEUM: Court Approves June 12 Auction of Assets -------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas entered an order approving (a) the stock purchase agreement and authorizing Cano Petroleum Inc. and its debtor-affiliates to enter into stock purchase agreement and comply with obligations thereunder; (b) break-up fee in connection with transaction contemplated by stock purchase agreement; (c) procedures for solicitation of higher or better offers; (d) form and manner of notice; (e) procedures for determining cure costs for executory contracts and unexpired leases; and (f) related relief. The Debtors will conduct the auction at 10:00 a.m., (prevailing central time), on June 12, 2012 at the offices of Thompson & Knight LLP, One Arts Plaza, 1722 Routh Street, Suite 1500, Dallas, Texas. An evidentiary hearing to consider approval of the successful bid will be on July 2, at 9:00 a.m. Objections, if any, are due 5:00 p.m., on June 25. As reported in the Troubled Company Reporter on March 22, 2012, the Debtors have signed a Stalking Horse Stock Purchase Agreement with NBI Services Inc., pursuant to which NBI would purchase all of the shares of common stock that would be issued by Reorganized Cano under a joint plan of reorganization, in exchange for roughly $47.5 million. The deal is subject to higher or better offers and a possible auction. Consummation of the transaction is conditioned upon entry of an order approving the sale or an order confirming the Plan. Under the deal, within 45 days of the date of the Stalking Horse SPA, NBI will deliver to Cano an executed commitment letter from F&M Bank and Trust Co. and other qualified banking institutions with respect to debt financing in an amount sufficient to enable NBI to perform its obligations to pay the purchase price, as adjusted. NBI may terminate the deal in the event: -- an order approving the procedures that will govern the auction and sale will not have been entered before 45 days after Cano received financing commitment from NBI or if the Bid Deadline will be a date later than 90 days after the Firm Financing Date; -- the Disclosure Statement explaining the Plan will not have been approved by the Bankruptcy Court on or before 90 days from the Firm Financing Date; -- the Confirmation Order will not have been approved by the Bankruptcy Court on or before 150 days from the Firm Financing Date; and -- the Bankruptcy Court will have approved any Alternative Transaction, or Cano will have entered into any definitive agreement with respect to any Alternative Transaction which agreement has been approved by the Bankruptcy Court. The Debtors proposed to pay NBI a $1,475,000 breakup fee in the event they consummate an alternative transaction if (i) the consummation occurs within 12 calendar months of the signing of the Stalking Horse PSA, (ii) the Stalking Horse PSA was terminated because the Court approved an alternative transaction, (iii) none of the Debtors breached their representations and warranties or failed to comply with their covenants and agreements, and (iv) NBI delivered to Cano the Commitment Letter within 45 days of the date of the Stalking Horse SPA. The Debtors said they have proposed a fair and open process for achieving the objective of obtaining the highest or best offer and sale of the Property for the benefit of the estates and creditors. The Debtors said they have insufficient liquidity to continue operations absent a substantial funding commitment, which the Debtors have been unable to obtain. The Debtors also noted that the prepetition secured lenders support the sale process. A copy of the purchase agreement with NBI is available for free at http://is.gd/0cYIfX About Cano Petroleum Cano Petroleum, Inc. (NYSE Amex: CFW), an independent Texas- based energy producer with properties in the mid-continent region of the United States, filed for Chapter 11 bankruptcy (Bank. N.D. Tex. Lead Case No. 12-31549) on March 7, 2012. Other affiliates also sought bankruptcy protection: Cano Petro of New Mexico, Ladder Companies, Inc., Square One Energy, Inc., Tri-Flow, Inc., W.O. Energy of Nevada, Inc., W.O. Operating Company, Ltd., W.O. Production Company, Ltd., and WO Energy, Inc. The cases are jointly administered. The Debtors filed for bankruptcy to pursue a sale under a joint plan of reorganization filed on the petition date. Cano Petroleum have entered into a Stalking Horse Stock Purchase Agreement with NBI Services Inc., pursuant to which NBI would purchase all of the shares of common stock that would be issued by Reorganized Cano under the Plan for $47.5 million. The deal is subject to higher and better offers and a possible auction. The petitions were filed by James R. Latimer, III, chief executive officer. Judge Barbara J. Houser oversees the case. The Debtors are represented by lawyers at Thompson & Knight LLP, in Dallas Texas. Cano Petroleum's consolidated balance sheet at Sept. 30, 2011, showed $63.37 million in total assets, $116.25 million in total liabilities, and a $52.88 million total stockholders' deficit. In schedules filed with the Court, Cano Petroleum disclosed $1.16 million in assets and $82.5 million in liabilities. Union Bank of California, the administrative agent and issuing lender under the Debtors' prepetition senior credit facility; and UnionBanCal Equities, Inc., the administrative agent and issuing lender, under the junior credit facility, are represented by: William A. "Trey" Wood III, Esq., at Bracewell & Giuliani LLP. CANO PETROLEUM: James Latimer OK'd as Chief Restructuring Officer ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Cano Petroleum, Inc., to employ James R. Latimer III of Blackhill Partners LLC as chief restructuring officer. As reported in the Troubled Company Reporter on April 10, 2012, Mr. Latimer attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm is expected to, among others, provide these services: (a) evaluating the Company's strategic alternatives, (b) selling the Company's assets, and/or raising additional debt/equity capital for the Company; (c) providing turnaround crisis management services, and (d) any other tasks that may be requested by the Company. The Company will pay the firm these fees and expenses: a. Fee Retainer: $75,000 b. Expense Retainer: $10,000 c. Monthly Fee: $50,000 per month d. Termination Fee: $250,000 About Cano Petroleum Cano Petroleum, Inc. (NYSE Amex: CFW), an independent Texas- based energy producer with properties in the mid-continent region of the United States, filed for Chapter 11 bankruptcy (Bank. N.D. Tex. Lead Case No. 12-31549) on March 7, 2012. Other affiliates also sought bankruptcy protection: Cano Petro of New Mexico, Ladder Companies, Inc., Square One Energy, Inc., Tri-Flow, Inc., W.O. Energy of Nevada, Inc., W.O. Operating Company, Ltd., W.O. Production Company, Ltd., and WO Energy, Inc. The cases are jointly administered. The Debtors filed for bankruptcy to pursue a sale under a joint plan of reorganization filed on the petition date. Cano Petroleum have entered into a Stalking Horse Stock Purchase Agreement with NBI Services Inc., pursuant to which NBI would purchase all of the shares of common stock that would be issued by Reorganized Cano under the Plan for $47.5 million. The deal is subject to higher and better offers and a possible auction. The petitions were filed by James R. Latimer, III, chief executive officer. Judge Barbara J. Houser oversees the case. The Debtors are represented by lawyers at Thompson & Knight LLP, in Dallas Texas. Cano Petroleum's consolidated balance sheet at Sept. 30, 2011, showed $63.37 million in total assets, $116.25 million in total liabilities, and a $52.88 million total stockholders' deficit. In schedules filed with the Court, Cano Petroleum listed $1.16 million in assets and $82.5 million in liabilities. Union Bank of California, the administrative agent and issuing lender under the Debtors' prepetition senior credit facility; and UnionBanCal Equities, Inc., the administrative agent and issuing lender, under the junior credit facility, are represented by: William A. "Trey" Wood III, Esq., at Bracewell & Giuliani LLP. CANYON HOLDINGS: Can Use Lenders' Cash Collateral Until April 30 ---------------------------------------------------------------- Judge Marc Barreca has approved a stipulation between Canyon Holdings LLC Series Southgate 42 and secured creditors East West Bank, Business Bank, Nantucket Fund, and Joseph & Marrquetta Novak, to temporarily use cash collateral of the secured creditors to pay monthly costs and expenses incurred by the Debtor in the ordinary course of its business. The Debtor's authority to use Cash Collateral will automatically expire upon the earlier of (a) April 30, 2012, or (b) the occurrence of an event of default that is not remedied within five business days after delivery of written notice of the failure to the Debtor. As adequate protection for any Cash Collateral used by the Debtor, the Secured Creditors are granted replacement liens in the same property of the Debtors. The Replacement Liens are granted for the sole purpose of securing an amount of the Prepetition Indebtedness, if any, that is equal to the diminution in value of the Prepetition Collateral. Granting this security interest to Secured Creditors is for the purpose of providing adequate protection to Secured Creditors to protect its allowed secured claim on the Petition Date. In addition to the Replacement Lien, the Debtor will pay East West Bank the monthly sum equal to $20,337.09, the regular monthly payment. In addition to the Replacement Lien, the Debtor will pay Business Bank the monthly sum equal to $3,996.30, which represents the monthly interest at the non-default rate of 4.25% on Business Bank's higher priority obligation only. Following the payment of monthly expenses and the monthly payments to East West Bank and Business Bank, the Debtor will send any excess net proceeds to Marc Stern, who will hold these funds pending further Court order. Business Bank is represented by: Richard G. Birinyi, Esq. SCHWABE WILLIAMSON & WYATT P.C. 1420 5th Avenue, Suite 3400 Seattle, WA 98101-4010 Tel: (206) 622-1711 E-mail: rbirinyi@schwabe.com About Canyon Holdings Clyde Hill, Wash.-based Canyon Holdings LLC Series Southgate 42 owns a condominium project in Bellingham, Wash., and is presently leasing the units it owns in the facility. Petitioner Joseph Novack filed an involuntary Chapter 11 bankruptcy petition against the Company (Bankr. W.D. Wash. Case No. 12-11327) on Feb. 13, 2012. Jeffrey B. Wells, Esq., in Seattle, Wash., assist the Debtor in its restructuring efforts. CANYON HOLDINGS: Creditor Gets Order Declaring Debtor in Default ---------------------------------------------------------------- Petitioning creditor Joseph Novak has obtained an order from the Bankruptcy Court declaring Canyon Holdings LLC Series Southgate 42 in default as required under Section 303 of the Bankruptcy Code. Clyde Hill, Wash.-based Canyon Holdings LLC Series Southgate 42 owns a condominium project in Bellingham, Wash., and is presently leasing the units it owns in the facility. Petitioner Joseph Novack filed an involuntary Chapter 11 bankruptcy petition against the Company (Bankr. W.D. Wash. Case No. 12-11327) on Feb. 13, 2012. Jeffrey B. Wells, Esq., in Seattle, Wash., assist the Debtor in its restructuring efforts. CANYON HOLDINGS: Files Sale-Based Joint Reorganization Plan ----------------------------------------------------------- Canyon Holdings LLC Series Southgate 42, Business Bank, and Nantucket Fund, Inc., filed a plan of reorganization with the Bankruptcy Court for the Western District of Washington. The plan proponents have not filed a disclosure statement together with the plan. The plan contemplates the sale of of real estate property under a Commercial & Investment Real Estate Purchase and Sale Agreement (CIREPSA) dated Feb. 6, 2012, between J. Hugh Wiebe and Canyon Holdings, LLC. The classification and treatment of claims under the Plan are: 1. Class 1 (Priority Claims) will be paid the entire amount of the holder's Allowed Claim by the Reorganized Debtor on the later of (a) the Effective Date or (b) the date upon which an order of the Court allowing such claim becomes a Final Order. 2. Class 2a (First position Allowed Secured Claim of East West Bank) will be paid and satisfied from the sale proceeds received from the sale of the Debtor's Real Property after crediting the amounts paid to the holder during the pendency of the bankruptcy case using the non- default rates under the loan documents covering the claim. In the event there are funds remaining after the payment of the Class 2a and 2f Allowed Claims, the holder of the Class 2b Allowed Secured Claim will receive funds up to the Allowed amount of the Claim. 3. Class 2b (Second position Allowed Secured Claim of Business Bank) will be paid and satisfied from the sale proceeds received from the sale of the Debtor's Real Property after crediting the amounts paid to the holder during the pendency of the bankruptcy case using the non- default rates under the loan documents covering the claim. In the event there are funds remaining after the payment of the Class 2a and 2f Allowed Claims, the holder of the Class 2b Allowed Secured Claim will receive funds up to the Allowed amount of the Claim. 4. Class 2c (Third position Allowed Secured Claim of Nantucket Fund, Inc.) will be paid and satisfied from the sale proceeds received from the sale of the Debtor's Real Property after crediting the amounts paid to the holder during the pendency of the bankruptcy case using the non- default rates under the loan documents covering the claim. In the event there are funds remaining after the payment of the Class 2a and 2f Allowed Claims, the holder of the Class 2b Allowed Secured Claim will receive funds up to the Allowed amount of the Claim. 5. Class 2d (Fourth position Allowed Secured Claim of Business Bank) will be paid and satisfied from the sale proceeds received from the sale of the Debtor's Real Property after crediting the amounts paid to the holder during the pendency of the bankruptcy case using the non- default rates under the loan documents covering the claim. In the event there are funds remaining after the payment of the Class 2a and 2f Allowed Claims, the holder of the Class 2b Allowed Secured Claim will receive funds up to the Allowed amount of the Claim. 6. Class 2e (Fifth position Allowed Secured Claim of Joseph and Marquetta Novak) will be paid and satisfied from the sale proceeds received from the sale of the Debtor's Real Property after crediting the amounts paid to the holder during the pendency of the bankruptcy case using the non- default rates under the loan documents covering the claim. In the event there are funds remaining after the payment of the Class 2a and 2f Allowed Claims, the holder of the Class 2b Allowed Secured Claim will receive funds up to the Allowed amount of the Claim. 7. Class 2f (Allowed Secured Claim of Whatcom County) will be paid and satisfied from the sale proceeds received from the sale of the Debtor's Real Property after crediting the amounts paid to the holder during the pendency of the bankruptcy case using the non-default rates under the loan documents covering the claim. In the event there are funds remaining after the payment of the Class 2a and 2f Allowed Claims, the holder of the Class 2b Allowed Secured Claim will receive funds up to the Allowed amount of the Claim. 8. Class 2g (Allowed Secured Claim of any other creditor holding a claim secured by assets of the estate) will be paid and satisfied from the sale proceeds received from the sale of the Debtor's Real Property after crediting the amounts paid to the holder during the pendency of the bankruptcy case using the non-default rates under the loan documents covering the claim. In the event there are funds remaining after the payment of the Class 2a and 2f Allowed Claims, the holder of the Class 2b Allowed Secured Claim will receive funds up to the Allowed amount of the Claim. 9. Class 3 (Unsecured Claims) will receive no distributions unless the Reorganized Debtor successfully prosecutes any avoidance claims reserved to it. The Reorganized Debtor will distribute such net proceeds pro rata to the holders of Class 3 Unsecured Claims. 10. Class 4 (Interests) will retain their interests in the Reorganized Debtor, but will receive no distributions under the Plan. A full-text copy of the reorganization plan is available for free at http://bankrupt.com/misc/CANYON_HOLDINGS_ds.pdf About Canyon Holdings Clyde Hill, Wash.-based Canyon Holdings LLC Series Southgate 42 owns a condominium project in Bellingham, Wash., and is presently leasing the units it owns in the facility. Petitioner Joseph Novack filed an involuntary Chapter 11 bankruptcy petition against the Company (Bankr. W.D. Wash. Case No. 12-11327) on Feb. 13, 2012. Jeffrey B. Wells, Esq., in Seattle, Wash., assist the Debtor in its restructuring efforts. CAPITOL INFRASTRUCTURE: Files for Chapter 11 to Sell Business ------------------------------------------------------------- Capitol Infrastructure LLC, a Cary, North Carolina-based provider of communication services operating under the name of Connexion Technologies, sought bankruptcy protection (Bankr. D. Del. Case No. 12-11356) in Delaware. The Debtors have signed a deal to sell the assets to Hotwire Communications, Ltd., absent higher and better offers. The sale process is subject to bankruptcy court approval. Capitol concluded earlier this year that its "deteriorating relationship with DirecTV and their overall corporate complexity made it highly unlikely the debtors would be able to obtain adequate financing in a timely fashion," Chief Executive Officer Glen D. Lang said in court papers. The Company said it is shuttering some operations and firing employees to "achieve a sustainable level of operations and to maximize value in connection with a sale." To maximize the value of the business for the benefit of creditors and other parties, the Company and 12 affiliates have commenced Chapter 11 proceeding with the objective of selling substantially all of their assets pursuant to a competitive auction process under 11 U.S.C. Sec. 363. "Connexion, and Connexion alone, needs to take responsibility for their current situation," DirecTV (DTV) said in a statement provided by spokesman Robert G. Mercer, according to Bloomberg News. "Under the terms of our arrangements with Connexion, we properly exercised our right to terminate some contracts for business reasons." Video, Internet Service Ten-year-old Capitol Infrastructure is a real estate and telecommunications company whose business is to secure telecommunications rights on properties, improve those rights by constructing broadband telecommunication infrastructure including fiber optics, coaxial cable, wireless systems, head end facilities, and satellite facilities at the properties, and to deliver video, voice, and internet and sometimes alarm services to end users. Prior to the financial crisis that precipitated the Chapter 11 filing, the Debtors served communities with operations in 48 states and had 102,460 video customers, 14,034 voice customers and 47,993 data customers. During the year ended Dec. 31, 2011, the Debtors had 570 full time employees and had annual revenues from its service provider business of $69.2 million. Prepetition Capital Structure Capitol Infrastructure estimated assets up to $500,000 and debts of up to $500 million in its Chapter 11 filing. Affiliate Capitol Infrastructure CP Funding LLC estimated up to $10 million in assets and debts of up to $100 million. Affiliate Infrastructure SPE, LLC, estimated up to $100 million in assets and debts. Secured creditors include UniCredit Bank AG, New York Branch, which is owed $74.0 million; Bank of America, N.A., $13.8 million; and Capital Bank, $15 million. The top three unsecured creditors are DirecTV, owed $2.4 million; Level 3 Communications LLC, owed $1.3 million; and Wise Owl Communications Inc., owed $738,000. Capitol is owned by Capitol Broadband LLC, which isn't in bankruptcy. Road to Bankruptcy Mr. Lang explains that Capitol's financial troubles began in 2007 when the housing crisis caused a slowdown in homebuilding. Capitol had invested in communications networks for many Greenfield properties that, because of the real estate crisis, were left incomplete by the property developers or even if they were completed, housed insufficient numbers of occupants for extended periods of time. The Debtors responded to this problem in 2007 by transitioning to a second strategic program, focused on increasing revenue existing housing projects. That program also failed to generate a profit. In 2011, the Company launched a third strategic program and became a master system operator for DirecTV. That allowed the company to collect commissions from DirecTV customers at its housing projects. The Company pursued rapid growth and in 2009 and 2010 was listed by Inc. Magazine as one of the 500 fastest growing companies in the U.S. The Debtors, however, experienced problems with the overall pace of subscriber update on new properties due to the high unemployment rate, the continued general economic problems in the U.S., and the high credit score requirements of the satellite providers. The Debtors also experienced unexpected difficulty in enforcing easements against incursion by incumbent cable companies, which led to approximately $2 million in legal fees and further delayed subscriber uptake of services. In late 2011, the signing of a substantial number of new properties was held up due to contractual disputes with DirectTV. In February 2012, DirecTV canceled multiple contracts with Capitol's operating units resulting in a dramatic negative impact on significant parts of the Debtors' cash flow starting in March 2012. First Day Motions The Debtors have filed customary first day motions, including requests to enjoin utilities from discontinuing service, pay prepetition sales and franchise taxes, honor customer programs, and pay prepetition wages and benefits. In order to keep operating while in bankruptcy, the Debtors are also seeking approval to obtain DIP financing and use cash collateral. A hearing before June Kevin Gross is scheduled for April 30, 2012. Attorneys at Wyrick Robbins Yates & Ponton LLP, and Pepper Hamilton LLP represent the Debtors. Sale to Hotwire The Debtors have already filed proposed procedures for selling substantially all assets. Potential bidders must have initial bids that exceed Hotwire Communications' offer by $800,000. Hotwire Communications is offering $8 million for the Dish Network assets, $2 million for the DirectTV assets, and $1 million for the FOVO assets. The purchased assets are located at 190 properties but excludes the Laguna Woods, California properties, and certain bulk DirectTV properties. An auction will be held if qualified bids are received prior to the deadline set by the bankruptcy court. In the event the Debtors sell the assets to another party, Hotwire will receive a break-up fee of $330,000 plus expense reimbursement of up to $220,000. Hotwire is represented by: Bradford J. Sandler, Esq. PACHULSKI STANG ZIEHL & JONES, LLP 919 N. Market Street, 17th Floor Wilmington, DE 190801 The DIP Lenders, led by Unicredit Bank, are represented by: Howard S. Beltzer, Esq. 1675 Broadway MAYER BROWN LLP New York, NY 10019-5820 - and - Mark D. Collins, Esq. RICHARDS, LAYTON & FINGER, P.A. 920 N. King Street Wilmington, DE 19801 CATALENT PHARMA: S&P Rates $605M Incremental Loan 'BB-' ------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating to Somerset, N.J.-based outsourced pharmaceutical manufacturer Catalent Pharma Solutions Inc.'s incremental term loan. This follows the company's announcement that it will issue a $205 million add-on to the existing $400 million facility. The company intends to use proceeds from the new debt to fund the retirement of its existing non-extended U.S. dollar-denominated loan. The add-on loan is expected to mature in 2017 and carry the same terms as Catalent's existing incremental loan. "Our other ratings on the company remain unchanged and the outlook is stable," S&P said. "At the same time, we assigned our '2' recovery rating to the incremental facility, indicating our expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default. The 'BB-' rating on the facility is one notch higher than our 'B+' corporate credit rating on the company, in accordance with our notching criteria for a recovery rating of '2'," S&P said. "The corporate credit rating on Catalent is 'B+' and the rating outlook is stable. The 'B+' rating reflects the company's 'highly leveraged' financial risk profile, characterized by adjusted leverage that we expect to be sustained at around 7x over the next year and funds from operations to total debt in the high-single digits. The rating also reflects Catalent's 'satisfactory' business risk profile, which considers the company's leading position within the outsourced pharmaceutical manufacturing space, business scale and diversity, and the long-term nature of the company's contractual arrangements, which promotes business stability," S&P said. RATINGS LIST Catalent Pharma Solutions Inc. Corporate Credit Rating B+/Stable/-- New Ratings Catalent Pharma Solutions Inc. Senior Secured $605 mil extended term loan B BB- Recovery Rating 2 CDC CORP: Fending Off Dismissal by Subsidiary China.com -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that CDC Corp., a China-based enterprise software developer also known as Chinadotcom, sold its 87% interest in CDC Software Corp. for enough to pay creditors in full, with millions left for shareholders. Before a reorganization plan can be approved, CDC needs to fend off a motion by subsidiary China.com Inc. to dismiss the Chapter 11 case begun in October. The report relates that with creditors paid in full, Chinadotcom contends the bankruptcy should be dismissed so shareholders can work out their disputes in another court. CDC directly owns or controls about 75% of China.com, court papers say. CDC, the official creditors' committee, and others are opposing dismissal set to be argued April 27 in U.S. Bankruptcy Court in Atlanta. According to Mr. Rochelle, CDC and the official equity committee filed a Chapter 11 plan paying creditors in full and calling for distribution to shareholders. The plan would allow filing lawsuits against insiders who CDC claims to be behind the motion to dismiss. The committee said that dismissal would only serve the "interests of insiders that initially drove the debtor into bankruptcy and that now seek to avoid the consequences of their actions." The report adds that ChinaRock Capital Management Ltd., owner of 8.4% of CDC's stock, likewise opposes dismissal. Like the committee, ChinaRock believes that dismissal is designed to "prevent the debtor's estate from pursuing potentially valuable causes of action." China.com filed a competing reorganization plan. CDC interprets the plan as giving releases of claims that CDC's plan would prosecute instead. CDC conjectures that China.com bought some of CDC's stock on the open market so it would have the right to propose a plan and urge dismissal. 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 US$100 million to US$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. The stock of CDC Software Corp. was sold for $249.8 million to an affiliate of Vista Equity Holdings. CELL THERAPEUTICS: Has $7.1 Million Net Loss in March ----------------------------------------------------- Cell Therapeutics, Inc., provided information pursuant to a request from the Italian securities regulatory authority, CONSOB, pursuant to Article 114, Section 5 of the Unified Financial Act, that the Company issue at the end of each month a press release providing a monthly update of certain information relating to the Company's management and financial situation. The Company reported a net loss attributable to common shareholders of $7.08 million on $0 of net revenue for the month ended March 31, 2012, compared with a net loss attributable to common shareholders of $5.30 million on $0 of revenue in February. Estimated research and development expenses were $2.7 million for the month of February and $2.9 million for the month of March 2012. A copy of the Report is available for free at: http://is.gd/gjsCHv About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. Cell Therapeutics reported a net loss attributable to CTI of $62.36 million in 2011, compared with a net loss attributable to CTI of $82.64 million in 2010. The Company's balance sheet at March 31, 2012, showed $44.15 million in total assets, $18.50 million in total liabilities $13.46 million in common stock purchase warrants, and $12.18 million in total shareholders' equity. Going Concern Doubt Raised The report of Marcum LLP, in San Francisco, Calif., dated March 8, 2012, expressed an unqualified opinion, with an explanatory paragraph as to the uncertainty regarding the Company's ability to continue as a going concern. The Company's available cash and cash equivalents are $47.1 million as of Dec. 31, 2011. The Company's total current liabilities were $17.8 million as of Dec. 31, 2011. The Company does not expect that it will have sufficient cash to fund its planned operations beyond the second quarter of 2012, which raises substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Form 10-K for the year ended Dec. 31, 2011, noted that if the Company receives approval of Pixuvri by the EMA or the FDA, it would anticipate significant additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and are currently exploring alternative sources of equity or debt financing. The Company may seek to raise that capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, the Company has a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, it may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CHATHAM MILLS: Exits Bankruptcy; To Pay Bank Debt in 35 Yrs ----------------------------------------------------------- Tammy Grubb at the Chapel Hill News reports that Tom Roberts, co-owner of Chatham Mills, said the Company has emerged from bankruptcy with a clear plan for paying its debts and growing into a cultural and business focal point for the community. According to the report, Mr. Roberts credited Mechanics & Farmers Bank, which holds nearly $4.9 million of the center's debt, for working with him and co-owners Vaughn and Margaret Haight, of Florida, to develop the plan. The report notes Chatham Mills has agreed to pay the debt at 4% interest over 35 years, with roughly $861,000 due in the next three years. The company also agreed to pay about $98,000 owed to S.T. Wooten Inc. at 6% interest over three years, about $25,602 to the Internal Revenue Service and the N.C. Department of Revenue at 3% interest, and smaller debts to its remaining creditors at 2% interest over the next three years. The report relates the reorganization plan also requires Chatham Mills to find at least two more tenants for 4,800 square feet of its available space in the next 30 months. Mr. Roberts said they are in the process of renewing three leases that expired this year for UNC Dialysis, UNC Home Health and UNC Hospice, and are talking with other retail, office and service businesses about moving into the available space. The report relates Mr. Roberts said closing the book on the center's bankruptcy filing has eliminated a big distraction. The next five years will bring new energy to Chatham Mills. Chatham Mills Development Corp. filed a Chapter 11 petition (Bankr. M.D.N.C. Case No. 11-80929) on June 9, 2011. Richard M. Hutson, II, Esq., at Hutson Law Office, P.A., in Durham, North Carolina, serves as counsel to the Debtor. In its schedules, the Debtor disclosed $6,116,150 in assets and $5,682,651 in liabilities. CHESAPEAKE ENERGY: Fitch Affirms 'BB' IDR & Sr. Unsec. Debt Rating ------------------------------------------------------------------ Fitch Ratings has revised the Rating Outlook for Chesapeake Energy Corporation's (Ticker: CHK) long-term Issuer Default Rating (IDR) to Stable from Positive and affirmed all of the company's ratings. Chesapeake has approximately $13 billion of rated securities. The Outlook revision results primarily from the near and intermediate term weak outlook for natural gas prices in the U.S. coupled with Chesapeake's still aggressive spending plans in 2012. The current weakness in natural gas prices has accelerated since just a couple of months ago with the 12 month NYMEX strip decreasing by nearly 20% to $2.63/Mcf over that timeframe. These price expectations will reduce earnings and cash flow significantly from last year's level. Current capex and leasehold spending are expected to total approximately $8.5-$9 billion with spending in the company's other segments expected to be $2.5-$3.5 billion. Current spending plans are expected to result in a funding gap of $7-8.5 billion, which is to be funded with asset sales and monetizations potentially totaling $10 billion. The asset sale/monetizations figure was approximately 30% of total enterprise value as recently as a few weeks ago. Liquidity is provided by the company's $4 billion senior secured revolver due 2015. Additionally, Chesapeake Midstream Operating, LLC has a $600 million senior secured revolver due 2016 that it can utilize, and Chesapeake Oilfield Operating, LLC has a $500 million senior secured facility that it can utilize. However, these latter two borrowing capacities are limited by certain restrictive provisions. Nearer-term maturities for Chesapeake are $464 million in 2013 and $1.6 billion in 2015. Key covenants are primarily associated with the senior secured credit facility and include maximum debt-to-book capitalization (70% covenant threshold) and maximum total debt-to-EBITDA (4.0x covenant level). Balance sheet debt totaled approximately $10.6 billion at the yearend 2011. In addition, the company has in the past sold approximately $6 billion of reserves into Volumetric Production Payments (VPPs) that Fitch considers to have debt-like characteristics and factors into its analysis for adjusted leverage. In addition, Chesapeake also has convertible preferreds and non-controlling interests in its capital structure totaling approximately $4 billion as of yearend 2011. The recent news regarding the personal borrowings by the company's CEO from the same group that has invested in preferred interests in two of Chesapeake's non-guarantor subsidiaries has raised issues regarding the potential for a conflict of interest and lack of transparency among some stakeholders. The borrowings and the lack of prior disclosure has focused a spotlight on the company's Board of Directors and its oversight of the company. Given this recent news, Fitch believes stakeholders will have a higher level of expectations for disclosure and transparency going forward. Given the reduction in near-term price expectations for natural gas, there exists a potential shortfall or delay in some of the expected proceeds from the remaining planned asset sales and monetizations this year. As such, a significant reduction in capital spending may be warranted for the Outlook to remain Stable. That said, Chesapeake has already completed or will complete soon approximately 25% of this year's $10 billion in planned assets sales/monetizations and has a proven track record of successfully monetizing assets in the past. Fitch has affirmed the ratings for Chesapeake as follows: -- IDR at 'BB'; -- Senior unsecured debt at 'BB'; -- Senior secured revolving credit facility at 'BBB-'; -- Convertible preferred stock at 'B+'. The Rating Outlook is revised to Stable from Positive. CLARE AT WATER: Illinois Finance Wants 5th Amended Plan Modified ---------------------------------------------------------------- The Illinois Finance Authority filed with the U.S. Bankruptcy Court for the Northern District of Illinois a limited objection to The Clare at Water Tower's Fifth Amended Plan of Reorganization dated April 23, 2012. The IFA is a body politic and corporate constituting a public instrumentality created and existing under and by virtue of the Illinois Finance Authority Act, as amended. The IFA is a party to that certain prepetition Indemnification Escrow Agreement dated July 15, 2010. The Indemnification Escrow Agreement and its funding were a condition precedent to the issuance of certain bonds by the IFA as part of the Debtor's financial restructuring in 2010. While the IFA has not been advised by the Escrow Agent of the exact amount of funds that are left in the original $750,000 Indemnity Escrow Fund established under Article III, Section 3.2 of the Agreement, the Authority estimates that there is in excess of $600,000 in the Indemnity Escrow Fund at this time. The IFA objected to the Fifth Amended Plan to the extent that it purports to: i) alter or in any way impact the rights of the parties to the Indemnification Escrow Agreement, or otherwise affect any claim or interest of the Authority in and to the Indemnity Escrow Fund; or ii) create jurisdiction in the Court over the Indemnity Escrow Fund or the Authority. The IFA also objects to provisions of the Debtor's proposed confirmation order that purport to retain (i) jurisdiction that does not otherwise exist, and (ii) unidentified causes of action against the IFA, if any, in the event that the Court does not approve the proposed releases and exculpation provisions of the Debtor's chapter 11 plan in favor of the Authority. Accordingly, the Court must strike all of the new provisions of the Fifth Amended Plan that relate to the Indemnification Escrow Agreement and the Indemnity Escrow Fund, the IFA asserts. Fifth Amended Plan The Plan will be implemented by the Plan Administrator in a manner consistent with the terms and conditions set forth in the Plan and the Confirmation Order. The Plan will be funded from the proceeds of the asset sale, including, but not limited to, sale proceeds, and all other remaining assets of the Debtor. Under the Plan, unless otherwise agreed by the holder of any Allowed Claim in the Class, (a) each holder of an Allowed General Unsecured Claim will be entitled to receive: (i) such holder's Pro Rata Share of any sale proceeds, if any, available after the full payment and satisfaction of Allowed Claims in Classes 1 through 5 (other than any Claim constituting an Unsecured Deficiency Claim) and Compensation and Reimbursement Claims Allowed as of the Effective Date, Priority Tax Claims Allowed as of the Effective Date, Trustee Fee Claims Allowed as of the Effective Date, DIP Claims Allowed as of the Effective Date, the Administrative and Priority Claims Reserve Amount, the Plan Expenses Reserve Amount and all expenses in amounts provided in the Wind-Down Budget; and (ii) such holder's Pro Rata Share of any net recoveries from Avoidance and Other Actions; and (b) solely in the event that the Third-Party Releases are approved pursuant to a Final Order, each Holder of an Allowed Third-Party Trade Claim will receive their Pro Rata Share of the Plan Contribution Amount. The holders of Allowed Class 3 and Class 4 Claims will retain their Unsecured Deficiency Claims but will waive any Distribution thereon to the extent that such Distribution consists of the proceeds of the Plan Contribution Amount. FSC and FSCSC will retain their Allowed Class 7 Claims but will waive any distribution thereon to the extent that the distribution consists of the proceeds of the Plan Contribution Amount. Each Holder of a Subordinated 510(b) Claim will not receive any distribution on account of the Subordinated 510(b) Claim, and each holder of a Subordinated 510(b) Claim will not receive or retain an interest in the debtor, the estate, or other property or interests of the Debtor or Plan Administrator on account of the Subordinated 510(b) Claim. Each Holder of an interest in Debtor will not receive any distribution on account of the interest. Each interest will not receive or retain an interest in the Debtor, the estate, or other property or interests of the Debtor on account of the interests. A full-text copy of the Fifth Amended Plan is available for free at http://bankrupt.com/misc/Clare_At_Water_plan_fifthamendment.pdf Previous Plan Objections On April 20, 2012, the Official Committee of Unsecured Creditors filed an objection to confirmation of the Debtor's Fourth Amended Plan. According to the Committee, the Plan contained several unlawful provisions that prevent it from being confirmed by the Court. The majority of these problems arise from certain non-consensual third party releases, injunctions and exculpations contained in the Plan. These releases were neither appropriate nor necessary for the liquidation of the Debtor and thus render the Plan, in its current state, unconfirmable. The Bank of New York Mellon Trust Company, N.A., as master trustee under that certain Master Trust Indenture, dated July 1, 2010, and as series trustee under various series indentures, Bank of America, N.A., on behalf of itself and certain prepetition letter of credit banks, and Wells Fargo Bank, N.A., as successor series trustee for the Series 2010A and 2010B fixed-rate bonds, objected on a limited basis to the Debtor's Fourth Amended Plan. The Prepetition Lender Parties related that they do not consent to, inter alia, the payment of certain junior administrative expense claims in the amounts requested to date and object to the Amended Plan on the limited basis that the Amended Plan could be understood to require the payment of such administrative claims, in such amounts. About The Clare at Water Tower The Clare at Water Tower is an upscale 334-unit high-rise continuing-care retirement community in Chicago, Illinois. The project is only 42% occupied because the target population either hasn't been able to sell homes or lacks sufficient cash to make required deposits as the result declining investments following the recession. The facility is a 53-story building on land rented from Loyola University of Chicago. The facility is managed and developed by a unit of the Franciscan Sisters of Chicago, who invested more than $14 million. The project opened in December 2008. Residents must make partially refundable deposits ranging from $263,000 to $1.2 million. Monthly fees are an additional $2,700 to $5,500. The Clare filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 11-46151) on Nov. 14, 2011, after defaulting on $229 million in tax-exempt bond financing used to build the project. Judge Susan Pierson Sonderby presides over the case. Matthew M. Murphy, Esq., at DLA Piper LLP, serves as the Debtor's counsel. Houlihan Lokey Capital, Inc., as its investment banker and financial advisor. Deloitte Financial Advisory Services LLP serves as restructuring advisor. Epiq Bankruptcy Solutions serves as claims and noticing agent. The Debtor, in its amended schedules, disclosed $56,778,671 in assets and $321,747,63 in liabilities. The petition was signed by Judy Amiano, president. The Official Committee of Unsecured Creditors proposed to retain SNR Denton US LLP as counsel. The Committee also tapped FTI Consulting, Inc., as its financial advisor. CLEARWIRE CORP: Incurs $181.8 Million Net Loss in First Quarter --------------------------------------------------------------- Clearwire Corporation reported a net loss attributable to the Company of $181.82 million on $322.64 million of revenue for the three months ended March 31, 2012, compared with a net loss attributable to the Company of $226.95 million on $236.81 million of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $8.89 billion in total assets, $5.71 billion in total liabilities and $3.17 billion in total stockholders' equity. "The compelling growth of wireless data is driving the need for more spectrum capacity and attracting new entrants to the market," said Erik Prusch, President and CEO of Clearwire. "Clearwire's high capacity LTE Advanced-ready network will sit at the intersection of these two trends." At the end of first quarter 2012, Clearwire operated networks in the U.S. covering areas where approximately 134 million people reside, including approximately 132 million people in markets where we provide 4G services. A copy of the press release is available for free at: http://is.gd/hix12D In a separate press release, Clearwire announced that New York City, San Francisco, Los Angeles, Chicago and Seattle will be among the 31 cities where the company will launch its TDD-LTE network during the first half of 2013. Deployment of Clearwire's TDD-LTE network will target high demand "hot zones" in major urban centers where demand for 4G mobile broadband access is high and the need for deep 4G capacity resources is most acute. "Our new 4G network will show that not all LTE networks are created equal," said Erik Prusch, President and CEO of Clearwire. "Clearwire's LTE Advanced-ready network will deploy our deep spectrum resources for the next great era in mobile broadband in which capacity is king. We're positioned to bring much needed capacity on a wholesale basis to address the unbridled demand for mobile data and the scarcity of spectrum in major urban and suburban markets." Clearwire LTE: The Next-Generation of 4G Clearwire's next-generation LTE Advanced-ready network will be a major advancement over the current LTE networks deployed in the U.S. By leveraging its deep spectrum holdings to commercialize large contiguous swaths of spectrum in a given market, Clearwire believes its LTE Advanced-ready network will further differentiate it as a leader in next-generation 4G mobile broadband technology, capable of serving the current and anticipated future demands of wholesale and retail customers. The company will announce the additional cities where it will launch TDD-LTE service at a later date. About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a provider of 4G mobile broadband network services in 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company reported a net loss of $2.30 billion in 2010 and a net loss of $1.25 billion in 2009. The Company also reported a net loss attributable to Clearwire Corporation of $480.48 million for the nine months ended Sept. 30, 2011. * * * As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured first- lien issue-level ratings on Bellevue, Wash.-based wireless provider Clearwire Corp. to 'CCC' from 'CCC+'. "The downgrade reflects our concerns that the company may choose to skip its $237 million of interest payments due on Dec. 1, 2011," explained Standard & Poor's credit analyst Allyn Arden. "With about $698 million of cash on the balance sheet, Clearwire has sufficient funds to pay the remaining interest expense due in 2011, although Standard & Poor's believes that it would still have to raise significant capital to maintain operations in 2012 despite the cost-reduction measures it has already achieved. If Clearwire elected to make the interest payment, we believe that it would exit 2011 with around $350 million to $400 million in cash, which assumes less than $100 million of capital expenditures and EBITDA losses. We do not believe that this cash balance will be sufficient to cover free operating cash flow (FOCF) losses and a Long-Term Evolution (LTE) wireless network overlay in 2012 and that the company will require additional funding during the year." CLEARWIRE CORP: Files Form 10-Q, Incurs $181.8MM Net Loss in Q1 --------------------------------------------------------------- Clearwire Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net loss attributable to the Company of $181.82 million on $322.64 million of revenue for the three months ended March 31, 2012, compared with a net loss attributable to the Company of $226.95 million on $236.80 million of revenue for the same period during the prior year. Clearwire reported a net loss attributable to the Company of $717.33 million in 2011, a net loss attributable to the Company of $487.43 million in 2010, and a net loss attributable to the Company of $325.58 million in 2009. The Company's balance sheet at March 31, 2012, showed $8.89 billion in total assets, $5.71 billion in total liabilities and $3.17 billion in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/I3h1ms About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a provider of 4G mobile broadband network services in 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. * * * As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured first- lien issue-level ratings on Bellevue, Wash.-based wireless provider Clearwire Corp. to 'CCC' from 'CCC+'. "The downgrade reflects our concerns that the company may choose to skip its $237 million of interest payments due on Dec. 1, 2011," explained Standard & Poor's credit analyst Allyn Arden. "With about $698 million of cash on the balance sheet, Clearwire has sufficient funds to pay the remaining interest expense due in 2011, although Standard & Poor's believes that it would still have to raise significant capital to maintain operations in 2012 despite the cost-reduction measures it has already achieved. If Clearwire elected to make the interest payment, we believe that it would exit 2011 with around $350 million to $400 million in cash, which assumes less than $100 million of capital expenditures and EBITDA losses. We do not believe that this cash balance will be sufficient to cover free operating cash flow (FOCF) losses and a Long-Term Evolution (LTE) wireless network overlay in 2012 and that the company will require additional funding during the year." CLIFFS CLUB: Moves Forward With Sale to Carlile-Led Group --------------------------------------------------------- Marie Beaudette and Rachel Feintzeig at Dow Jones' DBR Small Cap report that Cliffs Club & Hospitality Group Inc. said it will move forward with a sale to an investor consortium headed up by Carlile Group after no other bidders stepped forward to participate in a Chapter 11 auction. As reported in the Troubled Company Reporter on March 1, 2012, The Cliffs has eight premier, private master-planned residential communities, each to have its own world-class golf course. Approximately 3,734 lots have been sold. There are currently 1,385 finished homes, with 63 under construction. The properties for sale are owned by non-debtor development companies entities. Pursuant to the term sheet with Carlile, through a confirmed plan of reorganization, it is contemplated that: (i) The Debtors will transfer all assets -- other than avoidance actions and certain other causes of action -- to Carlile; (ii) Carlile will assume the principal outstanding on the senior secured notes; (iii) All administrative expenses and priority claims will be paid in full; (iv) Any valid undisputed mechanics or materialmen's liens will be paid in full over time; (v) Any undisputed trade unsecured claims (other than member claims) will be paid pro rata and in the aggregate 75% over time by Carlile; (vi) Executory contracts of members will be rejected and all current and former members, in good standing, will be invited to join a new club upon paying a transfer fee and dues on a go forward basis; and (vii) A litigation trust will be established holding $100,000 cash and the Debtors' avoidance actions and certain causes of action for payment of member claims for the benefit of those members who do not elect to join the new club. The Court-approved bidding procedures contemplated an auction in the event another party submits a qualified bid by the deadline. According to the Term Sheet, Carlile will commit up to $85 million to acquire, joint venture, land bank, or otherwise gain control of development land and lots. About Cliffs Club Units of The Cliffs Communities, led by The Cliffs Club & Hospitality Group, Inc., doing business as The Cliffs Golf & Country Club, along with 10 affiliates, sought Chapter 11 protection (Bankr. D. S.C. Lead Case No. 12-01220) on Feb. 28, 2012. The Cliffs has eight premier, private master-planned residential communities, each to have its own world-class golf course. Approximately 3,734 lots have been sold. There are currently 1,385 finished homes, with 63 under construction. The properties for sale are owned by non-debtor DevCo entities. The Feb. 28 Debtors operate the exclusive membership clubs for golf, tennis, wellness and social activities at The Cliffs' communities in North and South Carolina. The clubs have 2,280 members, and there are 766 resigned members with refundable deposits totaling $37 million. The Debtors do not own the golf courses -- they only own or lease all the "core amenities" for the operation of the golf courses. Another affiliate, Keowee Falls Investment Group, LLC, filed a Chapter 11 petition (Bankr. D. S.C. Case No. 12-01399) in Spartanburg, South Carolina, on March 2, 2012. Travelers Rest- based Keowee Falls estimated at least $100 million in assets and liabilities of up to $50 million. Judge John E. Waites presides over the Debtors' cases. Lawyers at McKenna Long & Aldridge LLP serve as the Debtors' lead counsel. Dana Elizabeth Wilkinson, Esq., serves as local counsel. Grisanti Galef & Goldress serves as restructuring advisors and Katie S. Goodman of GGG serves as CRO. BMC Group Inc. serves as the Debtors' claims and noticing agent. According to papers filed in Court, the Debtors' total assets had a $175 million book value at Dec. 31, 2011. The Debtors' total liabilities had a $333 million book value at Dec. 31, 2011. The petition was signed by Timothy P. Cherry, authorized officer. Wells Fargo, as Indenture Trustee, is represented in the case by Daniel S. Bleck, Esq., at Mintz Levin Cohn Ferris Glovsky and Popeo P.C.; and Elizabeth J. Philp, Esq., and Michael Beal, Esq., at McNair Law Firm P.A. The Official Committee of Unsecured Creditors is represented in the case by John B. Butler, III, P.A., and Jonathan B. Alter, Esq., at Bingham McCutchen LLP. COLORADO-FAYETTE: Plans to File for Chapter 11 Bankruptcy --------------------------------------------------------- Andy Behlen at the Schulenburg Sticker reports Colorado-Fayette Medical Center said on April 18 that it will file for reorganization under Chapter 11 of the Federal Bankruptcy Code. According to the report, a wave of financial troubles has plagued the Weimar hospital over the last decade but CEO Steve Gularte said the doors to the hospital as well as the clinics in Schulenburg and Flatonia will stay open. At a board meeting on Feb. 13, the hospital announced that it lost nearly $5.8 million since 2002, an average loss of over a half-million dollars every year. The red ink on the ledger sheet eventually forced the hospital to deal with its mounting debt. "You can't keep doing things the same way and expect the situation to improve," the report quotes Mr. Gularte as saying. "We have a mission to perform in this community. Without money, we can't do that." Colorado-Fayette Medical Center -- http://www.cfmctx.org-- is a 38-bed private nonprofit healthcare facility providing primary care. COMMUNITY MEMORIAL: Wants to Reopen Emergency Department -------------------------------------------------------- The Associate Press reports that Community Memorial Hospital said it plans to go before a bankruptcy judge to reopen the emergency department and other outpatient services at a closed northern Michigan hospital. The report relates McLaren Health Care Corp. already has reached an agreement with the U.S. Center for Medicare and Medicaid Services. According to the report, the hospital closed unexpectedly April 3 after a sale to McLaren fell through over issues with the federal government involving licensing and certification for Medicare and Medicaid services. The report says no date has been set for the reopening of the emergency department and outpatient operations. Hospital officials had proposed an expedited sale to McLaren that would have kept the facility open. The report notes, after the sale was blocked, the hospital's board voted to close the facility, a move that many in the lakefront community about 235 miles north of Detroit found hard to accept. About Community Memorial Hospital Community Memorial Hospital, operator of the Cheboygan Memorial Hospital, filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case No. 12-20666) on March 1, 2012. Judge Daniel S. Opperman oversees the case. Paul W. Linehan, Esq., at McDonald Hopkins LLC, represents the Debtor as counsel. The Debtor's financial advisor is Conway Mackenzie Inc. The Debtor estimated assets and debts of $10 million to $50 million. Opened in 1942, the Debtor is an independent, not-for-profit entity, organized exclusively for charitable, scientific and educational purposes, and holds tax exempt status in accordance with Section 501(c)(3) of the Internal Revenue Code. The Cheboygan Memorial Hospital is a 25-bed critical access hospital located in Cheboygan, Cheboygan County, a community on the Lake Huron coast. The Debtor has 395 employees. CPM HOLDINGS: S&P Retains 'B+' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its recovery rating on senior secured notes issued by Waterloo, Iowa-based CPM Holdings Inc. to '3' from '4'. "The '3' recovery rating indicates our expectation for meaningful (50%-70%) recovery for noteholders following a payment default. Our recovery expectation has increased because of the agriculture equipment manufacturer's recent repurchase of about $38 million of its senior secured notes; $162 million remains outstanding. CPM's capital structure also includes an unrated $14.5 million asset-backed revolving credit facility due 2013," S&P said. "Our 'B+' corporate credit rating and stable outlook on CPM Holdings Inc. remain unchanged," S&P said. RATINGS LIST CPM Holdings Inc. Corporate credit rating B+/Stable/-- Recovery Rating Revised To From Senior secured notes B+ B+ Recovery rating 3 4 CROW PARTNERS: Deal Granting JPMorgan Chase Relief from Stay OK'd ----------------------------------------------------------------- The Hon. Redfield T. Baum for the U.S. Bankruptcy Court for the Bankruptcy Court for the District of Arizona signed a stipulated order granting stay relief and addressing other matters related to Chase Bank's secured claim. The stipulation was entered among Crow Partners, LLC and Central Building, LLC; JP Morgan Chase Bank, N.A., and Neal Smither and Patricia Smither as guarantors. Central Building is obligated to Chase Bank on a loan. The Loan is evidenced by a Promissory Note dated as of May 5, 2008, in the original principal amount of $13,200,000 that Central Building executed in favor of Washington Mutual Bank, FA. Chase Bank is the current holder of the Arizona Note. The Loan is secured by, among other things, the Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing, dated as of May 5, 2008, by Central Building, as trustor, for the benefit of Washington Mutual Bank. As of Feb. 13, 2012, the indebtedness owing by Central Building to Chase Bank under the Loan Documents totaled the principal amount of $9,662,000, plus accrued and accruing interest, costs, and attorneys' fees, and other amounts due and owing under the Loan Documents. The primary terms of settlement are: 1. The automatic stay will be immediately terminated so that Chase Bank may exercise all of its rights and remedies with respect to Camelback Place, and, subject to the agreement on cash collateral, all other Chase Bank Collateral, including, but not limited to, completing a trustee's sale of Camelback Place or having a receiver appointed with respect to Camelback Place; 2. The Debtors and guarantors, and each of them, will not take any action to impede or interfere with Chase Bank in completing a trustee's sale with respect to Camelback Place or otherwise enforcing its rights in the Chase Bank Collateral in accordance with the terms of the parties' agreement; 3. The Debtors confirm that there are no unpaid commitments to tenants at Camelback Place for tenant improvements or similar commitments, or unpaid commissions owing with respect to any leases at Camelback Place, except only as disclosed in writing to Chase Bank prior to the date the motion was filed; and 4. Chase Bank agrees that, after the stipulated order is entered, (i) it will cause the pending trustee's sale of Camelback Place to be concluded as promptly as reasonably possible, and (ii) it will credit bid for the Chase Bank Collateral the full amount of the remaining Indebtedness owing after the cash collateral distributed to Chase Bank is applied. Further, Chase Bank agrees that it will either cause the pending trustee's sale of Camelback Place to be completed or obtain the appointment of a receiver with respect to the Chase Bank Collateral no later than 30 days after the stipulated order is entered. In the event Chase Bank seeks the appointment of a receiver with respect to the Chase Bank Collateral, the Debtors and guarantors will stipulate to the appointment of the receiver and otherwise cooperate with efforts to obtain the appointment of a receiver. A full-text copy of the stipulation is available for free at http://bankrupt.com/misc/CROWPARTNERS_stay_order.pdf About Central Building Orinda, California-based Central Building LLC filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 11-27970) on Oct. 3, 2011. Its wholly owned subsidiary, Crow Partners LLC, filed a separate petition (Bankr. D. Ariz. Case No. 11-27946), listing under $1 million in assets and debts. The case is jointly administered with Crow Partners. Central Building does business in Arizona under the name Central Building Camelback LLC. The Debtors own the County Square Shopping Center in California and the Camelback Place at Dysart in Arizona. The Debtors' sole members are Neal Smither and his spouse, Patricia Smither. The equity interests are subject to a Voting Trust Agreement of which G. Neil Elsey, a principal of Avion Holdings, LLC, is the voting trustee. Avion has also been retained as Restructuring Agent to manage and operate the Debtors during their restructuring. Central Building disclosed $22,913,866 in assets and $19,372,542 in liabilities. Judge George B. Nielsen, Jr. presides over the case. Lawyers at Stinson Morrison Hecker LLP in Phoenix, Arizona, serve as the Debtors' counsel. The petition was signed by Neal Smither, member. CROWNROCK LP: S&P Raises Corp. Credit Rating to 'B-' ---------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Midland, Texas-based CrownRock LP to 'B-' from 'CCC+'. The outlook is stable. "At the same time, we raised the issue level rating on CrownRock's senior unsecured debt to 'CCC+' (one notch below the corporate credit rating). The recovery rating remains '5', indicating our expectation of modest (10% to 30%) recovery in the event of a payment default," S&P said. "The rating actions reflect CrownRock's improved liquidity profile following the increase of its borrowing base to $180 million from $130 million," said Standard & Poor's credit analyst Marc D. Bromberg. "Pro forma for the increase, liquidity as of Dec. 31, 2011, was nearly $250 million, representing $67 million of cash on its balance sheet and an undrawn revolver. Because of significant capital spending to hold acreage in 2012, we previously viewed liquidity as weak, and potentially insufficient to fund operations beyond the fourth quarter. CrownRock has very large spending requirements, including approximately $190 million this year just to satisfy leasehold obligations in the Permian Basin (we envision total capital spending of approximately $275 million including discretionary capex). Cash interest represents an additional $15 million of liquidity needs. Because of improved liquidity, along with our West Texas Intermediate (WTI) price assumption of $85/bbl in 2012, we forecast that CrownRock will have sufficient liquidity to fund its fixed spending obligations over the next nine to 12 months without exhausting its resources." "The ratings reflect CrownRock's small oil and gas reserve and production base as an independent E&P company. The ratings also incorporate the company's very aggressive capital spending requirements to hold its acreage, a high percentage of undeveloped reserves, a volatile and commodity-based industry, and reliance on one basin (the Wolfberry region of the Permian Basin) for its production growth and cash flows. These negative credit factors are only partially buffered by an oil-weighted reserve profile and a competitive cost structure. We consider CrownRock's business risk to be 'vulnerable' and its financial profile to be 'highly leveraged'," S&P said. "The outlook is stable reflecting our estimate that liquidity will be sufficient to meet CrownRock's fixed spending needs in the near-term and that it will have some flexibility to reduce spending in 2013. Furthermore, we expect that CrownRock's exposure to robust oil prices will continue to benefit cash flows and profitability measures," S&P said. "We could lower the rating if liquidity declines below $40 million. Such a scenario could occur if the price of WTI declined meaningfully without a reduction in spending, or if expected production averages less than 4Mboe/d in 2012, a scenario we could foresee if the company's drilling program underperforms our expectations," S&P said. "We view an upgrade as unlikely over the next 12 months due to our expectation that spending levels will remain high relative to the company's liquidity. In addition, we would need to become confident that CrownRock could consistently meet production and reserve growth targets given its limited size and scale," S&P said. DELPHI CORP: DPH Files Bankruptcy Report for First Quarter ---------------------------------------------------------- DPH Holdings Corp. and its affiliates submitted to Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York on April 25, 2012, a consolidated operating report for the quarter period ended March 31, 2012. DPH Holdings President John C. Brooks said the Reorganized Debtors posted an operating income of $5 million for the first quarter of 2012. DPH Holdings Corp., et al. Schedule of Disbursements Three Months Ended March 31, 2012 DPH Holdings Corp. $2,554,000 ASEC Manufacturing General Partnership 0 ASEC Sales General Partnership 0 DPH Medical Systems Colorado LLC 0 DPH Medical Systems Texas LLC 0 DPH Medical Systems LLC 0 DPH-DAS Overseas LLC 0 DPH-DAS (Holding), LLC 0 DPH Diesel Systems LLC 0 DPH Connection Systems LLC 0 DPH-DAS Services LLC 0 DPH-DAS LLC 77,000 Mr. Brooks noted that disbursements were allocated to the legal entities but all disbursements are being made by DPH Holdings Corp. In connection with the consummation of Delphi Corp.'s Confirmed Modified First Amended Joint Plan of Reorganization, DIP Holdco LLP, now known as Delphi Automotive LLP, as assignee of DIP Holdco 3 LLC, through various subsidiaries and affiliates, acquired on October 6, 2009, substantially all of the global core business of Delphi Corp., now known as DPH Holdings Corp. and its debtor affiliates, including the stock of Delphi Technologies, Inc., and the membership interests in Delphi China LLC. Thus, neither Delphi Technologies, Inc., nor Delphi China LLC is included in the current quarterly operating report. Debtor Delphi Technologies, Inc. filed with the Court a separate operating report for the quarter ended March 31, 2012. Delphi Technologies, Inc. Schedule of Disbursements Three Months Ended March 31, 2012 Delphi Technologies, Inc. $8,512,000 Delphi Corp. Treasurer Keith D. Stipp related that operating expenses plus any applicable cure payments for the quarter ended March 31, 2012, was used as a proxy for disbursements for Delphi Technologies, Inc. Delphi Technologies, he added, had an operating income of $32 million for the first quarter of 2012. