/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120514.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, May 14, 2012, Vol. 16, No. 133 Headlines 586 HART: Voluntary Chapter 11 Case Summary 614 PARTNERS: Voluntary Chapter 11 Case Summary AHERN RENTALS: Proposes Settlement Conferences With PI Claimants ALLIANCE LOCKSMITHS: Case Summary & 13 Largest Unsecured Creditors ALLIED IRISH: Announces EUR395MM Prime RMBS Public Bond Issue ALION SCIENCE: Employee Trust Bought Shares at $18 Apiece AMBAC FINANCIAL: Dewey & LeBoeuf OK'd to Apply Retainer on Fees AMERICAN AXLE: Thomas Claugus Discloses 8.6% Equity Stake AMES DEPARTMENT: Plan Exclusivity Extended Until Oct. 31 ARCAPITA BANK: Employs KPMG as Tax Consultants & Valuation Advisor ARCAPITA BANK: Hiring Linklaters as Special Counsel APPALACHIAN FUELS: Court Rules on GATX Suit Against Addingtons ATLANTIC & PACIFIC: NJ Landlord Fails in Bid to Nix Pathmark Lease AURASOUND INC: Weisshaupt Resigns; Tetzlaff Tapped as Interim CEO AVENTINE RENEWABLE: Incurs $22.5 Million Net Loss in Q1 BEL AIR RACING: Case Summary & 7 Largest Unsecured Creditors BIOCORAL INC: Delays Form 10-Q for First Quarter BION ENVIRONMENTAL: Has $5.8-Mil. Net Loss for 3 Quarters BLUE SPRINGS: Court OKs Polsinelli Shughart as Counsel BLUE SPRINGS: Court Approves $8MM Revolving Credit From Ford BOULDER HEIGHTS: Case Summary & 7 Largest Unsecured Creditors BUFFETS INC: California FTB Allowed to Respond to Appeal on Claim CAESARS ENTERTAINMENT: Incurs $281.1 Million Net Loss in Q1 CALIFORNIA GREEN: Case Summary & 20 Largest Unsecured Creditors CANO PETROLEUM: Has Deal With U.S. on Claims Filing Deadlines CARNEGIE PIZZA: Case Summary & 3 Largest Unsecured Creditors CB HOLDING: Says Review of Plan Confirmation is Inappropriate CDC CORP: Court to Consider Non-Debtor Assets Sale on May 15 CHARLIE MCGLAMRY: Case Summary & 20 Largest Unsecured Creditors CHARLIE MCGLAMRY: Schedules Filing Deadline Extended to June 13 CHARLIE MCGLAMRY: Sec. 341(a) Creditors' Meeting Set for June 18 CHARLIE MCGLAMRY: Hires Cohen Pollock as Chapter 11 Counsel CHARLIE MCGLAMRY: Taps Nichols Cauley as Accountant CHEM RX CORP: Trustee Sues Paramount Board Over Bankruptcy CLEARWIRE CORP: FMR LLC Owns 8.1% of Class A Common Shares COLDWATER PORTFOLIO: Lender Objects to Use of Cash Collateral COMMUNITY MEMORIAL: Sale Scrapped; Committee Wants Ch. 11 Trustee COMMUNITY MEMORIAL: Conway MacKenzie Okayed as Financial Advisors COMMUNITY MEMORIAL: Files Schedules of Assets and Liabilities COMMUNITY MEMORIAL: McDonald Hopkins OK'd as Bankruptcy Counsel COMMUNITY MEMORIAL: Panel Can Retain Varnum LLP as Counsel COMPASS MINERALS: Moody's Affirms Ba1 CFR; Rates Term Loan Ba1 COMPLETE GENOMICS: Warns of Cash Crunch, Has Going Concern Doubt CORNERSTONE BANCSHARES: Posts $76,000 Net Income in Q1 COPPERAS CREEK: Voluntary Chapter 11 Case Summary COREL CORPORATION: Moody's Confirms 'Caa1' Corp. Family Rating CROSSRHYTHM CHURCH: Case Summary & 20 Largest Unsecured Creditors CROSSTEX ENERGY: Moody's Rates $250MM Sr. Unsecured Notes 'B2' CROSSTEX ENERGY: S&P Affirms 'B+' Corporate Credit Rating CUI GLOBAL: Incurs $1 Million Net Loss in First Quarter DEAN FOODS: Moody's Outlook Still Negative Despite Q1 Earnings DEWEY & LEBOEUF: Bienenstock Moves to Proskauer Rose DEWEY & LEBOEUF: Bond Debt Trading at between 50 And 65 Cents DEWEY & LEBOEUF: Partners Likely to Face Wrath of Creditors DEWEY & LEBOEUF: Partners Didn't Know Extent of Guarantees EAST COAST: BB&T Granted Relief from Stay on Unimproved Properties ELO TOUCH: Moody's Gives 'B2' Corp. Family Rating; Outlook Stable EMISPHERE TECHNOLOGIES: Needs to Raise Funds Before Sept. 26 EPICEPT CORP: Incurs $3.5 Million Net Loss in First Quarter EVERGREEN DEVELOPMENT: Pre-Trial Conference Set for June 26 FAIRFIELD SENTRY: Liquidator Seeks $7-Mil. in 3 New Clawback Suits FANNIE MAE: Reports $2.7 Billion Net Income for First Quarter GAVILON LLC: Moody's Assigns 'Ba2' Rating to Amended Facility GENERAC POWER: S&P Gives 'BB-' Rating to $800-Mil. Term Loan B GEO GROUP: S&P Keeps 'B+' Issuer Credit Rating; Outlook Stable GIBSON ENERGY: Moody's Rates Revolver & Term Loan 'Ba3' GIBSON ENERGY: S&P Rates $1.025-Bil. Secured Debt Facilities 'BB-' GREEN ENDEAVORS: Nexia Now Holds 100% of Supervoting Pref. Stock H D GERLACH: Case Summary & 9 Largest Unsecured Creditors HAMPTON ROADS: Files Form 10-Q, Incurs $7.4MM Net Loss in Q1 HARBOR FREIGHT: S&P Keeps 'B+' Corp. Credit Rating; Outlook Stable HAWKER BEECHCRAFT: Has 7-Member Unsecured Creditors' Committee HAWKER BEECHCRAFT: Has Court OK to Hire Epiq as Claims Agent HAWKER BEECHCRAFT: Schedules Filing Deadline Extended Thru June 16 HAWKER BEECHCRAFT: To Protect Tax Attributes From Ownership Change HAWKER BEECHCRAFT: Final DIP Hearing Set for May 30 HAWKER BEECHCRAFT: S&P Withdraws 'D' Corporate Credit Rating HORIZON LINES: Incurs $32.5 Million Net Loss in First Quarter HORNE INTERNATIONAL: Delays Form 10-Q for First Quarter HOST HOTELS: S&P Affirms 'BB-' Corp. Credit Rating; Outlook Pos HOSTESS BRANDS: PBGC Urges Teamsters to Mind ERISA in Deal IMAGEWARE SYSTEMS: Amends 44-Mil. Shares Sale Prospectus IMH FINANCIAL: CEO Sees Signs of Real Estate Market Recovery INMET MINING: Moody's Assigns 'B1' CFR/PDR; Rates $1BB Notes 'B1' INTERACCIONES BANKING: Chapter 15 Case Summary JDCK LLC: Case Summary & 2 Largest