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Delphi operates major technical centers, manufacturing sites and customer support facilities in 30 countries. The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represented the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is responsible for the post-Effective Date administration and eventual closing of the Chapter 11 cases as well as the disposition of certain retained assets and payment of certain retained liabilities as provided under the Modified Plan. Delphi Automotive PLC is UK-based company formed in May 2011 as a holding company for US-based automotive parts manufacturer Delphi Automotive LLP. Delphi Automotive LLP is the successor to the former Delphi Corporation. At the time of its formation, Delphi Automotive PLC filed an initial public offering seeking to raise at least $100 million. Bankruptcy Creditors' Service, Inc., publishes DELPHI BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/ or 215/945-7000). DELPHI CORP: Court Denies LAWS Director's Bid Over 1999 Spinoff --------------------------------------------------------------- Judge Robert Drain denied Patricia Meyer's request for relief in Delphi Corp.'s cases for the reasons stated at the hearing. In a letter to the Court, Ms. Meyer seeks relief with respect to alleged claims relating to transactions initiated by General Motors before the Petition Date and the related assumption and subsequent termination of certain pension and benefit obligations of GM by the Reorganized Debtors. As reported in Delphi Bankruptcy News, Issue No. 215, Ms. Meyer, director of Labor Advocates Workers Solution, wrote to Judge Drain, stating that her agency has been investigating the circumstances surrounding the 1999 GM/Delphi spin-off. As a result of the spin-off and the subsequent bankruptcy of Delphi, many Delphi employees lost their retirement money and now their pensions are "at the mercy of the [Pension Benefit Guaranty Corp]," said Ms. Meyer. Not only are the Delphi employees' pension coming from the PBGC but a group of salaried employees who never worked for Delphi but were employed by GM and American Axle found their GM pension had been switched to Delphi and are now also receiving their pension from the PBGC, she disclosed. Ms. Meyer appended documents to her letter to support her assertions and asked the Court to rectify the "fraudulent behavior on the part of GM/Delphi." About Delphi Corp. Based in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Delphi operates major technical centers, manufacturing sites and customer support facilities in 30 countries. The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represented the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On Oct. 6, 2009, Delphi Corp.'s Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is responsible for the post-Effective Date administration and eventual closing of the Chapter 11 cases as well as the disposition of certain retained assets and payment of certain retained liabilities as provided under the Modified Plan. Delphi Automotive PLC is UK-based company formed in May 2011 as a holding company for US-based automotive parts manufacturer Delphi Automotive LLP. Delphi Automotive LLP is the successor to the former Delphi Corporation. At the time of its formation, Delphi Automotive PLC filed an initial public offering seeking to raise at least $100 million. Bankruptcy Creditors' Service, Inc., publishes DELPHI BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/ or 215/945-7000). DELPHI CORP: BoNY Mellon Appeals Denial Order --------------------------------------------- The Bank of New York Mellon, as indenture trustee, Paul Feinsilver, James A. Klotz and Terrance O' Grady submitted to the U.S. District Court for the Southern District of New York a statement of issues and designation of items in connection with the appeal from Judge Robert Drain's order denying the Indenture Trustee's motion to proceed in the appropriate tribunal as against Reorganized Delphi and its affiliates. The Indenture Trustee specifically wants the District Court to review whether the U.S. Bankruptcy Court for the Southern District of New York erred in holding that: (1) the Assignment and Assumption Agreement between General Motors Corporation and Delphi Automotive Systems LLC made as of January 1, 1999 was not an executory contract such that the Debtors did not assume any postpetition obligations to the Indenture Trustee and the Bondholders under the 1999 Agreement; (2) the specific assumption of the 1999 Agreement under the Amended and Restated Master Restructuring Agreement between Delphi Corporation and General Motors Corporation terminated the Indenture Trustee's and the Bondholders' rights under the 1999 Agreement; (3) the Indenture Trustee's and the Bondholders' rights under the 1999 Agreement were prepetition claims subject to the Claims Bar Date Order; and (4) (a) the claims of the Indenture Trustee and the Bondholders were discharged under the Modified First Amended Plan of Reorganization and by the discharge provided in Section 1141(d) of the Bankruptcy Code, and (b) any further enforcement by the Indenture Trustee and the Bondholders of their claims is barred by the plan injunction under the Plan Modification Order. Denial Order As reported by Delphi Bankruptcy News Issue No. 215, Judge Drain denied the motion of The Bank of New York Mellon, et al., for permission to proceed in the appropriate tribunal as against the Reorganized Debtors. Judge Drain found that BoNY Mellon, as indenture trustee for the Sewage Disposal Revenue Bonds Series 1994, in the aggregate principal amount of $2.75 million, together with Paul Feinsilver, James A. Klotz and Terrance O'Grady, failed to show cause to lift the injunction under the Modified First Amended Joint Plan of Reorganization for reasons stated at the hearing. The bankruptcy judge further determined that the claims asserted by BoNY Mellon, et al., to the extent they might be valid, are barred by the Bar Date Order and the discharge provided in Section 1141(d) of the Bankruptcy Code, the Modified Plan, and the July 30, 2009 order confirming the Modified Plan. The Court retains jurisdiction over the parties to hear and determine all matters arising from the implementation of the order. In their surreply filed before entry of the order, the Reorganized Debtors maintained that the issue on whether the bonds were not discharged pursuant to Section 1141(d) was already resolved definitely by agreement of the parties and order of the Court in the Joint Stipulation and Order. The parties specifically stipulated that the Indenture Trustee is subject to injunctions in the Modified Plan and the Confirmation Order, Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, counsel to the Reorganized Debtors, pointed out. The fact that the debt at issue was not scheduled as to the Indenture Trustee with respect to the Bonds made it all the more important for the Indenture Trustee to file a proof of claim. Despite the requirements of the Bar Date Notice, the Bankruptcy Code, and the Federal Rules of Bankruptcy Procedure, it is undisputed that the Indenture Trustee failed to file a proof of claim, Mr. Meisler insisted. It also undisputed that the Indenture Trustee never filed a notice of appearance, a proof of claim, or established "reasonable procedures" to direct notice in these Chapter 11 cases, he averred. As to the Indenture Trustee's other concerns regarding the Master Restructuring Agreement, Mr. Meisler clarified that the Reorganized Debtors did not assume the 1999 Assignment Agreement pursuant to the Amended MRA. There is also no basis for concluding that Delphi undertook postpetition obligations enforceable by the Indenture Trustee by virtue of the Amended MRA as the Indenture Trustee and the Bondholders are not parties to the Amended MRA, he argued. Because GM granted the Debtors a full release as part of its consideration under the Modified Plan, omission of the MRA as among the contracts to be terminated in the Master Disposition Agreement should not affect, in any way, the outcome of the Indenture Trustee's Motion, he asserted. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Delphi operates major technical centers, manufacturing sites and customer support facilities in 30 countries. The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represented the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On Oct. 6, 2009, Delphi Corp.'s Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is responsible for the post-Effective Date administration and eventual closing of the Chapter 11 cases as well as the disposition of certain retained assets and payment of certain retained liabilities as provided under the Modified Plan. Delphi Automotive PLC is UK-based company formed in May 2011 as a holding company for US-based automotive parts manufacturer Delphi Automotive LLP. Delphi Automotive LLP is the successor to the former Delphi Corporation. At the time of its formation, Delphi Automotive PLC filed an initial public offering seeking to raise at least $100 million. Bankruptcy Creditors' Service, Inc., publishes DELPHI BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/ or 215/945-7000). DESIGNERWARE LLC: Bankruptcy Filing Halts Cyber-Spying Suit ----------------------------------------------------------- Lisa Thompson at Erie Times-News reports that DesignerWare LLC's bankruptcy filing halted, at least temporarily, a lawsuit a Wyoming couple filed against DesignerWare in May 2011. The couple, Crystal and Brian Byrd, claim DesignerWare's software, PC Rental Agent, was installed on a computer they bought at an Aaron's Rental Store in Casper, Wyo., and then used to spy on Brian Byrd as he played online poker. The report relates, in a recent order, U.S. District Judge Sean J. McLaughlin put a stay on the proceedings against DesignerWare. In the meantime, the case against the other defendants, Aaron's Inc. and Aspen Way Enterprises of Montana, the Aaron's franchisee that sold the Byrds their computer, is still pending. In a recent hearing, Judge McLaughlin gave the Byrds' lawyers 60 days to reformulate their complaints against Aspen Way and Aaron's Inc. The report notes the Byrds claim PC Rental Agent violates federal wiretap laws because it secretly captures a user's keystrokes and screen images and uses the computer Web camera to take a picture of the computer's user. The report relates Aspen Way argued that the suit against it was improperly filed in Pennsylvania. Judge McLaughlin agreed the Byrds had no basis for suing Aspen Way in Pennsylvania. Based in Pennsylvania, DesignerWare LLC is a software developer. The Company filed for Chapter 11 protection on March 19, 2012 (Bankr. W.D. Pa. Case No. 12-10397). Robert S. Bernstein, Esq., at Bernstein Law Firm, P.C., represents the Debtor. DEWEY & LEBOEUF: Greenberg Talks End; Patton Boggs Next ------------------------------------------------------- The Wall Street Journal's Jennifer Smith and Ashby Jones report that Greenberg Traurig LLP has called off discussions on a possible deal with Dewey & LeBoeuf LLP. WSJ also reports a person familiar with the matter said Dewey is in talks with Washington D.C.-based Patton Boggs LLP. WSJ also relates a person familiar with the situation said Sunday while official talks are over, Greenberg leaders are continuing informal efforts to cherry-pick certain Dewey lawyers and practice groups. The report notes a Greenberg spokeswoman said the 1,700-lawyer firm had discontinued discussions with Dewey, but declined to comment on "speculation and rumors" about recruitment of individual partners. Dewey and Patton Boggs also declined to comment to the WSJ report. An internal memorandum reviewed by The Wall Street Journal indicates Dewey told its global partnership Sunday that while discussions with Greenberg had ended, it was in talks "with other firms about a possible transaction." The Dewey memo also said that Steven Davis, its chairman until several weeks ago, had been removed from the firm's five-partner Office of the Chairman and from its executive committee, in the firm's "best interests." According to WSJ, Mr. Davis on Sunday sent an e-mail to the firm's partnership, expressing deep "regret" about the firm's plight, and saying he had "not engaged in any misconduct." In the e-mail, which was reviewed by the Journal, he said he was "saddened by the events of the last several days" and said that all of his "decisions as chairman were made in good faith and in the firm's best interest." WSJ also relates that Dewey said in another internal memo reviewed by the Journal that the Manhattan district attorney's office had begun last week an investigation focused on Mr. Davis. The district attorney's office has declined to comment. "No inferences about the outcome of the DA's or the firm's investigation should be taken from this action," Dewey said in its latest memo, according to the report. Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP. DEWEY & LEBOEUF: 90 to 120-Day Extension of Bank Loan Sought ------------------------------------------------------------ The Wall Street Journal's Jennifer Smith and Ashby Jones report that a person familiar with the matter said Dewey & LeBoeuf LLP at one point Sunday had discussed a 90 to 120-day extension of the loan with a syndicate of bank lenders, but the situation was fluid. WSJ notes the firm has been considering options including a merger that could involve a prearranged bankruptcy filing. Dewey has recently been in talks with the bank lenders to renegotiate a $100 million credit line. WSJ relates problems have been deepening at Dewey, which has lost about 70 partners since January amid disputes over compensation. The firm has drawn some $75 million on a $100 million revolving credit line, and it faces a looming deadline to renegotiate the terms of the loan with a syndicate of banks. Dewey leadership said on Friday that those negotiations were continuing. WSJ also reports Dewey owes at least $145 million to at least seven insurers companies that purchased a private bond the firm floated in 2010, according to 2011 filings with U.S. state insurance departments analyzed by the research firm SNL Financial and some of the insurers. WSJ, citing figures from SNL and people familiar with the matter, says the insurers with the biggest exposure are: Hartford Financial Services Group Inc. $40 million British insurer Aviva $35 million Dutch company Aegon NV $25 million WSJ says some insurers confirmed their holdings but all declined to discuss the investment or say if Dewey recently has discussed any of its plans with them. Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP. DEX MEDIA WEST: Bank Debt Trades at 36% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media West LLC is a borrower traded in the secondary market at 63.50 cents-on- the-dollar during the week ended Friday, April 27, 2012, an increase of 0.63 percentage points from the previous week, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2014, and carries Moody's 'Caa3' rating and Standard & Poor's 'D' rating. The loan is one of the biggest gainers and losers among 162 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About R.H. Donnelley & Dex Media Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc., and Local Launch, Inc., are the company's only direct wholly owned subsidiaries. Dex Media East LLC is a publisher of the official yellow pages and white pages directories for Qwest Communications International Inc. in the states, where Qwest is the primary incumbent local exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media, Inc., filed for Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09- 11852) on May 28, 2009, after missing a $55 million interest payment on its senior unsecured notes. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, represented the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, served as the Debtors' local counsel. The Debtors' financial advisor was Deloitte Financial Advisory Services LLP while its investment banker was Lazard Freres & Co. LLC. The Garden City Group, Inc., served as claims and noticing agent. The Official Committee of Unsecured Creditors tapped Ropes & Gray LLP as its counsel, Cozen O'Connor as Delaware bankruptcy co-counsel, J.H. Cohn LLP as its financial advisor and forensic accountant, and The Blackstone Group, LP, as its financial and restructuring advisor. The Debtors emerged from Chapter 11 bankruptcy proceedings at the end of January 2010. * * * In early April 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Cary, N.C.-based Dex One Corp. and related entities to 'CCC' from 'SD' (selective default). The rating outlook is negative. "At the same time, we affirmed our issue-level rating on Dex Media East Inc.'s $672 million outstanding term loan, Dex Media West Inc.'s $594 million outstanding term loan, and R.H. Donnelley Inc.'s $866 million outstanding term loan due 2014 at 'D'. The recovery rating on these loans remains at '5', indicating our expectation of modest (10% to 30%) recovery for lenders in the event of a payment default," S&P said. "The company's March 9, 2012 amendment allows for ongoing subpar repurchases of its term debt until 2013, as long as certain conditions are met. Additionally, on March 22, 2012, the company announced the commencement of a cash tender offer to purchase a portion of its senior subordinated notes due in 2017 below par. The term loan and subordinated notes are trading at a significant discount to their par values, providing the company an economic incentive to pursue a subpar buyback. We believe that these circumstances suggest a high probability of future subpar buybacks, which are tantamount to default under our criteria," S&P said. "The 'CCC' corporate credit rating reflects our view that Dex One's business will remain under pressure given the unfavorable outlook for print directory advertising. We view the company's rising debt leverage, low debt trading levels, weak operating outlook, and steadily declining discretionary cash flow as indications of financial distress. As such, we continue to assess the company's financial risk profile as 'highly leveraged,' based on our criteria. We regard the company's business risk profile as 'vulnerable,' based on significant risks of continued structural and cyclical decline in the print directory sector. Structural risks include increased competition from online and other distribution channels as small business advertising expands across a greater number of marketing channels," S&P said. DEX ONE: Reports $57.5 Million Net Income in First Quarter ---------------------------------------------------------- Dex One Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $57.57 million on $344.42 million of net revenues for the three months ended March 31, 2012, compared with net income of $55.41 million on $391.23 million of net revenues for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $3.14 billion in total assets, $3.09 billion in total liabilities and $48.87 million in total shareholders' equity. Dex One CEO Alfred Mockett said, "First quarter ad sales were consistent with guidance and reflect continued weakness with our print offering, particularly in large markets. We expect sales trends to improve in the subsequent quarters of 2012 as reflected by our second quarter ad sales guidance. Looking ahead, our mobile and online marketing solutions should continue to post solid gains, generating digital bookings growth in excess of 30 percent. "During the first quarter we made progress on each of our 2012 priorities. Digital bookings growth in the first quarter was 32%, while our bundles provided customers with an easy way to purchase a powerful combination of local marketing services. Bundles remain on track to account for half of bookings by year-end." Greg Freiberg, Dex One CFO, added, "In the first four months of 2012, we expect to retire $425 million of debt. While we continue to reduce expenses, we will look for additional opportunities to strengthen the balance sheet." A copy of the Form 10-Q is available for free at: http://is.gd/6Z09hG About Dex One Dex One, headquartered in Cary, North Carolina, is a local business marketing services company that includes print directories and online voice and mobile search. Revenue was approximately $1.1 billion for the LTM period ended Sept. 30, 2010. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09- 11833 through 09-11852). They emerged from bankruptcy on Jan. 29, 2010. On the Effective Date and in connection with its emergence from Chapter 11, RHD was renamed Dex One Corporation. Dex One reported a net loss of $518.96 million in 2011 compared with a net loss of $923.59 million for the eleven months ended Dec. 31, 2010. * * * As reported in the April 2, 2012 edition of the TCR, Moody's Investors Service has downgraded the corporate family rating (CFR) for Dex One Corporation's to Caa3 from B3 based on Moody's view that a debt restructuring is inevitable. Moody's has also changed Dex's Probability of Default Rating (PDR) to Ca/LD from B3 following the company's purchase of about $142 million of par value bank debt for about $70 million in cash. The Caa3 rating also reflects Moody's view that additional exchanges at a discount are likely in the future since the company amended its bank covenants to make it possible to repurchase additional bank debt on the open market through the end of 2013. As reported by the TCR on April 4, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Cary, N.C.-based Dex One Corp. and related entities to 'CCC' from 'SD' (selective default). "The upgrade reflects our assessment of the company's credit profile after the completion of the subpar repurchase transaction in light of upcoming maturities, future subpar repurchases, and our expectation of a continued week operating outlook," explained Standard & Poor's credit analyst Chris Valentine. DR HORTON: S&P Rates Proposed $300-Mil. Senior Notes 'BB-' ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue rating and '3' recovery rating to D.R. Horton Inc.'s proposed offering of $300 million of senior notes due 2017. "Our '3' recovery rating indicates our expectation for a meaningful (50%-70%) recovery in the event of a default," S&P said. "The company plans to use proceeds from the offering for general corporate purposes. Standard & Poor's expects the offering to immediately bolster the company's holdings of unrestricted cash and marketable securities (which totaled approximately $1.0 billion at March 31, 2012), providing additional funds for investment in land and inventory. The offering will also help the issuer repay its 2013 and 2014 debt maturities. The notes will be guaranteed by substantially all of D.R Horton's homebuilding subsidiaries and will rank equally with the company's other senior unsecured obligations," S&P said. "Our ratings on Ft. Worth, Texas-based D.R Horton reflect the company's 'fair' business risk profile. D.R. Horton is the nation's largest homebuilder by volume, having delivered 17,900 homes during the 12 months ended March 31, 2012, primarily to first-time homebuyers. In our view, the company has successfully grown its market share over the past year because of its low average price point (approximately $216,000) and its comparably more aggressive speculative construction strategy. We still view D.R. Horton's financial risk profile as 'aggressive,' but it is improving. Debt-to-EBITDA (including operating leases) totaled 6.8x at Dec. 31, 2011. While this metric is higher than among similarly rated industrial peers, we expect it to improve over the next 18 months," S&P said. "Our positive outlook on the company acknowledges our expectation that credit metrics will improve to the mid-5x area by year-end 2012, with further improvement expected in 2013. We could raise our corporate credit rating to 'BB' if we think D.R. Horton is poised to achieve low double-digit revenue growth in 2013 and EBITDA margins (excluding impairments and interest in cost of sales) in the mid-7% area. Under this scenario, we would expect debt-to-EBITDA to decline to the mid-4x area by year-end 2013. However, we could revise the outlook to stable if sales growth is more moderate than we currently expect (i.e., it falls below 5%) and EBITDA margins (excluding impairments and interest in cost of sales) decline to the high 6% area. Under this scenario, an upgrade is unlikely and we would not expect debt-to-EBITDA (including operating leases) to improve materially from the current high-6x area," S&P said. RATING LIST D.R. Horton Inc. Corporate credit rating BB-/Positive New Rating D.R. Horton Inc. $300 million senior notes due 2017 BB- Recovery rating 3 DRSK1 LLC: Case Summary & 11 Largest Unsecured Creditors -------------------------------------------------------- Debtor: DRSK1, LLC 2404 Alaqua Drive Longwood, FL 32779 Bankruptcy Case No.: 12-05409 Chapter 11 Petition Date: April 23, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: James H. Monroe, Esq. JAMES H. MONROE, P.A. P.O. Box 540163 Orlando, FL 32854 Tel: (407) 872-7447 Fax: (407) 246-0008 E-mail: jhm@jamesmonroepa.com Scheduled Assets: $723,884 Scheduled Liabilities: $1,317,688 A copy of the Company's list of its 11 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-05409.pdf The petition was signed by Dilipkumar M. Patel, managing member. DUNE ENERGY: Amends $29.2 Million Resale Prospectus --------------------------------------------------- Dune Energy, Inc., filed with the U.S. Securities and Exchange Commission amendment no.1 to Form S-1 relating to the resale of up to 29,174,957 shares of common stock, par value $0.001 per share, of the Company. The common stock may be offered for sale from time to time by West Face Long Term Opportunities Global Master L.P., TPG Funds, Mardi Gras Ltd., et al. The Company's common stock is traded on the OTC Bulletin Board under the symbol "DUNR." On April 26, 2012, the closing price of the Company's common stock on the bulletin board was $3.01. A copy of the amended prospectus is available for free at: http://is.gd/sPgwpf About Dune Energy Dune Energy, Inc. (NYSE AMEX: DNE) -- http://www.duneenergy.com/ -- is an independent energy company based in Houston, Texas. Since May 2004, the Company has been engaged in the exploration, development, acquisition and exploitation of natural gas and crude oil properties, with interests along the Louisiana/Texas Gulf Coast. The Company's properties cover over 90,000 gross acres across 27 producing oil and natural gas fields. The Company reported a net loss of $60.41 million in 2011, compared with a net loss of $75.53 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $247.42 million in total assets, $122.49 million in total liabilities, and $124.93 million in total stockholders' equity. * * * As reported by the TCR on Dec. 27, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on Dune Energy Inc. to 'SD' (selective default) from 'CC'. "The rating actions follow the company's announcement that it has completed the exchange offer for its 10.5% senior notes due 2012, which we consider a distressed exchange and tantamount to a default," said Standard & Poor's credit analyst Stephen Scovotti. "Holders of $297 million of principle amount of the senior secured notes exchanged their 10.5% senior secured notes for common stock, which in the aggregate constitute 97.0% of Dune's common stock post-restructuring, and approximately $49.5 million of newly issued floating rate senior secured notes due 2016. We consider the completion of such an exchange to be a distressed exchange and, as such, tantamount to a default under our criteria." In the Jan. 2, 2012, edition of the TCR, Moody's Investors Service revised Dune Energy, Inc.'s Probability of Default Rating (PDR) to Caa3/LD from Ca following the closing of the debt exchange offer of the company's 10.5% secured notes. Simultaneously, Moody's upgraded the Corporate Family Rating (CFR) to Caa3 reflecting Dune's less onerous post-exchange capital structure and affirmed the Ca rating on the secured notes. The revision of the PDR reflects Moody's view that the exchange transaction constitutes a distressed exchange. Moody's will remove the LD (limited default) designation in two days, change the PDR to Caa3, and withdraw all ratings. EASTMAN KODAK: Asks for Aug. 16 Deadline to Decide on Leases ------------------------------------------------------------ Eastman Kodak Co. and its affiliated debtors sought a court order granting them a three-month extension to determine whether to assume or reject their unexpired leases. In a motion filed with the U.S. Bankruptcy Court in Manhattan, Eastman Kodak proposed to extend the deadline to August 16, 2012, saying the company needs more time to determine which of their leases should be assumed. "The debtors are continuing their strategic review of their lease portfolio in connection with their efforts to preserve and maximize value through these Chapter 11 cases," said the company's lawyer, Pauline Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in New York. "Given the number of unexpired leases and the size and complexity of these Chapter 11 cases, the debtors need more time to complete this strategic review process," Ms. Morgan said in the court filing. A court hearing on the proposed extension is scheduled for May 10, 2012. Objections are due by May 3, 2012. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (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 are 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. 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. 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. 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. 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: Deadline to File Removal Notices Moved to Aug. 16 ---------------------------------------------------------------- The U.S. Bankruptcy Court in Manhattan authorized Eastman Kodak Co. to file notices of removal of pre-bankruptcy lawsuits until August 16, 2012. The ruling allows the company to evaluate and determine which lawsuits are subject to the automatic stay and which of them should be removed. Eastman Kodak and its affiliated debtors are involved in about 100 lawsuits, some of which have not been automatically halted by their bankruptcy filing. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (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 are 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. 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. 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. 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. 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: Shutterfly Acquiring Kodak Gallery for $23.8-Mil. ---------------------------------------------------------------- Shutterfly Inc. will acquire Kodak Gallery from Eastman Kodak Co. for $23.8 million after no other bidders came forward with a better offer for the online photo service. Shutterfly Inc., an Internet-based social expression and personal publishing service, made a $23.8 million "stalking horse" bid for Kodak Gallery last month, setting a floor for further offers. There were no other bids by the April 20 deadline, causing the cancellation of the auction scheduled for April 26. A hearing to approve the sale is scheduled for April 30. According to The Wall Street Journal, Kodak Gallery is one of many assets that Eastman Kodak failed to turn into a hit. At its peak, Kodak Gallery generated $150 million in revenue for the company but it was never profitable, The Journal reported, citing people familiar with the matter as its source. Traffic to Kodak Gallery's Web site tapered off in recent years as it faced competition from Shutterfly and other companies. In March, it had 971,000 unique visitors to its Web site, a 29% decline from a year earlier, according to the WSJ. Kodak's $400 million in 7% convertible notes due 2017 traded at 2:43 p.m. April 25 for 30.375 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (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 are 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. 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. 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. 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. 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: Seeks Nod of New ORIC Policy Terms ------------------------------------------------- Eastman Kodak Co. is asking the U.S. Bankruptcy Court in Manhattan to approve new provisions in the insurance policies proposed by Old Republic Insurance Co. and a Canadian affiliate in a bid to have those policies renewed by the insurance firms. The insurance firms earlier proposed to continue to provide insurance coverage to Eastman Kodak and its affiliated debtors for the policy year May 1, 2012-May 1, 2013. The firms, however, will only renew the insurance policies if the bankruptcy court approves additional provisions in those policies. One of the provisions requires Eastman Kodak to remit payment for any obligations currently outstanding under its various insurance agreements with the firms. Another provision exempts the insurance firms from being subjected to any bar date for filing proofs of claims with respect to their claims under the insurance agreements. The insurance firms also proposed that Eastman Kodak's rights against all collateral held by the firms should be governed by the insurance agreements, and that any post-petition obligations under those agreements should be administrative obligations entitled to priority under Section 503(b) of the Bankruptcy Code. A court hearing is scheduled for April 30, 2012. Objections are due by April 27, 2012. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (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 are 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. 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. 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. 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. 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 to Assume Pacts With Hitchcock, OAI ----------------------------------------------------------- Eastman Kodak Co. and its affiliated debtors are seeking court approval to assume their contracts with OnPoint Analytics Inc. and Richard Hitchcock in a bid to continue to get their services. The company entered into a contract with OnPoint prior to its bankruptcy filing to avail of the firm's services in connection with a lawsuit it filed against Epson Imaging Devices Corp. in 2010. The lawsuit is set for trial in November 2012. Meanwhile, the other contract allows Eastman Kodak to avail of Mr. Hitchcock's services in connection with its pension schemes in the United Kingdom. Mr. Hitchcock is a barrister who gives expert advice to companies including U.S. companies which are in bankruptcy protection and which face lawsuits from U.K. pension regulators. OnPoint and Mr. Hitchcock are "unwilling" to continue to provide their services without the assumption of the contracts, according to court filings. Eastman Kodak's lawyer, Pauline Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in New York, said the two experts have knowledge critical to help the company prosecute the Epson lawsuit and settle potential pension claims, and that they would be difficult to replace. A court hearing on the proposed assumption of the contracts is scheduled for May 10, 2012. Objections are due by May 3. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (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 are 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. 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. 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. 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. 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: 1st Quarter Results Show Improvement --------------------------------------------------- Eastman Kodak Company reported that its strategy of focusing on its most profitable businesses and strengthened cost controls resulted in profitability improvements in both of its business segments during the quarter and an increased cash balance at the end of the quarter. Selling, General and Administrative (SG&A) expenses decreased by $84 million compared to the first quarter of 2011, as Kodak reduced its investment in unprofitable business lines and consolidated into two business segments -- Commercial and Consumer. Kodak's liquidity improved, ending the first quarter with a cash balance of $1.4 billion, up $500 million from year-end 2011, as a result of $600 million in net new financing, utilization of the Chapter 11 process, and reduced year-over-year cash usage for continuing operations. "During the quarter, we took decisive steps -- including filing for Chapter 11 and exiting unprofitable businesses -- to accelerate our transformation and emerge in 2013 as a profitable, sustainable business," said Antonio M. Perez, Chairman and Chief Executive Officer. "As a result, during the quarter we saw improved profitability of our Commercial and Consumer business segments. We will continue to exploit our competitive advantage at the intersection of materials science, digital imaging, and deposition technologies. Our commercial and consumer products and services continue to offer unique technologies and market-leading value propositions. "With the support of our valuable suppliers, we continued to serve our customers with the same high-quality products and services that they have come to expect from Kodak. As demonstrated by our performance in the first quarter, Kodak's reorganization is proceeding according to plan. As we move forward, we are continuing to make progress in realizing each of these fundamental objectives in our Chapter 11 filing. We have exceptionally talented and dedicated employees, and I am proud of the way they managed the immediate impact of the filing. I also want to extend appreciation to our customers for their continued loyalty." Kodak noted that since filing for Chapter 11 reorganization in January, the company has bolstered its liquidity, and made good progress in the process of monetizing its non-strategic intellectual property, right-sizing its legacy liabilities, and focusing the company on a core set of businesses that most profitably leverage Kodak's exceptional technology and brand strengths. Kodak's revenue of $965 million in the quarter represented a decline of 27 percent from the same period in the prior year, reflecting the exit of digital cameras, continued secular decline of the traditional businesses, and a $61 million reduction in revenue associated with a tax refund sharing agreement with intellectual property licensees. This reduction is the result of a refund of Korean withholding taxes recorded in the quarter as a $122 million income tax benefit. The Consumer Segment's loss improved by $23 million in the first quarter of 2012 to $164 million from $187 million in the same period in the prior year. Excluding the impact of the Korean tax refund, the Consumer Segment generated an $84 million year-over- year improvement in profitability. Driving this improvement were several factors, including enhanced cost controls, solid revenue growth in the retail systems solutions business driven by higher demand for consumables, a 34% increase in consumer inkjet ink revenues, and the decision to phase out of the digital capture business. The profitability of the Commercial Segment modestly improved, driven by a reduction in operating expenses, with a segment loss of $64 million. The improvement in operating expenses was partially offset by continued decline in the traditional business, price erosion on plates due to industry overcapacity, and the slowdown in industry activity prior to the start of the drupa trade show. At the drupa trade show, opening next week in Dusseldorf, Germany, Kodak will present one of the broadest, most integrated portfolios in the graphic communications industry. Among the new products Kodak will highlight are the 1,000 fpm KODAK PROSPER 6000XL Press, the 3,000 fpm KODAK PROSPER S30 Imprinting System, the KODAK FLEXCEL Direct Platemaking System, and KODAK SONORA XP Process-Free Plates. On the basis of GAAP, the company reported a first quarter net loss of $366 million compared with a net loss of $246 million from the prior-year quarter. The results reflect the improvement in segment profitability discussed above, reorganization costs associated with the Chapter 11 case, the absence of a gain from an asset sale in the prior-year quarter, and higher restructuring charges, partially offset by the tax benefit from the net impact of the Korean tax refund. Kodak noted that as of March 31, 2012, it was in compliance with all covenants under its lender agreements. "Kodak is focusing on its opportunities, reducing costs, and fine- tuning the balance between liquidity and growth to enable the enterprise to emerge from its Chapter 11 restructuring in 2013 as a leaner, stronger, and sustainable business," Mr. Perez said. A copy of the Form 10-Q for the quarter ended March 31, 2012, filed with the Securities and Exchange Commission is available for free at http://is.gd/j9nl1J About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (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 are 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. 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. 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. 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. 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). ELEPHANT TALK: Files Form S-3, Registers 7.5MM Common Shares ------------------------------------------------------------ Elephant Talk Communications Corp. filed with the U.S. Securities and Exchange Commission a Form S-3 registering up to 7,586,207 shares of the Company's common stock to be sold by Hudson Bay Master Fund, Ltd., Iroquois Master Fund Ltd., JGB Capital LP, et al. All of the offered shares are issuable, or may in the future become issuable, in connection with a private placement of certain 8% senior secured convertible notes issued on March 30, 2012, with an original principal amount of $8,800,000. The shares of common stock being offered for resale by the selling stockholders pursuant to this prospectus include: shares of common stock which may be issued to selling stockholders as a result of conversion of the Convertible Notes; shares of common stock which may be issued in lieu of monthly interest and principal amortization payments on the Convertible Notes; and additional shares of common stock that may be issued to the selling stockholders as a result of conversion price anti-dilution adjustments applicable to the Convertible Notes. No underwriter or other person has been engaged to facilitate the sale of shares of the Company's common stock in this offering. The Company is paying the cost of registering the shares of the Company's common stock covered by this prospectus as well as various related expenses. The selling security holders are responsible for all selling commissions, transfer taxes and other costs related to the offer and sale of their shares of the Company's common stock. The Company's common stock is traded on the NYSE Amex under the symbol "ETAK." On April 23, 2012, the closing sale price of the Company's common stock on the NYSE Amex was $2.22 per share. A copy of the prospectus is available for free at: http://is.gd/8i8SSB About Elephant Talk Lutz, Fla.-based Elephant Talk Communications, Inc. (OTC BB: ETAK) -- http://www.elephanttalk.com/-- is an international provider of business software and services to the telecommunications and financial services industry. The Company reported a net loss of $25.31 million in 2011, a net loss of $92.48 million in 2010, and a net loss of $17.29 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $44.81 million in total assets, $9.71 million in total liabilities, and $35.09 million in total stockholders' equity. EMMIS COMMUNICATIONS: Enters Into NY 98.7FM Programming Deal ------------------------------------------------------------ Emmis Communications announced a long-term Local Programming and Marketing Agreement with ESPN Radio to provide programming and sell advertising on New York's 98.7FM. Emmis also entered into a transaction to sell the intellectual property rights of Kiss FM, the current format Emmis programs on 98.7FM, to YMF Media, which is in the process of acquiring New York radio stations WBLS-FM and WLIB-AM. In conjunction with these transactions, Emmis also announced that it entered into a loan agreement with a large insurance company. The total consideration related to the proceeds from the loan agreement, initial payment from the sale of Kiss FM intellectual property rights, and the present value of certain loan reserves required under the agreement with the insurance company which Emmis expects to receive in the future, will be approximately $96 million. The long-term LMA is not tied to a sale of the station. Transaction proceeds will be used to repay amounts outstanding under Emmis' senior credit facility and to pay transaction fees and expenses. "We want to thank our loyal employees and especially the fans of Kiss FM for an amazing 30 year run including several periods where Kiss was the number one ranked station in New York," Emmis Chairman and CEO Jeff Smulyan said. "Recent changes in the way radio ratings are measured made it very difficult for us to find success with Kiss FM despite the great work of our Emmis New York team. We hope the best parts of Kiss will continue to live on. With enhanced financial flexibility we look forward to enhancing our service to New York's urban community at our award winning Hot97 brand." This weekend Emmis New York plans to celebrate 30 years of Kiss FM. Emmis purchased Kiss FM 98.7 in 1994. "I have so many friends on the Kiss FM team and this is an extraordinarily difficult decision for me, however the benefits to the financial health of Emmis as a whole are significant. Coupled with the sale of a controlling interest in three of our radio stations to Merlin Media and the forthcoming sale of KXOS in Los Angeles, we will have one of the healthiest balance sheets in media thereby positioning Emmis for future growth," Smulyan said. The Emmis employees affected by the announcement will receive generous severance packages. Paul, Weiss, Rifkind, Wharton & Garrison LLP and Wiley Rein LLP served as legal counsel and Moelis & Company served as financial advisor to Emmis. Local Programming and Marketing Agreement On April 26, 2012, a subsidiary of Emmis Communications Corporation entered into a Local Programming and Marketing Agreement with New York AM Radio, LLC, pursuant to which, commencing April 30, 2012, Programmer will purchase from Emmis the right to provide programming on radio station WRKS(FM), 98.7FM, New York, NY, until Aug. 31, 2024, subject to certain conditions. Disney Enterprises, Inc., the parent company of Programmer, has guaranteed the obligations of Programmer under the LMA. Emmis' subsidiary will retain ownership of the Station during the term of the LMA and will receive an annual fee from Programmer of $8,435,000 for the first year of the term under the LMA, which fee will increase by 3.5% each year thereafter until the LMA's termination. Emmis' subsidiary plans to assign the LMA to a special-purpose subsidiary in connection with the funding of the Note under the Participation Agreement. A copy of the Local Marketing Agreement is available for free at: http://is.gd/g0F6sk Participation Agreement On April 26, 2012, the Financing Subsidiary and a subsidiary of the Financing Subsidiary which was formed to hold the Federal Communications Commission license for the Station entered into a Participation Agreement with Wells Fargo Bank Northwest, National Association and Teachers Insurance and Annuity Association of America. Pursuant to the Participation Agreement, the Holder will sell to TIAA a 100% participation interest in a 4.10% promissory note to be issued, jointly and severally, by the Financing Subsidiary and the License Subsidiary in the principal amount of $82.5 million. The Note will mature on Aug. 1, 2024, and will bear interest at a rate equal to 4.10% per annum. A copy of the Participation Agreement is available at: http://is.gd/JQxU74 Asset Purchase Agreement On April 5, 2012, certain of the Contributors entered into an Asset Purchase Agreement with YMF Media LLC. Yucaipa Corporate Initiatives Fund II, L.P., Yucaipa Corporate Initiatives (Parallel) Fund II, L.P., Fortress Credit Funding I, LP., Drawbridge Special Opportunities Fund Ltd. and CF ICBC LLC agreed to guarantee certain obligations of the Purchaser under the Asset Purchase Agreement. Pursuant to the Asset Purchase Agreement, the Contributors agreed to sell certain intellectual property rights to the Purchaser, and the Purchaser agreed to also assume certain liabilities of the Contributors, in the event the Contributors commence broadcasting ESPN programming on the Station under a Local Programming and Marketing Agreement. The purchase price is $10,000,000, plus quarterly earn-out payments, if any, equal to 15% of the incremental gross revenue over a three-year period in excess of calendar 2011 gross revenues attributable to radio station WBLS(FM), 107.5FM, New York, NY. The transactions contemplated by the Asset Purchase Agreement become effective on May 7, 2012. A copy of the Asset Purchase Agreement is available at: http://is.gd/2zOKzS About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. The Company reported a consolidated net loss of $11.54 million on $251.31 million of net revenues for the year ended Feb. 28, 2011, compared with a consolidated net loss of $118.49 million on $242.56 million of net revenues during the prior year. For the nine months ended Nov. 30, 2011, the Company reported net income attributable to common shareholders of $97.72 million on $185.08 million of net revenues, compared with a net loss attributable to common shareholders of $7.92 million on $193.24 million of net revenues for the same period during the prior year. The Company's balance sheet at Nov. 30, 2011, showed $365.70 million in total assets, $344.92 million in total liabilities,$56.38 million in series A cumulative convertible preferred stock and a $35.60 million total deficit. * * * Emmis carries Caa2 corporate family rating and a Caa3 probability of default rating from Moody's. In July 2011, Moody's Investors Service placed the ratings of Emmis on review for possible upgrade following the company's earnings release for 1Q12 (ended May 31, 2011) including additional disclosure related to the pending sale of controlling interests in three radio stations. The sale of the majority ownership to GCTR will generate estimated net proceeds of approximately $100 million to $120 million, after taxes, fees and related expenses. Emmis will retain a minority equity interest in the operations of the three stations and Moody's expects senior secured debt to be reduced resulting in improved credit metrics. ENEA SQUARE: Reorganization Case Converted to Chapter 7 ------------------------------------------------------- The Hon. Roger L. Efremsky of the U.S. Bankruptcy Court for the Northern District of California converted the Chapter 11 case of Enea Square Partners, L.P., to one under Chapter 7 of the Bankruptcy Code. The Debtor had requested that the Court dismiss its case. Enea Square Partners, LP, is the owner of commercial property including five parcels located in Concord, California. Enea Square filed for Chapter 11 protection (Bankr. N.D. Calif. Case No. 11-44888) on May 4, 2011. Bankruptcy Judge Roger L. Efremsky presides over the case. Chris D. Kuhner, Esq., at Kornfield, Nyberg, Bendes & Kuhner, in Oakland, Calif., represents the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million. ETHAN ALLEN: Case Summary & 9 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Ethan Allen Associates, LLC 148 Deer Hill Avenue Danbury, CT 06810 Bankruptcy Case No.: 12-50738 Chapter 11 Petition Date: April 23, 2012 Court: U.S. Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: James M. Nugent, Esq. HARLOW, ADAMS, AND FRIEDMAN, P.C. One New Haven Avenue, Suite 100 Milford, CT 06460 Tel: (203) 878-0661 Fax: (203) 878-9568 E-mail: jmn@quidproquo.com Scheduled Assets: $939,820 Scheduled Liabilities: $2,540,615 A copy of the Company's list of its nine largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ctb12-50738.pdf The petition was signed by Alison Y. Ling, member. FEDERAL-MOGUL: Calif. Court Rules in Bankhead v. Pneumo Abex ------------------------------------------------------------ In this asbestos personal injury case, a jury found Pneumo Abex LLC liable to Gordon and Emily Bankhead for compensatory and punitive damages. On appeal, Abex does not challenge the jury's verdicts as to liability or the amount of compensatory damages. It contends only that the punitive damages award is excessive because the trial court erred in excluding from evidence an unaudited financial statement for Abex that was not prepared in the ordinary course of business, and in admitting evidence of Abex's contractual right to indemnity from third parties, as well as evidence regarding the financial condition of those third parties. The Court of Appeals of California, First District, Division Four, in an April 26, 2012 decision, held that the exclusion of the unaudited financial statement was proper. The appellate court also concluded that given the limited purpose for which the trial court admitted the challenged evidence, and the other evidence supporting the punitive damages award, Abex has not satisfied its burden on appeal to show that there was any error in the trial court's evidentiary rulings. Nor has Abex shown that it was prejudiced by any of the errors it contends were committed. The trial court decision is affirmed. Abex is the successor in interest to another company, Abex Corporation, which manufactured asbestos-containing friction products, including brake linings for installation on commercial truck brakes. At least by the 1960's, Abex knew that workers exposed to asbestos dust were at risk of developing asbestos- related diseases, including mesothelioma. Nonetheless, Abex did not put warnings on its products until 1972 or later, and even then, only used the word "caution." Abex continued to sell asbestos-containing brake products until 1987. In 1994, Abex sold its entire friction product division to another company, Wagner Electric Corp., a subsidiary of Cooper Industries, Inc. As consideration for the sale, Abex received over $207 million in cash, and an indemnity agreement from Wagner for asbestos-related claims against Abex brought after 1998. Wagner's parent corporation, Cooper Inc., later became Cooper Industries, LLC, which in turn is a subsidiary of another entity, Cooper Industries plc. In 1998, Wagner was sold to Federal-Mogul Corporation, which agreed to assume Wagner's indemnity obligations to Abex. As part of the sale transaction, Cooper LLC agreed to guarantee the payment of the indemnity obligations owed to Abex by Wagner. Accordingly, after Federal-Mogul filed for Chapter 11 bankruptcy in 2001, Cooper LLC took responsibility for paying asbestos- related judgments against Abex. Abex continued to operate other aspects of its business until 2004, but then went out of business entirely, and ceased to generate any income. At the time this case went to trial, Abex still existed as a legal entity, but its principal activity was responding to claims and lawsuits, primarily for asbestos-related injuries. To cover its remaining asbestos-related liabilities, Abex relies on its right to indemnity from Wagner, which Cooper LLC, as guarantor, actually pays. Gordon Bankhead was exposed to asbestos dust from brake linings, including those manufactured by Abex, during the 30 years he worked at automotive maintenance facilities, primarily as a "parts man," starting in 1965 and continuing through his retirement in 1999. As a result of this exposure, he contracted mesothelioma, a form of lung cancer, in 2009. After his mesothelioma was diagnosed in January 2010, he sued numerous defendants, including Abex and ArvinMeritor. By the time the case went to trial on Oct. 15, 2010, he had settled with all but four of the defendants. A jury returned a verdict awarding the Bankheads $9 million in punitive damages against Abex. Abex filed motions for judgment notwithstanding the verdict and for new trial. The trial court denied both motions, and the appeal ensued. The case is Emily Bankhead, Plaintiff and Respondent, v. Pneumo Abex LLC, Defendant and Appellant, Nos. A131378, A135224 (Calif. App. Ct.). A copy of the decision is available at http://is.gd/40UILufrom Leagle.com. About Federal-Mogul Federal-Mogul Corporation is a supplier of powertrain, chassis and as safety technologies, serving the world's foremost original equipment manufacturers of automotive, light commercial, heavy- duty, agricultural, marine, rail, off-road and industrial vehicles, as well as the worldwide aftermarket. Federal-Mogul was founded in Detroit in 1899. The Company is headquartered in Southfield, Michigan, and employs nearly 41,000 people in 33 countries. The Company filed for Chapter 11 protection (Bankr. Del. Case No. 01-10582) on Oct. 1, 2001. Attorneys at Sidley Austin Brown & Wood, and Pachulski, Stang, Ziehl & Jones, P.C., represented the Debtors in their restructuring effort. The Debtors disclosed $10.15 billion in assets and $8.86 billion in liabilities as of the Chapter 11 filing. Attorneys at The Bayard Firm represented the Official Committee of Unsecured Creditors. The Debtors' Reorganization Plan was confirmed by the Bankruptcy Court on Nov. 8, 2007, and affirmed by the District Court on Nov. 14, 2007. Federal-Mogul emerged from Chapter 11 on Dec. 27, 2007. FGIC CORP: Court Enters Plan Confirmation Order ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that FGIC Corp. on April 23 won the signature of the bankruptcy judge of an order confirming a Chapter 11 plan that replaces a prepackaged reorganization that fell apart. The insurance holding company submitted the new plan in February with support from the creditors' committee, the insurance unit and New York insurance regulators. According to the report, the basis for the new plan is an agreement where the insurance subsidiary will contribute $10 million so the cash distribution to unsecured creditors will be in the range of 5.5% to 6%, according to the disclosure statement. In addition, creditors are receiving the new equity. Existing stock will be extinguished when the plan is implemented. The plan eliminates about $391.5 million in debt, consisting largely of $46 million on a revolving credit and $325 million in 6% senior notes due 2034. The revolving credit debt is treated as unsecured. The report recounts that along with the Chapter 11 petition in August 2010, FGIC filed a proposed plan where unsecured creditors would receive about 3% or less in cash plus stock of the bond insurance subsidiary, Financial Guaranty Insurance Co. The plan became infeasible when an exchange offer failed. Mr. Rochelle notes that the new plan incorporates a modified tax- sharing agreement where the company responsible for losses will receive tax refunds and other benefits. The agreement removes the chance that the FGIC parent could contend that the insurance subsidiary has only an unsecured claim for tax refunds. About FGIC Corp. New York-based FGIC Corporation is a privately held insurance holding company. FGIC Corp's main business interest lies in the holdings of the bond insurer Financial Guaranty Insurance Company -- http://www.fgic.com/-- and the Company depends on dividend payments by the bond insurer unit for sustaining its operations. FGIC had stopped paying dividends to FGIC Corp. since January 2008. FGIC Corp. filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-14215) on Aug. 3, 2010. The bond insurer subsidiary did not file for bankruptcy. Paul M. Basta, Esq., and Brian S. Lennon, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to the Debtor. Garden City Group, Inc., is the Debtor's claims and noticing agent. The Official Committee of Unsecured Creditors tapped David Capucilli, Esq., at Morrison & Foerster LLP, in New York as its counsel. The Debtor disclosed $11,539,834 in assets and $391,555,568 in liabilities as of the Petition Date. FILENE'S BASEMENT: Committee Says Creditors Should Be Paid in Full ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that retailers Syms Corp. and Filene's Basement LLC are close to filing a Chapter 11 plan that may pay all creditors in full. The official creditors' committee said in an April 25 court filing that it uncovered "several significant claims" that Filene's could make against Syms for "tens of millions of dollars." If successful, the claims would pay Filene's creditors in full. Alternatively, the committee said there can be a substantive consolidation plan where both companies' creditor bodies are fully paid without regard to the assets and debts of each company separately. Mr. Rochelle recounts that Syms said from the outset of bankruptcy that there would be enough from liquidating the retail business to pay both companies' creditors in full. The official shareholders committee cast doubt on the idea by taking the position that Syms assets shouldn't be used to pay creditors of subsidiary Filene's, which may be insolvent. Theoretically, Syms shareholders could receive a distribution in Chapter 11 even if Filene's creditors aren't fully paid. According to the report, both the creditors' committee and the companies said in their court filings that there is preliminary agreement on a Chapter 11 plan with some creditors' committee members. The company said it "hopes" the plan will be acceptable to the official equity committee. The papers were filed in advance of a May 2 hearing where the equity committee will seek the right to file a reorganization plan of its own. Both the creditors' committee and Syms said that a consensual plan will avoid a courtroom fight over substantive consolidation, where creditors of both companies receive an identical recovery. 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 Debtors' estate was formally renamed FB Liquidating Estate, following the sale of all of assets to Syms Corp. in June 2009. Pursuant to the Liquidating Plan confirmed in January 2010, secured creditors in the 2009 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 2011 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. Filene's Basement estimated $1 million to $10 million in assets and $50 million to $100 million in debts. The petitions were signed by Gary Binkoski, authorized representative of Filene's Basement. The official committee of unsecured creditors appointed in the 2011 case has retained Hahn & Hessen LLP as legal counsel. Holders of equity in Syms Corp. pushed for an official shareholders' committee and separation of the Syms and Filene's Basement bankruptcy estates. Gordon Brothers and Hilco are represented by Goulston & Storrs, P.C. and Ashby & Geddes, P.A. The Debtors finished going-out-of-business sales in December and are auctioning off trademarks and other intellectual property. Syms and Filene's also disposed of their leases, leaving mostly real property for later sale or retention as the basis for a reorganization. FRANCISCAN COMMUNITIES: Wins Court OK of $18.8-Mil. Sale -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Franciscan Communities St. Mary of the Woods Inc., received formal approval from the bankruptcy court in Cleveland on April 20 to sell the facility for $18.8 million to Orion Properties Eleven LLC. The auction started with a $15 million bid from Orion. It was bidding against Franciscan Communities Inc., which came in second with a $18.6 million bid. About Franciscan Communities Illinois-based Franciscan Communities St. Mary of the Woods, Inc., owns and operates a senior living community in Avon, Ohio. The not-for-profit community is owned and managed by the Franciscan Sisters of Chicago Service Corp. Franciscan Communities St. Mary of the Woods filed for Chapter 11 bankruptcy (Bankr. N.D. Ohio Case No. 11-19865) on Nov. 21, 2011, after it failed to negotiate an out-of-court workout with holders of tax-free bonds. Judge Jessica E. Price Smith oversees the case. The Debtor disclosed assets of $36 million and debt totaling $48 million as of the Chapter 11 filing. In its schedules, the Debtor disclosed $22,314,854 in assets and $49,555,487 in liabilities. The Debtor is represented by Heather Lennox, Esq., Carl E. Black, Esq., and Daniel M. Syphard, Esq., at Jones Day, as bankruptcy counsel. The Garden City Group, Inc., is the claims and noticing agent. The Debtor tapped Deloitte Financial Advisory Services LLP as restructuring advisor, and Houlihan Lokey Capital, Inc., as its investment banker. The U.S. Trustee appointed Beverly Laubert as patient care ombudsman. Franciscan Sisters of Chicago, the sole member of the Debtor, is providing $4.5 million in DIP loans. The DIP Lender is represented by George Mesires, Esq., and Daniel P. Strzalka, Esq., at Ungaretti & Harris LLP. The Bank of New York Mellon Trust Company, N.A., the bond trustee, is represented by Bruce H. White, Esq., and Clifton R. Jessup, Esq., at Greenberg Traurig LLP. Wells Fargo Bank, N.A., as Master Trustee, is represented by Daniel S. Bleck, Esq., at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., and John R. Weiss, Esq., at Duane Morris LLP. Sovereign Bank, provider of the Debtor's letter of credit facility, is also represented by John R. Weiss, Esq., at Duane Morris LLP. The Official Committee of Unsecured Creditors in the Chapter 11 cases of the Debtor is represented by McDonald Hopkins LLC as counsel. FRANNCY HOLDINGS: Marshfield Offers $2.75 Million at Auction ------------------------------------------------------------ Jeff Engel at Marshfield News-Herald reports that Marshfield Hospitality on April 25, 2012, bid $2.75 million for Clearwaters Hotel and Convention Center, currently owned by Franncy Holdings. The Troubled Company Reporter reported on Jan. 31, 2012, that Franncy Holdings agreed to dismiss its Chapter 11 bankruptcy protection on Jan. 25 leaving the future of the Marshfield hotel unclear. That left the hotel vulnerable to judicial foreclosure proceedings by Clearwaters' primary mortgage-holder, California- based Borrego Springs Bank. The bank has said it's owed $3.4 million by Franncy Holdings, Marshfield News-Herald reports. According to Marshfield News-Herald, Beverly Ghiloni, Wood County Sheriff's deputy in the civil process division, said the bank's opening bid at the sheriff's auction was $2.7 million. She said Marshfield Hospitality was the sole third-party bidder for the hotel. The report notes the bid still requires a judge's approval. A confirmation hearing is scheduled for May 11, said Chris Stewart, the bank's lawyer. If the judge approves the sale, Marshfield Hospitality would have 10 days to pay the full $2.75 million. The report says Marshfield Hospitality officials put down $275,000. Clearwaters opened in 1968 and has 103 hotel rooms, along with the Atlantis Lounge, Clearwaters Restaurant and conference space. Franncy purchased the business in 2009 from Guardian Hospitality, which had owned it since 2002. Franncy sought bankruptcy protection on June 29, 2011. FUSION TELECOMMUNICATIONS: Has $15MM Investment from Private Funds ------------------------------------------------------------------ Fusion Telecommunications International, Inc., on April 3, 2012, executed a letter of intent with two private funds. The LOI outlines the terms for a senior debt investment by the Lenders of $15 million in connection with the Company's pending acquisition of the business currently operated by Network Billing Systems, LLC, and Interconnect Systems Group II LLC. Under the terms of the LOI, the senior debt investment is expected to be comprised of five-year senior notes aggregating to $15 million bearing interest at rates ranging from 10% to 11.5%. Annual principal payments of $0.625 million would commence after the first anniversary of the closing, with the remainder due at maturity. The notes are expected to contain customary covenants. It is anticipated that the senior notes will be secured by senior or junior liens on all of the assets of the Company. Upon closing of the sale of the senior notes, it is also anticipated that the Company will issue to the Lenders shares of the Company's common stock in an amount equal to 2.5% of the outstanding common stock of the Company at the time of closing, adjusted for common shares issuable upon the exercise of certain "in the money" stock options and the conversion of then outstanding preferred stock. The Lenders' obligation to consummate the debt agreement and advance proceeds under the senior notes is subject to a number of preconditions, including but not limited to, completion of due diligence acceptable to the Lenders, the Company's adherence to certain financial conditions and formulae, an equity raise by the Company of not less than $7 million, the negotiation and execution of mutually acceptable loan documents with the Lenders, and the Company's consummation of the acquisition of NBS on substantially the terms set forth in the executed transaction documentation. About Fusion Telecommunications New York City-based Fusion Telecommunications International, Inc. (OTC BB: FSNN) is a provider of Internet Protocol ("IP") based digital voice and data communications services to corporations and carriers worldwide. The Company reported a net loss of $4.45 million in 2011, compared with a net loss of $5.79 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $4.55 million in total assets, $15.14 million in total liabilities and a $10.58 million total stockholders' deficit. For 2011, Rothstein, Kass & Company, P.C., in Roseland, New Jersey, noted that the Company has had negative working capital balances, incurred negative cash flows from operations and net losses since inception, and has limited capital to fund future operations that raises a substantial doubt about their ability to continue as a going concern. GARLOCK SEALING: December Hearing on Mesothelioma Claims -------------------------------------------------------- The Hon. George R. Hodges of the Bankruptcy Court for the Western District of North Carolina issued an order in relation to Garlock Sealing Technologies, LLC., et al.'s motion for estimation of asbestos claims under Section 502(c); and for entry of case management order for estimation of Mesothelioma claims. Garlock is subject to roughly 5,000 mesothelioma claims that were pending in state courts on the date it filed the Chapter 11 case. It is also potentially subject to many more similar claims in the future. Garlock has proposed a Plan of Reorganization and seeks an estimate of aggregate asbestos claims based on mesothelioma in order to determine the feasibility of its Plan. The Official Committee of Asbestos Personal Injury Claimants and the Future Asbestos Claimants' Representative have announced their intention to file a competing plan, and estimation would be necessary for consideration of it when appropriate. Further, the ACC and FCR have suggested that estimation would demonstrate that Garlock is insolvent. The Court also requested and the parties briefed the issue of the scope and purpose of the estimation proceeding. By the order, the Court has concluded: 1) to order an estimation proceeding; 2) to estimate the total amount of allowed mesothelioma claims in order to determine plan feasibility; 3) to consider properly supported evidence based upon the settlement approach and the legal liability approach; 4) not to require filing of claims or establish a bar date at this time; and 5) to set a hearing for the estimation proceeding in December 2012. The Court will set the hearing to determine estimation of pending and future mesothelioma claims to begin Dec. 3, and conclude Dec. 14. The Court will not attempt to dictate how each party presents its case, but will give each side five days to do it. Additional time will be granted only if necessary and if the first allotment has been efficiently utilized. As movant, Garlock is entitled to proceed first on Dec. 3 and conclude by Dec. 7. The ACC and FCR will begin on Dec. 10 and conclude by Dec. 14. The Court further asked the parties to discuss intermediate deadlines that may need to be established. Once that is resolved, the court will issue a formal scheduling order. About Garlock Sealing Headquartered in Palmyra, New York, Garlock Sealing Technologies LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, 2010, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D. N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for asbestos matters. The Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases is represented by Travis W. Moon, Esq., at Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC, Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and Jeanna Rickards Koski, Esq., in Washington, D.C. 20005. Joseph W. Grier, III, the Court-appointed legal representative for future asbestos claimants, has retained A. Cotten Wright, Esq., at Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co- counsel. About 124,000 asbestos claims are pending against Garlock in stateand federal courts across the country. The Company says majority of pending asbestos actions against it is stale and dormant -- almost 110,000 or 88% were filed more than four years ago and more than 44,000 or 35% were filed more than 10 years ago. GENESCO INC: S&P Hikes Corp. Credit Rating to 'BB'; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Genesco Inc. to 'BB' from 'BB-'. The outlook is stable. "The upgrade reflects performance over the past year that exceeded our forecast due to on-trend merchandising and the acquisition of Scotland-based retailer Schuh Group Ltd.," said Standard & Poor's credit analyst Diya Iyer. "It also incorporates our view that credit metrics, which strengthened over the past 12 months due to EBITDA expansion, will continue to improve modestly over the coming year." "The rating on Genesco reflects performance that has been better than we anticipated from its two largest segments (Journeys and Lids), which account for about 75% of sales. Nevertheless, we continue to view the company's business profile as 'weak' due to its participation in the intensely competitive footwear and headwear retailing industry and the substantial fashion risk associated with its large presence in the teenage market. We believe that the main risks to future performance will continue to include significant ability for substitution in the shoe retailing industry and limited organic growth opportunities in the saturated U.S. market. Genesco's margins improved in 2011 due to improved store efficiency. We think there could be some further expansion in 2012 as the company passes on sourcing costs through price increases and continues to close underperforming stores," S&P said. "The stable outlook reflects our expectation that credit protection metrics will remain in line with the current rating despite operational improvement over the near term. We could lower Genesco's rating if performance deteriorates because of merchandise missteps or difficulties integrating acquisitions. This could occur if Lids and Journeys sales decline in the double-digits percent area and SG&A increases by 20%. At that time, EBITDA would have eroded by over 15%, which would result in leverage approaching 4.0x. We could also lower the rating if Genesco makes a large debt-financed acquisition," S&P said. "We could raise the rating if Genesco is able to grow Journeys and Lids in the double-digits percent while improving store efficiency, which would lead to a substantial EBITDA increase of over 40%. We expect some of this growth would come from acquisitions, but we would anticipate that the company would not meaningfully increase debt to fund these transactions. Under this scenario, leverage would be in the low-2.0x area," S&P said. GEORGIA GULF: S&P Ups Corp. Credit Rating to 'BB-'; on Watch Pos ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Georgia Gulf Corp. to 'BB-' from 'B+'. "At the same time, we raised our senior secured debt rating on Georgia Gulf Corp. to 'BB' with a recovery rating of '2' from 'B+' with a recovery rating of '3'. The '2' senior secured recovery rating indicates our expectation for substantial (70%-90%) recovery in the event of a payment default," S&P said. "All our ratings on Georgia Gulf remain on CreditWatch with positive implications pending the outcome of Westlake Chemical Corp.'s offer to acquire Georgia Gulf," S&P said. "The one-notch upgrade follows significant strengthening in credit measures through earnings improvement and debt reduction since 2009, when the company completed a debt restructuring that included a debt for equity exchange," said Standard & Poor's credit analyst Cynthia Werneth. "The additional notch of improvement in the senior secured debt rating results from our updated recovery analysis." "As of Dec. 31, 2011, total adjusted debt was about $620 million, with debt to EBITDA of about 2.5x and funds from operations (FFO) to debt of about 30%. We adjust debt to include capitalized operating leases as well as tax-effected postretirement, environmental, and asset retirement liabilities. At the current ratings, we expect FFO to debt to average 20%-25%. As a result, there is cushion in the ratings for earnings and cash flow volatility, as well as seasonal and price-related working capital increases. The company should also be able to execute some debt- funded capital spending or acquisitions while maintaining credit quality," S&P said. "The ratings reflect our assessment of Georgia Gulf's business profile as 'weak' and financial profile as 'significant,'" S&P said. Based in Atlanta, Georgia Gulf is an integrated vinyls and building materials producer operating a primarily commodity business with some volatility in earnings and cash flow. Georgia Gulf is an integrated producer of PVC building and home improvement products, PVC resin, and aromatic chemicals, with 2011 revenue of $3.2 billion. It also sells caustic soda, a co-product resulting from its backward integration into chlorine, which is used in PVC production. Georgia Gulf is among the top four U.S. producers of PVC. It also benefits from favorable long-term demand growth prospects linked to economic output and the housing market, and a significant degree of backward integration into major inputs (like chlorine) and value-added PVC products. "Relative to its competitors, it is also well forward-integrated into PVC end products (window and door components, siding, and pipe), mainly as a result of its 2006 acquisition of the Royal Group. Still, demand remains susceptible to cyclical downturns, and operating performance is vulnerable to large supply additions by competitors. A recent increase in PVC exports, which has offset weakness in domestic demand, depends at least partly on the continuation of favorable ethylene prices in North America and favorable exchange rates, S&P said. "During the past couple of years, better operating performance has resulted from volume gains and cost reductions. However, like many commodity chemical companies, Georgia Gulf's fourth quarter 2011 performance weakened as a result of industry destocking, high raw material costs, and lower selling prices in some product categories. But we expect this weakness to have been temporary based on current industry conditions and our expectation for modest global economic growth in 2012. Although return on capital improved after the debt restructuring and is currently near 10%, EBITDA margins remain low, at approximately 8%. During the next few years, we expect operating performance to continue to strengthen, given our outlook for continued economic growth and recovery in the U.S. housing market--a critical source of demand for the company's products," S&P said. "All our ratings on Georgia Gulf remain on CreditWatch with positive implications pending the outcome of Westlake's offer to acquire Georgia Gulf. If that transaction takes place, we would expect to lower, or potentially (although less likely) affirm, our ratings on Westlake (currently BBB-/Watch Neg/--). The rating outcome will depend on the acquisition price and how it is financed. If the transaction closes, we expect to raise the rating on Georgia Gulf so it is equal to the rating on Westlake and to assign issue-level ratings based on a recovery analysis of the new capital structure. The ratings on Georgia Gulf are on CreditWatch with positive implications because, if Westlake acquires Georgia Gulf, we expect the corporate credit rating of the combined entity to be 'BB-' or higher," S&P said. "If Westlake withdraws its offer for Georgia Gulf, we would expect to affirm our ratings on Georgia Gulf and remove them from CreditWatch. At the 'BB-' corporate credit rating we expect Georgia Gulf's FFO to debt to average 20%-25%. Despite industry cyclicality and potentially significant capital spending to expand chlorine capacity, we believe this performance level is sustainable based on favorable natural gas costs, prospects for North American construction markets to gradually strengthen, and our expectation that Georgia Gulf will use debt prudently to support modest growth initiatives in its core businesses," S&P said. GIBSON ENERGY: Moody's Upgrades CFR to 'Ba3'; Outlook Stable ------------------------------------------------------------ Moody's Investors Service upgraded Gibson Energy Inc's Corporate Family Rating (CFR) to Ba3 from B1, and upgraded the company's senior secured bank credit facility to Ba2 from B1. The Speculative Grade Liquidity rating was changed to SGL-3 from SGL- 2. The outlook is stable. "The upgrade reflects Gibson's growth in the terminals and pipelines business, enhanced trucking presence in the United States through the Taylor acquisition, and significant improvement in the company's debt metrics," said Terry Marshall, Moody's Senior Vice President. "Gibson's EBITDA has increased significantly over the last 12 to 18 months. Moody's believes that the company's terminals and pipelines, and trucking segments will remain sufficiently healthy through 2013 to uphold the Ba3 CFR." Downgrades: Issuer: Gibson Energy Inc. Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Upgrades: Issuer: Gibson Energy Inc. Probability of Default Rating, Upgraded to Ba3 from B1 Corporate Family Rating, Upgraded to Ba3 from B1 Issuer: Gibson Energy ULC Senior Secured Bank Credit Facility, Upgraded to a range of B1, LGD3, 39 % from a range of B1, LGD3, 43 % Senior Secured Bank Credit Facility, Upgraded to a range of B1, LGD3, 39 % from a range of B1, LGD3, 43 % Outlook Actions: Issuer: Gibson Energy Inc. Outlook, Changed To Stable From Positive Issuer: Gibson Energy ULC Outlook, Changed To Stable From Positive Withdrawals: Issuer: Gibson Energy ULC Senior Secured Regular Bond/Debenture, Withdrawn, previously rated Ba3, LGD3, 39% Senior Secured Regular Bond/Debenture, Withdrawn, previously rated Ba3, LGD3, 39% Ratings Rationale Gibson's Ba3 CFR reflects the company's small size, and price and volume risks inherent in the company's business segments, particularly with respect to its marketing and trading activities, which expose the company to market risks resulting from movements in commodity prices between the time volumes are purchased and sold. The marketing business has a track record of consistent if modest profitability, and Gibson's experienced management team has hedged price risk inherent in this business segment appropriately to date. The rating also considers the company's low leverage, which Moody's expects to remain below 4.0x following significant improvement since 2010 because of considerable EBITDA growth. The rating is further supported by Gibson's diversified operations in several midstream segments, solid market position in each of its principal business areas, and proximity and ability to service the oil sands industry. The rating also considers the exit of Riverstone Holdings LLC, a private equity firm, from the company reducing the likelihood of leverage increasing. The SGL-3 Speculative Grade Liquidity rating indicates adequate liquidity through mid 2013. During this period Moody's expects Gibson to generate C$230 million of negative free cash flow, which will be funded with cash, revolver drawings and possibly equity. At December 31, 2011 Gibson had about C$65 million of cash and C$215 million available, after C$60 million in letters of credit, under its C$275 million senior secured revolving credit facility expiring June, 2016. The revolver has two financial covenants (maximum senior secured leverage ratio of 5:1 with two step-downs; minimum interest coverage ratio of 2.5:1 with two step-ups), neither of which is expected to pose a compliance issue. Gibson's alternative sources of liquidity are limited principally to the sale of existing properties, which are largely encumbered and would require the approval of secured lenders. The secured revolver and term loan B are rated at the Ba3 CFR, reflecting both the overall probability of default, to which Moody's assigns a PDR of Ba3, and a loss given default (LGD) of LGD3 (39%) using Moody's Loss Given Default Methodology. Moody's LGD model indicates a rating of Ba2 for the secured revolver and term loan B, but Moody's applies a one notch override to Ba3 given the large and volatile trade payables tied to the company's marketing business. This large trade payables balance reflects the significant weighting of purchase and sale activity. Given that approximately 50% of these payables are netted against receivables on a monthly basis, only 50% of trade payables are included in the LGD model. The stable outlook reflects Gibson's low leverage, solid EBITDA, and diversification across several midstream segments in western Canada and in the United States. While an upgrade is unlikely in the near term, the rating could be considered for an upgrade if Gibson expands the scale and scope of its operations, increasing EBITDA to over US$400 million per annum, while maintaining debt to EBITDA below 3.0x. The rating could be downgraded if Gibson's financial leverage increases due to debt funded capital expenditures. More specifically, if debt to EBITDA cannot be sustained under 5.0x a ratings downgrade could result. A downgrade is also likely if the company produces any material losses from the marketing segment. The principal methodology used in rating Gibson Energy was the Global Midstream Energy Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Gibson Energy Inc. is a Calgary, Alberta based midstream energy company engaged in the transportation, storage, blending, processing, marketing and distribution of crude oil and related products. Gibson Energy ULC is a wholly-owned subsidiary of publicly-traded Gibson Energy Inc., which will provide a downstream guarantee for the rated debt. GMX RESOURCES: To Swap $4.7MM Conv. Notes for 2.7MM Common Shares ----------------------------------------------------------------- GMX Resources Inc. entered into an exchange agreement with an investment manager on behalf of two holders of its 5.00% Convertible Senior Notes due 2013. Pursuant to this agreement, as consideration for the surrender by the holders of $4,700,000 aggregate principal amount of the 2013 Convertible Notes, GMXR will issue to the holders an aggregate of 2,714,084 shares of GMXR common stock, par value $0.001 per share, along with cash consideration relating to accrued and unpaid interest. 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." GRAND BEAR LODGE: Court Approves Plan of Reorganization ------------------------------------------------------- Morris Daily Herald reports that the U.S. Bankruptcy Court for the Northern District of Illinois, in Chicago has approved the reorganization plan submitted by Grand Bear Lodge LLC, thereby allowing the family resort to emerge from Chapter 11 bankruptcy protection. "It's been a long, hard 15 months," the report quotes Joseph F. Hook, Grand Bear Lodge's managing partner, as saying. "The Chapter 11 process has not been easy and it is important to realize that many companies do not make it out of bankruptcy. It is even rarer for a company to propose to pay back it's creditors in full, with interest. We have managed to do both. "I think it's a testament to the hard work of all of our staff and legal team working towards a common goal," the report quotes Mr. Hook as noting. Lockport, Illinois-based Grand Bear Lodge LLC filed for Chapter 11 protection in Chicago on Jan. 21, 2011 (Bankr. N.D. Ill. Case No. 11-02321), estimating assets of up to $50,000 and debts of $10 million to $50 million. The decision to file was due to the Company's inability to get a loan extension from its primary lender, according to the LaSalle News Tribune. GREENWAY 37: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Greenway 37 Offices, LLC 7337 E. Doubletree Ranch Road, Suite C-288 Scottsdale, AZ 85258 Bankruptcy Case No.: 12-08662 Chapter 11 Petition Date: April 23, 2012 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Eileen W. Hollowell Debtor's Counsel: John R. Clemency, Esq. GALLAGHER & KENNEDY, P.A. 2575 East Camelback Road, Suite 1100 Phoenix, AZ 85016 Tel: (602) 530-8040 E-mail: john.clemency@gknet.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by William Kostrivas, president of ZDI Inc., manager. HALE MOKU: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Hale Moku, LLC 8954 St. Ives Drive Los Angeles, CA 90069 Bankruptcy Case No.: 12-24357 Chapter 11 Petition Date: April 24, 2012 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Ernest M. Robles About the Debtor: Hale Moku is a Los Angeles-based property developer. Debtor's Counsel: Thomas C. Corcovelos, Esq. CORCOVELOS LAW GROUP 1001 Sixth Street, Suite 150 Manhattan Beach, CA 90266 Tel: (310) 374-0116 Fax: (310) 318-3832 E-mail: corforlaw@corforlaw.com Scheduled Assets: $20,100,500 Scheduled Liabilities: $14,914,699 The petition was signed by Doug Reed, manager. The Debtor's list of its three largest unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Steve Angelo -- $45,000 1111 Weatherly Drive Los Angeles, CA 90069 Susan Marsleet -- $28,000 400 Oakhurst Drive Beverly Hills, CA 90251 Jason Varge -- $12,000 1312 Ozeta Terrace Los Angeles, CA 90069 HAMPTON ROADS: To Relocate Corporate Offices to Virginia Beach -------------------------------------------------------------- Hampton Roads Bankshares, Inc., the holding company for The Bank of Hampton Roads and Shore Bank, plans to relocate the corporate offices of the Company and BHR from Dominion Tower in Norfolk to a Company-owned building located at 641 Lynnhaven Parkway in Virginia Beach. The relocation is scheduled to be completed by the end of the summer, subject to regulatory approval. Shore Bank will continue to be headquartered in Onley, Virginia. Douglas J. Glenn, President and Chief Executive Officer of the Company and BHR, said, "We continue to pursue opportunities to serve the needs of our customers and communities in ways that make the most efficient and effective use of our shareholders' resources. This relocation will allow us to reduce our operating expenses by better utilizing facilities we own. We remain committed to the Norfolk market, where we will maintain a strong presence, great people and an unchanged branch footprint." In addition to corporate officers, the Company and BHR will relocate their Human Resources, Accounting and Treasury, Facilities Management, Legal, Risk Management, Compliance, Security and Special Assets staff to the Lynnhaven Parkway Offices. The Company will be the largest community bank headquartered in Virginia Beach and is the ninth largest in the state of Virginia, based on assets at Dec. 31, 2011. The Company and BHR will maintain a significant ongoing presence in the Norfolk market. The BHR Dominion Tower branch will continue to serve the Downtown Norfolk market and BHR will renovate its Ghent branch to serve as its flagship branch in Norfolk. In addition, Mary Oliver, Norfolk Market President, Don Price, Senior Vice President/Commercial Banker, and Mike Imperial, Senior Credit Officer for Norfolk will relocate to the Ghent offices when the renovation is completed. About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and fifteen ATMs. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company reported a net loss of $98 million on $100.79 million in interest income for the year ended Dec. 31, 2011, compared with a net loss of $210.35 million on $122.19 million in interest income during the prior year. HARBOR FREIGHT: S&P Rates Proposed $1-Bil. Term Loan 'B+' --------------------------------------------------------- Standard & Poor's Rating Services assigned its 'B+' bank loan rating, with a '4' recovery rating to the company's proposed $1 billion term loan. "The '4' recovery rating indicates our expectation for an average (30% to 50%) recovery of principal in the event of a default," S&P said. "At the same time we affirmed the existing ratings on the company, including the 'B+' corporate credit rating on the company. The outlook is stable," S&P said. "The proposed dividend recapitalization results in pro forma debt to EBITDA increasing to about 4.5x on Jan. 31, 2011 from about 2.7x before the transaction. Standard & Poor's expects pro forma EBITDA interest coverage to weaken to low-4x from about 5.3x before the dividend," S&P said. "Although these measures are meaningfully weaker than before the transaction, we are affirming our 'B+' corporate credit rating, as it had already incorporated a high likelihood for future dividends," said Standard & Poor's credit analyst Mariola Borysiak. "In addition, our revised better assessment of the company's profitability provides additional capacity to support this increased leverage and weaker coverage of interest." "Our outlook on HFT is stable. We expect the company's niche position in the industry to continue to propel profitability gains. Nevertheless, a lower rating could result if commodity cost pressures, intensified competitive pressures, or poor execution of the company's growth plans hurt profitability, such that leverage increases above 5x. This could occur, for example, if same-store- sales decrease by 2% and gross margin remains flat with the Jan. 31, 2012 level. A downgrade could also result from higher leverage because of a future debt-financed dividend. In this case, balance- sheet debt would have to increase by about $180 million from pro forma levels and EBITDA would have to stay constant at the Jan. 31, 2012 level," S&P said. "We are not considering a higher rating in the near term, given our view of the company's financial policies as very aggressive and our anticipation that future debt-financed dividends are likely and will cause credit measures to remain in line with our view of the aggressive financial risk profile," S&P said. HARVEST BANK OF MARYLAND: Closed; Sonabank Assumes All Deposits --------------------------------------------------------------- HarVest Bank of Maryland in Gaithersburg, Md., was closed on Friday, April 27, 2012, by the Maryland Commissioner of Financial Regulation, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Sonabank of McLean, Va., to assume all of the deposits of HarVest Bank of Maryland. The four branches of HarVest Bank of Maryland will reopen during normal business hours as branches of Sonabank. Depositors of HarVest Bank of Maryland will automatically become depositors of Sonabank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of HarVest Bank of Maryland should continue to use their existing branch until they receive notice from Sonabank that it has completed systems changes to allow other Sonabank branches to process their accounts as well. As of Dec. 31, 2011, HarVest Bank of Maryland had around $164.3 million in total assets and $145.5 million in total deposits. In addition to assuming all of the deposits of the failed bank, Sonabank agreed to purchase essentially all of the assets. Customers with questions about the transaction should call the FDIC toll-free at 1-800-523-8275. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/harvest.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $17.2 million. Compared to other alternatives, Sonabank's acquisition was the least costly resolution for the FDIC's DIF. HarVest Bank of Maryland is the 19th FDIC-insured institution to fail in the nation this year, and the second in Maryland. The last FDIC-insured institution closed in the state was Bank of the Eastern Shore, Cambridge, April 27, 2012. HAWKER BEECHCRAFT: Suspending Filing of Reports with SEC -------------------------------------------------------- Hawker Beechcraft Acquisition Company, LLC, and Hawker Beechcraft Notes Company filed a Form 15 notifying of their suspension of their duties under Section 15(d) to file reports required by Section 13(a) of the Securities Exchange Act of 1934 with respect to their: * 8.5% Senior Fixed Rate Notes due 2015; * 8.875% / 9.625% Senior PIK-Election Notes due 2015; and * 9.75% Senior Subordinated Notes due 2017. Pursuant to Rule 12h-3, the Companies are suspending reporting because there are currently less than 300 holders of record of the Notes. There were only 50 holders of the Notes as of April 27, 2012. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kan., is a manufacturer of business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft reported a net loss of $631.90 million in 2011, compared with a net loss of $304.30 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Going Concern For the year ended Dec. 31, 2011, the Company's management has concluded that there is substantial doubt about the Company's ability to continue as a going concern. The Company determined not to pay its interest obligations under the Notes on April 2, 2012, and anticipate an inability to pay interest on the Notes on future interest payment dates. Furthermore, the Company will be required to repay or refinance its Senior Secured Credit Facilities and the Senior Tranche Advance prior to the repayment of the Notes and the Company will be required to repay or refinance the Senior Notes prior to the repayment of the Senior Subordinated Notes. The Company has suffered recurring operating losses resulting in a significant net shareholder's deficit that raises substantial doubt about its ability to continue as a going concern. The Company is operating under a forbearance agreement with its lenders which defers interest payment obligations and provides relief from loan covenants through June 29, 2012. Due to the fact that the Company has recurring negative cash flows from operations and recurring losses from operations, the Company will need to seek additional financing. There is substantial doubt that the Company will be able to obtain additional equity or debt financing on favorable terms, or at all, in order to have sufficient liquidity to meet its cash requirements for the next twelve months. Bankruptcy Warning As of Dec. 31, 2011, the Company was not in compliance with the covenants under its Senior Secured Credit Facilities and had $0.3 million for additional borrowings under its Revolving Credit Facility. As a result, the Company must rely on revenues from its business to meet its payment obligations under its indebtedness. The Company determined not to pay its interest obligations under the Notes on April 2, 2012, and anticipate an inability to pay interest on the Notes on future interest payment dates. Furthermore, the Company will be required to repay or refinance its Senior Secured Credit Facilities and the Senior Tranche Advance prior to the repayment of the Notes and the Company will be required to repay or refinance the Senior Notes prior to the repayment of the Senior Subordinated Notes. If the Company was unable to make payments or refinance its debt or obtain new financing under these circumstances, it would have to consider other options, such as: (a) sales of assets; (b) sales of equity; (c) negotiations with its lenders to restructure the applicable debt; or (d) seeking protection under chapter 11 of the U.S. Bankruptcy Code. * * * Hawker Beechcraft carries 'Caa2' corporate family and probability of default ratings from Moody's Investors Service. HAWKER BEECHCRAFT: Bank Debt Trades at 36% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Hawker Beechcraft is a borrower traded in the secondary market at 63.61 cents-on- the-dollar during the week ended Friday, April 27, 2012, a drop of 1.27 percentage points from the previous week, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on March 26, 2014, and carries Moody's 'Caa3' rating and Standard & Poor's 'D' rating. The loan is one of the biggest gainers and losers among 162 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft reported a net loss of $631.90 million on $2.43 billion of sales in 2011, compared with a net loss of $304.30 million on $2.80 billion of sales in 2010. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities, and a $956.90 million total deficit. Going Concern According to the Form 10-K for the year ended Dec. 31, 2011, management concluded there is substantial doubt about the Company's ability to continue as a going concern. The Company determined not to pay its interest obligations under the Notes on April 2, 2012, and anticipate an inability to pay interest on the Notes on future interest payment dates. Furthermore, the Company will be required to repay or refinance its Senior Secured Credit Facilities and the Senior Tranche Advance prior to the repayment of the Notes and the Company will be required to repay or refinance the Senior Notes prior to the repayment of the Senior Subordinated Notes. The Company has suffered recurring operating losses resulting in a significant net shareholder's deficit that raises substantial doubt about its ability to continue as a going concern. The Company is operating under a forbearance agreement with its lenders which defers interest payment obligations and provides relief from loan covenants through June 29, 2012. Due to the fact that the Company has recurring negative cash flows from operations and recurring losses from operations, the Company will need to seek additional financing. There is substantial doubt that the Company will be able to obtain additional equity or debt financing on favorable terms, or at all, in order to have sufficient liquidity to meet its cash requirements for the next twelve months. Bankruptcy Warning As of Dec. 31, 2011, the Company was not in compliance with the covenants under its Senior Secured Credit Facilities and had $0.3 million for additional borrowings under its Revolving Credit Facility. As a result, the Company must rely on revenues from its business to meet its payment obligations under its indebtedness. The Company determined not to pay its interest obligations under the Notes on April 2, 2012, and anticipate an inability to pay interest on the Notes on future interest payment dates. Furthermore, the Company will be required to repay or refinance its Senior Secured Credit Facilities and the Senior Tranche Advance prior to the repayment of the Notes and the Company will be required to repay or refinance the Senior Notes prior to the repayment of the Senior Subordinated Notes. If the Company was unable to make payments or refinance its debt or obtain new financing under these circumstances, it would have to consider other options, such as: (a) sales of assets; (b) sales of equity; (c) negotiations with its lenders to restructure the applicable debt; or (d) seeking protection under chapter 11 of the U.S. Bankruptcy Code. * * * As reported by the Troubled Company Reporter on April 10, 2012, Moody's Investors Service has downgraded ratings of Hawker Beechcraft Acquisition, including the probability of default rating to 'Ca' from 'Caa3'. Concurrently, a limited default ("LD") designation has been assigned because Moody's believes that the company deferred bank debt interest that was due March 30. Credit facility forbearance until June 29, 2012 has been arranged for the interest deferral, financial covenant and other breaches. The LD designation will remain in place until resolution of the deferred interest payment emerges. HAYDEL PROPERTIES: Has Access to People's Bank's Cash Collateral ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Mississippi authorized Haydel Properties, LP, to use the cash collateral which Peoples Bank asserts an interest. The Court also ordered that all rents received from the properties which comprise the collateral for loans made by The Peoples Bank, must be placed in a segregated debtor-in-possession account with The Peoples Bank. Funds placed in the account may be used only for payment of ad valorem taxes, establishment of a reserve for payment of insurance premiums as they become due, reasonable and necessary maintenance of The Peoples Bank's collateral, and adequate protection payments to The Peoples Bank, the amount and effective date of which will be determined by separate order once adequate information is available to determine these matters regarding adequate protection payments. With respect to the ad valorem taxes, they shall be paid, in full, in the order of their delinquency. Funds placed in the account may only be disbursed upon approval by The Peoples Bank. Additionally, if the bankruptcy be converted to a Chapter 7 liquidation proceeding or dismissed, any funds in the account will be applied towards the indebtedness owed to The Peoples Bank. As reported in the Troubled Company Reporter on March 22, 2012, the Debtor is indebted to the Banks on multiple promissory notes, all of which are secured by deeds of trust on property located in different states: Note Payoff Balance Bank as of Petition Date Total Liens ------------ ------------------- ----------- BancorpSouth $428,485 $468,213 Community Bank $1,506,500 $1,567,561 Gene Whitehurst $166,440 $170,216 Hancock Bank $101,500 $106,140 BanCorpSouth Mortgage $82,350 $84,888 Peoples Bank $3,893,800 $4,203,768 About Haydel Properties Haydel Properties LP, in Biloxi, Mississippi, filed for Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50048) on Jan. 11, 2012. Judge Katharine M. Samson presides over the case. Patrick A. Sheehan, Esq., at Sheehan & Johnson, PLLC; and Robert Gambrell, Esq., at Gambrell & Associates, PLLC, serve as the Debtor's counsel. Christy Pickering serves as accountant. The Debtor disclosed $11,656,761 in assets and $7,238,424 in liabilities as of the Chapter 11 filing. The petition was signed by Michael D. Haydel, manager of general partner. HAYDEL PROPERTIES: Court Approves Christy Pickering as Accountant ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Mississippi authorized Haydel Properties, LP to employ Christy Pickering, CPA, as accountant. As reported in the Troubled Company Reporter on March 16, 2012, Ms. Pickering is expected to: a. close out the Debtor's books as of the filing date of the petition and maintain new books and records; b. assist in preparing the filing of all required state and federal payroll tax reports; c. assists in preparing the filing of all required financial reports and operating reports; and d. assist in preparing the filing of the Plan of Reorganization and Disclosure Statement. The accountant will be paid $175 per hour for her services. Patrick A. Sheehan, Esq., at Sheehan Law Firm, PLLC, the attorney for the Debtor, assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Haydel Properties Haydel Properties LP, in Biloxi, Mississippi, filed for Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50048) on Jan. 11, 2012. Judge Katharine M. Samson presides over the case. Patrick A. Sheehan, Esq., at Sheehan & Johnson, PLLC; and Robert Gambrell, Esq., at Gambrell & Associates, PLLC, serve as the Debtor's counsel. Christy Pickering serves as accountant. The Debtor disclosed $11,656,761 in assets and $7,238,424 in liabilities as of the Chapter 11 filing. The petition was signed by Michael D. Haydel, manager of general partner. HAYDEL PROPERTIES: Files Schedules of Assets and Liabilities ------------------------------------------------------------ Haydel Properties, LP, filed with the U.S. Bankruptcy Court for the Southern District of Mississippi its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $11,645,721 B. Personal Property $11,040 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $7,024,839 E. Creditors Holding Unsecured Priority Claims $13,585 F. Creditors Holding Unsecured Non-priority Claims $200,000 ----------- ----------- TOTAL $11,656,761 $7,238,424 A full-text copy of the schedules is available for free at http://bankrupt.com/misc/HAYDEL_PROPERTIES_sal_amended.pdf About Haydel Properties Haydel Properties LP, in Biloxi, Mississippi, filed for Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50048) on Jan. 11, 2012. Judge Katharine M. Samson presides over the case. Patrick A. Sheehan, Esq., at Sheehan & Johnson, PLLC; and Robert Gambrell, Esq., at Gambrell & Associates, PLLC, serve as the Debtor's counsel. Christy Pickering serves as accountant. The petition was signed by Michael D. Haydel, manager of general partner. HAYDEL PROPERTIES: May 17 Hearing Set for BancorpSouth Lift Stay ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Mississippi will convene a hearing on May 17, 2012, at 1:30 p.m., to consider creditor BancorpSouth Bank's motion for relief from the automatic stay against Haydel Properties, LP's real properties located at: 1. 4019 8th Street, Gulfport MS; 2. 702 Mills Ave., Gulfport MS; and 3. 823 41st Ave., Gulfport MS BancorpSouth Bank required payment in full of the Debtor's indebtedness. At the hearing, the Court will also consider the U.S. Trustee's motion to dismiss or convert the Debtor's case to one under Chapter 7 of the Bankruptcy Code. Henry G. Hobbs, Jr., Acting U.S. Trustee for Region 5, related that the Debtor failed to cure multiple deficiencies documented in the Feb. 17, 2012, meeting of creditors. As reported in the Troubled Company Reporter on April 12, 2012, creditor and party-in-interest BancorpSouth Bank filed a joinder to the U.S. Trustee's motion. BancorpSouth noted that no operating reports have been filed to date. About Haydel Properties Haydel Properties LP, in Biloxi, Mississippi, filed for Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50048) on Jan. 11, 2012. Judge Katharine M. Samson presides over the case. Patrick A. Sheehan, Esq., at Sheehan & Johnson, PLLC; and Robert Gambrell, Esq., at Gambrell & Associates, PLLC, serve as the Debtor's counsel. Christy Pickering serves as accountant. The Debtor disclosed $11,656,761 in assets and $7,238,424 in liabilities as of the Chapter 11 filing. The petition was signed by Michael D. Haydel, manager of general partner. HAZRO ENTERPRISES: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Hazro Enterprises, LLC dba Days Inn 3574 S. Ivanhoe Street Denver, CO 80237 Bankruptcy Case No.: 12-18093 Chapter 11 Petition Date: April 23, 2012 Court: U.S. Bankruptcy Court District of Colorado (Denver) Judge: Sidney B. Brooks Debtor's Counsel: Kenneth J. Buechler, Esq. BUECHLER LAW OFFICE, L.L.C. 1828 Clarkson Street, Suite 200 Denver, CO 80218 Tel: (720) 381-0045 Fax: (720) 381-0392 E-mail: ken@kjblawoffice.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 10 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/cob12-18093.pdf The petition was signed by Sadaqat Khan, manager. HCA HOLDINGS: Extends Maturity of A-1 & B-1 Term Loans to 2016 -------------------------------------------------------------- HCA Inc. entered into Extension Amendment No. 1, by and among the Company, HCA UK Capital Limited, each of the U.S. Guarantors, each of the European Guarantors, the lenders party thereto and Bank of America, N.A., as administrative agent, swingline lender and letter of credit issuer, to the Amended and Restated Credit Agreement, dated as of May 4, 2011, among the Borrowers, the Lenders, the Administrative Agent and the other parties. The Extension Amendment extends the maturity date of $74,570,389 of the principal amount of the Borrowers' tranche A-1 term loans and $651,196,599 of the principal amount of the Borrowers' tranche B-1 term loans under the Credit Agreement by converting that amount of the Borrowers' tranche A-1 term loans and tranche B-1 term loans into the Borrowers' new tranche A-3 term loans, with a maturity date of Feb. 2, 2016, and with ABR margin and LIBOR margin of 2.25% and 3.25%, respectively. The maturity date, interest margins and fees, as applicable, with respect to all other loans, and all commitments and letters of credit outstanding under the Credit Agreement remain unchanged. A copy of the Extension Amendment is available for free at: http://is.gd/fbDzHY About HCA Inc. Headquartered in Nashville, Tennessee, HCA is the nation's largest acute care hospital company with 162 hospitals and 104 freestanding surgery centers (including eight hospitals and eight freestanding surgery centers that are accounted for using the equity method) as of Sept. 30, 2010. For the 12 months ended Sept. 30, 2010, the company recognized revenue in excess of $30 billion. The Company's balance sheet at Dec. 31, 2011, showed $26.89 billion in total assets, $33.91 billion in total liabilities, and a $7.01 billion stockholders' deficit. * * * In May 2011, Moody's Investors Service upgraded the Corporate Family and Probability of Default Ratings of HCA Inc. (HCA) to B1 from B2. "The upgrade of HCA's rating reflects the considerable progress the company has made in improving financial metrics and managing the company's maturity profile since the November 2006 LBO," said Dean Diaz, a Moody's Senior Credit Officer. "While the funding of distributions to shareholders at the end of 2010 increased debt levels, the growth in EBITDA and debt repayment since the LBO have improved leverage metrics considerably from the high levels seen just after the company went private," continued Diaz. As reported by the Troubled Company Reporter on March 14, 2011, Moody's Investors Service commented that the completion of the IPO by HCA Holdings, Inc., has no immediate impact on the company's B2 Corporate Family Rating. The outlook for the ratings remains positive. While Moody's believes that the completion of the IPO is a credit positive since proceeds are expected to be used to repay outstanding debt, the estimated $2.6 billion of proceeds to the company won't meaningfully reduce HCA's $28.2 billion debt load. In the March 16, 2011, edition of the TCR, Fitch Ratings has upgraded its ratings for HCA Inc. and HCA Holdings Inc., including the companies' Issuer Default Ratings which were upgraded to 'B+' from 'B'. The Rating Outlook is revised to Stable from Positive. The ratings apply to approximately $28.2 billion in debt outstanding at Dec. 31, 2010. Fitch noted that HCA has made significant progress in reducing debt leverage since it was taken private in 2006 in a LBO which added $17 billion to the company's debt balance; at Dec. 31, 2006, immediately post the LBO, debt-to- EBITDA was 6.7x. Most of the reduction in debt leverage over the past four years was accomplished through growth in EBITDA, which Fitch calculates has expanded by $1.7 billion or 40% to $5.9 billion for 2010 versus $4.2 billion in 2006. Although the company did not undertake a significant organizational restructuring post the LBO, management has nevertheless been successful in growing EBITDA and significantly expanding discretionary free cash flow (FCF). Fitch believes this was accomplished through various operational initiatives, including expansion of profitable service lines and the divestiture of some under performing hospitals, as well as the generally resilient operating trend of the for-profit hospital industry during the recent economic recession despite the pressure of increased levels of uncompensated care and generally weak organic patient volume trends. HEARTHSTONE HOMES: To Sell Off Assets on Piecemeal Basis -------------------------------------------------------- Cindy Gonzalez at The Omaha World-Herald reports that HearthStone Homes is to be sold off in pieces and proceeds from all sales ultimately would be distributed to entities owed money, including Wells Fargo Bank and multiple subcontractors and suppliers. Discussions continue with at least one party interested in buying the most valuable chunks of the bankrupt homebuilder: the lots and 40 houses under construction. If that happens, there is a chance the HearthStone business model could resurrect in some smaller fashion. The report relates the court-appointed trustee presiding over the Chapter 11 reorganization wants to unload all property leases that are costing money the indebted company does not have. So the contents in those places will be the first to go. Trustee Randel Lewis has recommended selling all furnishings in the HearthStone corporate offices at 810 N. 96th St. to the Lincoln-based Legacy Homes LLC for about $50,000. Included in that transaction will be office equipment and contents of the Choice Studio, the showroom where new homebuyers used to pick out appliances, flooring and certain other finishes. The report, citing court documents, says Legacy is to assume a $155,000 debt owed to the landlord for past rent on the corporate offices, according to court records. Legacy officials were unavailable for comment Wednesday. But Mr. Lewis and others have said the builder is interested in buying the larger HearthStone assets as well. The report adds court documents outline some of HearthStone's finances. John Smith, as president and owner, made more than $763,000 in the year prior to the bankruptcy filing. Four other top executives earned between $140,000 and $150,000 each. According to the report, Frederick Stehlik, Esq., an attorney who represents a committee of vendors owed money by HearthStone, sees the bankrupt company's current value as mostly "intangible." A buyer, he said, could inherit "great relationships" formed over time with subcontractors and suppliers that allowed HearthStone to construct homes at a reasonable cost in return for knowing they'd have plenty of work. The report relates Bankruptcy Judge Thomas Saladino approved Mr. Lewis' plan to auction off furnishings from the five HearthStone information centers and 20 model homes the company was renting from another entity. About Hearthstone Homes Hearthstone Homes, Inc., filed a Chapter 11 petition in Omaha, Nebraska (Bankr. D. Neb. Case No. 12-80348) on Feb. 24, 2012. ketv.com reported that HearthStone Homes filed for Chapter 11 bankruptcy protection after a deal to sell the company fell through. Hearthstone Homes' principal business activities have been the purchase, development and sale of residential real property for 40 years. Chief Judge Thomas L. Saladino presides over the case. The Debtor is represented by Robert F. Craig, P.C. Hearthstone estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. Wells Fargo N.A., the primary lender, is represented by lawyers at Croker Huck Kasher DeWitt Anderson & Gonderinger LLC. Nancy J. Gargula, the U.S. Trustee for Region 13, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Hearthstone Homes. HERCULES OFFSHORE: Incurs $38.3 Million Net Loss in First Quarter ----------------------------------------------------------------- Hercules Offshore, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $38.34 million on $143.32 million of revenue for the three months ended March 31, 2012, compared with a net loss of $14.22 million on $159.37 million of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $2.04 billion in total assets, $1.07 billion in total liabilities and $966.52 million in stockholders' equity. At March 31, 2012, the Company had unrestricted cash and cash equivalents totaling $165.1 million. John T. Rynd, Chief Executive Officer and President of Hercules Offshore stated, "This year has started off with the completion of several positive transactions, beginning with our acquisition and concurrent long-term contracting of the Hercules 266, followed shortly thereafter by our debt refinancing and capital raise. The strategic importance of these achievements cannot be overstated, as they add a sizable and stable source of earnings and cash flow to our international drilling operations, strengthen our relationship with a key international client, and improve our balance sheet by effectively extending our debt maturity schedule well into 2017 and allowing greater flexibility to pursue strategic investments." A copy of the Form 10-Q is available for free at: http://is.gd/IXr5Xk About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. The Company reported a net loss of $76.12 million in 2011, a net loss of $134.59 million in 2010, and a net loss of $91.73 million in 2009. * * * The Troubled Company Reported said on March 23, 2012, that Moody's Investors Service upgraded Hercules Offshore, Inc. Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to B3 from Caa1 contingent upon the completion of its recently announced recapitalization plan. Hercules' B3 CFR reflects its jackup fleet, which consists primarily of standard specification rigs with an average age of about 30 years. Its rigs are geographically concentrated in the Gulf of Mexico (GoM), a market that experienced a slow-down after the Macondo well incident. However, over the last year a pick-up in permitting and activity levels in the GoM, has led to higher dayrates. For Hercules, the improving market conditions have stabilized its cash flow from operations, which are expected continue to improve for at least the next 18 to 24 months as old contracts roll into new contracts with higher dayrates. These improving market conditions support the decision to upgrade Hercules' CFR at this time. As reported by the TCR on Jan. 23, 2012, Standard & Poor's Ratings Services revised its outlook on Houston-based Hercules Offshore Inc. to stable from negative and affirmed its 'B-' corporate credit rating on the company. "The rating on the company's senior secured credit facility remains 'B-' (the same as the corporate credit rating on the company) with a recovery rating of '3', indicating our expectation of a meaningful (50% to 70%) recovery in the event of payment default," S&P said. "Our ratings on Hercules reflect its participation in the highly volatile and competitive shallow-water drilling and marine services segments of the oil and gas industry. The ratings also incorporate our expectation that day rates and utilization for the company's jack-up rigs in the U.S. Gulf of Mexico will remain robust throughout 2012. Moreover, we expect the company's domestic offshore operations will provide the majority of EBITDA generation in 2012, since its international offshore segment will perform more weakly compared with 2011 due to lower contract renewal day rates reflecting current market conditions. The ratings also incorporate the company's geographic and product diversification (provided by the its liftboat segments) and adequate liquidity, as well as the risks associated with the Securities and Exchange Commission's investigation into possible violations of securities law, including possible violations of the Foreign Corrupt Practices Act. The company is also the subject of a review by the U.S. Department of Justice (DOJ)," S&P said. HERCULES OFFSHORE: DOJ Completes FCPA Inquiry, Takes No Action -------------------------------------------------------------- Hercules Offshore, Inc., received a letter from the Department of Justice notifying the Company that the DOJ has closed its inquiry into the Company regarding possible violations of the Foreign Corrupt Practices Act and does not intend to pursue enforcement action against the Company. The DOJ indicated that its decision to close the matter was based on, among other factors, the thorough investigation conducted by the Company's special counsel and the Company's compliance program. As previously disclosed, the Company was notified by the Securities and Exchange Commission and DOJ in April 2011, that certain of the Company's activities were under review by the SEC and DOJ with respect to possible violations of the FCPA in certain international jurisdictions where the Company conducts operations. About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. The Company reported a net loss of $76.12 million in 2011, a net loss of $134.59 million in 2010, and a net loss of $91.73 million in 2009. The Company's balance sheet at March 31, 2012, showed $2.04 billion in total assets, $1.07 billion in total liabilities and $966.52 million in stockholders' equity. * * * The Troubled Company Reported said on March 23, 2012, that Moody's Investors Service upgraded Hercules Offshore, Inc. Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to B3 from Caa1 contingent upon the completion of its recently announced recapitalization plan. Hercules' B3 CFR reflects its jackup fleet, which consists primarily of standard specification rigs with an average age of about 30 years. Its rigs are geographically concentrated in the Gulf of Mexico (GoM), a market that experienced a slow-down after the Macondo well incident. However, over the last year a pick-up in permitting and activity levels in the GoM, has led to higher dayrates. For Hercules, the improving market conditions have stabilized its cash flow from operations, which are expected continue to improve for at least the next 18 to 24 months as old contracts roll into new contracts with higher dayrates. These improving market conditions support the decision to upgrade Hercules' CFR at this time. As reported by the TCR on Jan. 23, 2012, Standard & Poor's Ratings Services revised its outlook on Houston-based Hercules Offshore Inc. to stable from negative and affirmed its 'B-' corporate credit rating on the company. "The rating on the company's senior secured credit facility remains 'B-' (the same as the corporate credit rating on the company) with a recovery rating of '3', indicating our expectation of a meaningful (50% to 70%) recovery in the event of payment default," S&P said. "Our ratings on Hercules reflect its participation in the highly volatile and competitive shallow-water drilling and marine services segments of the oil and gas industry. The ratings also incorporate our expectation that day rates and utilization for the company's jack-up rigs in the U.S. Gulf of Mexico will remain robust throughout 2012. Moreover, we expect the company's domestic offshore operations will provide the majority of EBITDA generation in 2012, since its international offshore segment will perform more weakly compared with 2011 due to lower contract renewal day rates reflecting current market conditions. The ratings also incorporate the company's geographic and product diversification (provided by the its liftboat segments) and adequate liquidity, as well as the risks associated with the Securities and Exchange Commission's investigation into possible violations of securities law, including possible violations of the Foreign Corrupt Practices Act. The company is also the subject of a review by the U.S. Department of Justice (DOJ)," S&P said. IMAGEWARE SYSTEMS: Amends Form S-1 for 44.1-Mil. Shares Offering ---------------------------------------------------------------- Imageware Systems, Inc., filed with the U.S. Securities and Exchange Commission amendment no. 1 to the Form S-1 registration statement registering 44,140,614 shares of the Company's common stock, $0.01 per share. All of the shares will be sold by Bruce Toll, Compass Financial, Traditional Investment Fund, LTD Class B, Goldman Capital Management MPP , et al. The Selling Stockholders will offer their shares of the Company's common stock at a price of $1.18 per share until those shares are quoted on the OTC Bulletin Board, or listed for trading or quoted on any other public market, and thereafter at prevailing market prices or privately negotiated prices. The shares of common stock registered for resale under this registration statement include: * up to 20,090,000 shares of common stock issued in a private placement transaction consummated on Dec. 20, 2011; * up to 12,252,500 shares of common stock issuable upon exercise of warrants issued in connection with the Private Placement; * up to 6,195,684 shares of common stock issued upon conversion of the Company's Series C 8% Convertible Preferred Stock upon consummation of the Private Placement; * up to 1,202,430 shares of common stock owned by BET Funding, LLC; and * up to 4,400,000 shares of common stock issuable upon exercise of certain warrants owned by BET Funding. The Company will not receive any proceeds from the sale of the shares by the Selling Stockholders; however, if the warrants are exercised the Company will receive the exercise price of the warrants, if exercised at all. The Company will pay the expenses of registering the shares sold by the Selling Stockholders. A copy of the amended prospectus is available for free at: http://is.gd/uEkAZ9 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. The Company reported a net loss of $3.18 million in 2011, compared with a net loss of $5.05 million 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. INDIANAPOLIS DOWNS: Files Plan for Sale or Debt Swap ---------------------------------------------------- Indianapolis Downs LLC filed a proposed reorganization plan and is proposing a June 28 hearing on the explanatory disclosure statement and the proposed sale procedures. The Debtor negotiated the terms of the plan with majority of second-lien and third lien creditors and Fortress Investment Group LLC. The plan provides for a sale if the price is satisfactory to the second-lien lenders. The Debtors began marketing the assets on March 26 and initial indications of interest from buyers were due on April 23. Allowed administrative claims and priority tax claims will be paid in full. DIP claims, aggregating $98 million to $101 million, will be paid in full in cash. Other secured claims will be reinstated or paid in full in cash and holders of these claims are unimpaired. Recovery by second and third lien lenders will depend on the outcome of the sale process. Holders of general unsecured claims of up to $24 million and equity interests won't receive anything. With respect to a sale: * If bids are acceptable for a sale, there would be an auction on Aug. 3. * Second-lien creditors will receive the proceeds less an agreed amount earmarked for third-lien creditors. * Third-lien creditors are to receive the agreed amount from second-lien creditors plus the surplus if the second-lien is fully paid. Absent a sale of the assets: * Second-lien lenders will receive a new second-lien term loan, warrants, and a new term loan paying interest with more debt. * Third-lien creditors will receive some of the new debt to pay interest with more debt together with some of the new warrants. * Unsecured creditors, with claims that may total from $9 million to $24 million, aren't to receive anything. The Debtors plan to present the Plan for confirmation at a hearing on Aug. 7, 2012. A copy of the Disclosure Statement filed April 25, 2012, is available for free at: http://bankrupt.com/misc/Indiana_Downs_DS.pdf About Indianapolis Downs Indianapolis Downs LLC operates Indiana Live -- http://www.indianalivecasino.com/-- a combined race track and casino at a state-of-the-art 283 acre Shelbyville, Indiana site. It also operates two satellite wagering facilities in Evansville and Clarksville, Indiana. Total revenue for 2010 was $270 million, representing an 8.7% increase in 2009. The casino captured 53% of the Indianapolis market share. In July 2001, Indianapolis Downs was granted a permit to conduct a horse track operation in Shelvyville, Indiana, and started operating the track in 2002. It was granted permission to operate the casino at the racetrack operation in May 2007. The casino began operations in July 2010. Indianapolis Downs and subsidiary, Indianapolis Downs Capital Corp., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11046) in Wilmington, Delaware, on April 7, 2011. Indianapolis Downs estimated $500 million to $1 billion in assets and up to $500 million in debt as of the Chapter 11 filing. According to a court filing, the Debtor owes $98,125,000 on a first lien debt. It also owes $375,000,000 on secured notes and $72,649,048 on subordinated notes. Matthew L. Hinker, Esq., Scott D. Cousins, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP in Wilmington, Delaware, have been tapped as counsel to the Debtors. Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, is the conflicts counsel. Lazard Freres & Co. LLC is the investment banker. Bose Mckinney & Evans LLP and Bose Public Affairs Group LLC serve as special counsel. Kobi Partners, LLC, is the restructuring services provider. Epiq Bankruptcy Solutions is the claims and notice agent. INERGY LP: Moody's Affirms 'Ba2' CFR; Outlook Developing -------------------------------------------------------- Moody's Investors Service changed Inergy, L.P.'s outlook to developing and affirmed its Ba2 Corporate Family Rating (CFR) and Probability of Default Rating (PDR), and Ba3 senior unsecured note rating, following the company's announcement that it has reached a definitive agreement to sell its retail propane assets to Suburban Propane Partners, L.P. for $1.8 billion. Suburban announced that it will commence offers in connection with the planned acquisition to exchange $1.2 billion of Inergy's senior notes for $1.0 billion of new Suburban senior notes and $200 million in cash. If such an exchange were to occur in accordance with the proposed offer (with the new unsecured notes being pari passu with the existing unsecured notes), the new Suburban notes would likely be rated Ba3 (assuming there are no unanticipated material changes in Suburban's credit profile between now and the exchange). The remaining $600 million of the acquisition price will be paid in the form of newly issued Suburban common units. Ratings Rationale "The developing outlook reflects uncertainty around the strategic direction and capital structure of Inergy following the proposed sale of its propane business to Suburban," commented Jonathan Kalmanoff, Moody's Analyst. "The transaction accelerates previously anticipated leverage reduction, with December 31, 2011 pro forma consolidated debt / EBITDA declining to 3.7x from 5.3x, and improves Inergy's business risk profile with the pro forma proportion of EBITDA from midstream operations increasing to approximately 88% from 46%, however it also decreases Inergy's scale with total EBITDA decreasing by approximately 48%." Issuer: Inergy, L.P. , Downgrades: Senior Unsecured Regular Bond/Debenture, Downgraded to LGD4, 69% from a range of LGD4, 68% to LGD4, 66% Outlook Actions: Outlook, Changed To Developing From Stable Withdrawals: Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated Ba3, LGD4, 66% The SGL-3 reflects adequate liquidity through the second quarter of 2013 with December 31, 2011 pro forma liquidity consisting of $134 million of availability under the revolving credit facility (amended on April 13, 2012 to reduce the size to 550 million) plus $19 million of cash. Moody's expects that the company will continue to be in compliance with these covenants through the second quarter of 2013. The company does not have material debt maturities until 2016 when the credit facility matures. NRGY's alternative sources of liquidity are limited since assets are encumbered by the secured credit facility. The principal methodology used in rating Inergy was the Global Midstream Energy rating methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Inergy, L.P., headquartered in Kansas City, Mo., is a master limited partnerships (MLP) with both midstream and propane operations. INFUSYSTEM HOLDINGS: Deal With Investors Changes Leadership ----------------------------------------------------------- InfuSystem Holdings, Inc., has reached an agreement with Global Undervalued Securities Master Fund, LP, Meson Capital Partners, Boston Avenue Capital and certain of their affiliates, resulting in changes to InfuSystem's Board of Directors and leadership. Together, those investors beneficially own approximately 11.4% of the Company's outstanding shares. Under the terms of the agreement, Dilip Singh, John Climaco, Charles Gillman, Ryan Morris, and Joseph Whitters have been appointed to the InfuSystem Board of Directors, effective immediately. Current InfuSystem Directors David Dreyer, Chairman of the Audit Committee, and Wayne Yetter, Chairman of the Nominating and Corporate Governance Committee, will remain on the Board and continue in their current roles. "We are optimistic about InfuSystem's prospects and believe that the Company has exciting opportunities ahead," Mr. Yetter said. "We appreciate the dialogue we have had with our stockholders and look forward to working collaboratively with the new directors to continue advancing InfuSystem's position as a significant leader in the infusion and pre-owned medical equipment markets." Mr. Yetter continued, "We thank the outgoing directors Sean, Jean- Pierre, Pat, John and Tim for their contributions, leadership and years of service to InfuSystem. Their insight and experience have been valuable to the Company, and we wish them the best in their future endeavors." With the changes announced, InfuSystem's Board will be comprised of seven directors, all of whom will stand for election at InfuSystem's 2012 Annual Meeting of Stockholders. In connection with the agreement, Global Undervalued Securities Master Fund, LP, Meson Capital Partners, Boston Avenue Capital and their affiliates have all withdrawn their request to call a special meeting. "As stockholders, we are all extremely pleased with this outcome and appreciate the level of engagement from the Board to help us accomplish this end," said Ryan Morris, Managing Member of Meson Capital Partners. "We look forward to working diligently with our fellow Board members to enhance value for all stockholders and helping InfuSystem reach the next level of success." InfuSystem also announced that Mr. Singh, former Chief Executive Officer and a Director of MRV Communications and former Chief Executive Officer of Telia-Sonera Spice Nepal, has been appointed Interim Chief Executive Officer, effective immediately. Mr. Singh succeeds Sean McDevitt, who left the Company to pursue other interests. "We are pleased to have someone of Dilip Singh's stature to serve as Interim CEO," Mr. Dreyer said. "Dilip has nearly 40 years of operational, executive management and board experience with global Fortune 500 companies and a proven record of overseeing profitable growth in rapidly emerging sectors." Under the Singh Employment Agreement, Mr. Singh will receive a salary of $150,000 for the Initial Term and is eligible for a performance bonus, up to a maximum of $500,000, based upon satisfaction of performance objectives to be developed by the Compensation Committee, including stock price performance. A copy of the Settlement Agreement is available for free at: http://is.gd/bYZOnT A complete copy of the Form 8-K disclosure is available at: http://is.gd/Hdb8ab Pursuant to a Consulting Agreement, dated as of April 24, 2012, by and between the Company and Sean McDevitt, the Share Award Agreement, dated as of April 6, 2010, by and between the Company and Mr. McDevitt, was terminated. About InfuSystem Holdings InfuSystem Holdings, Inc., operates through operating subsidiaries, including InfuSystem, Inc., and First Biomedical, Inc. InfuSystem provides infusion pumps and related services. InfuSystem provides services to hospitals, oncology practices and facilities and other alternate site healthcare providers. Headquartered in Madison Heights, Michigan, InfuSystem delivers local, field-based customer support, and also operates pump service and repair Centers of Excellence in Michigan, Kansas, California, and Ontario, Canada. The Company reported a net loss of $45.44 million on $54.63 million of net revenues in 2011, compared with a net loss of $1.85 million on $47.22 million of net revenues in 2010. The Company's balance sheet at Dec. 31, 2011, showed $76.26 million in total assets, $36.09 million in total liabilities and $40.16 million in total stockholders' equity. For 2011, Deloitte & Touche LLP, in Detroit, Michigan, noted that the possibility of a change in the majority representation of the Board and consequent event of default under the Credit Facility, which would allow the lenders to cause the debt of $24.0 million to become immediately due and payable, raises substantial doubt about the Company's ability to continue as a going concern. INFUSYSTEM HOLDINGS: Names Ryan Morris as Executive Chairman ------------------------------------------------------------ InfuSystem Holdings, Inc.'s Board of Directors has named Director Ryan J. Morris, 27, Executive Chairman. Morris led a shareholder activist movement that began in November of 2011 when the stock was trading at approximately $1.20 per share. It culminated in a major overhaul of the Company's governance earlier this week as former Chairman and Chief Executive Officer Sean McDevitt and four other directors resigned. The board also named Charles Gillman, Portfolio Manager of Nadel and Gussman, LLC, as Lead Independent Director. He and Morris joined the InfuSystem board this week, along with other new members John Climaco, Joseph Whitters and Dilip Singh. Singh was also named Interim CEO. Two directors, David Dreyer and Wayne Yetter, will continue their roles on the board. The Company said that its Annual Meeting of Shareholders, originally scheduled to be held on May 11, 2012, has been rescheduled for May 25. InfuSystem stockholders of record at the close of business on April 30, 2012, will be entitled to receive notice about and vote at the meeting. Further details regarding the meeting will be included in the Company's proxy statement, which InfuSystem expects to mail to stockholders shortly. "Our prime mandate is to create value for all shareholders," says new Executive Chairman Morris. "Further, we believe that our personal economic fates should continue to be entirely tied to performance. Accordingly, new board members will be compensated solely in stock options. "My immediate priorities as Executive Chairman will be to ensure sound operational performance, and the development of a strategic growth plan that leverages InfuSystem's market strengths with emerging growth opportunities," Morris states. "Directors David Dreyer and Wayne Yetter have each been instrumental to making this a smooth transition. I am also pleased to report that Dilip Singh, our new director as well as interim CEO, has hit the ground running at full speed." In addition to his role at InfuSystem, Morris founded and serves as Managing Partner of Meson Capital Partners, a New York- and Santa Monica-based value fund he founded in 2009. Before leading the successful efforts of an activist group of InfuSystem investors resulting in the board and management changes now being implemented, Morris launched his career co-founding VideoNote, an education software company, with Cornell University as its first customer. He holds both undergraduate and masters degrees in engineering from that institution. About InfuSystem Holdings InfuSystem Holdings, Inc., operates through operating subsidiaries, including InfuSystem, Inc., and First Biomedical, Inc. InfuSystem provides infusion pumps and related services. InfuSystem provides services to hospitals, oncology practices and facilities and other alternate site healthcare providers. Headquartered in Madison Heights, Michigan, InfuSystem delivers local, field-based customer support, and also operates pump service and repair Centers of Excellence in Michigan, Kansas, California, and Ontario, Canada. The Company reported a net loss of $45.44 million on $54.63 million of net revenues in 2011, compared with a net loss of $1.85 million on $47.22 million of net revenues in 2010. The Company's balance sheet at Dec. 31, 2011, showed $76.26 million in total assets, $36.09 million in total liabilities and $40.16 million in total stockholders' equity. For 2011, Deloitte & Touche LLP, in Detroit, Michigan, noted that the possibility of a change in the majority representation of the Board and consequent event of default under the Credit Facility, which would allow the lenders to cause the debt of $24.0 million to become immediately due and payable, raises substantial doubt about the Company's ability to continue as a going concern. INFUSYSTEM HOLDINGS: Signs Fifth Amendment to BOA Credit Pact ------------------------------------------------------------- InfuSystem Holdings, Inc., on April 24, 2012, and Bank of America, N.A., as Administrative Agent and Lender and Keybank National Association as Lender, entered into the Fifth Amendment to the Credit Agreement, dated as of June 15, 2010, and as amended, pursuant to which Bank of America and Keybank agreed: (i) that the changes in the composition of the Board contemplated by the Settlement Agreement will not constitute a "Change in Control" under the Credit Agreement, (ii) to a change of the maturity date thereof to July 1, 2013; (iii) to permit exclusion of certain expenses relating to the Settlement Agreement and the transactions contemplated thereby from the calculation of certain financial ratios; (iv) to the addition of a covenant requiring minimum liquidity at all times of not less than $1,500,000 at the end of each day and not less than $2,000,000 as of the end of each fiscal month; (v) that commencing Aug. 1, 2012, the payment of a monthly ticking fee equal to 1% of the aggregate amount outstanding thereunder; and (vi) an amendment fee equal to 1% of the aggregate amount outstanding thereunder. InfuSystem has reached an agreement with Global Undervalued Securities Master Fund, LP, Meson Capital Partners, Boston Avenue Capital and certain of their affiliates, resulting in changes to InfuSystem's Board of Directors and leadership. A copy of the Fifth Amendment is available for free at: http://is.gd/mc7jwd About InfuSystem Holdings InfuSystem Holdings, Inc., operates through operating subsidiaries, including InfuSystem, Inc., and First Biomedical, Inc. InfuSystem provides infusion pumps and related services. InfuSystem provides services to hospitals, oncology practices and facilities and other alternate site healthcare providers. Headquartered in Madison Heights, Michigan, InfuSystem delivers local, field-based customer support, and also operates pump service and repair Centers of Excellence in Michigan, Kansas, California, and Ontario, Canada. The Company reported a net loss of $45.44 million on $54.63 million of net revenues in 2011, compared with a net loss of $1.85 million on $47.22 million of net revenues in 2010. The Company's balance sheet at Dec. 31, 2011, showed $76.26 million in total assets, $36.09 million in total liabilities and $40.16 million in total stockholders' equity. For 2011, Deloitte & Touche LLP, in Detroit, Michigan, noted that the possibility of a change in the majority representation of the Board and consequent event of default under the Credit Facility, which would allow the lenders to cause the debt of $24.0 million to become immediately due and payable, raises substantial doubt about the Company's ability to continue as a going concern. INNER CITY MEDIA: Lender Selling Station in South Carolina ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that secured lenders for Inner City Media Corp. are selling another one of the Debtor's radio stations rather than take ownership themselves. Inner City filed papers last week seeking bankruptcy court permission to sell station WZMJ-FM in Batesburg, South Carolina, to Lake Murray Broadcasting Inc. for $450,000. Lake Murray owns another station in Lexington, South Carolina. Mr. Rochelle relates that the lenders are awaiting the court's formal approval for the sale of KBLX-FM in Berkeley, California, for $25 million to Entercom Communications Corp. Mr. Rochelle notes that after there were no competing bids at auction, the bankruptcy judge in February authorized selling the stations to secured lenders Yucaipa Cos. and Fortress Investment Group LLC in exchange for debt. The Manhattan-based company's 17 stations include WLIB and WBLS in New York. The sale to the lenders hasn't been completed. The original sale agreement called for the lenders to pay an additional $2.75 million for trademarks and other intellectual property. About Inner City Media On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit Facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. INTELSAT SA: Amends Tender Offers, Posts Early Offer Results ------------------------------------------------------------ Intelsat S.A. announced that, in connection with the Tender Offers, Intelsat Jackson has been advised by Global Bondholder Services Corporation, as the depositary for the Tender Offers, that as of 5:00 p.m. New York City time on Wednesday, April 25, 2012, Intelsat Jackson had received tenders of $48,042,000 aggregate principal amount of the 9 1/2% Notes and tenders of $10,059,000 aggregate principal amount of the 11 1/4% Notes pursuant to the Tender Offers. On April 25, 2012, Intelsat S.A. also announced that Intelsat Jackson amended the terms of the Tender Offer for the 9 1/2% Notes and the Tender Offer for the 11 1/4% Notes and is now offering to pay the total consideration, including the early tender payment, to Holders who validly tender their Notes prior to the expiration of the applicable Tender Offer. Including accrued and unpaid interest, Intelsat Jackson has paid $51,584,590 in total consideration with respect to the 9 1/2% Notes tendered prior to the Early Tender Time and $10,928,474 in total consideration with respect to the 11 1/4% Notes tendered prior to the Early Tender Time. Each of the Tender Offers is scheduled to expire at 12:00 midnight, New York City time, on Wednesday, May 9, 2012, unless extended or earlier terminated by Intelsat Jackson. Subject to the terms and conditions set forth in the Offer to Purchase, Intelsat Jackson will accept for purchase all 9 1/2% Notes tendered and not withdrawn prior to the Early Tender Time. Subject to the terms and conditions set forth in the Offer to Purchase, Intelsat Jackson intends to accept for purchase all 9 1/2% Notes tendered after the Early Tender Time and prior to the Expiration Time. Subject to the terms and conditions set forth in the Offer to Purchase, Intelsat Jackson will accept for purchase all 11 1/4% Notes tendered and not withdrawn prior to the Early Tender Time. As the principal amount of 11 1/4% Notes validly tendered and not withdrawn in the 11 1/4% Offer prior to the Early Tender Time is less than the Tender Cap, subject to the terms and conditions set forth in the Offer to Purchase, Intelsat Jackson intends to accept for purchase 11 1/4% Notes tendered after the Early Tender Time and prior to the Expiration Time, subject to the Tender Cap and any required proration, as described in the Offer to Purchase. The withdrawal deadline relating to each of the Tender Offers occurred at 5:00 p.m., New York City time, on Wednesday, April 25, 2012. Notes previously tendered and Notes that are tendered after the withdrawal deadline may not be withdrawn, except as required by law. Each of the Tender Offers is scheduled to expire at 12:00 midnight, New York City time, on Wednesday, May 9, 2012, unless extended or earlier terminated. Intelsat Jackson has retained Goldman, Sachs & Co. to act as the dealer manager for each of the Tender Offers. Global Bondholder Services Corporation is acting as the Information Agent and the Depositary for each of the Tender Offers. Questions regarding either of the Tender Offers should be directed to Goldman, Sachs & Co. at (800) 828-3182 (toll-free) or (212) 357-0345 (collect). Requests for documentation should be directed to Global Bondholder Services Corporation at (866) 470-3900 (toll-free) or (212) 430- 3774 (collect). About Intelsat Intelsat S.A., formerly Intelsat, Ltd., provides fixed-satellite communications services worldwide through a global communications network of 54 satellites in orbit as of Dec. 31, 2009, and ground facilities related to the satellite operations and control, and teleport services. It had US$2.5 billion in revenue in 2009. Washington D.C.-based Intelsat Corporation, formerly known as PanAmSat Corporation, is a fully integrated subsidiary of Intelsat S.A., its indirect parent. Intelsat Corp. had US$7.70 billion in assets against US$4.86 billion in debts as of Dec. 31, 2010. The Company reported a net loss of $433.99 million in 2011, a net loss of $507.77 million in 2010, and a net loss of $782.06 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $17.36 billion in total assets, $18.45 billion in total liabilities, $1.14 billion total Intelsat S.A. shareholder's deficit, and $50.92 million noncontrolling interest. * * * Luxembourg-based Intelsat S.A. carries 'B' issuer credit ratings from Standard & Poor's. It has 'Caa1' corporate family and probability of default ratings from Moody's Investors Service. INTELSAT SA: Unit Issues $1.2 Billion of 7-1/4% Senior Notes ------------------------------------------------------------ Intelsat Jackson Holdings S.A. issued $1,200,000,000 aggregate principal amount of its 7 1/4% Senior Notes due 2020. The New Notes were issued pursuant to an indenture, dated as of Sept. 30, 2010, among Intelsat Jackson, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee. Intelsat Jackson previously issued $1,000,000,000 aggregate principal amount of its 7 1/4% Senior Notes due 2020 on Sept. 30, 2010. The net proceeds from the New Notes will be used by Intelsat Jackson to purchase any and all of its $701,913,000 outstanding 9 1/2% Senior Notes due 2016 and up to $470,000,000 aggregate principal amount of its outstanding $1,048,220,000 aggregate principal amount of 11 1/4% Notes that are validly tendered in connection with Intelsat Jackson's tender offers announced on April 12, 2012. Proceeds from the sale of the New Notes may also be used to redeem or repurchase notes not purchased in the applicable Tender Offer, to pay related fees and expenses and for general corporate purposes. The Indenture contains covenants which include, among other things: -- a limitation on Intelsat Jackson's and some of its subsidiaries' ability to incur or guarantee additional debt or issue disqualified or preferred stock; -- a limitation on Intelsat Jackson's and some of its subsidiaries' ability to pay dividends, make other equity distributions or repurchase or redeem capital stock; -- a limitation on Intelsat Jackson's and some of its subsidiaries' ability to make certain investments; -- a limitation on Intelsat Jackson's and some of its subsidiaries' ability to enter into transactions with affiliates; -- a limitation on merger, consolidation, amalgamation and sale of assets applicable to Intelsat Jackson and some of its subsidiaries; and -- a limitation on Intelsat Jackson's and some of its subsidiaries' ability to incur liens on any of Intelsat Jackson's assets securing other indebtedness. The New Notes are redeemable on the dates, at the redemption prices and in the manner specified in the Indenture. Pursuant to a registration rights agreement, Intelsat Jackson and the guarantors of the New Notes agreed with Goldman, Sachs & Co., as representative of the initial purchasers in the offering of the New Notes, in the circumstances described therein to make an offer to exchange the New Notes for registered, publicly tradable notes that have substantially identical terms to the New Notes. About Intelsat Intelsat S.A., formerly Intelsat, Ltd., provides fixed-satellite communications services worldwide through a global communications network of 54 satellites in orbit as of Dec. 31, 2009, and ground facilities related to the satellite operations and control, and teleport services. It had US$2.5 billion in revenue in 2009. Washington D.C.-based Intelsat Corporation, formerly known as PanAmSat Corporation, is a fully integrated subsidiary of Intelsat S.A., its indirect parent. Intelsat Corp. had US$7.70 billion in assets against US$4.86 billion in debts as of Dec. 31, 2010. The Company reported a net loss of $433.99 million in 2011, a net loss of $507.77 million in 2010, and a net loss of $782.06 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $17.36 billion in total assets, $18.45 billion in total liabilities, $1.14 billion total Intelsat S.A. shareholder's deficit, and $50.92 million noncontrolling interest. * * * Luxembourg-based Intelsat S.A. carries 'B' issuer credit ratings from Standard & Poor's. It has 'Caa1' corporate family and probability of default ratings from Moody's Investors Service. INTERBANK FSB: Closed; Great Southern Bank Assumes All Deposits --------------------------------------------------------------- Inter Savings Bank, fsb, also doing business as InterBank, fsb, of Maple Grove, Minn., was closed on Friday, April 27, 2012, by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Great Southern Bank of Reeds Spring, Mo., to assume all of the deposits of InterBank, fsb. The four branches of InterBank, fsb, will reopen during normal business hours as branches of Great Southern Bank. Depositors of InterBank, fsb, will automatically become depositors of Great Southern Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of InterBank, fsb, should continue to use their existing branch until they receive notice from Great Southern Bank that it has completed systems changes to allow other Great Southern Bank branches to process their accounts as well. As of Dec. 31, 2011, InterBank, fsb, had around $481.6 million in total assets and $473.0 million in total deposits. In addition to assuming all of the deposits of the failed bank, Great Southern Bank agreed to purchase essentially all of the assets. The FDIC and Great Southern Bank entered into a loss-share transaction on $413.0 million of InterBank, fsb's assets. Great Southern Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers with questions about the transaction should call the FDIC toll-free at 1-800-405-8357. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/Interbank.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $117.5 million. Compared to other alternatives, Great Southern Bank's acquisition was the least costly resolution for the FDIC's DIF. InterBank, fsb, is the 20th FDIC-insured institution to fail in the nation this year, and the third in Minnesota. The last FDIC-insured institution closed in the state was Home Savings of America, Little Falls, on Feb. 24, 2012. INTERLEUKIN GENETICS: Extends President's Contract Until Nov. 30 ---------------------------------------------------------------- Interleukin Genetics, Inc., entered into an amendment to the employment agreement, dated Nov. 12, 2008, with its President and Chief Scientific Officer, Kenneth S. Kornman. The Amendment, which has an effective date of March 31, 2012, extends the term of the Agreement through Nov. 30, 2012. About Interleukin Waltham, Mass.-based Interleukin Genetics, Inc., is a personalized health company that develops unique genetic tests to provide information to better manage health and specific health risks. Following the Company's financial results for the year ended Dec. 31, 2011, Grant Thornton LLP, in Boston, Massachusetts, expressed substantial doubt about Interleukin Genetics' ability to continue as a going concern. The independent auditors noted that the Company incurred a net loss of $5.02 million during the year ended Dec. 31, 2011, and, as of that date, the Company's current liabilities exceeded its current assets by $12.27 million and its total liabilities exceeded total assets by $11.4 million. The Company reported a net loss of $5.0 million for 2011, compared with a net loss of $6.0 million for 2010. The Company's balance sheet at Dec. 31, 2011, showed $3.0 million in total assets, $14.4 million in total liabilities, and a stockholders' deficit of $11.4 million. INTERNATIONAL MEDIA: Lease Decision Period Extended Until Aug. 6 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended until Aug. 6, 2012, International Media Group Inc., et al.'s time to assume or reject unexpired leases of nonresidential real property. International Media Group Inc. and its affiliates operate television station KSCI-TV (Channel 18) Long Beach, California; KUAN-LP (Channel 48) Poway, California; and KIKU-TV (Channel 19) Honolulu, Hawaii. KSCI, KUAN and KIKU focus primarily on the large Asian markets of Southern California and Hawaii and offer programming in six (6) main languages -- (i) Chinese; (ii) Korean; (iii) Tagalog (Filipino); (iv) Vietnamese; (v) English; and (vi) Japanese. The Television Stations' programming is a mix of locally produced original news, entertainment, and talk shows, purchased or syndicated foreign language programming, and paid programming comprised principally of infomercials, per-inquiry and direct response television advertisements. KHAI Inc. owns all of the equity of KHLS Inc., which holds the FCC license for KIKU-TV (Channel 19). KSCI Inc. owns all of the equity of KHAI and of KSLS Inc., which holds the FCC license for KSCI-TV (Channel 18) and KUANLP (Channel 48). International Media Group Inc. owns all of the equity of KSCI. AMG Intermediate LLC owns all of the equity of IMG, and AsianMedia Group LLC owns all of the equity of AMG. Non-debtor AsianMedia Investors I L.P. owns all of the equity of AsianMedia. International Media Group and six affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-10140) on Jan. 9, 2012, with the intent to sell their business as a going concern under 11 U.S.C. Sec. 363(a). NRJ TV II LLC, an entity owned by the first lien lender, will be the stalking horse bidder. As of Jan. 9, 2012, the Debtors owe $77.3 million on a first lien debt, including $67 million on a term-loan. Fortress Credit Corp. serves as agent. Unless outbid at the auction, the pre-petition lenders will acquire the assets in exchange for a credit bid of $45 million, will assume certain liabilities, and fund a "carve-out". An auction and sale hearing is contemplated to be held in March. Judge Mary F. Walrath oversees the Debtors' cases. International Media Group tapped Houlihan Lokey Capital, Inc., in October to market the assets. Houlihan will continue marketing the assets post-petition. William E. Chipman, Jr., Esq., and Mark D. Olivere, Esq., at Cousins Chipman & Brown, LLC, in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. The Debtors' claims agent is Epiq Bankruptcy Solutions LLC. International Media disclosed $206,825,047 in assets and $233,218,073 in liabilities as of the Chapter 11 filing. The petition was signed by Dennis J. Davis, chief restructuring officer. ISTAR FINANCIAL: Swings to $46 Million Net Loss in First Quarter ---------------------------------------------------------------- iStar Financial Inc. reported a net loss of $46.04 million on $94.70 million of total revenues for the three months ended March 31, 2012, compared with net income of $83.90 million on $110.24 million of total revenues for the same period during the prior year. The Company reported a net loss of $25.69 million in 2011, compared with net income of $80.20 million in 2010. The Company's balance sheet at March 31, 2012, showed $7.58 billion in total assets, $6.08 billion in total liabilities and $1.50 billion in total equity. A copy of the press release is available for free at: http://is.gd/dYDmTX About iStar Financial New York-based iStar Financial Inc. (NYSE: SFI) provides custom- tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust, provides innovative and value added financing solutions to its customers. * * * As reported by the TCR on March 29, 2011, Fitch Ratings has upgraded the Issuer Default Rating to 'B-' from 'C'. The upgrade of iStar's IDR is based on the improved liquidity profile of the company, pro forma for the new senior secured credit agreement (the new financing) that extends certain of the company's debt maturities, relieving the overhang of significant secured debt maturities in June 2011. In July 2010, Standard & Poor's Ratings Services lowered its long- term counterparty credit rating on iStar Financial to 'CCC' from 'B-'. The outlook is negative. iStar's limited funding flexibility and the severe credit quality deterioration in its loan portfolio continue to put negative pressure on the rating, S&P said. As reported by the Troubled Company Reporter on March 22, 2011, Standard & Poor's said that it raised its counterparty credit rating on iStar Financial Inc. to 'B+' from 'CCC' and removed it from CreditWatch where it was placed with positive implications on Feb. 23. The outlook is stable. "The upgrade reflects the company's closing of a $2.95 billion senior secured credit facility, which it will use to refinance the company's existing secured bank facilities and repay a portion of the company's unsecured debt," said Standard & Poor's credit analyst Jeffrey Zaun. If S&P's analysis of the new secured facility indicates 100% or more collateral coverage, S&P will rate the issue 'BB-'. If S&P's analysis of collateral indicates less than 100% coverage, S&P will rate the issue 'B+'. JACKSON HEWITT: Court Nixes National Tax Network's Counterclaims ---------------------------------------------------------------- District Judge Dennis M. Cavanaugh granted the request of Jackson Hewitt, Inc., to dismiss the counterclaims of National Tax Network, LLC, in the lawsuit, Jackson Hewitt, Inc., v. Barnes Enterprises, et al.; and Jackson Hewitt, Inc., v. Kathryne L. Ward, No. 10-cv-05 108 (D. N.J.). Kathryne L. Ward, a citizen of Arizona, signed as a guarantor for National Tax on several franchise agreements to operate Jackson Hewitt tax preparation businesses in Arizona beginning in 2004. The franchise agreements gave NTN the right to operate tax return businesses using Jackson Hewitt trade names, trademarks, service marks, and logos. NTN also received the right to use Jackson Hewitt proprietary business methods and software. On July 23, 2010, Jackson Hewitt terminated the franchise agreements by letter to NTN and Ms. Ward. During an Aug. 30, 2011 status conference, Magistrate Judge Joseph A. Dickson ordered the Defendants to answer the Complaint on or before Sept. 8, 2011, to serve initial disclosures on Jackson Hewitt on or before Sept. 15, 2011, and to respond to Jackson Hewitt's interrogatories and requests for production on or before Sept. 15, 2011. On Sept. 6, 2011, Magistrate Judge Dickson entered a written Order confirming this schedule. NTN filed its Answer on Sept. 8, 2011, asserting six Counterclaims, including allegations of (1) fraudulent inducement or negligent misrepresentation; (2) unfair competition and tortious interference with contract; (3) detrimental reliance; (4) fraud, intentional misrepresentation, and negligent misrepresentation; (5) declaratory judgment; and (6) breach of the implied covenant of good faith and fair dealing. On Sept. 29, 2011, Jackson Hewitt filed the Motion to Dismiss the Counterclaims, arguing that all Counterclaims should be dismissed as untimely, that Counterclaims One, Two, Three, Four, and Six fail to state a claim on which relief may be granted, and that Counterclaim Five should be dismissed as the District Court has already adjudicated the issue. NTN did not file Opposition to the Motion. Pursuant to Fed. R. Civ. P. 78, no oral argument was heard in the lawsuit. A copy of the District Court's April 25, 2012 Opinion is available at http://is.gd/oGoXctfrom Leagle.com. About Jackson Hewitt Parsippany, New York-based Jackson Hewitt Tax Service Inc., aka JHTS Inc., provides computerized preparation services for federal, state and local individual income tax returns in the United States through a nationwide network of franchised and company-owned offices operating under the brand name Jackson Hewitt Tax Service. The Company has 700 franchisees that collectively operated a total of 4,846 offices. The Company also operates 1,110 company-owned offices. Jackson Hewitt and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-11587) on May 24, 2011. Judge Mary F. Walrath presided over the bankruptcy case. Skadden, Arps, Slate, Meagher & Flom LLP, served as the Debtors' bankruptcy counsel. Alvarez & Marsal North America, LLC, served as their financial advisor. Moelis & Company LLC acted as investment banker. The Garden City Group, Inc., served as the Debtors' Claims and Noticing Agent. The Debtors also tapped Deloitte & Touche to serve as tax advisors and Kekst & Company to serve as communications advisors. BDO Financial served as financial advisors to the Official Committee of Unsecured Creditors. As of June 30, 2011, Jackson Hewitt's balance sheet showed $390.3 million in total assets, $432.9 million in total liabilities, and a stockholders' deficit of $42.6 million. Jackson Hewitt on Aug. 8, 2011, received confirmation of its "pre-packaged" Plan of Reorganization. Under the Plan, Jackson Hewitt emerged as a private company with Bayside Capital becoming the majority owner. Bayside is an affiliate of Miami, Florida- based H.I.G. Capital, and the largest holder of Jackson Hewitt's secured debt prior to its restructuring. JATCO INCORPORATED: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Jatco, Incorporated 725 Zwissig Way Union City, CA 94587 Bankruptcy Case No.: 12-43549 Chapter 11 Petition Date: April 23, 2012 Court: U.S. Bankruptcy Court Northern District of California (Oakland) Judge: Roger L. Efremsky Debtor's Counsel: Neal L. Wolf, Esq. NEAL WOLF AND ASSOCIATES, LLC 155 N. Wacker Drive, #1910 Chicago, IL 60606 Tel: (312) 228-4990 Fax: (312) 228-4988 E-mail: nwolf@nealwolflaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/canb12-43549.pdf The petition was signed by Paul H. Appelblom, chief executive officer. JEFFERIES GROUP: Moody's Issues Summary Credit Opinion ------------------------------------------------------ Moody's Investors Service issued a summary credit opinion on Jefferies Group, Inc. and includes certain regulatory disclosures regarding its ratings. The release does not constitute any change in Moody's ratings or rating rationale for Jefferies Group, Inc. Moody's current ratings on Jefferies Group, Inc. are: Long Term Issuer rating of Baa2 Senior Unsecured (domestic currency) ratings of Baa2 Preferred Stock (domestic currency) ratings of Ba1 (hyb) Senior Unsecured Shelf (domestic currency) ratings of (P)Baa2 Subordinate Shelf (domestic currency) ratings of (P)Baa3 Preferred Shelf (domestic currency) ratings of (P)Ba1 Preferred shelf -- PS2 (domestic currency) ratings of (P)Ba1 Rating Rationale The Baa2 rating with a stable outlook reflects Jefferies' relatively straightforward business model based on limited principal risk, a focus on highly liquid products, modest use of OTC derivatives, and low financial leverage, but also incorporates the risks posed by the firm's less diversified franchise, lower level of profitability, and rapid growth. In 4Q 2011, Jefferies demonstrated the liquidity of the balance sheet in challenging market conditions by reducing total assets from $45.1 billion to $35 billion. The reduction was broad based across asset categories including a reduction in total Level 3 assets from $636 million to $474 million. Jefferies is maintaining a prudent posture to wholesale funding. At 4Q 2011, 87% of Jefferies repo collateral was acceptable at clearing houses and for the remaining 13%, weighed average term exceeded 2 months. The firm had $3.6 billion in cash and unencumbered collateral and $850 million available in an undrawn committed credit facility. Over the past few years Jefferies has taken steps to diversify its revenue and profit streams through a strategic build-up of the company's investment banking and FICC segments. Additionally, the company's recent acquisition of Prudential Bache's Global Commodities Group should further diversify revenues. Compared to peers, Jefferies has engaged in limited principal risk taking and has consistently maintained a low level of leverage. Profitability has been reduced in the second half of 2011, reflecting a difficult market environment and firm-specific market speculation in November. In the second half of 2011, after backing out the $41 million gain on the Bache Commodities business and the $12 million debt extinguishment gain, the firm was modestly profitable - producing $64 million in net income. Moody's also notes that higher revenue diversity comes at the cost of increasing business complexity. Jefferies has rapidly expanded its headcount to roughly 3,850 employees at present from 2,250 at the end of 2008. Moody's believes it is critical that Jefferies' risk management functions and processes evolve to control these risks. Moody's expects that until Jefferies has a fully implemented risk and control infrastructure that matches the company's increased business complexity it will continue to focus on the simplest and most liquid asset classes, with conservative risk limits. Rating Outlook The stable outlook reflects Moody's expectation that Jefferies will continue to run the business in a disciplined way, adhering to its basic tenets of - low risk appetite and leverage, and focus on liquidity. Moody's also expects Jefferies to continue investing in its risk management, technology, and infrastructure to support its growth. What Could Change the Rating - Up Moody's currently views the rating as well positioned. Longer- term, if Jefferies' market share gains prove sustainable and if pre-tax profitability increases (e.g. closer to 30%) while its risk appetite does not, the outlook could be changed to positive. What Could Change the Rating - Down Jefferies Baa2 rating has been based on its conservative approach to leverage and the simplicity and liquidity of its balance sheet. Accordingly, Moody's would consider ratios above any of the following levels as suggestive of increased risk at Jefferies that could lead to a rating downgrade. - Gross Leverage (Tangible Assets/Tangible Common Equity) exceeding a range of 16-18x (estimated at 12x as of 11/30/2011) - Gross Market Value (Long plus Short Inventory/Tangible Common Equity) exceeding a range of 11-13x (estimated at under 10x as of 11/30/2011) - L3 assets exceeding $750MM (estimated at $474MM as of 11/30/2011) Moody's defines Tangible Common Equity as Common Equity less Goodwill, Intangibles and Minority Interest or approximately $2.9 billion at Jefferies as of 11/30/2011. The methodologies used in this rating were Global Securities Industry Methodology published in December 2006, and Moody's Guidelines for Rating Bank Hybrid Securities and Subordinated Debt published in November 2009. KERSKI ASSOCIATES: Case Summary & 4 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Kerski Associates Limited Partnership 74 Towantic Hill Road Oxford, CT 06483 Bankruptcy Case No.: 12-30954 Chapter 11 Petition Date: April 23, 2012 Court: U.S. Bankruptcy Court District of Connecticut (New Haven) Judge: Lorraine Murphy Weil Debtor's Counsel: Peter L. Ressler, Esq. GROOB RESSLER & MULQUEEN 123 York Street, Suite 1B New Haven, CT 06511-0001 Tel: (203) 777-5741 Fax: (203) 777-4206 E-mail: ressmul@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ctb12-30954.pdf The petition was signed by Francis Kerski, general partner. KURRANT MOBILE: To Reduce Authorized Common Shares to 15 Billion ---------------------------------------------------------------- Cogito Media Group, Inc., formerly known as Kurrant Mobile Catering, Inc., on Jan. 12, 2012, filed with the Secretary of State for the State of Colorado an amendment to its Articles of Incorporation to reduce its authorized common stock shares from 50 billion shares to 15 billion shares, effective immediately. "We believe that this reduction of authorized capital will attract new funding and demonstrate to potential new investors in the Company that we are serious about managing potential future dilution in our stock and we continue to be steadfastly dedicated to bringing increased value to our shareholders." About Kurrant Mobile Montreal, Quebec-based Kurrant Mobile Catering, Inc., operates in a single business segment that includes the publication and distribution of books and eBooks. The Company sells its products to distributors throughout the world. The Company's balance sheet at Nov. 30, 2010, showed $1.02 million in total assets, $1.71 million in total liabilities, and a $686,774 stockholders' deficit. According to the Form 10-Q for the quarter ended Nov. 30, 2010, "The Company has incurred net losses and has negative cash flows from its operations. These factors raise substantial doubt regarding Kurrant Mobile's ability to continue as a going concern. Realization value may be substantially different from carrying values as shown and these financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should Kurrant Mobile be unable to continue as a going concern. The continuation of Kurrant Mobile as a going concern is dependent upon the continued financial support from its shareholders, the ability of Kurrant Mobile to obtain necessary equity financing to continue operations, and the attainment of profitable operations." The Company has not filed its financial statements subsequent to the Nov. 30, 2010, Form 10-Q. The management of Cogito Media deems additional time is necessary in order to fully compile the necessary financial information and adequately complete its financial statements required to prepare its quarterly report on Form 10-Q for the period ended May 31, 2011, and annual report on Form 10-K for the period ended Feb. 28, 2011. LAM RESEARCH: S&P Raises Ratings From 'BB+'; Outlook Positive ------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Lam Research Corp. to 'BBB-' from 'BB+' and removed the rating from CreditWatch, where it was listed with positive implications on Dec. 15, 2011. The outlook is positive. "The rating change reflects the company's expanded leadership position beyond its previously narrow business focus to include adjacent markets within the wafer fabrication equipment industry," said Standard & Poor's credit analyst David Tsui, "while maintaining its 'intermediate' financial risk profile after the stock-for-stock merger with Novellus." "We are also raising the issue-level ratings on the company's $450 million senior unsecured convertible bonds due 2016 and $450 senior unsecured convertible bonds due 2018 to 'BBB-' from 'BB+'," S&P said. Lam Research is a global producer of plasma etch and single-wafer cleaning tools used to manufacture memory, logic, and micro- electromechanical system devices. "We placed Lam Research's ratings on CreditWatch following the announcement that the company will merge with Novellus Systems Inc. in a stock-for-stock transaction valued at about $3.3 billion or 1.125 shares of Lam Research for each share of Novellus. We view the proposed merger as a positive for our assessment of Lam Research's business risk profile as the company expands its leadership positions beyond its previously narrow business focus in plasma etch and single-wafer clean segments of the semiconductor wafer equipment addressable market. Novellus is a leader in deposition and surface preparation semiconductor equipment, with sales and EBITDA at approximately half of Lam Research's current size. As a result, we revised Lam Research's business risk profile to 'satisfactory' from 'fair,'" S&P said. "The outlook is positive, reflecting the company's expanded leadership positions beyond its previously narrow business focus to include adjacent markets within the wafer fabrication equipment industry and a continued moderate financial policy after the stock-for-stock merger with Novellus. We could upgrade the company to 'BBB' if it successfully integrates the merger with Novellus and achieves the $100 million cost synergies as outlined, while maintaining its current pro forma financial profile. We could revise the outlook to stable if the company experiences difficulty with the integration of Novellus, leading to sustained leverage in excess of 2.5x throughout an industry cycle," S&P said. LANTHEUS MEDICAL: Moody's Cuts Corporate Family Rating to 'Caa2' ---------------------------------------------------------------- Moody's Investors Service lowered the ratings of Lantheus Medical Imaging, Inc. (Corporate Family Rating and senior unsecured notes to Caa2 from Caa1), because of ongoing concerns regarding liquidity and the potential for negative cash flow from operations related to the prolonged shut down of a key third party manufacturing plant as well as expectations that sales trends will continue to be lower than expected. At the same time, the company's speculative grade liquidity rating remained at SGL-4. The rating outlook is negative. This concludes Moody's rating review that was initiated on December 20, 2011. Ratings downgraded Lantheus Medical Imaging, Inc. Corporate Family Rating to Caa2 from Caa1 PDR to Caa2 from Caa1 $400 million senior unsecured notes to Caa2, LGD4, 57% from Caa1, LGD4, 57% Rating unchanged Speculative grade liquidity rating of SGL-4 Ratings Rationale "Uncertainty associated with the ongoing shut down of the BVL plant provides concerns regarding liquidity despite the benefit of a cash infusion from BVL," said Diana Lee, a Moody's Senior Credit Officer. The downgrade to Caa2 and SGL-4 reflect concerns regarding near term liquidity if Ben Venue Labs (BVL) or if alternative manufacturing sources are not operational relatively soon. Moody's believes there is a reasonable likelihood that cash outflows will erode cash balances, which have been boosted by a recent payment from BVL under terms of a new contractual agreement with BVL. In addition, although Lantheus amended its covenants in January 2012, Moody's believes that covenant cushions will again tighten especially in light of step-down provisions. This, coupled with significantly lower than expected overall sales, driven largely by a lack of recovery in TechneLite generator sales as well as unfavorable product mix changes in Cardiolite, are key concerns. BVL, a third party manufacturing plant, is the exclusive manufacturer of DEFINITY (a contrast agent used for echocardiograms), which accounted for about 19% of FY2011 sales and Neurolite (estimated 5% of sales), and is the primary manufacturer of Cardiolite contrast agent (used in nuclear stress tests), which generated about 18% of total FY2011 sales. BVL was expected to resume production in March 2011 after scheduled remediation, but subsequent delays have now resulted in significant manufacturing constraints although Lantheus is seeking alternative manufacturing sites for products produced at BVL. Lantheus could face additional challenges because of an April 2012 scheduled maintenance shutdown of the company's NRU reactor facility in Chalk River, Canada. Although Moody's believes Lantheus can find alternative sources for Moly during the scheduled four week shut down, any delays in reopening Chalk River could result in additional pressure on Moly-related product sales. Chalk River still accounts for the majority of the company's Moly source material, but the company hopes to become more balanced in its Moly sources in the future. Canada has stated it will exit the nuclear reactor business by 2016. BVL's parent (Boehringer Ingelheim) has decided to exit the contract manufacturing business by 2014, which will require a permanent transfer of manufacturing to alternate sites. Effective February 1, 2012, Lantheus entered a new agreement with Jubilant HollisterStier (JHS) to manufacture DEFINITY; Moody's understands that JHS is in the process of transferring technology. The negative outlook reflects concerns that if BVL or JHS are not able to produce commercialized products for Lantheus within the next few months, the likelihood of a default increases. If BVL or JHS are not operational within the next several months or if overall sales continue to be suppressed, and there is a high likelihood that Lantheus will need to spend down substantially all of its cash, the ratings could be downgraded. If Moody's believes a covenant breach under the revolver could result in a cross default under the bond indenture, it could support a rating downgrade. If BVL or JHS are operational within the next several months, overall sales improve, and it appears that the company will be able to see breakeven free cash flow, the ratings could be upgraded. The Caa2 rating also considers Lantheus's heavy reliance on a somewhat volatile supply source for its nuclear products, small size with declining revenues due to generic competition for Cardiolite, and high product and customer concentration risk. These underlying weaknesses have been partially offset by the company's solid market position in the medical diagnostic imaging segment, and contracts with key radiopharmacies. The principal methodology used in this rating was the Global Pharmaceutical Industry Methodology published in October 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the US, Canada and EMEA published in June 2009. Lantheus Medical Imaging Inc. is a leading global manufacturer of medical imaging products and a wholly-owned subsidiary of Lantheus MI Intermediate, Inc., which, in turn, is a wholly-owned subsidiary of Lantheus MI Holdings, Inc. The company primarily manufactures products for cardiovascular diagnostic imaging. LARSON LAND: Owner Stopped From Cash Use; Trustee Takes Over ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the effort by Larson Land Co. to reorganize in U.S. Bankruptcy Court in Boise, Idaho, came to a quick end, in terms of the company's ability to control its own destiny. The bankruptcy judge ceded to objection from secured lender Zions First National Bank and denied the company use of cash representing collateral for the bank's claim. Without cash and salaries unpaid, workers walked off the job, according to a court filing. The report relates that to prevent 3 million pounds of onion product from rotting if a freezer was turned off, the bankruptcy judge quickly appointed a Chapter 11 trustee at the behest of the U.S. Trustee. Owed $11.9 million on a secured claim, Zions said that Larson "wrongfully" told customers to send payments to the company rather than the bank, according to the report. An affiliate of ConAgra Foods Inc. said it has secured claims totaling $46.5 million. ConAgra agreed with appointment of a Chapter 11 trustee, according to court papers. About Larson Land Company Ontario, Oregon-based Larson Land Company LLC, fka Select Onion Co. LLC -- http://www.selectonion.com/-- a privately held agribusiness company that grows, stores, processes and ships bagged onions, fresh processed onions, whole peel onions, IQF onions, and delicious raw breaded hand packed onion rings, filed a Chapter 11 petition (Bankr. D. Idaho Case No. 12-00820) in Boise, Idaho, on April 12, 2012, estimating assets of up to $100 million and debts of up to $500 million. Judge Terry L. Myers presides over the case. Brent T. Robinson, Esq., at Robinson, Anthon & Tribe, serves as the Debtor's counsel. The petition was signed by Farrell Larson, president. LAW ENFORCEMENT ASSOC: To Liquidate Assets Under Chapter 7 ---------------------------------------------------------- Chris Bagley, staff writer at the Triangle Business Journal, reports that Law Enforcement Associates Corp. has converted its Chapter 11 bankruptcy reorganization into a Chapter 7 liquidation. According to the report, the company, previously traded on an over-the-counter exchange, said in a securities filing at the time that it didn't have sufficient financial resources to pay the judgment. The company's bankruptcy was converted to a Chapter 7 liquidation in early March. Its operating subsidiary, Law Enforcement Associates Inc., filed its own Chapter 7 petition on April 25, 2012. The subsidiary reported $346,000 in assets and no debt of its own. The report notes company officers, rather than an outside bankruptcy counsel, are representing it in court. About Law Enforcement Law Enforcement Associates Corporation was formed on Dec. 3, 2001, when the Company acquired all the outstanding stock of Law Enforcement Associates, Inc., a New Jersey company, incorporated in 1972, doing business in North Carolina. The Company's operations consist of the manufacturing and providing of surveillance and intelligence gathering products and vehicle inspection equipment. Products are used by law enforcement agencies, the military, security, and correctional organizations. Law Enforcement Associates Corp. filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.C. Case No. 11-05686) on July 27, 2011. William P. Janvier, Esq., at Janvier Law Firm, PLLC, in Raleigh, North Carolina, serves as counsel. The Debtor estimated assets of up to $50,000 and debts of up to $10 million. LEFKARA GROUP: Involuntary Chapter 11 Case Summary -------------------------------------------------- Alleged Debtor: Lefkara Group LLC 350 7th Avenue, Suite 2205 New York, NY 10001 Bankruptcy Case No.: 12-11702 Involuntary Chapter 11 Petition Date: April 25, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Stuart M. Bernstein Petitioners' Counsel: Scott S. Markowitz, Esq. TARTER KRINSKY & DROGIN LLP 1350 Broadway, 11th Floor New York, NY 10018 Tel: (212) 216-8000 Fax: (212) 216-8001 E-mail: smarkowitz@tarterkrinsky.com Creditors who signed the Chapter 11 petition: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ 42-05 Parsons LLC Mortgage $2,700,000 30-56 Whitestone Expressway Flushing, NY 11354 Leonard J. Strandberg & Associates Trade Claim $15,000 32 Smith Street Freeport, NY 11520 Montrose Surveying Co. LLP Trade Claim $1,250 116-20 Metropolitan Avenue Richmond Hill, NY 11418 LEHMAN BROTHERS: LVH Says Notes Investors Have Poor Recovery ------------------------------------------------------------ Investor advocacy law firm Vernon Healy said that investors holding Lehman 100% principal protected notes or other Lehman structured products are now receiving word that their share of the initial Lehman bankruptcy distribution on April 17 amounts to 6 cents on the dollar. "We've been informed by a representative of Wilmington Trust, the bankruptcy trustee that is handling Lehman notes distributions, that Lehman note holders may receive up to 21 cents on the dollar with that amount dribbled out over the next 3 to 5 years through the bankruptcy liquidation process," said investor rights attorney Chris Vernon, of the Vernon Healy law firm. "In our ongoing efforts to assist investors, we are aggressively pursuing UBS in arbitrations before the Financial Industry Regulatory Authority for fraudulent misrepresentations to investors that their Lehman notes were safe and 100 percent principal protected." Vernon Healy has aggressively represented investors with more than $13 million in FINRA arbitration claims against UBS on behalf of Lehman note holders. "We believe that this updated information from the bankruptcy trustee will shock those defrauded investors who have not obtained legal counsel yet and have held out hope that the bankruptcy process would provide them with some meaningful recovery," Vernon said. Vernon Healy's advocacy on behalf of Lehman notes investors was featured in an AARP magazine article about the dangers of investing in structured products, which continue to be pitched by brokerage firms to retirees as safe investments. Vernon Healy's ongoing investigation continues to reveal numerous concerns in relation to the sales of Lehman notes by UBS that have not been addressed by FINRA or federal regulators. Vernon Healy claims have alleged that UBS fraudulently misrepresented Lehman principal protected notes not only to its brokerage firm clients but also to some of its own financial advisors, who continued to sell Lehman principal protected notes as safe investments to investors well after UBS knew Lehman was in financial trouble. A second distribution in the Lehman Brothers bankruptcy is scheduled for Sept. 30, 2012 and a third distribution is scheduled for March 30, 2013 with semi-annual distribution thereafter. The Lehman Brothers bankruptcy in September 2008 is the biggest bankruptcy in U.S. history, and it touched off the world financial crisis and most significant economic recession since the Great Depression. Former CEO Bryan Marsal, who ran Lehman during the bankruptcy, painted a bleak picture for creditors when he told Bloomberg Businessweek that the firm will continue selling assets through 2014 as it tries to raise a total of $65 billion to pay estimated claims of $370 billion. Bloomberg Businessweek also noted that Enron investors were paid 53 cents on the dollar while average Lehman creditors will receive only an estimated 18 cents on the dollar. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LEVI STRAUSS: Has $385MM Purchase Agreement with Merrill Lynch -------------------------------------------------------------- Levi Strauss & Co. entered into a purchase agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated to sell $385.0 million aggregate principal amount 6 7/8% Senior Notes due 2022 of the Company in accordance with a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933. A copy of the Purchase Agreement is available at http://is.gd/XYkp4s About Levi Strauss & Co. Headquartered in San Francisco, California, Levi Strauss & Co. -- http://www.levistrauss.com/-- is one of the world's leading branded apparel companies. The Company designs and markets jeans, casual and dress pants, tops, jackets and related accessories, for men, women and children under the Levi's(R), Dockers(R) and Signature by Levi Strauss & Co.(TM). The Company markets its products in three geographic regions: Americas, Europe, and Asia Pacific. The Company's balance sheet at Feb. 26, 2012, showed $3.21 billion in total assets, $3.30 billion in total liabilities, $6.20 million in temporary equity, and a $96.49 million total stockholders' deficit. * * * In April 2012, Standard & Poor's Ratings Services assigned its 'B+' rating (same as the corporate credit rating) to San Francisco-based Levi Strauss & Co.'s proposed $350 million senior unsecured notes due 2022. "The ratings on Levi Strauss reflect our view that the company's financial profile continues to be 'aggressive,' particularly since the company's balance sheet remains highly leveraged and we expect cash flow protections measures to continue to be weak. In addition, we continue to consider Levi Strauss' business risk profile to be 'weak,' given its continuing participation in the highly competitive denim and casual pants market, which is subject to fashion risk and still-weak consumer spending, and our expectation that the company's business focus will remain narrow. We believe the company benefits from its strong, well-recognized Levi's brand, long operating history, and distribution channel diversity (both by retail customer and geography)," S&P said. In April 2012, Moody's Investors Service affirmed Levi Strauss & Co ("LS&Co) B1 Corporate Family and Probability of Default Ratings. Moody's also assigned a B2 rating to the company's proposed $350 million senior unsecured notes due 2022 and affirmed the B2 ratings of the company's other series of unsecured debt. Levi Strauss' B1 Corporate Family Rating reflects the company's negative trends in operating margins reflecting inconsistent execution as well as input cost pressures. The ratings also reflect the company's still significant debt burden, which has been increasing due to the company's continued investment in its own retail stores and its sizable underfunded pension. Debt/EBITDA (incorporating Moody's standard analytical adjustments) was 5.1 times for the LTM period ending 2/26/2012. The rating take into consideration the company's significant global scale, with revenues near $5 billion, its operations in over 110 countries and the ownership of the iconic Levi's trademark. LIGHTSQUARED INC: Some Lenders Want Falcone to Step Aside --------------------------------------------------------- Mike Spector and Greg Bensinger at Dow Jones' Daily Bankruptcy Review report that some of LightSquared Inc.'s lenders want hedge- fund manager Philip Falcone to step aside as the public face of the wireless-communications firm as a condition for avoiding a looming debt default this week, said people familiar with the matter. About LightSquared Inc. LightSquared Inc. -- http://www.lightsquared.com/-- is a company that plans to develop a wholesale 4G LTE wireless broadband communications network integrated with satellite coverage across the United States. But the plan hit a roadblock when the U.S. military and others complained that the planned service would disrupt global positioning system equipment. Phillip Falcone's Harbinger Capital Partners owns roughly a 96% equity stake in LightSquared. LightSquared is facing an April 30 deadline to renegotiate the terms of the loan in order to head off a potential default that would spur a bankruptcy filing. Reuters notes LightSquared's recently filed financial statements indicate the balance sheet has about $282 million in cash and short-term investments against $1.85 billion in liabilities. The financial statement lists about $453 million in debt payments due by the end of 2012. LightSquared has said there is "substantial doubt about our ability to continue as a going concern." Potential Bankruptcy Filing In early April 2012, Phil Falcone said he is considering seeking bankruptcy protection for LightSquared Inc. A bankruptcy filing is "one of the options I am considering," the hedge fund manager said in an e-mail to Dow Jones, saying it's the "best way" for him to maintain control of the company. "Spectrum value does not decrease in bankruptcy," he said. LODGENET INTERACTIVE: Incurs $2.1-Mil. Net Loss in First Quarter ---------------------------------------------------------------- LodgeNet Interactive Corporation reported a net loss of $2.09 million on $94.69 million of total revenues for the three months ended March 31, 2012, compared with a net loss of $908,000 on $107.73 million of total revenues for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $388.41 million in total assets, $442.16 million in total liabilities and a $53.75 million total stockholders' deficiency. "During the quarter, we made continued progress on our strategic initiatives to diversify our revenues and expand our business opportunities," said LodgeNet Chairman and CEO Scott C. Petersen. "While these efforts are making positive contributions, overall revenue decreased 12% as Hospitality revenue per room was down 1.5% across a room base that was 12% smaller than one year ago. On a per-room basis, we did see continued double digit revenue growth of 10.8% from our revenue diversification initiatives, but Guest Entertainment revenue continued to be challenged and was off 11.3% in the quarter. We have been and will continue to actively evaluate all aspects of this business to bolster its performance, including the implementation of new content formats, promotional and marketing campaigns and other strategic initiatives. On the other hand, hotel adoption of Envision, our new cloud-connected interactive television system, continues to accelerate. This is driving the conversion of our room base to our higher-revenue, high-definition platform and is creating new subscription-based revenues for our Company. Our "four screen" services strategy greatly expanded during the quarter with the successful launch of the LodgeNet Mobile App in January. With the growing portfolio of apps and services, we are seeing increased usage by both hotel guests and operators. As we continue to expand our business beyond its Guest Entertainment heritage, we are becoming essential business partners with hoteliers and more relevant to the travelers we serve." A copy of the press release is available for free at: http://is.gd/Nh9mEC About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET), formerly LodgeNet Entertainment Corp. -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. The Company reported a net loss of $631,000 in 2011, a net loss of $11.68 million in 2010, and a net loss of $10.15 million in 2009. * * * Lodgenet carries a 'B3' long term corporate family rating and a 'Caa1' probability of default rating, with 'stable' outlook, from Moody's. It has 'B' long term foreign and local issuer credit ratings, with 'stable' outlook, from Standard & Poor's. "In Moody's opinion, continued cautious investment from LodgeNet's hotel customers will hamper intermediate term growth in its core hospitality services business, and over the long term competing forms of entertainment will pressure this revenue stream as the company seeks to defend its relevance to both hotel operators and hotel guests. The B3 corporate family rating incorporates these weak growth prospects, mitigated somewhat by the company's moderately high financial risk profile and demonstrated capacity to generate positive free cash flow throughout challenging economic conditions, along with a measure of stability from the monthly fees it receives from hotels regardless of occupancy," Moody's said in October 2010. LODGENET INTERACTIVE: Mast Capital Discloses 7.8% Equity Stake -------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Mast Capital Management, LLC, and its affiliates disclosed that, as of April 26, 2012, they beneficially own 1,983,121 shares of common stock of LodgeNet Interactive Corporation representing 7.8% of the shares outstanding. Mast Capital previously reported beneficial ownership of 2,425,915 common shares or a 9.6% equity stake as of Jan. 5, 2012. A copy of the amended filing is available for free at http://is.gd/tV1Y0D About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET), formerly LodgeNet Entertainment Corp. -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. The Company reported a net loss of $631,000 in 2011, a net loss of $11.68 million in 2010, and a net loss of $10.15 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $408.67 million in total assets, $459.61 million in total liabilities and a $50.94 million total stockholders' deficit. * * * Lodgenet carries a 'B3' long term corporate family rating and a 'Caa1' probability of default rating, with 'stable' outlook, from Moody's. It has 'B' long term foreign and local issuer credit ratings, with 'stable' outlook, from Standard & Poor's. "In Moody's opinion, continued cautious investment from LodgeNet's hotel customers will hamper intermediate term growth in its core hospitality services business, and over the long term competing forms of entertainment will pressure this revenue stream as the company seeks to defend its relevance to both hotel operators and hotel guests. The B3 corporate family rating incorporates these weak growth prospects, mitigated somewhat by the company's moderately high financial risk profile and demonstrated capacity to generate positive free cash flow throughout challenging economic conditions, along with a measure of stability from the monthly fees it receives from hotels regardless of occupancy," Moody's said in October 2010. LOUISVILLE ORCHESTRA: Musicians Reach New Deal With Management -------------------------------------------------------------- Elizabeth Kramer at the Courier-Journal reports that leaders for the Louisville Orchestra Musicians Association said the group had ratified an agreement for a new contract with the orchestra management -- potentially ending a months-long impasse. The agreement calls for a one-year contract covering 57 musicians for 30 weeks with a base salary level of $925 per week, including medical and pension benefits. It also calls for a binding arbitration process involving a mutually agreed-upon orchestra professional to work with both sides to establish a longer-term contract, according to the report. The report notes that, under the agreement, Kim Tichenor, a violinist with the orchestra and the players' negotiating committee chair, said the musicians would be giving up their vacation and sick days for the year. She estimated that adds up to several thousand days total. The report relates the orchestra management and its musicians had been unable to agree to contract terms during several rounds of negotiations since the musicians' last contract expired on May 31, 2012. About Louisville Orchestra Based in Louisville, Kentucky, Louisville Orchestra, Inc. filed for Chapter 11 bankruptcy protection (Bankr. W.D. Ky. Case No. 10-36321) on Dec. 3, 2010. Judge David T. Stosberg presides over the case. Daniel T. Albers, Jr., Esq., Mark A. Robinson, Esq., and Robert Wagner, Esq., at Valenti Hanley & Robinson PLLC, represent the Debtor. In its schedules, Louisville Orchestra disclosed it had $412,000 in assets and $1.4 million in liabilities. The Louisville Symphony Orchestra won confirmation of its Chapter 11 plan on Aug. 17, 2011. The reorganization plan resulted from negotiations with JPMorgan Chase Bank NA and Fifth Third Bank, the two principal secured lenders. The non-profit symphony was founded in 1937 and filed for Chapter 11 relief last December in its hometown. In August, the Debtor announced the cancellation of concerts scheduled for September and October 2011. The symphony said that the musicians' union threatened to fine members who worked so long as there is no new contract. The symphony said it was offering musicians $925 a week plus benefits, the same as last season's wages. MAUI LAND: Six Directors Elected at Annual Meeting -------------------------------------------------- Maui Land & Pineapple Company, Inc., held its 2012 annual meeting of shareholders on April 23, 2012. Proxies for the Annual Meeting were solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934. The number of shares of the Company's common stock that were outstanding as of March 7, 2012, which was the record date for the Annual Meeting, was approximately 18,801,754. At the Annual Meeting, shareholders elected Stephen M. Case, Warren H. Haruki, David A. Heenan, Kent T. Lucien, Duncan MacNaughton, and Arthur C. Tokin to the Company's Board of Directors. The shareholders also ratified the appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm for fiscal year 2012. About Maui Land & Pineapple Co. Maui Land & Pineapple Company, Inc. (NYSE: MLP) -- http://mauiland.com/-- develops, sells, and manages residential, resort, commercial, and industrial real estate. The Company owns approximately 23,000 acres of land on Maui and operates retail, utility operations, and a nature preserve at the Kapalua Resort. The Company's principal subsidiary is Kapalua Land Company, Ltd., the operator and developer of Kapalua Resort, a master-planned community in West Maui. The Company's balance sheet at Dec. 31, 2011, showed $64.07 million in total assets, $90.32 million in total liabilities, and a $26.25 million stockholders' deficiency. Following the financial results for the year ended Dec. 31, 2011, the Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. Deloitte & Touche LLP, in Honolulu, Hawaii, noted that the Company's recurring negative cash flows from operations and deficiency in stockholders' equity raise substantial doubt about the Company's ability to continue as a going concern. MCCLATCHY CO: Incurs $2.1 Million Net Loss in First Quarter ----------------------------------------------------------- The McClatchy Company reported a net loss of $2.08 million on $288.30 million of revenue for the three months ended March 25, 2012, compared with a net loss of $1.96 million on $303.73 million of revenue for the three months ended March 27, 2011. Commenting on McClatchy's first quarter results, Gary Pruitt said, "We were pleased to see the advertising revenue trend improving throughout the quarter. Advertising revenues were down 7.9% in January, 6.8% in February and 5.6% in March. For the full quarter advertising revenues were down 6.8%. Excluding one-time advertising related to the 2011 Super Bowl included in our Fort Worth newspaper's results, first quarter 2012 advertising revenues were down an estimated 6.3%." Pat Talamantes, McClatchy's CFO and in-coming president and CEO, said, "We were pleased with the debt reduction progress considering that we also made seasonally large bond interest payments and used $40 million of cash to fund near-term required pension contributions in the quarter. We reduced debt by $35.5 million in the first quarter to $1.599 billion and finished the quarter with a cash balance of $24.4 million. Our nearest term maturity in Nov. 2014 is only about $81 million - not an issue given our free cash flow. Our leverage ratio at the end of the first quarter as defined in our credit agreement was 4.56 times cash flow and our interest coverage was 2.26 times." McClatchy announced that Gary Pruitt, chairman, president and chief executive officer of McClatchy, will leave the company May 16, 2012, to become president and chief executive officer of The Associated Press. A copy of the press release is available for free at: http://is.gd/4jUW1s About The McClatchy Company Sacramento, Calif.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The Company's balance sheet at Dec. 25, 2011, showed $3.04 billion in total assets, $2.86 billion in total liabilities and $175.18 million in stockholders' equity. * * * McClatchy carries a 'Caa1' corporate family rating from Moody's Investors Service. In May 2011, Moody's changed the rating outlook from stable to positive following the company's announcement that it closed on the sale of land in Miami for $236 million. The outlook change reflects Moody's expectation that McClatchy will utilize the net proceeds to reduce debt, including its underfunded pension position, which will reduce leverage by approximately half a turn and lower required contributions to the pension plan over the next few years. MECHEL OAO: Gets OK on Waivers and Amendments to Credit Facilities ------------------------------------------------------------------ Mechel OAO disclosed completion of talks with lenders resulting in waivers and amendments to certain major credit facilities. On March 29, 2012, Mechel entered talks with over 25 leading international and Russian banks regarding some financial covenants the company expected to breach due to uncertain market conditions and a period of decline in market prices for its products. These talks were successfully completed on April 26, 2012, as lenders confirmed their agreement to waivers on a number of credit facilities and including a significant structural change to financial covenants. These changes to the financial parameters will increase the company's financial and operational flexibility, even in the event that price volatility on key markets increases. "Gaining approval from more than 25 leading international and Russian banks within such a limited time frame is proof of their trust in Mechel as a quality and reliable borrower as well as their confidence in our company's strategic choices. The new levels of covenants will enable us to continue our operational and investment activity regardless of volatility on the global financial and commodity markets. At the same time, one of our main priorities is systematic deleveraging as a whole and reduction of short-term debt in particular," Mechel OAO's Chief Financial Officer Stanislav Ploschenko noted. Mechel is one of the leading Russian companies. Its business includes four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, nickel, ferrochrome, ferrosilicon, steel, rolled products, hardware, heat and electric power. Mechel products are marketed domestically and internationally. About Mechel OAO Mechel OAO is a Russia-based integrated mining and steel company. The Company focuses on the production of mining products, such as coal, iron ore, nickel, and steel products. Its operations are divided into two segments: Mining and Steel. The Mining segment focuses on the production and sales of coking coal concentrate, iron ore concentrate and coke with assets in Russia and the United States. The Steel segment comprises production and sale of semi-finished steel products, carbon and specialty long products, stainless flat products, and value-added downstream metal products, including hardware and stampings. The Company has production facilities in 13 of Russia's regions, as well as the United States, Kazakhstan, Romania, Lithuania and Bulgaria. Additionally, Mechel OAO owns two trade ports and a railway company. In 2011, the Company completed the acquisition of a 100% stake in Rostvoskiy elektrometallurgicheskiy zavod (REMZ). MOMENTIVE PERFORMANCE: Expects to Record $595-Mil. Sales in Q1 -------------------------------------------------------------- Momentive Performance Materials Inc. announced preliminary results for the first quarter ended March 31, 2012. Momentive Performance expects to record sales of approximately $595 million, an operating loss of $(11) million to $(1) million and Combined Adjusted EBITDA, excluding the impact of pro forma cost savings from the shared services agreement, of $48 million to $58 million in the first quarter of 2012. The Company recorded sales of $660 million, operating income of $73 million and Combined Adjusted EBITDA, excluding the impact of pro forma cost savings from the shared services agreement, of $120 million in the first quarter of 2011. Combined Adjusted EBITDA is a non-GAAP financial measure and is defined and reconciled to operating income later in this release. Momentive Performance Materials estimates that its total debt was approximately $3.0 billion at March 31, 2012, versus $2.9 billion at Dec. 31, 2011, and that it had approximately $120 million of cash and cash equivalents at the end of the first quarter of 2012. The Company also estimates that it had liquidity of approximately $380 million as of March 31, 2012, which is comprised of cash plus available borrowings under its revolving credit facility. Momentive Performance Materials expects to be in compliance with all of the terms of its outstanding indebtedness, including financial covenants, at March 31, 2012. "Our results continue to reflect challenging market conditions, which negatively impacted our volume and product mix, as well as lower demand in China and the Asia Pacific region," said Craig O. Morrison, Chairman, President and CEO. "Soft semiconductor demand also continued to hamper our quartz results. While the first quarter of 2012 trailed the prior year period, we continued to see sequential improvement in our average daily order rate for our silicone products through March 2012 versus year-end 2011 levels." "We continue to focus on actions designed to maximize cash flow and benefit from strong liquidity and a long-dated capital structure. We were also pleased to successfully refinance portions of our capital structure in the first quarter of 2012." Momentive Performance Materials will issue a more detailed press release regarding its first quarter 2012 results, and will file its Form 10-Q for the period ended March 31, 2012, in early May, with an accompanying investor conference call to follow shortly thereafter. A copy of the press release is available for free at: http://is.gd/9VxNCy About Momentive Performance Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. The Company had a net loss of $140 million on $2.63 billion of net sales in 2011, following a net loss of $63 million on $2.58 billion of net sales in 2010. Net loss in 2009 was $42 million. The Company's balance sheet at Dec. 31, 2011, showed $3.16 billion in total assets, $3.90 billion in total liabilities and a $736 million total deficit. * * * Momentive carries a 'B3' corporate family and probability of default ratings from Moody's Investors Service. "The impact of softening demand and high raw material prices has disrupted the trajectory of improving fundamentals, and will result in an acceleration of cost reduction activities," stated John Rogers, Senior Vice President at Moody's, in November 2011, when Moody's affirmed the ratings. Moody's said, the B3 CFR continues to be constrained by MPM's elevated leverage and weak credit metrics, which outweigh its strong business profile and improved maturity schedule. As a result of the softening demand and high raw materials prices, the 2011 operating performance will underperform that of 2010 and will challenge credit metrics more than previously expected. MPM's good liquidity is supported by the company's cash balance of $250 million and the expectation for positive free cash flow generation over the next four quarters. Maturities of long term debt will become a greater concern by the end of 2012; maturities are $215 million in 2013, $300 million in 2014, and $840 million in 2015. MOMENTIVE SPECIALTY: Expects to Report $1.2 Billion Sales in Q1 --------------------------------------------------------------- Momentive Specialty Chemicals Inc. announced preliminary results for the first quarter ended March 31, 2012. The Company expects to record sales of approximately $1.2 billion, operating income of $41 million to $51 million and Segment EBITDA of $145 million to $155 million in the first quarter of 2012. The Company recorded revenues of $1.3 billion, operating income of $119 million and Segment EBITDA of $178 million in the first quarter of 2011. Segment EBITDA is a non-GAAP financial measure and is defined and reconciled to operating income later in this release. Momentive Specialty Chemicals estimates that its total non- affiliated debt was approximately $3.5 billion at March 31, 2012, compared to $3.5 billion at Dec. 31, 2011. In addition, the Company had approximately $400 million of cash and cash equivalents at the end of the first quarter of 2012. Momentive Specialty Chemicals also estimates that it had liquidity of approximately $670 million as of March 31, 2012, which is comprised of cash plus available borrowings under its credit facilities. The Company expects to be in compliance with all of the terms of its outstanding indebtedness, including the financial covenants, at the end of the first quarter of 2012. "As anticipated, first quarter 2012 results reflected volatile market conditions in certain end markets and the impact of negative product mix due to lower volumes for some of our specialty products compared to the prior year," said Craig O. Morrison, Chairman, President and CEO. "While we experienced softer results in the first quarter of 2012 compared to the prior year, we were pleased with our strong sequential quarterly improvement in volumes and Segment EBITDA compared to the fourth quarter of 2011. "With strong liquidity and a disciplined approach to managing market volatility, we believe we are well-positioned for the long- term," Morrison said. "We continue to focus on actions designed to maximize cash flow and benefit from our long-dated capital structure. We were also pleased to successfully refinance portions of our capital structure in the first quarter of 2012." Momentive Specialty Chemicals will issue a more detailed press release regarding its first quarter 2012 results, and will file its Form 10-Q for the period ended March 31, 2012, in early May, with an accompanying investor conference call to follow shortly thereafter. About Momentive Specialty Momentive Specialty Chemicals, Inc., headquartered in Columbus, Ohio, is a leading producer of thermoset resins (epoxy, formaldehyde and acrylic). The company is also a supplier of specialty resins for inks and specialty coatings sold to a diverse customer base as well as a producer of commodities such as formaldehyde, bisphenol A, epichlorohydrin, versatic acid and related derivatives. Momentive Specialty reported net income of $118 million on $5.20 billion of net sales in 2011, compared with net income of $214 million on $4.59 billion of net sales in 2010. The Company's balance sheet at Dec. 31, 2011, showed $3.11 billion in total assets, $4.87 billion in total liabilities and a $1.76 billion total deficit. * * * Momentive Specialty carries a 'B-' issuer credit rating from Standard & Poor's Ratings Services. It has 'B3' corporate family and probability of default ratings from Moody's Investors Service. corporate credit rating from Standard & Poor's. As reported in the Oct. 27, 2010 edition of TCR, Moody's Investors Service assigned a 'Caa1' rating to the guaranteed senior secured second lien notes due 2020 of Momentive Specialty (formerly known as Hexion Specialty Chemicals Inc.). Proceeds from the notes were allocated for the repayment of $533 million of guaranteed senior secured second lien notes due 2014. "With this refinancing Hexion will have refinanced or extended the maturities on the vast majority of the debt that was originally slated to mature prior to 2015. There is less than $600 million of this debt remaining, which should be much easier to for the company to refinance as its credit metrics improve further," stated John Rogers, Senior Vice President at Moody's. MONEYGRAM INT'L: Reports $10.3-Mil. Net Income in First Quarter --------------------------------------------------------------- MoneyGram International, Inc., reported net income of $10.27 million on $318.09 million of total revenue for the three months ended March 31, 2012, compared with net income of $14.04 million on $294.02 million of total revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $5.13 billion in total assets, $5.22 billion in total liabilities, and a $92.48 million total stockholders' deficit. "The year is off to a strong start. We generated double-digit growth in all major money transfer categories thanks to a steady stream of new, high-quality agents, solid same-store sales improvements and the continued expansion of our self-service products. We are particularly encouraged by the ongoing improvement in our bill payment business," said Pamela H. Patsley, chairman and chief executive officer. "Our revenue growth and disciplined expense management is yielding margin expansion, and we continue to generate strong free cash flow. We are focused on value-creating initiatives and are excited about the prospects for our future." MoneyGram ended the quarter with assets in excess of payment service obligations of $223.6 million, and outstanding debt principal of $814.3 million. Interest expense was $17.9 million in the quarter, down $2.6 million sequentially as a result of refinancing activities and continued delevering in 2011. Book income tax expense in the quarter was $7.8 million, with approximately $0.1 million in cash tax expenses. Free cash flow for the quarter was $28.2 million driven by strong revenue growth and lower interest expense. A copy of the press release is available for free at: http://is.gd/MgHJt7 About MoneyGram International MoneyGram International, Inc. (NYSE: MGI) -- http://www.moneygram.com/-- is a leading global payment services company. The Company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram is a New York Stock Exchange listed company with 203,000 global money transfer agent locations in 191 countries and territories. MoneyGram reported net income of $59.40 million on $1.24 billion of total revenue for the year ended Dec. 31, 2011, compared with net income of $43.80 million on $1.16 billion of total revenue during the prior year. Moody's said in a summary credit opinion issued in March 2012 that MoneyGram's B1 corporate family rating reflects the company's strong market position in its core money transfer business and Moody's view of the favorable long-term characteristics of the worldwide money transfer industry. MoneyGram's money transfer business has shown resiliency during economic cycles. Despite the fallout and distractions caused by the portfolio investment losses several years ago, the company has managed to produce consistent cash flows and operating profitability. * * * This concludes the Troubled Company Reporter's coverage of MoneyGram until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. MONTANA ELECTRIC: Yellowstone's Bid to Resume Lawsuit Set Aside --------------------------------------------------------------- Richard Ecke at greatfallstribune.com reports Bankruptcy Judge Ralph B. Kirscher on Tuesday took under advisement a request by Yellowstone Valley Electric to resume its lawsuit against Southern Montana Electric Generation & Transmission Cooperative, which was halted by the bankruptcy filing. The co-op argued that it should be able to resume the trial in its quest to leave Southern Montana for good. The report relates Lee Freeman, the Chapter 11 Trustee, argued against allowing Yellowstone Valley, which buys more than one- third of Southern Montana's power, to pursue legal issues in state court. Mr. Freeman and his attorney, John Parks, Esq., have urged co-op members to be patient while the trustee whips up a plan to keep Southern Montana going for the long term. Southern Montana has six members, including five rural electric co-ops -- Yellowstone Valley, Tongue River, Beartooth, Fergus and Mid-Yellowstone -- and the city of Great Falls' electric utility arm, Electric City Power. Half of Southern Montana's members still want to leave the umbrella cooperative, even though an independent trustee is now running it. The report notes Great Falls City Commissioner Bob Jones said Yellowstone Valley wanted out of Southern Montana first because it opposed construction of a proposed coal-fired power plant. The report also recounts the Beartooth co-op filed a motion earlier this month to have its contract with Southern Montana invalidated by Judge Kirscher, based, in part, on regulation of some of its customers by the Wyoming Public Service Commission. Great Falls wants out in part because the coal plant was never built, Mr. Jones added. Instead, Southern Montana built a natural gas-powered plant east of the city. The plant's first 40-megawatt phase is completed, but the plant rarely runs amid a glut of power in the Pacific Northwest. About Southern Montana Electric Based in Billings, Montana, Southern Montana Electric Generation and Transmission Cooperative, Inc., was formed to serve five other electric cooperatives. The city of Great Falls later joined as the sixth member. Including the city, the co-op serves a population of 122,000. In addition to Great Falls, the service area includes suburbs of Billings, Montana. Southern Montana filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana estimated assets of $100 million to $500 million and estimated debts of $100 million to $500 million. Timothy Gregori signed the petition as general manager. Jon E. Doak, Esq., at Doak & Associates, P.C., in Billings, Montana, serves as the Debtor's counsel. In December 2011, Southern Montana also sought permission to employ the Goodrich Law Firm, P.C., as general co-counsel. Also in December, Lee A. Freeman was appointed as Chapter 11 trustee. Mr. Freeman retained Horowitz & Burnett, P.C., as his counsel and Waller & Womack, P.C., as local counsel. The United States Trustee for Region 18 has appointed an Official Committee of Unsecured Creditors in the case. After filing for reorganization in October, the co-op agreed to a request for appointment of a Chapter 11 trustee. Lee A. Freeman was appointed as the Chapter 11 trustee and he is represented by Joseph V. Womack, Esq., at Waller & Womack, and John Cardinal Parks, Esq., Bart B. Burnett, Esq., Robert M. Horowitz, Esq., and Kevin S. Neiman, Esq., at Horowitz & Burnett, P.C. MOOD MEDIA: Moody's Affirms 'B2' CFR; Outlook Positive ------------------------------------------------------ Moody's Investors Service changed Mood Media Corporation's ratings outlook to positive from stable and also upgraded the company's speculative grade liquidity rating to SGL-2 (good) from SGL-3 (adequate). At the same time, the company's B2 corporate family and B3 probability of default ratings were affirmed, as was the Ba3 rating assigned to Mood Media's senior secured credit facility and the Caa1 rating assigned to the company's second lien credit facility. Mood Media recently acquired DMX Holdings, Inc. (DMX), a United States-based provider of subscription services using primarily music and audio (but with growing use of video, digital signage, messaging, scent, and audio/visual systems) to assist with defining a business or its customers' experience. These so-called "multi-sensor branding services" are Mood Media's core activity. Mood Media issued C$114.5 million in common equity to acquire DMX's equity and retire its net debt (respectively, for US$53.8 million and US$30.8 million). With the issued equity purchasing US$16.5 million of trailing EBITDA, the transaction provides modest de-leveraging albeit at the cost of modest margin dilution. The transaction also results in an estimated C$30 million in excess proceeds augmenting cash, improves free cash flow and expands financial covenant compliance cushions. These three factors allowed Mood Media's SGL rating to be upgraded to SGL-2 from SGL-3. The DMX transaction follows last year's US$345 million acquisition (inclusive of net debt) of Muzak Holdings LLC (Muzak), another United States-based provider of subscription --based "multi- sensory branding services". The combination of the three companies should allow for meaningful synergies, EBITDA growth and de- leveraging. When combined with low capital intensity and resulting strong free cash flow that can accelerate de-leveraging, together with the above-noted improved liquidity, the outlook was revised to positive from stable. The following summarizes the rating actions and Mood Media's ratings: Issuer: Mood Media Corporation Outlook: Changed to Positive from Stable Corporate Family Rating: Unchanged at B2 Probability of Default Rating: Unchanged at B3 Speculative Grade Liquidity Rating: Changed to SGL-2 from SGL-3 Senior Secured Credit Facility: Unchanged at Ba3 with the LGD Assessment revised to (LGD2, 16%) from (LGD2, 19%) Second Lien Credit Facility: Unchanged at Caa1 with the LGD assessment revised to (LGD4, 55%) from (LGD4, 64%) Ratings Rationale Mood Media's B2 CFR is influenced primarily by elevated leverage and low coverage measures that result from the company's 2011 acquisition of Muzak. The measures are modestly improved with the recent equity-funded acquisition of DMX. Along with execution risks related to the business integrations, Mood Media's limited operating history and entrepreneurial management team provide uncertainty that leverage and coverage will improve over time. There are also risks that new competitors or alternative delivery mechanisms could disrupt Mood Media's plans to expand its music and audio based branding services. The rating assessment draws support from Mood Media's leading position as a branding services company, its royalty-free music library, broad customer diversification, low capital intensity and reasonable growth prospects. The company's liquidity profile is also a positive feature in the ratings assessment. Rating Outlook The potential for de-leveraging via both EBITDA growth and the application of free cash flow towards debt reduction allow the outlook to be positive. What Could Change the Rating - Up Should the business model stabilize and should free cash flow be used to repay debt, positive outlook and ratings actions would be considered if Moody's expected the Debt/EBITDA to be sustained below 3.5x with FCF/Debt of no worse than 7.5%. What Could Change the Rating - Down Should the company encounter integration setbacks, should liquidity deteriorate materially, or should a debt-financed acquisition transpire, downwards rating pressure would result. As well, were Debt/EBITDA to increase beyond 5.0x, adverse outlook and ratings pressure would result. Mood Media's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Mood Media's core industry and believes Mood Media's ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. MOUNTAIN PROPERTY: Case Summary & 4 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Mountain Property Development, Inc. 201 Los Gatos-Saratoga Road, No. 142 Los Gatos, CA 95030 Bankruptcy Case No.: 12-53090 Chapter 11 Petition Date: April 24, 2012 Court: U.S. Bankruptcy Court Northern District of California (San Jose) Judge: Charles Novack Debtor's Counsel: Terrell S. Root, Esq. LAW OFFICES OF JAMES M. SULLIVAN 225 N. Santa Cruz Avenue Los Gatos, CA 95030 Tel: (408) 395-3837 E-mail: tracy@jsullinc.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Robert Comes, president. Debtor's list of its four largest unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gibraltar SSI, LLC Bank Loan $11,600,000 250 Gibraltar Road Horsham, PA 19044 Park Capital, LLC Bank Loan $11,600,000 14425 Springer Avenue Saratoga, CA 95070 Vectra Bank Bank Loan $11,600,000 2000 S. Colorado Boulevard, #2-1200 Denver, CO 80222 California Bank & Trust Bank Loan $11,600,000 11622 El Camino Real, Suite 200 San Diego, CA 92130 MOUNTAIN PROVINCE: Shareholders OK Kennady Diamonds Spin-Out ------------------------------------------------------------ Mountain Province Diamonds Inc.'s shareholders have voted 99.5% in favor of the proposed spin-out of Kennady Diamonds Inc. at a special meeting of shareholders held on April 25, 2012. The spin-out will be completed through a plan of arrangement and remains subject to final court and regulatory approval. An application has been submitted to the TSX Venture Exchange for the listing of the common shares of Kennady Diamonds under the trading symbol KDI following the completion of the plan of arrangement. Mountain Province anticipates receiving final court approval during the first week of May, 2012. Subject to final court and regulatory approval, Mountain Province expects the shares of Kennady Diamonds to commence trading prior to the end of May, 2012. Under the plan of arrangement, 100% of the Company's Kennady North Project will be transferred to Kennady Diamonds together with working capital in the amount of C$3 million. Mountain Province intends distributing 100% of the shares of Kennady Diamonds to Mountain Province shareholders on the basis of one Kennady Diamonds share for every five shares of Mountain Province held by shareholders as of the effective date, which will be set following receipt of final court and regulatory approval. Mountain Province will shortly provide further guidance on the effective date of the plan of arrangement. The Kennady North project comprises thirteen leases and claims located to the west and north of the four leases controlled by the Gahcho Kue Joint Venture between De Beers Canada Inc. (51%) and Mountain Province (49%). Exploration at Kennady North commenced in the late 1990's and resulted in the discovery of the diamondiferous Kelvin, Faraday and Hobbes kimberlites. The number of diamonds recovered from these kimberlites and the size-frequency distribution indicate that they may be of comparable grade to the 5034 (1.77 carats per tonne) and Hearne (2.10 carats per tonne) kimberlites at the Gahcho Ku� JV. Exploration samples from Kelvin and Faraday returned a relatively large number of macro diamonds with the two largest being a 0.4 carat diamond from Faraday and a 0.09 carat diamond from Kelvin. Exploration at Kennady North recommenced during 2011 with a 50- meter line-spacing airborne gravity gradiometry (AGG) survey over the entire 123.6 square kilometer project area. The survey identified 106 geophysical targets. The Company has also completed a 560-line-kilometre total magnetic field (MAG) ground survey over the 106 geophysical targets identified by the AGG survey. The high priority targets identified through the AGG and MAG surveys will be scheduled for drilling as soon as a land use permit is obtained. About Mountain Province Headquartered in Toronto, Canada, Mountain Province Diamonds Inc. (TSX: MPV, NYSE AMEX: MDM) -- http://www.mountainprovince.com/-- is a Canadian resource company in the process of permitting and developing a diamond deposit (the "Gahcho Kue Project" located in the Northwest Territories of Canada. The Company's primary asset is its 49% interest in the Gahcho Kue Project. Mountain Province reported a net loss of C$11.53 million in 2011, compared with a net loss of C$14.53 million in 2010. The Company' balance sheet at Dec. 31, 2011, showed C$66.55 million in total assets, C$9.42 million in total liabilities and C$57.13 million in total shareholders' equity. For the year ended Dec. 31, 2011, KPMG LLP, in Toronto, Canada, noted that the Company has incurred a net loss in 2011 and expects to require additional capital resources to meet planned expenditures in 2012 that raise substantial doubt about the Company's ability to continue as a going concern. MUSCLEPHARM CORP: Board OKs 100-Mil. Shares Repurchase Program -------------------------------------------------------------- MusclePharm Corporation's board of directors has authorized a stock repurchase program of up to 100 million shares of MusclePharm common stock in open market transactions. vFinance Investments, Inc., a subsidiary of National Holdings Corporation, has been appointed to purchase, on the company's behalf, shares of MusclePharm common stock in compliance with the provisions of Rule 10b5-1 and 10b-18 under the Securities Exchange Act of 1934. "The repurchase program reflects the board's optimism and confidence in the future of our company and the belief that at current prices MusclePharm shares represent an attractive long term investment for the company and its shareholders," said John H. Bluher, chief operating officer and executive vice president of MusclePharm. The repurchase program, approved by the Company's Board at a April 18, 2012, Board of Directors meeting, expires at the earlier of the close of trading on Dec. 31, 2012, the purchases reach 100 million shares or the company gives notice of termination to vFinance Investments, Inc. About MusclePharm Headquartered in Denver, Colorado, MusclePharm Corporation (OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life- style company that develops and manufactures a full line of National Science Foundation approved nutritional supplements that are 100% free of banned substances. MusclePharm is sold in over 120 countries and available in over 5,000 U.S. retail outlets, including GNC and Vitamin Shoppe. MusclePharm products are also sold in over 100 online stores, including bodybuilding.com, Amazon.com and Vitacost.com. The Company reported a net loss of $23.28 million in 2011, compared with a net loss of $19.56 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $5.04 million in total assets, $18.01 million in total liabilities, and a $12.97 million total stockholders' deficit. For the year ended Dec. 31, 2011, Berman & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a net loss of $23,280,950 and net cash used in operations of $5,801,761 for the year ended Dec. 31, 2011; and has a working capital deficit of $13,693,267, and a stockholders' deficit of $12,971,212 at Dec. 31, 2011. NASDAQ OMX: Moody's Issues Summary Credit Opinion ------------------------------------------------- Moody's Investors Service issued a summary credit opinion on NASDAQ OMX Group, Inc. The release includes certain regulatory disclosures regarding its ratings. It does not constitute any change in Moody's ratings or rating rationale for NASDAQ OMX Group, Inc. (The). Moody's current ratings on NASDAQ OMX Group, Inc. (The) are: Long Term Issuer (domestic currency) rating of Baa3 Senior Secured Bank Credit Facility (domestic currency) ratings of Baa3 Senior Unsecured (domestic currency) ratings of Baa3 Senior Secured Shelf (domestic currency) ratings of (P)Baa3 Senior Unsecured Shelf (domestic currency) ratings of (P)Baa3 Subordinate Shelf (domestic currency) ratings of (P)Ba1 Junior Subordinate Shelf (domestic currency) ratings of (P)Ba1 Preferred Shelf (domestic currency) ratings of (P)Ba2 Rating Rationale The NASDAQ OMX Group Inc. (NDAQ) operates several trading venues, including The NASDAQ Stock Market and the OMX Nordic Exchange, and also provides securities listing, trading, information products and services, and technology support to other exchanges. In May 2011, Moody's affirmed the Baa3 rating and maintained Moody's negative outlook after NDAQ and the Intercontinental Exchange (ICE) withdrew their joint proposal to acquire NYSE Euronext (NYX). The NDAQ/ICE's decision to withdraw the proposal followed the announcement by the U.S. Department of Justice that it was prepared to file a lawsuit to block the transaction, because of concerns that the combination of NASDAQ and NYX would effectively create a monopoly within the U.S. listings and cash trading businesses. In September 2011, NDAQ executed an important refinancing. The firm retired $335 million in convertible notes and repaid a $700 million credit facility which had helped finance previous acquisitions (discussed below). These debt repayments came from cash on hand as well as a new $1.2 billion senior unsecured revolving credit facility which matures in 2016. Moody's viewed the refinancing positively since it extends the term of NDAQ's debt. At the same time the firm also established a $300 million share repurchase program of which it executed approximately $100 million in 4Q11. Management at the NDAQ has demonstrated an ability to steadily reengineer and adapt its businesses. A cornerstone of that plan was the 2005 acquisition of the INET trading platform, which allowed NDAQ to reclaim some of the market share in trading of NASDAQ-listed securities and allowed management to move all public equity trading onto the speedy reliable INET platform. The past several years have seen further transformation at NDAQ. First, management consummated the $4.4B merger between NASDAQ and OMX in February 2008, which included a $2.2B cash component. Later in 2008, NDAQ acquired the Philadelphia and Boston Stock Exchanges. A further concern is the fierce competition NDAQ faces for cash equities order flow from traditional exchange rivals, new trading platforms, as well as from the major global investment banks. NDAQ strategy has been to stay nimble, reduce costs and take a cautious approach to capital expenditures. For example, NDAQ has chosen to lease rather than build its data centers. Importantly, U.S. regulators are initiating a wide-ranging review of overall market structure to address the risks presented by the growth of dark pools, increased internalization, new order types and high-frequency trading. While the outcome of the review cannot be predicted, it is possible that changes may occur that would reduce advantages that accrue to smaller trading platforms without market surveillance obligations. Within the U.S., NDAQ's has seen its cash equity trading market share decrease with matched market share on NYSE listed securities falling to 16.4% at 4Q11 (down from 19.1% at 4Q09), and matched market share on NASDAQ securities to 30.8% from 33.8%. However, its derivative business has grown with a 27.2% market share at 4Q11, up from 22.4% in 4Q09. Rating Outlook The rating outlook is negative reflecting the possibility that management may increase leverage in pursuit of strategic consolidation opportunities. NDAQ historically had a strong track record of successfully managing integration and achieving cost saving synergies. Even though several large exchange mergers were denied by regulators last year, Moody's thinks exchange managers will continue to try and solve the regulatory riddle, leaving bondholders exposed to event risk until the industry is more fully consolidated. NDAQ's hostile offer for NYX in 2011 demonstrated that management is willing to increase leverage in pursuit of strategic opportunities. What Could Change the Rating - Up Upward rating pressure could develop if NDAQ continues its current operating performance and demonstrates the capacity and discipline to maintain a debt/EBITDA ratio of below 3x. What Could Change the Rating - Down Downward pressure could develop for the Baa3 rating if there was a change in financial policy, such as an aggressively leveraged acquisition or accelerated share repurchases that cause deterioration in debt/EBITDA to greater than 3x. The methodologies used in this rating were Global Securities Industry Methodology published in December 2006, and Moody's Guidelines for Rating Bank Hybrid Securities and Subordinated Debt published in November 2009. NEONODE INC: Common Stock to Trade on NASDAQ Starting May 1 ----------------------------------------------------------- Neonode, Inc.'s application to list the Company's common stock on the NASDAQ Capital Market has been approved by The NASDAQ Stock Market LLC. Trading on NASDAQ is expected to commence at 9:30 a.m. ET on May 1, 2012 under the ticker symbol "NEON". "We are delighted to achieve a NASDAQ listing for our common stock and look forward to the increased visibility it will help bring to our company," said Neonode CEO Thomas Eriksson. "This news comes at an exciting time for Neonode as our patented MultiSensing touch technology continues to penetrate and broaden its presence in the marketplace. I believe the NASDAQ listing and our growth of customers and design wins make the future look very exciting." In connection with the approval, the Company filed with the SEC a Form 8-A to register its common stock, par value $0.001 per share, under Section 12(b) of the Securities Exchange Act of 1934, as amended. About Neonode Inc. Lafayette, Calif.-based Neonode Inc. (OTC BB: NEON) -- http://www.neonode.com/-- provides optical touch screen solutions for hand-held and small to midsize devices. The Company reported a net loss of $17.14 million in 2011, compared with a net loss of $31.62 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $16.62 million in total assets, $2.95 million in total liabilities and $13.67 million in total stockholders' equity. NET ELEMENT: Mike Zoi's Equity Stake Increased to 93.3% ------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Mike Zoi and his affiliates disclosed that, as of April 20, 2012, they beneficially own 940,987,015 shares of common stock of Net Element, Inc., representing 93.3% of the shares outstanding. Mr. Zoi previously disclosed beneficial ownership of 902,417,232 common shares or a 90.7% equity stake as of May 16, 2011. A copy of the amended filing is available for free at http://is.gd/hKNKvf About Net Element Miami, Fla.-based Net Element, Inc. (formerly TOT Energy, Inc.) currently operates several online media websites in the film, auto racing and emerging music talent markets. The Company reported a net loss of $24.85 million in 2011, compared with a net loss of $3.10 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.66 million in total assets, $6.89 million in total liabilities and a $5.22 million total stockholders' deficit. For 2011,Daszkal Bolton LLP, in Fort Lauderdale, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has experienced recurring losses and has an accumulated deficit and stockholders' deficiency at Dec. 31, 2011. NET ELEMENT: Rakishev Can No Longer Join Equity-Based Financing --------------------------------------------------------------- Net Element, Inc., and Kenges Rakishev entered into a First Amendment, effective as of April 19, 2012, to the Subscription Agreement dated as of Feb. 23, 2012. Under the Subscription Agreement, the Company granted Mr. Rakishev the right to participate in any equity-based financing of the Company so long as Mr. Rakishev and his affiliates beneficially own greater than 5% of the Company's common stock, as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder. Pursuant to the Amendment, that right to participate in any equity-based financing of the Company has been removed. On April 23, 2012, Mr. Rakishev was appointed as a director of the Company by the Company's Board of Directors to fill a vacancy on the Board of Directors created by an increase in the number of directors of the Company from 5 to 6 which was authorized by the Board of Directors. Mr. Rakishev was selected as a director upon the request of Mark Global Corporation pursuant to Section 3.1(a) of the Shareholder Rights Agreement, dated Feb. 24, 2012, among Mark Global Corporation, Kenges Rakishev, Mike Zoi, TGR Capital, LLC, MZ Capital LLC (Delaware), MZ Capital LLC (Florida), Enerfund, LLC and the Company. In accordance with Section 3.2 of the Shareholder Rights Agreement, Mr. Rakishev is expected to be named a member of any compensation committee, nominating committee and audit committee that the Board of Directors may establish. The Shareholder Rights Agreement became effective at 12:01 a.m. (New York time) on April 23, 2012, which was the first business day immediately following the date on which Mark Global Corporation, together with its affiliates, acquired beneficial ownership of greater than 10% of the Company's common stock as a result of Mark Global Corporation's purchase on April 20, 2012, of 200,000,000 shares of common stock of the Company from one of the Company's principal shareholders, TGR Capital, LLC, which is indirectly owned and controlled by the Company's Chairman and Chief Executive Officer, Mike Zoi. Pursuant to the Subscription Agreement, Mr. Rakishev purchased from the Company 13,333,334 newly issued shares of common stock of the Company for an aggregate purchase price of $2,000,000.10, or $0.15 per share. There have been no other transactions and there are no currently proposed transactions in which the Company was or is to be a participant and in which Mr. Rakishev had or will have a direct or indirect material interest that requires disclosure pursuant to Item 404(a) of Regulation S-K. Other than the Shareholder Rights Agreement, there is no plan, contract or arrangement to which Mr. Rakishev is a party or in which he participates that was or will be entered into, or any amendment to such a plan, contract or arrangement, in connection with Mr. Rakishev?s appointment as a director of the Company and there was and will be no grant or award to Mr. Rakishev, or modification thereto, under any such plan, contract or arrangement in connection with his appointment as a director of the Company. On April 24, 2012, the Board of Directors of the Company approved amendments to the Company's Bylaws, effective immediately, in connection with the appointment of Kenges Rakishev as a director of the Company. The amendments provide that: (i) the Board of Directors will consist of not less than one and not more than nine members, the exact number thereof to be determined from time to time by resolution of the Board of Directors; and (ii) indemnification of directors and officers by the Company is mandatory, rather than permissive. The first amendment described above was adopted to clarify that the exact number of directors serving at any particular time is determined by resolution of the Board of Directors. With respect to the second amendment, the Company's Bylaws previously provided that indemnification of directors and officers was permissive, rather than mandatory. About Net Element Miami, Fla.-based Net Element, Inc. (formerly TOT Energy, Inc.) currently operates several online media websites in the film, auto racing and emerging music talent markets. The Company reported a net loss of $24.85 million in 2011, compared with a net loss of $3.10 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.66 million in total assets, $6.89 million in total liabilities, and a $5.22 million total stockholders' deficit. For 2011, Daszkal Bolton LLP, in Fort Lauderdale, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has experienced recurring losses and has an accumulated deficit and stockholders' deficiency at Dec. 31, 2011. NEWPAGE CORP: Creditors Must Sue Lenders by May 4 ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the unsecured creditors' committee for paper maker NewPage Corp. persuaded the bankruptcy judge to extend the deadline until May 4 for filing a lawsuit targeting secured lenders for financing fraudulent transfers as part of a leveraged buyout in 2007. The committee wanted the judge to grant a 45-day extension of the deadline until May 18. Instead, the judge gave the panel until May 4 to file suit. NewPage and the secured lenders opposed allowing more time to sue. They argued that unsecured creditors are "out of the money" and not entitled to a recovery in bankruptcy because the company isn't worth enough to pay secured debt. According to the report, NewPage reached agreement with the U.S. Environmental Protection Agency to settle air pollution violations at a plant in Escanaba, Michigan. As part of the settlement, to be considered for approval at a bankruptcy court hearing May 17, the company will pay $205,000. NewPage said fines could have been as much as $10.8 million. About NewPage Group Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. NewPage Group, NewPage Holding, NewPage, and certain of their U.S. subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del. Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its subsidiary, Consolidated Water Power Company, is not a part of the Chapter 11 proceedings. Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage Port Hawkesbury Corp., brought a motion before the Supreme Court of Nova Scotia to commence proceedings to seek creditor protection under the Companies' Creditors Arrangement Act of Canada. NPPH is under the jurisdiction of the Canadian court and the court- appointed Monitor, Ernst & Young in the CCAA Proceedings. Initial orders were issued by the Supreme Court of Nova Scotia on Sept. 9, 2011 commencing the CCAA Proceedings and approving a settlement and transition agreement transferring certain current assets to NewPage against a settlement payment of $25 million and in exchange for being relieved of all liability associated with NPPH. On Sept. 16, 2011, production ceased at NPPH. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., Dewey & LeBoeuf LLP, in New York, serve as counsel in the Chapter 11 case. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co- counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, the Debtors disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. The Official Committee of Unsecured Creditors selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. NewPage prevailed over most objections from the official creditors' committee and won agreement from the bankruptcy judge on final approval of $600 million in secured financing. Moody's Investors Service assigned a Ba2 rating to the $350 million first-out revolving debtor-in-possession credit facility and a B2 rating to the $250 million second-out debtor-in- possession term loan for NewPage. NEWPAGE CORP: Economic Woes Halt Plans to Build Refinery -------------------------------------------------------- The Associated Press reports that NewPage Corp. has halted plans to build a refinery at its Wisconsin Rapids paper mill, saying "economics did not justify" continuing the project. The report relates the U.S. Department of Energy awarded NewPage $30 million in 2008 to build a so-called biorefinery that would have turned wood chips and mill residue into diesel fuel. Last year the Energy Department gave the papermaker another $20 million for the project. AP, citing report from Wisconsin Rapids Daily Tribune, says NewPage employs about 1,700 people at facilities in Wisconsin Rapids, Biron and Stevens Point. About NewPage Group Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. NewPage Group, NewPage Holding, NewPage, and certain of their U.S. subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del. Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its subsidiary, Consolidated Water Power Company, is not a part of the Chapter 11 proceedings. Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage Port Hawkesbury Corp., brought a motion before the Supreme Court of Nova Scotia to commence proceedings to seek creditor protection under the Companies' Creditors Arrangement Act of Canada. NPPH is under the jurisdiction of the Canadian court and the court- appointed Monitor, Ernst & Young in the CCAA Proceedings. Initial orders were issued by the Supreme Court of Nova Scotia on Sept. 9, 2011 commencing the CCAA Proceedings and approving a settlement and transition agreement transferring certain current assets to NewPage against a settlement payment of $25 million and in exchange for being relieved of all liability associated with NPPH. On Sept. 16, 2011, production ceased at NPPH. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., Dewey & LeBoeuf LLP, in New York, serve as counsel in the Chapter 11 case. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co- counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, the Debtors disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. The Official Committee of Unsecured Creditors selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. NewPage prevailed over most objections from the official creditors' committee and won agreement from the bankruptcy judge on final approval of $600 million in secured financing. Moody's Investors Service assigned a Ba2 rating to the $350 million first-out revolving debtor-in-possession credit facility and a B2 rating to the $250 million second-out debtor-in- possession term loan for NewPage. NEXSTAR BROADCASTING: Moody's Affirms 'B3' CFR; Outlook Positive ---------------------------------------------------------------- Moody's Investors Service affirmed the B3 corporate family and probability of default ratings of Nexstar Broadcasting, Inc. (Nexstar) as well as its SGL-2 Speculative Grade Liquidity and the positive outlook. Based on the current capital structure, Moody's believes EBITDA growth from the existing operations would enable Nexstar to reduce net leverage on a two year average basis to below 5 times debt-to- EBITDA over the next 18 months, which would be consistent with a higher corporate family rating. However, given the company's process to explore strategic alternatives (announced July 2011) and the December 2013 maturity of its revolver and the January 2014 maturity of the senior subordinated notes, Moody's expects a capital structure change sometime within the next year. The affirmation of the positive outlook reflects the potential for the outcome of any transaction to result in a credit profile in line with a B2 corporate family rating, including the ability to achieve and sustain leverage below 6 times debt-to-EBITDA on a two year average basis and to generate sustained positive free cash flow-to-debt in the mid to high single digit percent range. A sale to a private equity sponsor could increase leverage and negatively impact the credit profile, but based on expectations for robust political revenue in 2012, the company will likely continue to build up financial flexibility to manage such a possibility. A sale to a strategic operator or a merger, depending on the financing, could enhance scale and improve the credit profile. Moody's also moved the corporate family, probability of default, and SGL ratings to Nexstar Broadcasting, Inc.. from Nexstar Finance Holdings, Inc. due to repayment of the 11.375% Sr Discount Notes due April 2013 in May 2011 (the only rated debt at the Nexstar Finance Holdings, Inc. entity). Moody's also adjusted instrument ratings as shown below. A summary of the rating actions follows. Nexstar Broadcasting, Inc. Corporate Family Rating, Assigned B3 (withdrew B3 CFR at Nexstar Finance Holdings, Inc.) Probability of Default Rating, Assigned B3 (withdrew B3 PDR at Nexstar Finance Holdings, Inc.) Speculative Grade Liquidity Rating, Assigned SGL-2 (withdrew SGL-2 at Nexstar Finance Holdings, Inc.) Senior Secured Bank Credit Facility, Affirmed Ba3, LGD adjusted to LGD2, 12% from LGD2, 10% 7% Senior Subordinated Bonds, Affirmed Caa2, LGD adjusted to LGD6, 92% from LGD5, 88% 8.875% Sr Sec 2nd Lien Notes due Apr 2017, Affirmed B3, LGD adjusted to LGD4, 58% from LGD4, 52% Outlook, Positive Mission Broadcasting, Inc. Senior Secured Bank Credit Facility, Affirmed Ba3, LGD adjusted to LGD2, 12% from LGD2, 10% Outlook, Positive Nexstar Finance Holdings, Inc. Outlook, Withdrawn From Positive Probability of Default Rating, Withdrawn, previously rated B3 Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-2 Corporate Family Rating, Withdrawn, previously rated B3 11.375% Sr Disc Notes due April 2013, Withdrawn, previously rated Caa2, LGD6, 95% Ratings Rationale Nexstar's B3 corporate family rating incorporates its high, albeit improved, leverage (approximately 6 times on a two year average basis for 2011), which poses challenge for managing a business vulnerable to advertising spending cycles. Furthermore, the mature broadcasting industry continues to face pressure from media fragmentation, and higher network programming expenses will likely constrain EBITDA margins and limit the cash flow gains from rising retransmission revenue. Nevertheless, Nexstar's application of its strong free cash flow to debt reduction and accretive acquisitions positions it better to withstand volatility from both election and economic cycles. Its diverse geographic footprint, continued local market focus, and leading audience share in many markets creates good margins and the capacity to generate significant unlevered cash flow, which supports the rating. Also, Nexstar benefits from its diverse network affiliations and local marketing agreement (LMA) with Mission Broadcasting, which expands programming coverage and cost efficiencies. The positive outlook reflects the potential for an upgrade to B2 based on continued improvement in the credit profile from the combination of ongoing core EBITDA growth, debt reduction and accretive acquisitions. Moody's would consider an upgrade based on expectations for sustained leverage below 6 times debt-to-EBITDA on a two year average basis, sustained positive free cash flow-to-debt in the mid to high single digit percent range, and continued modest growth in core advertising revenue. An upgrade would also require Nexstar to address the December 2013 maturity of its revolver and the January 2014 maturity of its senior subordinated notes on a timely basis. The outlook could revert to stable based on expectations for sustained leverage above 6 times debt-to-EBITDA on a two year average basis, whether due to operational weakness or a capital structure change related to the strategic alternatives process. Expectations for negative free cash flow, sustained leverage above 8 times debt-to-EBITDA on a two year average basis, or deterioration of the liquidity profile, including lack of progress on refinancing near term maturities, would likely have negative ratings implications. The principal methodology used in rating Nexstar Broadcasting was the Global Broadcast Industry Methodology published in June 2008. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Based in Irving, Texas, Nexstar owns, operates, programs or provides sales and other services to 55 television stations and 11 digital multi-cast channels in 32 markets and reaches approximately 10.6 million viewers. Its annual revenue in 2011 was approximately $306 million. PACIFIC MONARCH: Approved Sale Still Not Completed -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Pacific Monarch Resorts Inc. is asking for an extension of the exclusive right to propose a Chapter 11 plan until June 15. The Debtor was authorized to sell its business in mid-January for $49.3 million to Diamond Resorts Corp but the sale hasn't been completed. The company said it expects the sale to be completed around April 30. The hearing for approval of an expansion of exclusive plan-filing rights is set for May 17. About Pacific Monarch Resorts Pacific Monarch Resorts, Inc., and its affiliated debtors operate a "timeshare business" business. The Debtors filed voluntary Chapter 11 petitions (Bankr. C.D. Calif. Lead Case No. 11-24720) on Oct. 24, 2011, disclosing $100 million to $500 million in both assets and debts. The affiliated debtors are Vacation Interval Realty Inc., Vacation Marketing Group Inc., MGV Cabo LLC, Desarrollo Cabo Azul, S. de R.L. de C.V., and Operadora MGVM S. de R.L. de C.V. Based in Laguna Hills, California, Pacific Monarch and its affiliates generate revenue primarily from the sale and financing of "vacation ownership points" in a timeshare program commonly known and marketed as "Monarch Grand Vacations," a multi-location vacation timeshare program that establishes a uniform plan for the development, ownership, use and enjoyment of specified resort accommodations for the benefit of its members. MGV is a nonprofit mutual benefit corporation whose members are timeshare owners, and it is administered by a board of directors elected by MGV members. As of the Petition Date, MGV owned Resort Accommodations within these resorts: Palm Canyon Resort (Palm Springs), Riviera Oaks Resort & Racquet Club (Ramona), Riviera Beach & Spa Resort - Phases I and II (Dana Point), Riviera Shores Beach (Dana Point), Cedar Breaks Lodge (Brian Head), Tahoe Seasons Resort (South Lake Tahoe), Desert Isle of Palm Springs (Palm Springs), the Cancun Resort (Las Vegas), and the Cabo Azul Resort (Los Cabos, Mexico). Future Vacation Accommodations are currently in the pre- development stage in Kona, Hawaii and Las Vegas, Nevada. Additionally, the Cabo Azul Resort has construction in progress on two buildings. The Pacific Monarch entities do not include the entities that actually own the timeshare properties that have been dedicated to use by the purchasers of timeshare points. The trusts that own the properties are not liable for the Pacific Monarch entities' obligations. MGV is not a debtor. Judge Erithe A. Smith presides over the jointly administered cases. Lawyers at Stutman, Treister & Glatt PC, in Los Angeles, serve as counsel to the Debtors. The petition was signed by Mark D. Post, chief executive officer and director. Houlihan Lokey Capital, Inc., serves as investment baker to the Debtors. Raymond J. Gaskill, Esq., represents the Debtors as special timeshare counsel. Greenberg, Whitcombe & Takeuchi, LLP, serves as the Debtors' special counsel for employment and labor matters. Lesley, Thomas, Schwarz & Postma, Inc., serves as the Debtors' tax and vacation ownership points accountants. White & Case LLP is the Debtors' special tax counsel. Attorneys at Brinkman Portillo Ronk, PC, serve as counsel to the Official Committee of Unsecured Creditors. Creditor Ikon Financial Services is represented by Christine R. Etheridge. Creditor California Bank & Trust is represented in the case by Michael G. Fletcher at Frandzel Robins Bloom & Csato, L.C. Marshall F. Goldberg, Esq. at Glass & Goldberg argues for creditor Fifth Third Bank. Creditor The Macerich Company is represented by Brian D. Huben, Esq. at Katten Muchin Rosenman LLP. Interested Party DPM Acquisition is represented by Joshua D. Wayser, Esq. at Katten Muchin Rosenman LLP. PALM DESERT NB: Closed; Pacific Premier Bank Assumes All Deposits ----------------------------------------------------------------- Palm Desert National Bank of Palm Desert, Calif., was closed on Friday, April 27, 2012, by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Pacific Premier Bank of Costa Mesa, Calif., to assume all of the deposits of Palm Desert National Bank. The sole branch of Palm Desert National Bank will reopen during normal banking hours as a branch of Pacific Premier Bank. Depositors of Palm Desert National Bank will automatically become depositors of Pacific Premier Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Palm Desert National Bank should continue to use their existing branch until they receive notice from Pacific Premier Bank that it has completed systems changes to allow other Pacific Premier Bank branches to process their accounts as well. As of Dec. 31, 2011, Palm Desert National Bank had around $125.8 million in total assets and $122.8 million in total deposits. In addition to assuming all of the deposits of the failed bank, Pacific Premier Bank agreed to purchase essentially all of the assets. Customers with questions about the transaction should call the FDIC toll-free at 1-800-591-2820. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/palmdesert.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $20.1 million. Compared to other alternatives, Pacific Premier Bank's acquisition was the least costly resolution for the FDIC's DIF. Palm Desert National Bank is the 22nd FDIC-insured institution to fail in the nation this year, and the first in California. The last FDIC-insured institution closed in the state was Citizens Bank of Northern California, Nevada City, on Sept. 23, 2011. PISTOL PETE'S: To Auction Off Restaurant at Bankruptcy ------------------------------------------------------ Brian Ianieri at pressofatlanticcity reports that Pistol Pete's Steakhouse and Saloon is closed and will be auctioned at bankruptcy. According to the report, the establishment has been abandoned. "The business is closed until they bring new buyers in," the report quotes Thomas Subranni, an Atlantic City-based attorney who is a court-appointed trustee in the case, as saying. "We hope to have the auction as soon as possible." The establishment's liquor license -- valued in different court documents at $125,000 and $200,000 -- will be coordinated as part of the sale of the business. The report notes Peter Quarelli, the owner of Pistol Pete's and principal of Salvi and Peter Land LLC, filed for Chapter 11 bankruptcy protection on Feb. 9. The filing was later changed to a Chapter 7 liquidation. The report adds the largest secured creditor is Cape Savings Bank, which granted a 25-year, $550,000 loan in 2007. In bankruptcy documents, Mr. Quarelli listed debts to the bank at $725,000. There were 16 unsecured creditors listed, including $1,500 to Valenti's Atlantic City Bread in Pleasantville; $1,750 to Westfield Distributors in Rio Grande, Cape May County; and $1,275 to Harrison Beverage in Egg Harbor Township. The report, citing court documents, says Cape Savings Bank said the business had failed to make payments on its loan, and in March 2011, the bank declared the loan in default and filed a foreclosure complaint in Atlantic County. The report adds the court in July appointed Wildwood attorney Alan Gould to help find a buyer. Mr. Gould said Barnabas Enterprises offered $530,000 for the business and the liquor license. In bankruptcy filings, an attorney representing Cape Savings Bank said the bar's potential liability from a motorcycle accident involving a patron of Pistol Pete's may have played a factor in the business's filing for bankruptcy protection in February. Pistol Pete's Steakhouse & Saloon filed on Feb. 9, 2012, for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of New Jersey and for a while remained open under supervision of a bank manager. The Company estimated debts between $500,000 and $1 million, and assets between $100,000 and $500,000. PITTSBURGH CORNING: Corning Inc. Has $462MM Net Income in Q1 ------------------------------------------------------------ Corning Incorporated reported net income attributable to the Company of $462 million on $1.92 billion of net sales for the three months ended March 31, 2012, compared with net income attributable to the Company of $748 million on $1.92 billion of net sales for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $28.48 billion in total assets, $7.12 billion in total liabilities and $21.36 billion in total equity. "We are pleased with the progress we made in the first quarter," Wendell P. Weeks, chairman, chief executive officer, and president, said. "Our overall business performance is on track with our expectations. First-quarter sales in our Telecommunications, Environmental Technologies, Life Sciences, and Specialty Materials business segments grew, and we continued making strategic investments to create new revenue streams for the company. In the Display Technologies segment, LCD glass volume was slightly better than our forecast. And, we were especially delighted with the strength of Corning Gorilla Glass sales in the quarter." A copy of the press release is available for free at: http://is.gd/2z1mpp About Pittsburgh Corning Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 00-22876) on April 16, 2000, to address numerous claims alleging personal injury from exposure to asbestos. At the time of the bankruptcy filing, there were about 11,800 claims pending against the Company in state court lawsuits alleging various theories of liability based on exposure to Pittsburgh Corning's asbestos products and typically requesting monetary damages in excess of $1 million per claim. The Hon. Judith K. Fitzgerald presides over the case. Reed Smith LLP serves as counsel and Deloitte & Touche LLP as accountants to the Debtor. The United States Trustee appointed a Committee of Unsecured Trade Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of Leech, Tishman, Fuscaldo & Lampl, LLC, as counsel to the Committee of Unsecured Trade Creditors, and Pascarella & Wiker, LLP, as financial advisor. The U.S. Trustee also appointed a Committee of Asbestos Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of these professionals by the Committee of Asbestos Creditors: (i) Caplin & Drysdale, Chartered as Committee Counsel; (ii) Campbell & Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as special insurance counsel; (iv) Legal Analysis Systems, Inc., as Asbestos-Related Bodily Injury Consultant; (v) defunct firm, L. Tersigni Consulting, P.C. as financial advisor, and (vi) Professor Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered. On Feb. 16, 2001, the Court approved the appointment of Lawrence Fitzpatrick as the Future Claimants' Representative. The Bankruptcy Court authorized the retention of Meyer, Unkovic & Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP as his special counsel, and Analysis, Research and Planning Corporation as his claims consultant. In 2003, a plan of reorganization was agreed to by various parties-in-interest, but, on Dec. 21, 2006, the Bankruptcy Court issued an order denying the confirmation of that plan, citing that the plan was too broad in addressing independent asbestos claims that were not associated with Pittsburgh Corning. On Jan. 29, 2009, an amended plan of reorganization (the Amended PCC Plan) -- which addressed the issues raised by the Court when it denied confirmation of the 2003 Plan -- was filed with the Bankruptcy Court. As reported by the TCR on April 25, 2012, Pittsburgh Corning Corp., a joint venture between Corning Inc. and PPG Industries Inc., filed another amendment to its reorganization plan designed to wrap up a Chapter 11 begun 12 years ago. According to the report, a hearing to consider the new plan is scheduled for June 21. PLANTATION FB: Closed; First Federal Bank Assumes All Deposits -------------------------------------------------------------- Plantation Federal Bank of Pawleys Island, S.C., was closed on Friday, April 27, 2012, by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Federal Bank (formerly known as First Federal Savings and Loan Association of Charleston) of Charleston, S.C., to assume all of the deposits of Plantation Federal Bank. The six branches of Plantation Federal Bank will reopen during normal banking hours as branches of First Federal Bank, including the three branches operating under the name of First Savers Bank. Depositors of Plantation Federal Bank will automatically become depositors of First Federal Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Plantation Federal Bank should continue to use their existing branch until they receive notice from First Federal Bank that it has completed systems changes to allow other First Federal Bank branches to process their accounts as well. As of Dec. 31, 2011, Plantation Federal Bank had around $486.4 million in total assets and $440.5 million in total deposits. In addition to assuming all of the deposits of the failed bank, First Federal Bank agreed to purchase essentially all of the assets. The FDIC and First Federal Bank entered into a loss-share transaction on $221.7 million of Plantation Federal Bank's assets. First Federal Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers with questions about the transaction should call the FDIC toll-free at 1-800-640-2538. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/plantation.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $76.0 million. Compared to other alternatives, First Federal Bank's acquisition was the least costly resolution for the FDIC's DIF. Plantation Federal Bank is the 21st FDIC-insured institution to fail in the nation this year, and the first in South Carolina. The last FDIC-insured institution closed in the state was BankMeridian, N.A., Columbia, on July 29, 2011. POST PROPERTIES: S&P Affirms 'BB' Rating on Preferred Stock ----------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Post Properties Inc. to positive from stable and affirmed its 'BBB-' corporate credit rating on the company. "At the same time, we affirmed our 'BBB-' rating on the company's unsecured debt and 'BB' rating on the company's preferred stock. 's actions affect roughly $376 million of senior unsecured notes and $43 million of preferred stock," S&P said. "Our revised outlook on Post reflects improved fixed-charge coverage (FCC) and our expectation that organic growth, the lease- up of development properties, lower leverage, and favorable debt cost will further strengthen the company's coverage measures over the next one to two years," said credit analyst Eugene Nusinzon. Outlook "The positive outlook reflects improved FCC and our expectation that organic growth, the lease-up of development properties, lower leverage, and favorable debt cost will further strengthen the company's coverage measures over the next one to two years. We also expect Post to maintain modest leverage and predominantly fund growth with proceeds from condominium sales and equity over the next few years. We would raise our ratings one notch if the company achieves, underwritten returns on new development, funds growth in a prudent manner, and sustains an improved FCC in the 2.7x-3.0x range, while maintaining adequate liquidity with modest reliance on the revolver. Conversely, we would revise our outlook back to stable if FFO declines precipitously (perhaps because of a sizable debt-financed growth) such that FCC drops below 2.0x, draw on the revolver is greater than 50% for a sustained period of time, or coverage of the common dividend dips below 1.0x," S&P said. QUANTUM FUEL: Unit Buys New Wind Farm in Ontario ------------------------------------------------ Quantum Fuel Systems Technologies Worldwide, Inc., announced that its wholly-owned subsidiary, Schneider Power Inc. has acquired a newly constructed 10 megawatt utility-scale wind farm in Ontario, Canada. The Zephyr wind farm generation facility will supply electricity to the Ontario Power Authority under a 20-year renewable energy purchase contract, generating in excess of $3 million in estimated annual revenues. The project commenced power generation testing at 25% capacity on April 20th 2012, and is projected to go into full production on or about May 5th, producing more than 26.7 Giga watt-hours of clean electricity per year, enough to meet the needs of 3,000 Canadian households. The project is financed by Samsung Heavy Industries of Korea. "This acquisition is part of our long-term strategy to evolve into a leading independent power producer in North America," said Alan P. Niedzwiecki, the President and CEO of Quantum. "We seek to increase our revenues and nameplate capacity under 100% ownership, leveraging our experience in the fast-track development of profitable renewable energy projects." "We are pleased and honored to be working with Samsung for financing this project," said Thomas Schneider, the President of Schneider Power. "Quantum and Schneider Power are active in several renewable energy projects in various stages of development, and we are actively pursuing additional opportunities in Ontario with its attractive feed in tariff programs." The Zephyr wind farm, located in the Brooke-Alvinston Township in the Canadian province of Ontario, will be operated by Zephyr Farms Limited, a wholly-owned subsidiary of Schneider Power. The project utilizes high efficiency, 2.5 megawatt capacity Samsung wind turbines. The Company disclosed that on Aug. 24, 2011, SPI entered into a Purchase and Sale Agreement with Green Breeze Energy Inc. for the purchase and sale of all of the issued and outstanding shares of Zephyr Farms for a purchase price of C$2.5 million, subject to post-closing adjustment. The Purchase and Sale Agreement required that the transaction be completed by Sept. 30, 2011, which the parties later changed to Dec. 16, 2011. The parties were unable to satisfy certain of the closing conditions by Dec. 16, 2011, and the Purchase and Sale Agreement terminated by its own terms. On April 19, 2012, SPI and Green Breeze executed a Second Amending Agreement pursuant to which the Purchase and Sale Agreement was reinstated with certain amendments; in particular, the purchase price was reduced to approximately C$1.97 million and paid in cash at closing. About Quantum Fuel Based in Irvine, California, Quantum Fuel Systems Technologies Worldwide, Inc., is a fully integrated alternative energy company and considers itself a leader in the development and production of advanced clean propulsion systems and renewable energy generation systems and services. Quantum Fuel reported a net loss attributable to stockholders of $38.49 million on $24.47 million of total revenue for the eight months ended Dec. 31, 2011, compared with a net loss attributable to stockholders of $6.52 million on $10.51 million of total revenue for the same period a year ago. The Company reported a net loss of $11.03 million for the year ended April 30, 2011, following a net loss of $46.29 million during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $46.43 million in total assets, $20.86 million in total liabilities and $25.57 million in total equity. Haskell & White LLP, in Irvine, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that Company incurred significant operating losses and used a significant amount of cash in operations during the eight months ended Dec. 31, 2011. REDDY ICE: Kessler Says $1MM Class Settlement in Bankr. Court ------------------------------------------------------------- Kessler Topaz Meltzer & Check, LLP, in a release, informed persons and entities who purchased or otherwise acquired the publicly- traded securities of Reddy Ice holdings, inc. between Aug. 10, 2005 and Sept. 15, 2008, inclusive, and were damaged thereby (the "class"), that pursuant to Rules 7023 and 9019 of the Federal Rules of Bankruptcy Procedure, that a settlement of the action captioned John Chamberlain, individually and on behalf of all others similarly situated, v. Reddy Ice Holdings, Inc., et al., Civil Action No. 2:08-cv-13451 (E.D. Mich.) (the "Securities Action") for $1,000,000 (the "Settlement Amount") has been proposed in connection with Reddy Ice's bankruptcy filing (the "Settlement"), and in the interests of justice and for the convenience of all parties, the Securities Action has been transferred to the Bankruptcy Court for purposes of approving and administrating the Settlement in conjunction with other matters affecting the Reddy Ice bankruptcy estate. A hearing will be held before the Honorable Stacey G. C. Jernigan in the Bankruptcy Court, Earle Cabell Building, U.S. Courthouse, 1100 Commerce Street, Dallas, Texas 75242-1496 at 9:30 a.m. (prevailing Central Time) on May 18, 2012 to determine, among other items related to Reddy's Ice's bankruptcy proceeding: (1) whether the proposed Settlement, as set forth in the Stipulation and Agreement of Settlement, is fair and reasonable and should be approved pursuant to Bankruptcy Rule 9019; (2) whether the Class described above should be certified for purposes of settlement pursuant to Bankruptcy Rule 7023; (3) whether the proposed plan for allocating the settlement proceeds, as set forth on the website, http://classaction.kccllc.net/ReddyIceshould be approved; and (4) whether Lead Counsel's application for an award of attorneys' fees not to exceed 15% of the Settlement Amount and reimbursement of expenses not to exceed $300,000 should be approved. IF YOU ARE A MEMBER OF THE CLASS DESCRIBED ABOVE, YOUR RIGHTS WILL BE AFFECTED AND YOU MAY BE ENTITLED TO SHARE IN THE SETTLEMENT AMOUNT. If you are a member of the Class, in order to be eligible to receive a payment from the proposed Settlement, you must submit a Proof of Claim form, along with the supporting documentation requested in the Proof of Claim form, postmarked no later than July 18, 2012 to Reddy Ice Holdings Class Action, c/o Kurtzman Carson Consultants LLC, P.O. Box 6177, Novato, CA 94948-6177. You can obtain a copy of the Proof of Claim form by visiting the website http://classaction.kccllc.net/ReddyIce, or you can call (866) 731-4775 and request that a Proof of Claim form be mailed to you. If you are a member of the Class and do not submit a proper Proof of Claim form, you will not share in the distribution of the net proceeds of the Settlement, but you will nevertheless be bound by any order pertaining to the Settlement that is entered by the Bankruptcy Court. Depending on the number of claims filed and when Class Members purchased, acquired and sold their Reddy Ice securities, the estimated average recovery per damaged share of Reddy Ice common stock will be approximately $.032 (before the deduction of attorneys' fees and expenses set forth above and before payments that would be made to those with transactions in options).[2] Additionally, if the amount of attorneys' fees and expenses set forth above are requested and approved by the Court, the average cost per damaged share of Reddy Ice common stock will be approximately $.014. Please note that these amounts are only estimates. If you are a member of the Class, you also have the right to exclude yourself from the Class or to submit an objection to the proposed Settlement, Plan of Allocation and/or application for attorneys' fees and reimbursement of expenses. To exclude yourself from the Class, you must submit a letter stating that you "request exclusion from the Class in the In re Reddy Ice Holdings, Inc. Bankruptcy Case, Case Nos. 12-32349 and 12-32350" and your request must be received by Lead Counsel (at the address set forth below) on or before May 11, 2012. In light of Reddy Ice's bankruptcy, if you choose to exclude yourself from the Class, you will have limited rights, if any, to proceed against the Defendants for the claims asserted in the Securities Action. If you are a member of the Class and do not exclude yourself from the Class, you will be bound by any order pertaining to the Settlement that is entered by the Bankruptcy Court. Any objections to the proposed Settlement, Plan of Allocation, and/or application for attorneys' fees and reimbursement of expenses must be filed with the Clerk of the Bankruptcy Court, at Earle Cabell Building, U.S. Courthouse, 1100 Commerce Street, Room 1254, Dallas, Texas 75242-1496, and submitted to Lead Counsel (at the address set forth below) on or before May 11, 2012. Please Note: More information regarding the Settlement and Reddy Ice's bankruptcy proceeding can be obtained by visiting the website http://classaction.kccllc.net/ReddyIce. The procedural history of the Securities Action and the terms of the Settlement are contained in the Settlement Agreement which is posted on the website. Also posted on the website is the plan for allocating the settlement proceeds among those members of the Class who submit proper Proofs of Claim. Inquiries, other than requests for copies of the Proof of Claim form, may be made to Lead Counsel: Michael K. Yarnoff, Esq, and Kimberly A. Justice, Esq., Kessler Topaz Meltzer & Check, LLP, 280 King of Prussia Road, Radnor, PA 19087, (610) 667-7706 [1] Excluded from the Class are the Defendants (i.e., Reddy Ice, William P. Brick, Steven J. Janusek and Jimmy C. Weaver), current and former officers and directors of Reddy Ice, members of the immediate family of each of the individual defendants and their legal representatives, heirs, successors, or assigns and any entity in which Defendants have or had a controlling interest. Also excluded from the Class are any person or entity who excludes themselves by requesting exclusion from the Class in accordance with the requirements set forth herein. [2] The combined recovery for the Put/Call Options shall not exceed 3% of the Net Settlement Fund. See the Plan of Allocation available for review at http://classaction.kccllc.net/ReddyIce. About Reddy Ice Reddy Ice Holdings Inc. and wholly owned subsidiary Reddy Ice Corp. manufacture and distribute packaged ice in the United States. As of Dec. 31, 2011, the Company had assets totaling $434 million and total liabilities of $531 million. The bulk of the liabilities were total debt outstanding of $471.5 million. Reddy Holdings and Reddy Corp. on April 12, 2012, filed voluntary Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Case Nos. 12- 32349 and 12-32350) together with a plan of reorganization and accompanying disclosure statement to complete a previously announced plan to strengthen its balance sheet and ensure strong financial footing for the future. As part of the restructuring, Reddy Ice seeks to pursue a strategic acquisition of all or substantially all of the businesses and assets of Arctic Glacier Income Fund and its subsidiaries, including Arctic Glacier Inc., a major producer, marketer and distributor of packaged ice in North America. Arctic Glacier on Feb. 22, 2012, filed for protection under the Companies' Creditors Arrangement Act in Canada and Chapter 15 of the Bankruptcy Code in the United States. Arctic is seeking sale or investment proposals from qualified bidders. Reddy Ice's Plan provides for the restructuring of the Company's obligations with respect to $300 million of First Lien Notes; $139.4 million of Second Lien Notes; and $11.7 million of Discount Notes. If the Plan is approved, all Second Lien Notes will be exchanged and will be retired and cancelled and all Discount Notes will be cancelled. Reddy Ice said the Plan has the support of a majority of its lenders and major creditors, led by Centerbridge Capital Partners II, L.P. Entities entitled to vote on the Plan have until May 9, 2012, to cast their ballot. The Debtors have asked the Court to hold a combined hearing to approve the Disclosure Statement and confirm the Plan no later than May 18, 2012. Judge Stacey G. Jernigan presides over the case. Reddy Ice's legal advisor on the restructuring is DLA Piper LLP (US) and its financial advisors are Jefferies & Company, Inc. and FTI Consulting, Inc. Kurtzman Carson Consultants serves as claims and notice agent. Centerbridge Partners is represented by Jonathan S. Zinman, Esq., Joshua A. Sussberg, Esq., James H.M. Sprayregen, Esq., and Anup Sathy, Esq., at Kirkland & Ellis. Macquarie Bank Limited is represented by Sarah Hiltz Seewer, Esq., and David R. Seligman, Esq., also at Kirkland & Ellis. The ad hoc group of First Lien and Second Lien Noteholders is represented by Joshua Andrew Feltman, Esq., at Wachtell Lipton Rosen & Katz. Wells Fargo Bank, National Association, serves as First Lien and Second Lien Agent. RENEGADE HOLDINGS: Auction of Chinqua Penn Assets Nets $2MM+ ------------------------------------------------------------ Richard Craver at Winston-Salem Journal reports that the bankruptcy estate for three Mocksville tobacco manufacturers is likely to receive net proceeds exceeding the $2 million projection as a result of the auction of the assets of Chinqua Penn Plantation. According to the report, the auction at the Greensboro Coliseum offered collectors, investors and the curious access for the first time in decades to what plantation officials touted as "the state's premier collection of eclectic decorative arts," featuring items dating to the 16th century. The report notes the auction resumed on April 25. The report notes the auctioneers are Leland Little Auction & Estate Sales Ltd. and Iron Horse Auction Co. The highest bid in the morning session was $77,500 for a Pallazo Carrara marble urn and pedestal. In the afternoon, a pair of Chinese Quialong bronze panther sculptures went for $120,000. According to the report, likely the most aggressive in-person bidder was Del Ray Simmons, who came upon the auction by what his business associate Brian Thigpen called a "happy circumstance." Mr. Simmons successfully bid on at least 15 pieces just during the first round of 114 lots, ranging in price from $800 to $34,000. His main rival for many pieces was an Internet bidder who gained at least 12 pieces in the morning session. The report says the lots are available for auction because of a Chapter 11 bankruptcy case involving Calvin Phelps, the plantation's owner, and his three Mocksville tobacco companies -- Renegade Holdings Inc., Alternative Brands Inc. and Renegade Tobacco Co. About Renegade Holdings Renegade Holdings and two subsidiaries -- Alternative Brands, Inc. and Renegade Tobacco Company -- filed for Chapter 11 protection (Bankr. M.D.N.C. Lead Case No. 09-50140) on Jan. 28, 2009, and exited bankruptcy on June 1, 2010. They were put back into bankruptcy July 19, 2010, when Judge William L. Stocks vacated the reorganization plan, in part because of a criminal investigation of owner Calvin Phelps and the companies regarding what authorities called "unlawful trafficking of cigarettes." Alternative Brands is a federally licensed manufacturer of tobacco products consisting primarily of cigarettes and cigars. Renegade Tobacco distributes the tobacco products produced by ABI through wholesalers and retailers in 19 states and for export. ABI also is a contract fabricator for private label brands of cigarettes and cigars which are produced for other licensed tobacco manufacturers. The stock of RHI is owned indirectly by Calvin A. Phelps through his ownership of the stock of Compliant Tobacco, LLC which, in turn, owns all of the stock of RHI which in turn owns all of the stock of RTC and ABI. Mr. Phelps was the chief executive officer of all three companies. All three of the Debtors' have their offices and production facilities in Mocksville, North Carolina. In August 2010, the Bankruptcy Court approved the appointment of Peter Tourtellot, managing director of turnaround-management company Anderson Bauman Tourtellot Vos & Co., as Chapter 11 trustee. REPUBLIC MORTGAGE: Under Supervision From NC Dept. of Insurance --------------------------------------------------------------- Old Republic International, in its latest financial results, said that its flagship mortgage guaranty insurance carrier, Republic Mortgage Insurance Company, had been operating pursuant to a waiver of minimum state regulatory capital requirements since late 2009. This waiver expired on Aug. 31, 2011. As a consequence, underwriting of new policies ceased and the existing book of business was placed in run-off operating mode. Afterwards, on Jan. 19, 2012, RMIC received a Summary Order from the North Carolina Department of Insurance placing the Company under supervision. Among other considerations, the Order instructed RMIC to reduce the cash payment on all claims by 50 percent during an initial period not to exceed one year. The remaining 50 percent deferred payment obligation is to be included in RMIC's statutory capital and will be paid at a future date if and when necessary funds are available. Old Republic said consolidated first quarter operating results were at near break-even compared with last year's loss-burdened first and fourth quarters. 2012's first quarter reflected greater earnings contributions by Old Republic's general and title insurance groups, and lower operating losses from the mortgage guaranty line. Consolidated net investment income was down as market yields on investment and re-investment of funds remained at very low levels. Old Republic reported net income of $400,000 on $1.15 billion of revenue for the quarter ended March 31, 2012, compared with a net loss of $12.9 million on $1.12 billion in revenue in the same period in 2011. Old Republic had total assets of $16.15 billion, total liabilities of $12.38 billion, and shareholders' equity of $3.77 billion as of March 31, 2012. A full text copy of the Company's financial results is available free at http://is.gd/Jwl1Wr Old Republic International Corporation is engaged in the single business of insurance underwriting. It conducts its operations through a number of regulated insurance company subsidiaries organized into three major segments, namely its General Insurance (property and liability insurance), Mortgage Guaranty and Title Insurance Groups. The Company is headquartered in Chicago, Illinois. REVLON CONSUMER: Reports $10 Million Net Income in First Quarter ---------------------------------------------------------------- Revlon Consumer Products Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $10 million on $330.70 million of net sales for the three months ended March 31, 2012, compared with net income of $12 million on $333.20 million of net sales for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $1.20 billion in total assets, $1.83 billion in total liabilities, and a $625.70 million total stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/r1X6uE About Revlon Consumer Headquartered in New York, Revlon Consumer Products Corporation is a worldwide cosmetics, skin care, fragrance, and personal care products company. The company is a wholly-owned subsidiary of Revlon, Inc., which is majority-owned by MacAndrews & Forbes, which is in turn wholly-owned by Ronald O. Perelman. Revlon's net sales for the twelve-month period ended December 2009 were approximately $1.3 billion. M&F beneficially owns approximately 77.4% of Revlon's outstanding Class A common stock, 100% of Revlon's Class B common stock and 78.8% of Revlon's combined outstanding shares of Class A and Class B common stock, which together represent approximately 77.2% of the combined voting power of such shares. In April 2011, Moody's Investors Service upgraded Revlon Consumer Products Corporation's Corporate Family and Probability of Default ratings to B1 from B2. The upgrade of Revlon's Corporate Family rating to B1 reflects the company's ability to sustain operating and financial momentum despite the ongoing challenges of the macroeconomic environment and intensified competitive environment. Revlon's credit metrics continue to improve modestly driven by strong profitability and cash flow generation with further gains expected in fiscal 2011. Moody's affirmed the ratings in May 2011. * * * This concludes the Troubled Company Reporter's coverage of Revlon until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. REVLON INC: Reports $8.5 Million Net Income in First Quarter ------------------------------------------------------------ Revlon, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $8.5 million on $330.70 million of net sales for the three months ended March 31, 2012, compared with net income of $10.40 million on $333.20 million of net sales for the same period a year ago. The Company reported net income of $53.40 million on $1.38 billion of net sales in 2011, compared with net income of $327.30 million on $1.32 billion of net sales in 2010. The Company's balance sheet at March 31, 2012, showed $1.15 billion in total assets, $1.83 billion in total liabilities and a $679.60 million total stockholders' deficiency. Commenting on the announcement, Revlon President and Chief Executive Officer, Alan T. Ennis, said, "We continue to focus on driving top-line profitable growth and, in the first quarter of 2012, we grew net sales and delivered competitive margins. We remain focused on building our strong brands by launching and appropriately supporting innovative new products and we are pleased with our new product launches so far this year." A copy of the Form 10-Q is available for free at: http://is.gd/cNagAT About Revlon Inc. Headquartered in New York City, Revlon, Inc. (NYSE: REV) -- http://www.revloninc.com/-- is a worldwide cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirants/deodorants and personal care products company. The Company's brands, which are sold worldwide, include Revlon(R), Almay(R), Mitchum(R), Charlie(R), Gatineau(R), and Ultima II(R). * * * This concludes the Troubled Company Reporter's coverage of Revlon until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. RIVER ROAD: High Court Focuses on "Indubitable Equivalence" ----------------------------------------------------------- In an article posted at Lexology.com, Ben Feder at Kelley Drye & Warren LLP said the U.S. Supreme Court heard arguments on April 23 in RadLAX Gateway Hotel over whether the Bankruptcy Code permits a debtor in a chapter 11 case to sell encumbered assets without providing its secured lenders an opportunity to credit bid their debt. According to the article, lawyers at the oral argument faced a "hot bench", as the Supreme Court justices sought to understand the particulars of the process of selling assets in chapter 11 cases, and the distinction between selling assets pursuant to a plan and asset sales outside of a plan. Somewhat surprisingly, the article says, the justices focused very little on whether the "plain meaning" of the disjunctive "or" in the statute mandated the result sought by the debtor in River Road/RadLAX, and grappled instead with the concept of "indubitable equivalence", and whether it could be ever be realized through a sale process that did not permit the secured lender to credit bid. The credit bidding case in the Supreme Court is RadLax Gateway Hotel LLC v. Amalgamated Bank, 11-166, U.S. Supreme Court (Washington). The opinion by the Court of Appeals is River Road Hotel Partners LLC v. Amalgamated Bank (In re River Road Hotel Partners), 10-3597, 7th U.S. Circuit Court of Appeals (Chicago). About River Road Hotel & RadLAX Gateway Hotel River Road Hotel Partners, LLC, developed and manages the InterContinental Hotel Chicago O'Hare located in Rosemont, Illinois. Affiliate RadLAX Gateway Hotel LLC owns the Radisson hotel at Los Angeles International Airport. Both were controlled owned by Harp Group. River Road and its affiliates filed Chapter 11 in Chicago (Bankr. N.D. Ill. Lead Case No. 09-30029) on Aug. 17, 2009. Based in Oak Brook, Illinois, River Road estimated assets of as much as $100 million and debt of as much as $500 million in its Chapter 11 petition. River Road disclosed $0 in assets and $14,400,000 in liabilities as of the Chapter 11 filing. RadLAX and its affiliates filed a separate chapter 11 petition (Bankr. N.D. Ill. Case No 09-30047) also on the same date, estimating assets at $50 million to $100 million. David M. Neff, Esq., at Perkins Coie LLP, serves as counsel to the River Road and RadLAX debtors. The two cases, however, are not jointly administered. The Official Committee of Unsecured Creditors is represented by Stephen T. Bobo and Ann E. Pille at Reed Smith LLP. Adam A. Lewis, Esq., and Norman S. Rosenbaum, Esq., of Morrison Foerster LLP of San Francisco, California; and John W. Costello, Esq., and Mary E. Olson, Esq., of Wildman, Harrold, Allen & Dixon LLP of Chicago, Illinois, represented Amalgamated Bank. John Sieger, Esq., and Andrew L. Wool, Esq., of Katten Muchin Rosenman LLP represented U.S. Bank. The bankruptcy judge in Chicago on July 7, 2011, signed a confirmation order for the Chapter 11 plan for River Road. The plan, which was proposed by River Road's lender, Amalgamated Bank, will give ownership in exchange for $162 million in debt. The lender waived its deficiency claim on taking title through the plan. The plan was declared effective Nov. 23, 2011. RadLAX's case remains pending. RYLAND GROUP: Incurs $5.1 Million Net Loss in First Quarter ----------------------------------------------------------- The Ryland Group, Inc., reported a net loss of $5.11 million on $215.86 million of total revenues for the three months ended March 31, 2012, compared with a net loss of $19.53 million on $167.67 million of total revenues for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $1.54 billion in total assets, $1.06 billion in total liabilities, and $479.91 million in total equity. A copy of the press release is available for free at: http://is.gd/xDv5tr About Ryland Group Headquartered in Calabasas, California, The Ryland Group, Inc. (NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's largest homebuilders and a leading mortgage-finance company. Since its founding in 1967, Ryland has built more than 285,000 homes and financed more than 240,000 mortgages. The Company currently operates in 15 states and 19 homebuilding divisions across the country and is listed on the New York Stock Exchange under the symbol "RYL." The Company reported a net loss of $50.75 million in 2011, a net loss of $85.14 million in 2010, and a net loss of $162.47 million in 2009. * * * Ryland Group carries 'B1' corporate family and probability of default ratings, with stable outlook, from Moody's. It has 'BB-' issuer credit ratings, with stable outlook, from Standard & Poor's. RYLAND GROUP: Seven Directors Elected at Annual Meeting ------------------------------------------------------- The Ryland Group, Inc., held its 2012 annual meeting of stockholders on April 25, 2012. Proxies representing 41,268,619 shares of common stock eligible to vote at the meeting, or 92.9% of the 44,434,020 outstanding shares, were voted. Seven persons were elected to the Board of Directors, namely: (1) William L. Jews; (2) Ned Mansour; (3) Robert E. Mellor; (4) Norman J. Metcalfe; (5) Larry T. Nicholson; (6) Charlotte St. Martin; and (7) Robert G. van Schoonenberg. The stockholders voted against an advisory vote on the compensation program for the Company's named executive officers. The stockholders ratified the appointment of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2012. About Ryland Group Headquartered in Calabasas, California, The Ryland Group, Inc. (NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's largest homebuilders and a leading mortgage-finance company. Since its founding in 1967, Ryland has built more than 285,000 homes and financed more than 240,000 mortgages. The Company currently operates in 15 states and 19 homebuilding divisions across the country and is listed on the New York Stock Exchange under the symbol "RYL." The Company reported a net loss of $50.75 million in 2011, a net loss of $85.14 million in 2010, and a net loss of $162.47 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $1.57 billion in total assets, $1.09 billion in total liabilities and $483.91 million in total equity. * * * Ryland Group carries 'B1' corporate family and probability of default ratings, with stable outlook, from Moody's. It has 'BB-' issuer credit ratings, with stable outlook, from Standard & Poor's. SABRE HOLDINGS: S&P Affirms 'B' Corp. Credit Rating; Outlook Pos ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Southlake, Texas-based Sabre Holdings Corp. to positive from stable. The corporate credit rating was affirmed at 'B'. "At the same time, we are assigning the company's proposed extending term loan due Dec. 29, 2017 and the $400 million secured notes due 2019 an issue-level rating of 'B' (at the same levels as our 'B' corporate credit rating on the company) and a recovery rating of '3'. The '3' recovery rating indicates our expectation of meaningful (50%-70%) recovery for debtholders in the event of a payment default," S&P said. "The outlook revision to positive is based on Sabre's plan to extend a portion of its significant 2014 maturities through a combination of term loan extension and secured notes issuance," said Standard & Poor's credit analyst Andy Liu. "The proposed transactions would reduce Sabre Holdings' 2014 maturities to nearly $1 billion--a figure that involves significantly less refinancing risk. The revision also considers the company's steady operation performance." "Our 'B' rating on the company incorporates our assumption of fairly stable operating performance, despite the company's ongoing dispute with one of its airline customers, and competitive pressure at its online travel agency, Travelocity. We expect that growth in the travel market will more than offset the specific weakness that Sabre is currently experiencing," S&P said. "We assess the company's business risk profile as 'fair', reflecting its market-leading position in travel distribution in the U.S. and growing demand for travel-related services. We view Sabre's financial risk profile as 'highly leveraged,' as debt leverage remains high, in the mid-5x area, and the company faces significant debt maturities in 2014. Sabre has made significant progress extending its 2014 maturities to $1.7 billion from about $3 billion. The proposed transactions would lower its 2014 maturities to near $1 billion. We believe it is highly likely that the company will be able to refinance its remaining 2014 maturities prior to them becoming current," S&P said. "Sabre's business includes global distribution systems (GDS) that travel agents and corporations use, software for travel providers, and online travel agency (OTA) Travelocity. Sabre Holdings is a major provider of marketing and distribution services to the travel industry," S&P said. SEALY CORP: H Partners Wants KKR-Affiliated Directors Replaced -------------------------------------------------------------- H Partners Management, LLC, a beneficial owner of approximately 15.3 percent of Sealy Corporation's outstanding shares, commented on the voting results with respect to Sealy's director nominees at the Company's Annual Meeting of Stockholders. As disclosed by Sealy, 61 percent of the shares voted at the meeting that were not owned by or affiliated with Kohlberg Kravis Roberts & Co. L.P. or a company insider withheld support for Deborah Ellinger, James Johnston and Gary Morin. This result is in line with H Partners' recommendation to replace three directors, and the recommendations of independent proxy advisory services ISS and Glass Lewis. H Partners said "These voting results represent a decisive vote of "no confidence" for the incumbent Sealy directors. KKR engaged public investors in April 2006 when it sold 10 million shares in Sealy's IPO at $16.00 per share and paid itself a dividend. Now, with the stock at $2.04 per share, Sealy and KKR prefer to ignore stockholders, ISS, and Glass Lewis. We are disappointed with both KKR and the "independent" directors who have overseen the destruction of $1.2 billion or almost 90% of shareholder value, approved excessive fees to KKR, and disregarded public stockholders." "With a CEO search underway and deteriorating financial performance, the Company is at a critical inflection point. The time has come for KKR and the board to provide equal rights and representation for all stockholders." H Partners urges the board to address its governance defects by implementing the following recommendations: * Appoint an H Partners representative to the Sealy board, in line with H Partners' ownership stake. This individual should serve on the Nominating & Corporate Governance Committee and the CEO Search Committee. * Replace three KKR-affiliated directors with truly independent directors to bring KKR's representation in line with its ownership interest. These new directors should be recommended by non-KKR stockholders, and at least one of these directors should serve on the Nominating & Corporate Governance Committee. * Request the resignation of Dean Nelson, CEO of KKR Capstone, due to obvious conflicts of interest involved in having a provider of consulting services on the board. * Create a "Conflicts Committee" comprising three independent directors. H Partners said it will not cease in its efforts to reform the governance and oversight of Sealy, and will continue to pursue all avenues to protect its investment. About Sealy Corp. Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) -- http://www.sealy.com/-- is the largest bedding manufacturer in the world with sales of $1.5 billion in fiscal 2008. The Company manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), including SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns & Foster(R), and Bassett(R) brands. Sealy operates 25 plants in North America, and has the largest market share and highest consumer awareness of any bedding brand on the continent. In the United States, Sealy sells its products to approximately 3,000 customers with more than 7,000 retail outlets. The Company reported a net loss of $9.88 million for the 12 months ended Nov. 27, 2011, and a net loss of $13.74 million during the prior year. The Company reported a net loss of $15.20 million for the three months ended Nov. 27, 2011. The Company's balance sheet 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. * * * Sealy carries 'B' local and issuer credit ratings, with stable outlook, from Standard & Poor's. SOLAR TRUST: Mason Capital, Not NextEra, is the DIP Lender ---------------------------------------------------------- On April 26, 2012, Solar Trust of America, LLC received final approval from U.S. Bankruptcy Court for the District of Delaware to obtain a replacement debtor-in-possession financing from Mason Capital Management, LLC. The new DIP facility provides the Company with up to $25 million of available borrowing capacity in addition to $18.4 million for letters of credit. "The new loan will provide the necessary funding to maximize value through a longer and more robust asset sale process than was provided for under the prior DIP," said Ned Kleinschmidt, President and Chief Restructuring Officer of STA. The process will culminate with an auction currently scheduled for late June 2012, with the exact date yet to be determined and subject to approval by the Bankruptcy Court. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Solar Millennium Inc. landed financing for its bankruptcy reorganization on terms more favorable than those originally offered by NextEra Energy Inc., the parent of Florida Power & Light Co. and a potential buyer for the business. The Debtor had lined up NextEra to provide a $3.9 million term loan and an $18.4 million letter of credit facility. The loan required a quick sale of the property, with NextEra as a bidder. According to the report, Mason Capital Management LLC later offered a larger loan and a slower sale process. Solar Millennium selected Mason as the permanent lender, citing a "belief that a process longer than 30 days is necessary." As approved by the bankruptcy court April 26, New York-based Mason is providing a $25 million working capital term loan along with an $18.3 million letter of credit. The report relates that Mason's loan requires filing papers by April 30 to set up auction procedures. Procedures must be court approved by May 15, so there can be an auction no later than July 12. Under the NextEra loan, the auction had to occur by April 30. 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. K&L Gates LLP is the special corporate counsel. Ridgecrest Solar Power Project, LLC, and two entities filed for Chapter 11 protection (Bankr. D. Del. Case Nos. 12-11204 to 12-11206) on April 10, 2012. Ridgecrest Solar, et al., are affiliates of Solar Trust of America LLC. STA Development, LLC, one of the debtors that filed for bankruptcy April 2, owns 100% of the interests in Ridgecrest, et al. Ridgecrest Solar Power estimated up to $50,000 in assets and debts. Ridgecrest Solar I, LLC, estimated up to $50,000 in assets and up to $10 million in liabilities. SOLYNDRA LLC: Court Extends Solicitation Period Until Sept. 23 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended until Sept. 23, 2012, Solyndra LLC, et al.'s exclusive period to solicit acceptances for the proposed Plan of Reorganization. As reported in the Troubled Company Reporter on April 23, 2012, Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that creditors of Solyndra LLC are evidently satisfied with the progress of the Chapter 11 liquidation of the defunct solar-panel maker that was partly financed by the U.S. government. No one objected to an extension of the company's exclusive right to propose a plan, allowing the bankruptcy judge in Delaware to sign an order on April 18 pushing exclusivity out by three months to July 2. About Solyndra LLC Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Solyndra LLC. The Committee has tapped Blank Rome LLP as counsel. In October 2011, the Debtors hired Berkeley Research Group, LLC, and designated R. Todd Neilson as Chief Restructuring Officer. Solyndra is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are Evergreen Solar and start-up Spectrawatt Inc., both of which filed in August, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. When they filed for Chapter 11, the Debtors pursued a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors were unable to identify any potential buyers, an orderly liquidation of the assets for the benefit of their creditors. Solyndra did not receive acceptable offers to buy the business as a going concern. Two auctions late last year brought in a total of $8 million. A three-day auction in February generated another $3.8 million. SPANISH TRAIL: Resolves Chapter 11 Case by Ceding Ownership ----------------------------------------------------------- Tim O'Reiley at the Las Vegas Review-Journal reports that, moments before an in-court auction set for the afternoon of April 24, the Spanish Trail Country Club Inc. resolved its Chapter 11 bankruptcy by ceding ownership of its land and facilities to its main lender in return for continuing to operate as it has for the past quarter-century. According to the report, the terms call for Hermitage Management LLC, a unit of mortgage holder Jackson National Life Insurance Co., to take title of the golf and country club and cancel a $17.9 million debt. The report says Jackson National will lease the property back to the nonprofit club and give members an option to buy it back within four years for $7.5 million. The report notes the club will also agree not to file another bankruptcy case should it run into financial trouble again. The report relates the company submitted court papers promising to bid at least $7 million and hire an outside manager for the 249- acre club, with its 27-hole golf course, swimming pool, tennis courts and dining room. Jackson National indicated that it valued the club, surrounded by the separate Spanish Trail gated community, at $10 million. Las Vegas, Nevada-based Spanish Trail Country Club Inc. filed for Chapter 11 bankruptcy Protection (Bankr. D. Nev. Case No. 11-23466) on Aug. 24, 2011. Judge Bruce A. Markell presides over the case. Gerald M. Gordon, Esq., at Gordon Silver, represents the Debtor. The Debtor estimated assets of between $1 million and $10 million, and debts of between $10 million and $50 million. SUBURBAN PROPANE: Moody's Affirms 'Ba2' CFR; Outlook Negative ------------------------------------------------------------- Moody's Investors Service changed Suburban Propane Partners, L.P.'s outlook to negative from stable and affirmed its Ba2 Corporate Family Rating (CFR), Ba2 Probability of Default Rating (PDR), and Ba3 senior unsecured note ratings. Moody's also assigned a SGL-3 Speculative Grade Liquidity (SGL) rating. The change to a negative outlook follows the company's announcement that it has reached a definitive agreement to acquire Inergy, L.P.'s (Inergy) retail propane assets for $1.8 billion ($1 billion of newly issued Suburban notes, $600 million of new Suburban common units, and $200 million in cash). Suburban has also announced that it will commence offers in connection with the planned acquisition to exchange $1.2 billion of Inergy's senior notes for $1.0 billion of new Suburban senior notes and $200 million in cash. If such an exchange were to occur in accordance with the proposed offer (with the new unsecured notes being pari passu with the existing unsecured notes), the new Suburban notes would likely be rated Ba3 (assuming there are no unanticipated material changes in Suburban's credit profile between now and the exchange). "The negative outlook reflects increased leverage pro forma for the planned acquisition, with debt / EBITDA above 5.0x," commented Jonathan Kalmanoff, Moody's Analyst. "We view debt / EBITDA below 4.0x as appropriate for the Ba2 CFR over the long term, and believe the company can achieve this through a return to more normal winter weather and debt reduction from the proceeds of an anticipated equity issuance of about $350 million." The negative outlook also considers the likelihood of limited covenant headroom under the credit facility following the acquisition. Very warm winter weather from December 2010 through March 2012 will have a pronounced negative impact on EBITDA for the company's fiscal year ending September 30, 2012. Given the inherent unpredictability of weather, combined with the challenges of rising commodity prices and customer conservation, the negative outlook considers the possibility that leverage will not decline as expected. Issuer: Suburban Propane Partners, L.P. , Upgrades: Senior Unsecured Regular Bond/Debenture, Upgraded to LGD4, 63% from LGD5, 79% Assignments: Speculative Grade Liquidity Rating, Assigned SGL-3 Outlook Actions: Outlook, Changed To Negative From Stable Ratings Rationale The Ba2 CFR is supported by a significant market position in propane, pro forma scale which is comparable to the largest propane peers, and a strong track record of successful cost reduction efforts and conservative financial policies. The rating is tempered by characteristics of the propane sector which include a trend of declining volumes, the highly competitive and fragmented nature of the sector, and growth opportunities that are mostly limited to acquisitions as opposed to organic growth. The rating also considers the risks associated with the planned acquisition, including elevated leverage, integration risks, and execution risks related to achieving anticipated synergies. The SGL-3 reflects adequate liquidity through the first quarter of 2013 with $96 million of cash at March 31, 2012 and an expectation of about $30 of million negative free cash flow over the next twelve months. Pro forma for the transaction, Suburban will have a $400 million secured credit facility which matures in 2017. Moody's expects there to be only a small amount of headroom under the covenants, but with temporary covenant relief initially for an unspecified amount of time. Limited covenant headroom could limit the company's ability to fully draw on the credit facility as a source of alternate liquidity. Apart from the credit facility maturity in 2017, there are no other debt maturities until 2020. The Ba3 senior unsecured note rating reflects both the overall probability of default of Suburban, to which Moody's assigns a PDR of Ba2, and a loss given default of LGD4-63%. The size of the senior secured revolver's priority claim relative to the senior unsecured notes results in the notes being rated one notch beneath the Ba2 CFR under Moody's Loss Given Default Methodology. The outlook could be changed to stable if it appears that debt / EBITDA will be reduced to below 4.0x by fiscal year end September 30, 2013, with increased covenant headroom and good liquidity. If it appears that debt / EBITDA is not likely to be reduced below 4.0x by fiscal year end 2013, the ratings could be downgraded. The principal methodology used in rating Suburban Propane Partners, L.P. was the Global Midstream Energy published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Suburban Propane Partners, L.P. is a master limited partnership (MLP) based in Wippany, NJ which distributes propane, fuel oil, and refined fuels, and markets natural gas and electricity. TALON THERAPEUTICS: Amends 4.1 Million Resale Prospectus -------------------------------------------------------- Talon Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission a post-effective amendment no. 1 to the Form S-1 relating to the offering on a resale basis of a total of 4,063,146 shares of the Company's common stock, including 1,658,200 shares issuable upon the exercise of outstanding warrants. The Company's common stock is quoted on the OTC Bulletin Board under the symbol "TLON.OB." The Company will receive none of the proceeds from the sale of the shares by the selling stockholders, except for the warrant exercise price paid for the shares offered that are issuable upon the exercise of certain warrants. A copy of the amended prospectus is available for free at: http://is.gd/taQRGZ About Talon Therapeutics Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc. (TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical company dedicated to developing and commercializing new, differentiated cancer therapies designed to improve and enable current standards of care. The company's lead product candidate, Marqibo, potentially treats acute lymphoblastic leukemia and lymphomas. The Company has additional pipeline opportunities some of which, like Marqibo, improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity. Effective Dec. 1, 2010, Hana Biosciences Inc. changed its name to Talon Therapeutics Inc. The name change was effected by merging Talon Therapeutics, Inc., a wholly-owned subsidiary of the Company, with and into the Company, with the Company as the surviving corporation in the merger. The Company reported a net loss of $18.82 million for the year ended Dec. 31, 2011, compared with a net loss of $25.98 million during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $2.48 million in total assets, $30.86 million in total liabilities, $30.64 million in redeemable convertible preferred stock, and a $59.02 million total stockholders' deficit. The Company does not generate significant recurring revenue and has incurred significant net losses in each year since its inception. The Company expects to incur substantial losses and negative cash flow from operations for the foreseeable future, and the Company may never achieve or maintain profitability. BDO USA, LLP, in San Jose, California, noted that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. TELKONET INC: Tim Ledwick Appointed to Board of Directors --------------------------------------------------------- The Board of Directors of Telkonet, Inc., appointed Tim S. Ledwick to the Board. Mr. Ledwick was also appointed Chairman of the Company's Audit Committee, replacing William H. Davis, who will remain a member of the Audit committee as well as Chairman of the Board of Directors. Mr. Ledwick, 54, is currently the Chief Financial Officer of Management Health Solutions, a private equity-backed company that provides software solutions and services to hospitals focused on reducing costs through superior inventory management practices. From 2007 to 2011, Mr. Ledwick provided CFO consulting services to a $150 million services firm and, in addition, from 2007-2008 also acted as special advisor to The Dellacorte Group, a middle market financial advisory firm focused on transactions between $100 million and $1 billion. The Company's Director Compensation Policy is applicable to Mr. Ledwick as a non-employee director. Mr. Ledwick will receive a monthly board retainer of $5,000 payable in Company stock and $500 per committee meeting participation, also payable in Company stock. Mr. Ledwick will also be reimbursed for certain tax liabilities incurred in connection with his director compensation. Prior to his appointment to the Board, there were no material relationships between Mr. Ledwick and the Company or any of its other directors or executive officers. "Tim Ledwick is a proven financial expert with extensive public company experience and exceptional leadership, interpersonal and technical skills. We welcome him as an immediate asset and contributor to our firm and Board of Directors and I personally look forward to working with him," stated Telkonet CEO Jason Tienor. "I'm excited to be joining a leader in the promising clean energy management technology industry," said Mr. Ledwick. "I look forward to the opportunity to work with a talented management team that I believe has positioned Telkonet well in its core markets." About Telkonet Milwaukee, Wisconsin-based Telkonet, Inc. is a clean technology company that develops and manufactures proprietary energy efficiency and smart grid networking technology. The Company reported a net loss of $1.90 million in 2011, compared with a net loss of $2.17 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $13.19 million in total assets, $4.58 million in total liabilities, $2.36 million in total redeemable preferred stock, and $6.24 million in total stockholders' equity. For 2011, Baker Tilly Virchow Krause, LLP, in Milwaukee, Wisconsin, noted that the Company continues to incur significant operating losses, has an accumulated deficit of $118.34 million and has a working capital deficiency of $775,000 that raise substantial doubt about the Company's ability to continue as a going concern. TENET HEALTHCARE: Buys Back $299-Mil. of Conv. Preferred Stock -------------------------------------------------------------- Tenet Healthcare Corporation has repurchased $299 million of mandatory convertible preferred stock. This preferred stock would have converted into 51 million shares of the Company's common stock on Oct. 1, 2012, based on the most recent closing share price. In a related private financing, the Company issued $150 million of 8% senior notes due Aug. 1, 2020, and $141.2 million of 6.25% senior secured notes due Nov. 1, 2018. In connection with these transactions, Tenet released its preliminary results for the quarter ended March 31, 2012. First quarter results included net operating revenues of $2.350 billion, an increase of 2.2 percent compared to the first quarter of 2011, and net income attributable to common shareholders of $58 million, or $0.13 per diluted share compared to $73 million, or $0.14 per diluted share, in the first quarter of 2011. State provider fees, Health Information Technology incentives, payer settlements, and gains contributed nearly $40 million more to Adjusted EBITDA in the first quarter of 2011 than similar items contributed in the first quarter of 2012. "This repurchase of preferred stock avoids the potential issuance of up to 51 million additional common shares later this year," said Trevor Fetter, president and chief executive officer. "As a result of this repurchase and the Company's prior share repurchase program, completed in January of this year, our outstanding common share count was reduced by approximately 25 percent, on a fully dilutive basis. These aggressive actions to restructure our balance sheet provide a strong signal of management's confidence in the value of the Company's common stock. This confidence is bolstered by the solid start we've achieved in 2012 with strong growth in adjusted admissions, surgeries, and emergency department visits. Our first quarter performance allows us to raise our 2012 Outlook for Adjusted EBITDA by an additional $25 million. This is our second Outlook increase this year." Agreement to Sell CUMC On April 24, 2012, Tenet signed a non-binding letter of intent to sell its interest in Creighton University Medical Center to Alegent Health. CUMC is located in Omaha, Nebraska. If the transaction is consummated, the Company anticipates recognizing a pre-tax non-cash impairment charge of approximately $100 million ($50 million after-tax and after a noncontrolling interest benefit) as a component of discontinued operations. CUMC's revenue and Adjusted EBITDA included in the Company's 2012 Outlook were expected to be approximately $190 million and $10 million, respectively, and its income before income taxes and free cash flow were expected to be breakeven for 2012. The sale transaction price, including working capital, is expected to be approximately $63 million. The Company currently expects the transaction to be completed in the quarter ending June 30, 2012. The Company does not expect to incur any significant cash expenditures as a result of the impairment. The transaction is subject to finalization of definitive agreements and customary closing conditions. About Tenet Healthcare Dallas, Texas-based Tenet Healthcare Corporation (NYSE: THC) -- http://www.tenethealth.com/-- is a health care services company whose subsidiaries and affiliates own and operate acute care hospitals, ambulatory surgery centers and diagnostic imaging centers. The Company's balance sheet at Dec. 31, 2011, showed $8.46 billion in total assets, $6.95 billion in total liabilities, $16 million in redeemable non-controlling interests in equity of consolidated subsidiaries, and $1.49 billion in total equity. * * * Standard & Poor's Ratings Services said November 2011 the corporate credit rating on Tenet is 'B' and the outlook is stable. "The rating reflects our view of the company's weak business risk as the benefits of a fairly sizable portfolio of 49 hospitals are undercut by uncertain reimbursement, significant uncompensated care, weak patient volume trends and concentration in certain markets, many of which are competitive. We view Tenet's financial risk profile as aggressive, even though there has been a recent reduction in debt to EBITDA to 4.5x. This has contributed to the generation of free cash flow since last year. (For the latest complete corporate credit rating rationale, see Standard & Poor's research report on Tenet published July 20, 2011 on Ratings Direct)," S&P related. Moody's Investors Service said in November 2011 that Tenet's 'B2' Corporate Family Rating remains constrained by Moody's expectation of modest free cash flow generation and continued high geographic concentration. Furthermore, industry challenges like high bad debt expense, weak volume trends and changes in mix as commercial volumes decline, will likely challenge organic growth. However, the rating also incorporates Moody's expectation that the company will continue to see improvements in operating performance, driven by cost savings initiatives and benefits from capital investment. TENET HEALTHCARE: Moody's Rates $141MM Senior Secured Notes 'B1' ---------------------------------------------------------------- Moody's Investors Service commented that Tenet Healthcare Corporation's offering of $141 million of senior secured notes due 2018 are rated B1 (LGD 3, 39%). Tenet's offering of $150 million senior unsecured notes due 2020 have been rated Caa1 (LGD 5, 87%). Moody's understands that the proceeds of the offerings, which are add-ons to existing note issuances, were used to repurchase approximately $299 million of the company's 7% mandatory convertible preferred stock. Moody's existing ratings of the company, including the B2 Corporate Family and Probability of Default Rating, remain unchanged. The rating outlook remains positive. "While the issuance of debt to fund a repurchase of equity will result in increased leverage and is a modest credit negative, it is not enough to affect Tenet's ratings or positive outlook," said Dean Diaz, a Moody's Senior Credit Officer. "The interest cost associated with the new debt will be ongoing and negate any benefit to cash flow that would have been realized with the elimination of the dividend upon the mandatory conversion of the preferred stock in October 2012." Ratings assigned: 8.0% senior unsecured notes due 2020, Caa1 (LGD 5, 87%) Ratings unchanged/LGD assessments revised: 10.0% senior secured notes due 2018, B1 (LGD 3, 39%) 8.875% senior secured notes due 2019, B1 (LGD 3, 39%) 6.25% senior secured notes due 2018, B1 (LGD 3, 39%) 6.5% senior notes due 2012, to Caa1 (LGD 5, 87%) from Caa1 (LGD 5, 86%) 7 3/8% senior notes due 2013, to Caa1 (LGD 5, 87%) from Caa1 (LGD 5, 86%) 9 7/8% senior notes due 2014, to Caa1 (LGD 5, 87%) from Caa1 (LGD 5, 86%) 9 1/4% senior notes due 2015, to Caa1 (LGD 5, 87%) from Caa1 (LGD 5, 86%) 8% senior notes due 2020, to Caa1 (LGD 5, 87%) from Caa1 (LGD 5, 86%) 6 7/8% senior notes due 2031, to Caa1 (LGD 5, 87%) from Caa1 (LGD 5, 86%) Corporate Family Rating, B2 Probability of Default Rating, B2 Speculative Grade Liquidity Rating, SGL-2 Ratings Rationale Tenet's B2 Corporate Family Rating is constrained by Moody's expectation of modest free cash flow generation and continued high geographic concentration. Furthermore, industry challenges like high bad debt expense, weak volume trends and changes in mix as commercial volumes decline, will likely challenge organic growth. However, the rating also incorporates Moody's expectation that the company will continue to see improvements in operating performance, driven by cost savings initiatives and benefits from capital investment. The positive outlook reflects Moody's expectation that EBITDA growth will continue and result in gradually improving free cash flow generation and reduced leverage. Moody's could upgrade the rating if the company is able to effectively manage growth of the business such that leverage remains at or below 4.5 times while earnings growth continues to result in improving credit metrics. Moody's could downgrade the rating if a decline in operating performance results in an expectation that debt to EBITDA will rise above 5.5 times or if free cash flow, prior to discretionary reinvestment in the business, is expected to be negative. Furthermore, a significant debt financed acquisition could result in a downgrade of the ratings. For further details, refer to Moody's Credit Opinion for Tenet Healthcare Corporation on moodys.com. The principal methodology used in rating Tenet Healthcare Corporation was the Moody's Global Healthcare Service Provider Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Tenet, headquartered in Dallas, Texas, is one of the largest for- profit hospital operators by revenues. At December 31, 2011 the company operated 50 hospitals in 11 states. The company also operated a long-term acute care hospital and owned or leased and operated 32 medical office buildings located on or nearby its hospital facilities. Further, Tenet's subsidiaries operated 98 free standing and provider based diagnostic imaging centers, ambulatory surgery centers and urgent care centers as well as one free standing emergency department, in 12 states at December 31, 2011. Tenet generated revenue of approximately $9.6 billion for the year ended December 31, 2011 before consideration of the provision for doubtful accounts of about $730 million. THERMON INDUSTRIES: S&P Retains 'B+' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services revised its recovery rating upward, to '3' from '4', on San Marcos, Texas-based Thermon Industries Inc.'s 9.5% second-lien secured notes. The industrial electric heat tracing products and services provider recently announced its intention to redeem an additional 10% of the notes. This will reduce the outstanding amount to about $118 million, from the original principal amount of $210 million. "We expect the lower amount of outstanding debt to result in greater recovery for lenders in a payment default. The new '3' recovery rating indicates our expectation that noteholders would receive meaningful (50%-70%) recovery in the event of a payment default. The issue rating remains 'B+', the same as the corporate credit rating," S&P said. "The ratings on Thermon reflect our expectation that the company will benefit from the increasing global demand for energy. We also expect the company to maintain an operating margin (before depreciation and amortization) of at least 20%. This, in addition to the recently announced debt reduction, should result in debt to EBITDA of about 2x at its fiscal year-end March 31, 2013, better than the 4x-5x we consider in line with the rating. Thermon has an 'aggressive' financial risk profile in our view due to its April 2010 acquisition by Code Hennessy & Simmons LLC, which the $210 million in senior secured notes partially financed," S&P said. RATINGS LIST Thermon Industries Inc. Corporate credit rating B+/Stable/-- Recovery Rating Revised To From Senior secured B+ B+ Recovery rating 3 4 TOPS HOLDING: S&P Ups Corp. Credit Rating to 'B+'; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Buffalo, N.Y.-based Tops Holdings Corp., including the corporate credit rating to 'B+' from 'B'. The outlook is stable. "We also raised the issue rating on the company's senior secured second-lien notes to 'B+' (the same as the corporate credit rating) from 'B'. The recovery rating on the notes remains a '3', indicating our expectation of meaningful (50% to 70%) recovery of principal in the event of payment default," S&P said. "The upgrade primarily reflects our revised view of the company's financial risk profile as 'aggressive' from 'highly leveraged,'" said Standard & Poor's credit analyst Charles Pinson-Rose. "This change follows better-than-expected profit growth in 2011 as a result of better operating margins following the integration of Penn Traffic stores in 2010. It also incorporates our expectation that Tops will maintain 2011 operating margins and modestly grow revenue and profits in 2012." "The rating on Tops reflects our view that the company will maintain its aggressive financial risk profile, since we forecast moderate operating income growth in the near term and improving credit metrics. We assess Tops' business risk profile as 'weak,' which reflects its geographic concentration and participation in the very competitive food retail industry. The industry is currently experiencing continued incursions from discounters, dollar stores, warehouse clubs, and drug stores. Nonetheless, we believe Tops is reasonably well positioned to maintain its current market share," S&P said. "In the fourth quarter of 2011, Tops' sales performance was mostly in line with our expectations, but it expanded operating margins more than we expected," added Mr. Pinson-Rose. "In particular, costs of goods sold, labor, and administrative costs improved as a percentage of sales by about 190 basis points. We believe this benefit was largely a result of more efficient operations, fewer promotions, and better cost management following the integration of the Penn Traffic stores it acquired in 2010. We believe Tops can maintain its current operating margins going forward." "The rating outlook on Tops is stable and reflects our opinion that it should modestly enhance credit ratios over the near term. We would consider a lower rating if total leverage worsens to the 5.4x area, and if we believe that credit ratios would not improve from those levels. Such a scenario could occur with current debt levels if EBITDA drops by about 7% in 2012, as a result of a 1% sales decline and 30 basis points of operating margin contraction," S&P said. "Although unlikely in the near term, we would consider a higher rating if leverage was below 4x, which we do not believe is possible considering our near-term performance expectations, since it would need about 30% EBITDA growth with current debt levels," S&P said. TRIBUNE CO: Bank Debt Trades at 32% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Tribune Co. is a borrower traded in the secondary market at 67.66 cents-on-the- dollar during the week ended Friday, April 27, 2012, an increase of 0.51 percentage points from the previous week, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank loan matures on May 17, 2014. The loan is one of the biggest gainers and losers among 162 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. 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: Three Directors Resign from Board ------------------------------------------------------- Raymond Ostby, Carl Hsu and A.C. D' Augustine each resigned as members of the Board of Directors of Trident Microsystems, Inc. Neither Mr. Ostby nor Mr. Hsu nor Mr. D' Augustine resigned as a result of any disagreement with the Company. The Company and the Board acknowledged Messrs. Ostby's, Hsu's and D' Augustine's commitment, dedication and thoughtful service to the Company, and their deep appreciation of their contributions to the Company during their tenure as members of the Board. As of April 26, 2012, the Board of Directors consists of Brian R. Bachman, Dr. Bami Bastani, David H. Courtney (the Company's Chairman of the Board) and Philippe Geyres. About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $309,992,980 in assets and $39,607,591 in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. TXU CORP: Bank Debt Trades at 44% Off in Secondary Market --------------------------------------------------------- Participations in a syndicated loan under which TXU Corp., now known as Energy Future Holdings Corp., is a borrower traded in the secondary market at 55.81 cents-on-the-dollar during the week ended Friday, April 27, 2012, a drop of 2.01 percentage points from the previous week, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 350 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 10, 2014, and carries Standard & Poor's 'CCC' rating. The loan is one of the biggest gainers and losers among 162 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. 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. 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. Energy Future had a net loss of $1.91 billion on $7.04 billion of operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.81 billion on $8.23 billion of operating revenues during the prior year. * * * In late January 2012, Moody's Investors Service changed the rating outlook for Energy Future Holdings Corp. (EFH) and its subsidiaries to negative from stable. Moody's affirmed EFH's Caa2 Corporate Family Rating (CFR), Caa3 Probability of Default Rating (PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1 senior secured rating for Oncor. EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed company with limited flexibility. EFH's capital structure is complex and, in our opinion, untenable which calls into question the sustainability of the business model and expected duration of the liquidity reserves. UNITED STATES OIL: CEO Alex Tawse Resigns; James Crimi Takes Over ----------------------------------------------------------------- The Board of Directors of United States Oil & Gas Corp accepted the resignation of Alex Tawse as Chairman of the Board of Directors, Chief Executive Officer and President of the Company, as well as his position as a member of the Board effective April 27, 2012. The Company also appointed James Crimi to the same positions effective April 27, 2012. Mr. Crimi was also elected to the Board. James Crimi, 48, was appointed Chairman, President and Chief Executive Officer in April 2012. Mr. Crimi has served as the Company's Director of Investor Relations from September 2010 to April 2012. From September 2006 to the present, Mr. Crimi has served as President and Chief Executive Officer for JCSD Consultants, Inc. a consulting firm which provides private and publicly traded companies with guidance on increasing market exposure, improving and managing shareholder relationships, accessing the capital markets and assisting with corporate filings. From July 2002 to December 2005, Mr. Crimi was the Chief Executive Officer of Sky Capital UK, Limited, a London, England based broker dealer. From October 1996 to September 1999, Mr. Crimi served as President and Chief Operating Officer of JJ Rich & Company, which controlled an equity stake and operated an Office of Supervisory Jurisdiction (OSJ) of a New York based broker dealer. Mr. Crimi has previously held a securities license in the United Kingdom as a registered person with the Financial Services Authority (FSA), and has been a series 7-licensed stockbroker registered with NASD and FINRA and regulated by the SEC. Mr. Crimi's close work with the Company since September 2010, familiarity with recent issues the Company has faced and its objectives and goals; and experience within the financial markets qualify him to serve on the Company's Board. Meanwhile, the Company said it is continuing in its efforts to complete its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011, but has been unable to finalize the audit of its subsidiary, United Oil & Gas Inc. The Company will continue working with its auditors and its subsidiary and file as soon as the audit is completed. About United States Oil United States Oil and Gas Corp. OTC QB: USOG) -- http://www.usaoilandgas.com/-- is an oil and gas products, services and technology company headquartered in Austin, Texas. Through its subsidiaries, the Company markets and distributes refined oil and gas (diesel, gasoline, propane, high octane racing fuels and lubricants) to wholesale and retail customers in the United States. The Company reported a net loss of $1.3 million in 2010 and a net loss of $1.5 million in 2009. The Company reported a net loss of $2.37 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $6.35 million in total assets, $7.43 million in total liabilities, and a $1.07 million total stockholders' deficit. As reported in the TCR on April 27, 2011, M&K CPAS, PLLC, in Houston, Texas, expressed substantial doubt about United States Oil and Gas Corp.'s ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has accumulated losses resulting in an accumulated deficit as of Dec. 31, 2010. US FIDELIS: Committee Can Hire GCG as Claims and Notice Agent ------------------------------------------------------------- The Bankruptcy Court has authorized the Official Committee of Unsecured Creditors for US Fidelis, Inc., to retain GCG, Inc., as consumer claims and noticing agent. The Committee chose GCG based on its experience, reputation and the competitiveness of its fees. GCG is a bankruptcy administrator that specializes in providing comprehensive chapter 11 administrative services including noticing, claims processing, balloting and other related services critical to the effective administration of chapter 11 cases. GCG has developed efficient and cost-effective methods to handle properly the voluminous mailings associated with the noticing, claims processing and balloting portions of chapter 11 cases to ensure the orderly and fair treatment of creditors, equity security holders and all parties-in-interest. This is particularly important in handling the potential volume of consumer claims in this case. Pursuant to the Retention Agreement, GCG will undertake the following actions and procedures in its role as the Consumer Claims Agent: A. Following Court approval of the form and content of the notice, notify the potential consumer creditors of the filing of the bankruptcy, the disclosure statement, consumer claim and ballot process; B. Furnish a notice of the last date for the filing of consumer proofs of claim and a form for the filing of a proof of claim, after such notice and form are approved by this Court; C. Assist with the publication of required notice(s), as necessary and requested by the Committee, following approval of a form of publication notice; D. For all notices, file an affidavit or certificate of service which includes a copy of the notice, a list of persons to whom it was mailed, and the date mailed, within seven days of service; E. Create and maintain a public access website setting forth pertinent case information and allowing access to certain documents filed in the Debtor's case and potentially to be used for the online submission of consumer claims; F. Maintain a mailing address for the purpose of receiving claims and ballots from consumers; G. Docket all consumer claims provided to GCG by the Committee that have already been filed in this case or that are filed at the Court after approval of GCG's retention and maintain a consumer claims register on behalf of the consumer trust, and upon the receipt of a request from the Committee, AG Steering Committee, or trust advisory committee, provide those parties with access to the Consumer Claims Register and/or reports summarizing the Consumer Claims Register; H. Specify in the Consumer Claims Register with respect to consumer claims, the following information for each consumer claim docketed: (i) the claim number assigned, (ii) the date received, (iii) the name and address of the claimant and agent, if applicable, who filed the claim, (iv) the amount and classification(s) of the claim and (v) additional information that is required or requested by the consumer trust advisory committee; I. Record all transfers of consumer claims and provide any notices of such transfers as required under the Bankruptcy Rules or consumer trust agreement; J. Make changes in the Consumer Claims Register pursuant to Court Order or the consumer trust agreement; K. Maintain a mailing list for the trust of all consumers that have filed a proof of claim; and L. Assist with, among other things, with respect to consumer claims and ballots, solicitation and calculation of votes and distribution as required in furtherance of confirmation of any plan of reorganization. In addition, GCG will provide other noticing, claims processing, balloting and related administrative services as the Committee or the consumer trust may require or request from time to time. To the best of the Committee's knowledge, GCG is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About US Fidelis Wentzville, Missouri-based US Fidelis, Inc., was a marketer of vehicle service contracts developed by independent and unrelated companies. It stopped writing new business in December 2009. The Company filed for Chapter 11 bankruptcy protection (Bankr. E.D. Mo. Case No. 10-41902) on March 1, 2010. Brian T. Fenimore, Esq., Crystanna V. Cox, Esq., James Moloney, Esq, at Lathrop & Gage L.C., in Kansas City, Mo.; and Laura Toledo, Esq., at Lathrop & Gage, in Clayton, Mo., assist the Debtor in its restructuring effort. According to the schedules, the Company had assets of $74,386,836, and total debts of $25,770,655 as of the petition date. Allison E. Graves, Esq., Brian Wade Hockett, Esq., and David A. Warfield, Esq., at Thompson Coburn LLP, in St. Louis, Mo., represent the Official Unsecured Creditors Committee. USEC INC: Ten Directors Elected at Annual Meeting ------------------------------------------------- USEC Inc. held its annual meeting on April 26, 2012. As of the record date, March 2, 2012, there were 122,073,407 shares of common stock outstanding, each entitled to one vote. At the Annual Meeting, USEC's shareholders voted on four proposals. USEC's shareholders elected ten directors to hold office until the next annual meeting of shareholders and until his or her successor is elected and has qualified. There were no abstentions. The newly elected directors are: (1) James R. Mellor, Chairman; (2) Joyce F. Brown; (3) Sigmund L. Cornelius; (4) Joseph T. Doyle; (5) William Habermeyer; (6) William J. Madia; (7) W. Henson Moore; (8) Walter E. Skowronski; (9) Richard Smith; and (10) John K. Welch. USEC's shareholders approved the Company's executive compensation. USEC's shareholders approved the Tax Benefit Preservation Plan and ratified the appointment of PricewaterhouseCoopers LLP as the Company's independent auditors for 2012. About USEC Inc. Headquartered in Bethesda, Maryland, USEC Inc. (NYSE: USU) -- http://www.usec.com/-- supplies enriched uranium fuel for commercial nuclear power plants. The Company reported a net loss of $540.70 million in 2011, compared with net income of $7.50 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $3.54 billion in total assets, $2.79 billion in total liabilities and $752.40 million in total stockholders' equity. * * * USEC Inc. carries 'Caa1' corporate and probability of default ratings, with "developing" outlook, from Moody's, and 'CCC+' long term foreign issuer credit rating and 'CCC-' long term local issuer credit rating, with outlook "developing", from Standard & Poor's. In May 2010, S&P said that its rating and outlook on USEC Inc. are not affected by the announcement that Toshiba Corp. and Babcock & Wilcox Investment Co., an affiliate of The Babcock & Wilcox Co., have signed a definitive investment agreement for $200 million with USEC. UTSTARCOM HOLDINGS: Swings to $11.7 Million Net Income in 2011 -------------------------------------------------------------- UTStarcom Holdings Corp. filed with the U.S. Securities and Exchange Commission its annual report on Form 20-F disclosing net income of $11.77 million on $320.57 million of net sales in 2011, compared with a net loss of $65.29 million on $291.53 million of net sales in 2010. The Company's balance sheet at Dec. 31, 2011, showed $600.94 million in total assets, $329.90 million in total liabilities and $271.04 million in total equity. A copy of the Form 20-F is available for free at: http://is.gd/bRSgvC About UTStarcom, Inc. UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a global leader in IP-based, end-to-end networking solutions and international service and support. The Company sells its solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks. The Company's headquarters are currently in Alameda, California, with its research and design operations primarily in China. VERSO PAPER: Moody's Says Debt Exchange Offer to Hit 'B1' Rating ---------------------------------------------------------------- Moody's Investors Service commented that the debt exchange offer announced by Verso Paper Holdings for its subordinated notes may pressure the B1 (LGD3 40%) rating on the company's proposed secured notes due 2019 (the proposed secured notes). Verso announced on April 25, 2012 that it will exchange up to $157 million of its $300 million subordinated notes due 2016 for up to $105 million of additional proposed secured notes plus a total cash payment of $17.5 million. The new exchange offer will change the liability waterfall by reducing the debt cushion available to the proposed secured notes. The principal methodology used in rating Verso was the Global Paper and Forest Products Industry Rating Methodology published in September 2009. Headquartered in Memphis, Tennessee, Verso is the second largest coated paper producer in North America with a 20% coated groundwood market share and about 12% coated freesheet market share. The company operates 9 paper machines at four mills with total paper production capacity of approximately 1.7 million tons. VIASPACE INC: Director Paul Kim Resigns for Personal Reasons ------------------------------------------------------------ Paul Kim resigned as a director of Viaspace Inc. on April 19, 2012. Mr. Kim indicated that he was resigning due to other increasing personal and professional commitments. About VIASPACE Inc. Irvine, Calif.-based VIASPACE Inc. (OTC Bulletin Board: VSPC - News) -- http://www.VIASPACE.com/-- is a clean energy company providing products and technology for renewable and alternative energy that reduce or eliminate dependence on fossil and high- pollutant energy sources. Through its majority-owned subsidiary VIASPACE Green Energy Inc., the Company grows Giant King Grass as a low carbon fuel for electricity generating power plants and as a feedstock for cellulosic biofuels. The Company reported a net loss of $9.36 million in 2011, compared with a net loss of $2.96 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $10.21 million in total assets, $7.35 million in total liabilities, and $2.85 million in total equity. After auditing the financial results for the the year ended Dec. 31, 2011, Hein & Associates LLP, in Irvine, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that he Company has incurred significant losses from operations, resulting in an accumulated deficit of $43,050,000. The Company expects those losses to continue. In addition, the Company has limited working capital and based on current cash flows does not have sufficient funds to pay the May 2012 installment due on the note to Changs LLC. W.R. GRACE: Hikes Net Income to $60.9MM in Q1 2012 -------------------------------------------------- W. R. Grace & Co. announced first quarter earnings of $60.9 million, or $0.80 per diluted share. Comparable earnings for the prior-year quarter were $54.2 million, or $0.72 per diluted share. Adjusted EPS of $0.88 per diluted share increased 12.8 percent from $0.78 per diluted share in the prior-year quarter. "We are off to a good start in 2012. We are performing in line with our plan, led by strong results in our catalysts and construction products businesses." said Fred Festa, Grace's Chairman and Chief Executive Officer. "We are well positioned to take advantage of new opportunities to move our business forward and deliver another year of solid earnings growth." First Quarter Results First quarter net sales of $754.4 million increased 8.4 percent compared with the prior-year quarter. The increase was due to improved pricing (+8.4 percent) and higher sales volumes (+1.5 percent), partially offset by currency translation (-1.5 percent). Sales in the emerging regions represented 33 percent of sales and grew 14 percent compared with the prior-year quarter. Gross profit of $277.1 million increased 9.8 percent compared with the prior-year quarter primarily due to improved pricing and productivity, offset by higher raw materials costs. Gross margin of 36.7 percent increased 40 basis points compared with the prior- year quarter and increased 180 basis points sequentially. Adjusted EBIT of $111.3 million increased 16.3 percent compared with $95.7 million in the prior-year quarter. The increase primarily was due to higher sales, improved gross margins and higher equity income from the company's Advanced Refining Technologies (ART) joint venture. Adjusted EBIT margin improved to 14.8 percent compared with 13.8 percent in the prior-year quarter and 13.1 percent sequentially. Adjusted EBIT Return On Invested Capital was 35.1 percent on a trailing four-quarter basis, compared with 28.0 percent for the prior-year quarter. Grace Catalysts Technologies Sales up 13.6%; segment operating income up 27.3% First quarter sales for the Catalysts Technologies operating segment, which includes specialty catalysts and additives for refinery, plastics and other chemical process applications, were $313.2 million, an increase of 13.6 percent compared with the prior-year quarter. The increase was due to improved pricing (+16.0 percent), which more than offset lower sales volumes (-0.9 percent) and unfavorable currency translation (-1.5 percent). Sales in the Refining Technologies product group increased approximately 18 percent, as improved pricing more than offset slightly lower sales volumes and unfavorable currency translation. More than two-thirds of the improvement in pricing was due to improvement in base price, largely reflecting the impact of new product introductions. Weaker volumes primarily resulted from slow-downs in North American refinery operations and customer order patterns. Separately, sales volumes and pricing improved for polyolefin catalysts as end-users continued to migrate to higher-margin niche plastics. Polypropylene catalyst growth continued at double-digit rates primarily due to increased penetration with key partners. Segment gross profit was $131.5 million, an increase of 18.8 percent compared with the prior-year quarter. Segment gross margin was 42.0 percent, compared with 40.1 percent in the prior- year quarter and 38.0 percent in the 2011 fourth quarter. The increase in gross margin compared with the prior-year quarter primarily was due to improved pricing partially offset by higher raw materials costs. Segment operating income was $99.2 million compared with $77.9 million in the prior-year quarter, a 27.3 percent increase primarily due to higher sales and improved gross margin. Segment operating margin was 31.7 percent, an improvement of 340 basis points compared with the prior-year quarter and 530 basis points sequentially. Grace Materials Technologies Sales up 0.2%; segment operating income down 11.4% First quarter sales for the Materials Technologies operating segment, which includes packaging technologies and engineered materials for consumer, industrial, coatings and pharmaceutical applications, were $212.9 million, an increase of 0.2 percent compared with the prior-year quarter. The increase was due to improved pricing (+3.5 percent), which offset lower sales volumes (-1.8 percent) and unfavorable currency translation (-1.5 percent). Packaging sales increased approximately 11 percent due to improved pricing and increased sales volumes in closures, can sealants and can coatings. In Asia, rapid adoption of the company's non-PVC closures and can coatings helped increase sales volumes. The volume increase in packaging was offset by lower sales volumes in engineered materials due to increased competition in matting applications, particularly in Asia. Segment gross profit was $67.5 million, a decrease of 6.0 percent compared with the prior-year quarter. Segment gross margin was 31.7 percent compared with 33.8 percent in the prior-year quarter and 31.9 percent in the 2011 fourth quarter. The decrease in gross margin compared with the prior-year quarter primarily reflected lower volumes in engineered materials and higher manufacturing costs. Segment operating income was $35.8 million compared with $40.4 million in the prior-year quarter, an 11.4 percent decrease primarily due to lower sales volumes and lower gross margin. Segment operating margin was 16.8 percent, a decrease of 220 basis points compared with the prior-year quarter and an increase of 70 basis points sequentially. Grace Construction Products Sales up 10.0%; segment operating income up 25.8% First quarter sales for the Construction Products operating segment, which includes Specialty Construction Chemicals (SCC) products and Specialty Building Materials (SBM) products used in commercial, infrastructure and residential construction, were $228.3 million, an increase of 10.0 percent compared with the prior-year quarter. The increase was due to higher sales volumes (+7.9 percent) and improved pricing (+3.3 percent), partially offset by unfavorable currency translation (-1.2 percent). Last year's third quarter acquisition of De Neef Conchem Group contributed $8.4 million to sales, which more than offset a $4.9 million decrease in sales due to the 2011 divesture of the vermiculite business. The Construction Products segment achieved its sixth consecutive quarter of year-on-year sales growth. Sales in the emerging regions, which represented 33 percent of sales, increased 24 percent due to strong sales performance of SCC products in Latin America, the Middle East and emerging Asia. Sales in North America, which represented approximately 41 percent of sales, increased 6 percent. Western Europe, which represented approximately 16 percent of sales, declined 2 percent compared with the prior-year quarter. Segment gross profit was $78.1 million, an increase of 11.6 percent compared with the prior-year quarter. Segment gross margin of 34.2 percent improved 50 basis points compared with the prior-year quarter and 150 basis points sequentially. The increase in gross margin compared with the prior-year quarter primarily was due to higher volumes, improved pricing and a favorable sales mix comparison between the acquired and divested businesses. Segment operating income was $20.5 million compared with $16.3 million for the prior-year quarter, a 25.8 percent increase primarily due to higher sales and improved gross margin. Segment operating margin improved to 9.0, percent compared with 7.9 percent in the prior-year quarter and 8.4 percent in the 2011 fourth quarter. Other Expenses Total corporate expenses were $25.4 million for the first quarter, an increase of 13.4% compared with the prior-year quarter, largely due to higher benefits expenses and investments in productivity initiatives, including information technology. Defined benefit pension expense for the first quarter was $18.8 million compared with $16.5 million for the prior-year quarter. The 13.9 percent increase primarily was due to the lower expected long-term rate of return on assets and a decrease in the discount rate used in determining the pension benefit obligation. In February 2012, the company made an accelerated contribution of approximately $83 million to its U.S. defined benefit plans. Interest expense was $11.3 million for the first quarter compared with $10.4 million for the prior-year quarter. The annualized weighted average interest rate on pre-petition obligations for the first quarter was 3.5 percent. Income Taxes Income taxes are recorded at a global effective tax rate of approximately 33 percent before considering the effects of certain non-deductible Chapter 11 expenses, changes in uncertain tax positions and other discrete adjustments. Grace has not had to pay U.S. Federal income taxes in cash in recent years since available tax deductions and credits have fully offset U.S. taxable income. Income taxes in foreign jurisdictions are generally paid in cash. Grace expects to generate significant U.S. Federal net operating losses upon emergence from bankruptcy. Income taxes paid in cash, net of refunds, were $8.0 million during the first quarter, or approximately 8.7 percent of income before income taxes. Cash Flow Net cash used for operating activities in the first quarter was $31.7 million compared with $180.4 million in the prior-year quarter. The improved cash flow primarily was due to lower pension contributions, lower income tax payments, improved working capital performance, and higher earnings. Adjusted Free Cash Flow was $32.5 million for the first quarter compared with negative $19.7 million in the prior-year quarter. The improved cash flow primarily was due to lower income tax payments, improved working capital performance, and higher earnings. Investor Call Grace discussed the results during an investor conference call and webcast on April 25, 2012. W. R. Grace & Co. and Subsidiaries Consolidated Balance Sheets (Unaudited) ========================================== Mar. 31, Dec. 31, Amounts in millions 2012 2011 ------------------- -------- -------- ASSETS Current Assets Cash and cash equivalents $1,008.2 $1,048.3 Restricted cash and cash equivalents 139.6 136.5 Trade accounts receivable, less allowance 458.0 461.8 Accounts receivable - unconsolidated affiliate 13.7 11.2 Inventories 358.5 329.1 Deferred income taxes 68.7 66.5 Other current assets 86.5 93.0 -------- -------- Total Current Assets 2,133.2 2,146.4 Properties and equipment, net 726.8 723.5 Goodwill 150.4 148.2 Deferred income taxes 735.0 759.4 Asbestos-related insurance 500.0 500.0 Overfunded defined benefit pension plans 33.3 37.1 Investment in unconsolidated affiliates 76.4 70.8 Other assets 104.9 108.6 -------- -------- Total Assets $4,460.0 $4,494.0 ======== ======== LIABILITIES AND EQUITY (DEFICIT) Liabilities Not Subject to Compromise Current Liabilities Debt payable within one year $59.1 $57.9 Debt payable - unconsolidated affiliate 3.5 3.4 Accounts payable 259.1 257.1 Accounts payable - unconsolidated affiliate 4.5 0.5 Other current liabilities 291.1 314.0 -------- -------- Total Current Liabilities 617.3 632.9 Debt payable after one year 3.0 3.3 Loan payable - unconsolidated affiliate 19.4 18.3 Deferred income taxes 19.1 19.8 Underfunded and unfunded defined benefit pension plans 293.5 407.4 Other liabilities 45.6 49.1 -------- -------- Total Liabilities Not Subject to Compromise 997.9 1,130.8 Liabilities Subject to Compromise Debt plus accrued interest 949.5 941.8 Income tax contingencies 70.3 69.3 Asbestos-related contingencies 1,700.0 1,700.0 Environmental contingencies 146.3 149.9 Postretirement benefits 184.3 185.2 Other liabilities and accrued interest 152.3 149.5 -------- -------- Total Liabilities Subject to Compromise 3,202.7 3,195.7 -------- -------- Total Liabilities 4,200.6 4,326.5 Equity (Deficit) Common stock 0.7 0.7 Paid-in capital 479.1 472.9 Retained earnings 362.0 301.1 Treasury stock, at cost (28.7) (36.8) Accumulated other comprehensive loss (562.3) (578.5) -------- -------- Total W.R. Grace & Co. Shareholders' Equity (Deficit) 250.8 159.4 Non-controlling interests 8.6 8.1 -------- -------- Total Equity (Deficit) 259.4 167.5 -------- -------- Total Liabilities and Equity (Deficit) $4,460.0 $4,494.0 ======== ======== W. R. Grace & Co. and Subsidiaries Consolidated Statements of Operations Three Months Ended (Unaudited) Mar. 31, Mar. 31, ========================================= ======== ======== Amounts in millions 2012 2011 ------------------- -------- -------- Net sales $754.4 $695.7 Cost of goods sold 477.3 443.3 -------- -------- Gross profit 277.1 252.4 Selling, general and administrative expense 136.6 129.9 Restructuring expenses & rel. asset impairments 3.0 0.2 Research and development expenses 16.5 15.6 Defined benefit pension expense 18.8 16.5 Interest expense and related financing costs 11.3 10.4 Provision for environmental remediation 0.6 - Chapter 11 expenses, net of interest income 4.5 5.8 Equity in earnings of unconsolidated affiliates (5.7) (3.5) Other income, net (0.6) (2.0) -------- -------- Total costs and expenses 185.0 172.9 Income before income taxes 92.1 79.5 Provision for income taxes (30.8) (25.5) -------- -------- Net income 61.3 54.0 Less: Net loss (income) attributable to noncontrolling interests (0.4) 0.2 -------- -------- Net income (loss) attributable to W.R. Grace & Co. shareholders $60.9 $54.2 ======== ======== W.R. Grace & Co. and Subsidiaries Consolidated Statements of Cash Flows Three Months Ended (Unaudited) Mar. 31, Mar. 31, ========================================= ======== ======== Amounts in millions 2012 2011 ------------------- -------- -------- OPERATING ACTIVITIES Net income $61.3 $54.0 Reconciliation to net cash used for operating activities: Depreciation and amortization 29.4 29.2 Equity in earnings of unconsolidated affiliate (5.7) (3.5) Dividends received from unconsolidated affiliate 5.2 - Chapter 11 expenses, net of interest income 4.5 5.8 Chapter 11 expenses paid (3.2) (3.8) Provision for income taxes 30.8 25.5 Income taxes paid, net of refunds (8.0) (23.9) Interest accrued on prepetition liabilities subject to compromise 9.9 9.5 Restructuring expenses & rel. asset impairments 3.0 0.2 Payments for restructuring expenses and related asset impairments (2.2) (1.9) Defined benefit pension expense 18.8 16.5 Payments under defined benefit pension arrangements (113.7) (207.3) Provision for environmental remediation 0.6 0.2 Expenditures for environmental remediation (4.4) (2.4) Changes in assets and liabilities, excluding effect of currency translation: Trade accounts receivable 11.1 (37.8) Inventories (26.1) (38.5) Accounts payable (1.2) 45.4 All other items, net (41.8) (47.6) -------- -------- Net cash used for operating activities (31.7) (180.4) INVESTING ACTIVITIES Capital expenditures (25.0) (23.4) Transfer to restricted cash & cash equivalents (3.0) (0.6) Other investing activities - (0.1) -------- -------- Net cash used for investing activities (28.0) (24.1) FINANCING ACTIVITIES Net (repayments) borrowings under credit arrangements 0.9 (3.2) Proceeds from exercise of stock options 12.0 1.9 Other financing activities 1.7 1.6 -------- -------- Net cash provided by financing activities 14.6 0.3 Effect of currency exchange rate changes on cash and cash equivalents 5.0 7.9 -------- -------- Decrease in cash and cash equivalents (40.1) (196.3) Cash & cash equivalents, beginning of period 1,048.3 1,015.7 -------- -------- Cash and cash equivalents, end of period $1,008.2 $819.4 ======== ======== About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve the definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Has $19.5-Mil. Settlement of Libby Claimants Disputes ----------------------------------------------------------------- W.R. Grace & Co. and its debtor affiliates ask Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware to approve (a) the settlement among Grace, the Official Committee of Asbestos-related Personal Injury Claimants, and the Libby Claimants, as memorialized by a term sheet, (b) the transition of the Libby Medical Program to a trust created pursuant to the global settlement arrangement -- the LMP Trust, and (c) the settlement agreement between Grace and BNSF Railway Company. On Jan. 31, 2012, Grace entered into a proposed agreement requiring the Company to turn the Libby Medical Program over to a locally administered trust, and to fund the trust with $19.5 million. The request is part of a comprehensive, global resolution among the Debtors, with the support of the Asbestos PI Committee and the PI Future Claims Representative, the Libby Claimants, BNSF, and certain insurers, Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, tells the Court. Among other things, the global resolution will result in the Libby Claimants and BNSF withdrawing their objections to the Debtors' Confirmed Joint Plan of Reorganization and appeals of that Plan's confirmation order, as well as their appeals of the orders approving the insurance settlements with the CNA Companies and Arrowood Indemnity Company. There are four separate settlements, which comprise the global deal: (1) The settlement among the Debtors, the Asbestos PI Committee, and the Libby Claimants, as outlined in the Libby Settlement Term Sheet, provides for the consensual transition of the Libby Medical Program to the LMP Trust, and the termination of the Debtors' funding and operational obligations for that program through a single lump-sum payment of $19.5 million. In addition, the Libby Claimants will withdraw their appeal of the Confirmation Order and their objections to the Joint Plan. (2) The settlement between the Debtors and BNSF resolves BNSF's current indemnity claims in consideration of the payment of $8 million by the Asbestos PI Trust to be made following the effective date of the Joint Plan. As part of this resolution, BNSF will withdraw its appeals of and objections to the Joint Plan, the Confirmation Order, and the Debtors' insurance settlements with CNA and Arrowood. (3) The settlement among the Libby Claimants, BNSF, and certain of BNSF's insurers, including CNA, Maryland Casualty Company and Arrowood, resolves the Libby Claimants' claims against BNSF and those insurers in consideration of a settlement payment to those Libby Claimants who provide releases under the terms of that agreement. As part of this resolution, which is funded in part by CNA, MCC, and Arrowood, the Libby Claimants will withdraw their appeals of and objections to the Joint Plan and the Debtors' insurance settlements with CNA and Arrowood. (4) The settlement among the Libby Claimants and certain of the Debtors' insurers resolves certain so-called "insurer wrong-doing" claims. These agreements resolve myriad claims among the parties, and each is an essential component of the comprehensive global settlement. Only the first two of these settlements, however, involve the Debtors -- the Debtors' settlement with the Libby Claimants and the Debtors' settlement with BNSF -- and thus only those two settlements memorialized in the Libby Settlement Term Sheet and the BNSF Settlement are the subjects of the motion for approval. LMP and the Libby Settlement Beginning in April 2000, the Debtors voluntarily created the Libby Medical Program to provide certain health care benefits for the treatment of asbestos-related conditions to eligible individuals, who enrolled in the program. The program covers former employees of the Debtors who worked in the Debtors' mine operations in Libby, Montana, and certain other individuals, who reside or formerly resided in the area surrounding the mine operations. The Libby Medical Program was instituted by the Debtors prior to, and independent of, their Chapter 11 Cases. As authorized by the Court's "first day" order permitting the Debtors to pay prepetition wages and benefits, the Debtors have continued to operate the Libby Medical Program in the ordinary course during the pendency of the cases. During the Debtors' operation of the program there have been complaints by some individuals who claim injury from Grace asbestos -- the validity of which the Debtors dispute -- that they have not been permitted to participate in the Libby Medical Program. Ms. Jones disclosed that the Debtors' estates currently incur more than $2,000,000 annually in health care expenses for the Libby Medical Program. If the program were to be maintained in its current form, she notes, there is no reason to believe that the cost of operating the Libby Medical Program will decrease in the near term and the ongoing cost to the Debtors and their estates would be substantial and would continue for the foreseeable future. The Debtors have determined that continuation of the Libby Medical Program in its current form is not in the best interest of the Debtors or their estates. However, while the Debtors believe they have the right simply to terminate the Libby Medical Program, the Debtors seek the Court's approval to transition the Libby Medical Program to the LMP Trust, and to avoid any potential disputes with respect to termination of or criteria for participation in the program. All current participants in the Libby Medical Program will be beneficiaries of the LMP Trust, as will other persons whom the LMP Trustee determines were exposed to asbestos from the Libby mine operations and have asbestos-related disease. The LMP Trust will be established as a trust under Montana law, and will be reviewed and approved by the District Court of the 19th Judicial District for the state of Montana, which will retain exclusive jurisdiction over the LMP Trust and will monitor the LMP Trust in the future. The Debtors sought and obtained a Court order shortening the notice period with respect to their motion to approve the global settlement. Accordingly, hearing on the request will be held on May 23, 2012. Objections are due on May 4. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve the definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: May 1 Hearing on Garlock Plea for Plan Rehearing ------------------------------------------------------------ Judge Ronald L. Buckwalter of the U.S. District Court for the District of Delaware ordered the Appellees -- the Debtors, Official Committee of Asbestos Personal Injury Claimants, Asbestos PI Future Claimants' Representative and Official Committee of Equity Security Holders -- and Garlock Sealing Technologies LLC to appear before the District Court on May 1, 2012, to address all issues related to Garlock's motion for reargument, rehearing and to alter or amend Judge Buckwalter's January 30, 2012 decision affirming the confirmation of the Debtors' plan of reorganization. Judge Buckwalter explains that on May 1, the Parties will have the opportunity to present their arguments in support of or opposition to Garlock's Motion. He said that he will rule on Garlock's Motion, and Grace's responses in opposition after oral argument is heard on May 1. As reported in the March 29, 2012 edition of the TCR, the Debtors, et al., are opposing a request by Garlock Sealing Technologies LLC for re-argument, rehearing and to alter or amend Judge Ronald L. Buckwalter's January 30, 2012 decision affirming the confirmation of the Debtors' plan of reorganization. Representing the Debtors, Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, contends that as both the Bankruptcy Court and the District Court correctly ruled, ever since Garlock filed its Chapter 11 case in June 2010, the possibility that Garlock might someday face injury from putative joint and several liability with Grace has been, and remains, hypothetical and conjectural. Thus, she insists, the District Court's reference to the GST Plan is merely an additional, incidental observation that corroborates the District Court's conclusion that Garlock's hypothesized claims remain too conjectural to create standing. Plea for Stay Denied Meanwhile, the U.S. District Court for the District of Delaware denied, without prejudice, Garlock Sealing Technologies LLC's request to stay the District Court's memorandum opinion and order dated Jan. 30, 2012, based on the Debtors' statement that they have already agreed and twice advised Garlock that they will not seek to consummate the Joint Plan while Garlock's motion for reargument, rehearing, and to alter or amend the judgment is pending. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve the definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Has Confidential Settlement of Locke Claim ------------------------------------------------------ W.R. Grace, Robert H. Locke and Robert J. Bettacchi on March 9, 2012, entered into a confidential settlement agreement and general release, which resolves Claim No. 9566, known as the Locke Claim, and certain litigation pending before the Massachusetts Superior Court, Middlesex County, captioned as Robert H. Locke v. W.R. Grace & Co.-Conn. and Robert I Bettacchi, Civil Action No. MICV1999-02530-C. On May 18, 1999, the Claimant commenced the Locke Action, asserting claims of employment discrimination against the Debtors and Mr. Bettacchi. Mr. Locke is a former Grace executive. The Locke Action was stayed after the Debtors filed for bankruptcy in 2001. On March 28, 2003, the Claimant filed the Locke Claim for approximately $6-7 million for age and handicap discrimination as alleged in the Locke Action. On May 19, 2003, the Parties entered into a stipulation that partially lifted the automatic stay and injunction to permit the Parties to complete discovery, prosecute and defend a summary judgment motion. On November 16, 2004, the Summary Judgment Motion was granted as to the age discrimination claims, but it was denied as to the disability claims. On June 27, 2005, the Bankruptcy Court entered an order expunging the Locke Claim. In November 2006, the Debtors and Mr. Locke entered into a stipulation to reinstate the Locke Claim solely as to the disability claim and refer the Locke Claim to mediation pursuant to the Bankruptcy Court's order establishing an alternative dispute resolution program. In December 2006, the Debtors filed their objection to the Locke Claim. The Debtors and Mr. Locke thereafter participated in good faith in the mediation program, but they were unable to resolve the Locke Claim. On January 31, 2011, the Debtors and Mr. Locke entered into a stipulation lifting the automatic stay so that the Locke Action could proceed to trial in the Massachusetts Court. On March 25, 2011, the Court allowed the Locke Action regarding Claim No. 9566 to proceed. Prior to the commencement of trial in the Massachusetts Court, the Parties were able to resolve their differences and enter into the Settlement Agreement on these terms: -- The Locke Claim will be an allowed, general unsecured claim in the amount of $600,000; -- The Locke Claim will accrue post-judgment interest on the terms and conditions set forth in the Plan from March 9, 2012, until the date of payment; -- The Debtors will pay the Locke Claim on or after the Plan's Effective Date on the terms and conditions set forth in the Plan; -- Messrs. Locke and Bettacchi and the Debtors have entered into mutual releases; -- The Debtors have agreed to indemnify Mr. Locke for any claims brought against him by Mr. Bettacchi, Mario Favorito, Robert Walsh, Harry Eschenbach, William McCaig, or Jack Wolter, concerning the criminal trial in the U.S. District Court for the District of Montana, captioned United States v. W.R. Grace, et al., No. CR 05-07-M-DWM; and -- The Parties agreed to keep the terms of the Settlement Agreement and the nature of the settlement set forth therein confidential, except for these summary of terms. Subsequent to entering into the Settlement Agreement, the Massachusetts Court entered a final judgment pursuant to the Massachusetts Rules of Civil Procedure, in which the Massachusetts Court ordered and adjudged that Mr. Locke recovers from W. R. Grace & Co.-Conn $600,000 with interest thereon from March 15, 2012 to date in the sum of $2,367 and costs of the action so accrued. The Parties have agreed that the allowed amount of the Locke Claim will not include the $2,367 of interest set forth in the Final Judgment. The Locke Claim will be allowed for $600,000, as set forth in the Settlement Agreement, with interest accruing pursuant to the terms and conditions set forth in the Plan. The Debtors believe that the terms of the Settlement Agreement fall well within the acceptable range of potential outcomes of the Locke Action in view of (i) their assessment of the probability of success in the Locke Action, and (ii) the complexity, expense, inconvenience and delay necessarily attending the Locke Action. All objections and responses to the Settlement Agreement are due on May 12, 2012. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve the definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Pachulski Discloses Tie-Ups With Kirkland ----------------------------------------------------- In the Chapter 11 case of W.R. Grace and its affiliates, Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, filed with the Court her first supplemental affidavit in support of the application to employ her firm as co-counsel for the Debtors. Ms. Jones disclosed that: (a) Pachulski Stang serves as bankruptcy co-counsel with the firm of Kirkland & Ellis LLP in the Debtors' Chapter 11 cases; and (b) Pachulski Stang has recently been engaged to serve as counsel to K&E in connection with the Chapter 11 bankruptcy cases of Stallion Oilfield Services LTD., et al., Chapter 11 Case No. 09-13562 (BLS) pending in the United States Bankruptcy Court for the District of Delaware. The representation of K&E in the Stallion Case is wholly unrelated to the Debtors' cases, Ms. Jones asserts. Ms. Jones attests that neither she, the Firm, nor any partner, of counsel or associate of the Firm has any connection with the Debtors, their creditors or any other parties-in-interest. About Stallion Oilfield Based in Houston, Texas, Stallion Oilfield Services Ltd. -- http://www.stallionoilfield.com/-- provides wellsite support services and production & logistics services to the oilfield with over 1,700 employees in 65 locations. The Debtors deliver products and services in the South Texas, Gulf Coast, Ark-La- Tex, Ft. Worth Basin, Permian Basin, Mid-Continent, Alaska's Prudhoe Bay, Rocky Mountain and Applachinian Basin regions as well as to the global offshore industry. The Company and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 09-13562) on Oct. 19, 2009. The Debtors selected Jonathan S. Henes, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis LLP, as counsel; Daniel J. DeFranceschi, Esq., and Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., as co-counsel; John R. Castellano, Managing Director of AP Services, LLC, as restructuring advisor; and Epiq Bankruptcy Solutions, LLC as claims agent. Stallion Oilfield estimated both assets and debts between $500 million and $1 billion in its petition. Stallion emerged from bankruptcy in February 2010. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve the definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WESTMORELAND COAL: Offering $50 Million Common Shares ----------------------------------------------------- Westmoreland Coal Company filed with the U.S. Securities and Exchange Commission a Form S-3 registration statement relating to the Company's offer to sell up to an aggregate of $50,000,000 of the Company's common stock. The Company will provide specific terms of the offerings, including the offering prices, in one or more supplements to this prospectus. The Company's common stock is traded on the Nasdaq Global Market under the symbol "WLB.' On April 24, 2012, the last reported sale price of the Company's common stock as quoted on the Nasdaq Global Market was $9.14 per share. A copy of the prospectus is available for free at: http://is.gd/io41SX About Westmoreland Coal Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest independent coal company in the United States. The Company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. The Company reported a net loss of $36.87 million in 2011, a net loss of $3.17 million in 2010, and a net loss of $29.16 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $759.17 million in total assets, $1.01 billion in total liabilities, and a $249.85 million total deficit. * * * In March 2011, Standard & Poor's Ratings Services said that it assigned a 'CCC+' corporate credit rating to Colorado Springs, Colorado-based Westmoreland Coal Co. In January 2012, S&P revised its outlook on Westmoreland to positive from stable and affirmed its 'CCC+' credit rating. "The outlook revision reflects our expectation that the acquisition, improved reserve position, and stronger coal pricing could bring WLB's credit metrics in line with a higher rating over the next several quarters," said Standard & Poor's credit analyst Gayle Bowerman. The rating and outlook for WLB also incorporate the combination of what S&P considers to be its 'vulnerable' business risk profile and 'highly leveraged' financial risk profile. The ratings also reflect WLB's high-cost position in the Powder River Basin (PRB) and Texas, relatively short reserve life, high customer concentration, challenges posed by the inherent risks of coal mining, and liquidity that's less than adequate to meet the company's near-term obligations. * Moody's Says US Cable Industry EBITDA Growth to Decelerate ------------------------------------------------------------ Moody's expects US cable industry EBITDA growth to continue to decelerate as the Triple-Play-Equivalent (TPE) growth for US cable companies hits a plateau. That reflects continued video-subscriber losses and a deceleration of high speed data and voice subscriber additions, says Moody's. TPE is a Moody's metric that tracks the average penetration rate of the industry's three primary residential products - video, high speed data and voice - in a metric called the Triple-Play- Equivalent penetration rate. Moody's notes that operators with TPE growth potential include Cequel Communications Holdings (B1 stable), Harron Communications LP (B2 stable), and Comcast Corp. (Baa1 stable). The report also examines operators with weak TPE trends that include Charter Communications Inc (Ba3 positive) and Mediacom Communications Corp. (B1 stable). "TPE rates capture how well a cable company is managed compared to peers and competitors. Cable companies with a low TPE rate might have a greater potential for subscriber and EBITDA growth, but their market positions are also more tenable," said Karen Berckmann, a Moody's Assistant Vice President and author of the report. "The companies with the highest TPE rates have less growth potential, but their market positions are more sustainable." TPE trends are often difficult to reverse without hurting revenue and margins, so companies have to choose to pursue market share or short-term profits. However, short-term decisions have longer-term negative implications and limit growth of other products, says Moody's. It will become even more important that cable companies focus on their TPE rates as growth in revenue per homes passed will moderate over time, says Moody's. Revenue per homes passed captures a company's success in attracting new customers, retaining customers and selling customers more-expensive products. The full report is entitled "Triple Play Equivalent Rate Is at a Plateau". * S&P's 2012 Global Corporate Default Tally Rises to 29 ------------------------------------------------------- The 2012 global corporate default tally increased by one last week after Brazil-based Lupatech S.A. selectively defaulted, said an article published April 26 by Standard & Poor's Global Fixed Income Research, titled Global Corporate Default Update (April 19 -- 25, 2012). On April 23, Standard & Poor's Ratings Services lowered the ratings on the capital goods company to 'SD' after it postponed its debentures' interest payment due on April 15, 2012. This raises the global corporate default tally to 29 so far in 2012. Of the total defaulters this year, 18 were based in the U.S., six in the emerging markets, three in Europe, and two in the other developed region (Australia, Canada, Japan, and New Zealand). In comparison, last year, only 13 issuers -- seven based in the U.S., two in New Zealand, two in the emerging markets, one in Europe, and one in Canada -- defaulted during the same period (through April 25). So far this year, missed payments accounted for 12 defaults, bankruptcy filings accounted for six, distressed exchanges were responsible for four, and four defaulters were confidential. Of the remaining defaults, one was the result of a notice of acceleration by the issuer's lender, one was due to the company's placement under regulatory supervision, and the last was due to a judicial organization filing. In 2011, 21 issuers defaulted because of missed interest or principal payments, and 13 because of bankruptcy filings -- both of which were among the top reasons for defaults in 2010. Distressed exchanges -- another top reason for default in 2010 -- followed with 11 defaults in 2011. Of the remaining defaults, two issuers failed to finalize refinancing on bank loans, two were subject to regulatory action, one had its banking license revoked by its country's central bank, one was appointed a receiver, and two were confidential. * Disregard for IRS Regulations Not Fatal for Exemption ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in Denver ruled on April 24 that even though a bankrupt's Keogh retirement plan violated Internal Revenue Service regulations, the bankrupt was entitled to treat the plan's assets as exempt from creditors' claims. The case is Gladwell v. Reinhart (In re Reinhart), 09-4028, U.S. 10 th Circuit Court of Appeals (Denver). * Five Bank Failures Bring Year's Tally to 22 --------------------------------------------- The number of U.S. failures reached 22 this year, after regulators on Friday shut five banks and the Federal Deposit Insurance Corp. was named receiver. The failures on April 27 will cost $272.6 million to the FDIC's deposit insurance fund. The two largest from Friday's batch were Plantation Federal Bank of Pawleys Island, S.C., and Inter Savings Bank of Maple Grove, Minn., each with nearly $500 million in deposits. First Federal Savings and Loan Association of Charleston, S.C., will assume the deposits of Plantation Federal Bank, while Great Southern Bank of Reeds Spring, Mo., will assume the deposits of Inter Savings. HarVest Bank of Maryland in Gaithersburg, will have its $145.5 million in deposits assumed by Sonabank of McLean, Va. Sonabank also agreed to purchase essentially all assets of HarVest Bank, which had $164.3 million in total assets as of Dec. 31, 2011. The sole branch of Palm Desert National Bank, Palm Desert, California, will reopen as a branch of Pacific Preimer Bank. Pacific Premier Bank, Costa Mesa, agreed to assume all of the deposits of Palm Desert National Bank, which had $122.8 million in total deposits as of Dec. 31, 2011. For the second time this year, no bank assumed the deposits of a failed bank. The FDIC created the Deposit Insurance National Bank of Eastern Shore, which will remain open until May 25, so customers of failed Bank of the Eastern Shore of Cambridge, Md., can withdraw their insured deposits. Eastern Shore had about $154.5 million in deposits as of Dec. 31. 2012 Failed Banks List The FDIC was appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks that agreed to assume the deposits of most of the closed banks. The FDIC also entered into loss-share transactions on assets bought by the banks. For this year, the failed banks are: Loss-Share Transaction Party FDIC Cost Assets of Bank That Assumed to Insurance Closed Bank Deposits & Bought Fund Closed Bank (millions) Certain Assets (millions) ----------- ----------- ----------------- ------------ Palm Desert Nat'l $125.8 Pacific Premier Bank $20.1 Plantation Federal $486.4 First Federal Bank $76.0 HarVest Bank of Md. $164.3 Sonabank $17.2 Bank of the Est. Shore $166.7 [No Acquirer] $41.8 Inter Savings Bank $473.0 Great Southern Bank $117.5 Fort Lee Federal $51.9 Alma Bank $14.0 Fidelity Bank $818.2 The Huntington Nat'l $92.8 Premier Bank $268.7 Int'l Bank of Chi. $64.1 Covenant Bank $95.7 Stearns Bank, N.A. $31.5 New City Bank $71.2 [No Acquirer] $17.4 Global Commerce Bank $143.7 Metro City Bank $17.9 Central Bank of Georgia $278.9 Ameris Bank $67.5 Home Savings of Amer. $434.1 [No Acquirer] $38.8 Charter National Bank $93.9 Barrington Bank $17.4 SCB Bank $182.6 First Merchants Bank $33.9 Patriot Bank $111.3 First Resource Bank $32.6 BankEast $272.6 U.S. Bank N.A. $75.6 Tennessee Commerce $1,185.0 Republic Bank & Trust $416.8 First Guaranty Bank $377.9 CenterState Bank $82.0 American Eagle $19.6 Capital Bank, N.A. $3.2 The First State Bank $416.8 Hamilton State Bank $416.8 Central Florida $79.1 CenterState Bank $24.4 In 2011 there were 92 failed banks, compared with 157 in 2010, 140 in 2009 and just 25 for 2008. A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html 813 Banks in Problem List The FDIC's Quarterly Banking Profile for Dec. 31, 2011, says the number of institutions on the FDIC's "Problem List" declined from 844 to 813 during the quarter, and total assets of "problem" institutions fell from $339 billion to $319.4 billion. The number of institutions in the "problem list" has decreased for the third consecutive quarter. The FDIC defines "problem" institutions as those with financial, operational or managerial weaknesses that threaten their viability. The deposit insurance fund, which protects customer holdings up to $250,000 per account in the event of a failure, saw its balance increase in the fourth quarter to $9.2 billion (unaudited) from $7.8 billion in the third quarter, the eighth consecutive quarterly increase. Problem Institutions Failed Institutions -------------------- ------------------- Year Number Assets (Mil) Number Assets (Mil) ---- ------ ------------ ------ ------------ 2011 813 $319,432 92 $34,923 2010 884 $390,017 157 $92,085 2009 702 $402,800 140 $169,700 2008 252 $159,405 25 $371,945 2007 76 $22,189 3 $2,615 2006 50 $8,265 0 $0 2005 52 $6,607 0 $0 2004 80 $28,250 4 $170 Federal regulators assign a composite rating to each financial institution, based upon an evaluation of financial and operational criteria. The rating is based on a scale of 1 to 5 in ascending order of supervisory concern. "Problem" institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. Depending upon the degree of risk and supervisory concern, they are rated either a "4" or "5." The number and assets of "problem" institutions are based on FDIC composite ratings. Prior to March 31, 2008, for institutions whose primary federal regulator was the OTS, the OTS composite rating was used. * New Research Paper Calls for 'Repo Resolution Authority' ---------------------------------------------------------- Patrick Fitzgerald at Dow Jones' Daily Bankruptcy Review reports that the new resolution authority created by the Dodd-Frank financial overhaul law is ill-suited to handle a run in the repo market, a new paper says, and a "Repo Resolution Authority" is needed to prevent a repeat of the financial meltdown that followed Lehman Brothers Holdings Inc.'s collapse. * Matthew Ertman Winner of the M&A Advisor's Recognition Awards --------------------------------------------------------------- Matthew J. Ertman has been recognized as a winner of the 3rd Annual M&A Advisor 40 UNDER 40 Awards. Matthew is a corporate and securities lawyer in the Los Angeles and San Francisco offices of Allen Matkins Leck Gamble Mallory & Natsis LLP, a leading California business, litigation, and real estate law firm. "In 2010 we initiated the 40 UNDER 40 Awards to recognize the emerging leaders of the M&A, Financing and Turnaround industries," reports Roger Aguinaldo, CEO of the M&A Advisor. "I am pleased to recognize Matthew Ertman as a 2012 40 UNDER 40 Award Winner and bestow upon him this distinguished honor." On Thursday, May 31, The M&A Advisor will host a black tie Awards Gala at the Hollywood Roosevelt Hotel in Los Angeles, California, to introduce the 40 UNDER 40 Award Winners and Finalists to the business community and celebrate their achievements. Matthew has been chosen for his accomplishments and contribution to the industry from a pool of accomplished nominees by an independent judging panel of distinguished business leaders. Matthew is a highly sought-out deal lawyer. Among the notable deals that Matthew worked on in 2011 were: the structuring and formation of a new $200 million private equity fund for motion picture and television interests for Content Partners, LLC, a $125 million investment in a $1.75 billion oil and gas fund for a state pension fund, the representation of Firestorm Capital, LLC in and the structuring and formation of a new $200 million public equities hedge fund, and the acquisition of the landmark Robinson's May site located at 9900 Wilshire Boulevard in Beverly Hills for $150 million. Matthew has a broad multi-disciplinary practice that involves representation of clients across numerous industries, representing companies in corporate finance transactions, including public and private securities offerings of equity and debt, venture capital investments, initial and secondary public offerings, and asset- based lending and borrowing. He is a member of the Board of Trustees of the Los Angeles Ronald McDonald House. He has been selected as a Southern California Rising Star by Super Lawyers magazine for the years of 2006, 2007, 2008, 2010 and 2011. Most recently, he was selected for the Los Angeles Business Journal's 2011 Special Report, "Who's Who in Los Angeles Law." About M&A Advisor The M&A Advisor, renowned globally for its recognition and presentation of leading M&A, financing and turnaround professionals, created this recognition awards program to promote mentorship and professional development amongst the emerging business leaders. About Allen Matkins Allen Matkins Leck Gamble Mallory & Natsis LLP, founded in 1977, is a California-based law firm with approximately 220 attorneys with offices in four major metropolitan areas of California: Los Angeles, Orange County, San Francisco and San Diego. The firm's core specialties include bankruptcy and creditors' rights, construction, corporate and securities, employment and labor law, environmental, intellectual property, joint ventures, land use, natural resources, real estate, real estate finance, taxation, and dispute resolution and litigation in all these matters. * BOND PRICING -- For Week From April 16 to 20, 2012 ---------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- AMBAC INC 9.375 8/1/2011 16.250 AMBAC INC 9.500 2/15/2021 17.250 AMBAC INC 7.500 5/1/2023 17.001 AMBAC INC 6.150 2/7/2087 0.250 AES EASTERN ENER 9.000 1/2/2017 24.000 AGY HOLDING COR 11.000 11/15/2014 36.000 AHERN RENTALS 9.250 8/15/2013 61.250 ALION SCIENCE 10.250 2/1/2015 49.500 AMER GENL FIN 5.200 5/15/2012 97.000 AMR CORP 9.000 8/1/2012 42.000 AM AIRLN PT TRST 10.180 1/2/2013 67.000 AM AIRLN PT TRST 9.730 9/29/2014 30.750 AMR CORP 6.250 10/15/2014 49.500 AM AIRLN PT TRST 7.379 5/23/2016 31.000 A123 SYSTEMS INC 3.750 4/15/2016 30.250 MAINST-CALL05/12 8.900 12/1/2027 100.750 BROADVIEW NETWRK 11.375 9/1/2012 85.800 BLOCKBUSTER INC 11.750 10/1/2014 1.688 C-CALL05/12 5.700 5/15/2024 100.700 CHRCH CAP FNDING 6.600 5/15/2013 25.000 DELTA AIR 1992B1 9.375 9/11/2017 26.625 DELTA AIR 1993A1 9.875 4/30/2049 19.260 DIRECTBUY HLDG 12.000 2/1/2017 16.875 DIRECTBUY HLDG 12.000 2/1/2017 23.000 DUNE ENERGY INC 10.500 6/1/2012 93.500 EASTMAN KODAK CO 7.250 11/15/2013 30.250 EASTMAN KODAK CO 7.000 4/1/2017 31.000 EASTMAN KODAK CO 9.950 7/1/2018 27.251 ENERGY CONVERS 3.000 6/15/2013 48.000 EVERGREEN SOLAR 13.000 4/15/2015 50.000 FIRST METRO 6.900 1/15/2019 15.000 GLB AVTN HLDG IN 14.000 8/15/2013 32.500 GMX RESOURCES 5.000 2/1/2013 73.936 GMX RESOURCES 5.000 2/1/2013 77.000 GLOBALSTAR INC 5.750 4/1/2028 55.500 HAWKER BEECHCRAF 8.500 4/1/2015 15.200 HAWKER BEECHCRAF 8.875 4/1/2015 12.000 HAWKER BEECHCRAF 9.750 4/1/2017 3.000 HOS-CALL04/12 6.125 12/1/2014 100.650 JBPOIN-CALL05/12 8.750 3/15/2014 100.000 KV PHARM 12.000 3/15/2015 55.000 QUICKSILVER RES 1.875 11/1/2024 97.703 LEHMAN BROS HLDG 0.250 9/6/2012 22.000 LEHMAN BROS HLDG 1.000 9/7/2012 22.000 LEHMAN BROS HLDG 0.250 12/8/2012 22.000 LEHMAN BROS HLDG 0.250 12/8/2012 22.000 LEHMAN BROS HLDG 1.000 12/9/2012 22.000 LEHMAN BROS HLDG 1.500 3/29/2013 22.000 LEHMAN BROS HLDG 1.000 10/17/2013 22.000 LEHMAN BROS HLDG 0.250 12/12/2013 22.000 LEHMAN BROS HLDG 0.250 1/26/2014 22.000 LEHMAN BROS HLDG 1.250 2/6/2014 22.000 LEHMAN BROS HLDG 1.000 3/29/2014 22.000 LEHMAN BROS HLDG 1.000 8/17/2014 22.000 LEHMAN BROS HLDG 1.000 8/17/2014 22.000 LEHMAN BROS INC 7.500 8/1/2026 10.250 LIFECARE HOLDING 9.250 8/15/2013 68.936 MASHANTUCKET PEQ 8.500 11/15/2015 10.300 MF GLOBAL LTD 9.000 6/20/2038 37.250 MANNKIND CORP 3.750 12/15/2013 54.500 NETWORK EQUIPMNT 7.250 5/15/2014 40.000 PMI GROUP INC 6.000 9/15/2016 21.901 PMI CAPITAL I 8.309 2/1/2027 0.500 PENSON WORLDWIDE 8.000 6/1/2014 32.142 POWERWAVE TECH 3.875 10/1/2027 33.458 POWERWAVE TECH 3.875 10/1/2027 31.500 REDDY ICE HLDNGS 10.500 11/1/2012 56.000 REDDY ICE CORP 13.250 11/1/2015 29.000 REAL MEX RESTAUR 14.000 1/1/2013 46.000 RESIDENTIAL CAP 6.500 4/17/2013 33.500 RESIDENTIAL CAP 6.875 6/30/2015 47.470 THORNBURG MTG 8.000 5/15/2013 6.000 TOUSA INC 9.000 7/1/2010 20.000 TOUSA INC 9.000 7/1/2010 21.000 TRAVELPORT LLC 11.875 9/1/2016 32.500 TRAVELPORT LLC 11.875 9/1/2016 33.000 TIMES MIRROR CO 7.250 3/1/2013 40.000 TRIBUNE CO 5.250 8/15/2015 35.750 TRICO MARINE 3.000 1/15/2027 0.750 TRICO MARINE 3.000 1/15/2027 0.031 TERRESTAR NETWOR 6.500 6/15/2014 10.000 TEXAS COMP/TCEH 7.000 3/15/2013 15.000 TEXAS COMP/TCEH 10.250 11/1/2015 21.250 TEXAS COMP/TCEH 10.250 11/1/2015 20.875 TEXAS COMP/TCEH 10.250 11/1/2015 21.500 TEXAS COMP/TCEH 15.000 4/1/2021 30.000 USEC INC 3.000 10/1/2014 40.500 VENTURE HLDGS 11.000 6/1/2007 4.750 VENTURE HLDGS 12.000 6/1/2009 5.000 VERSO PAPER 11.500 7/1/2014 106.000 WESTERN EXPRESS 12.500 4/15/2015 56.000 ********* 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 ***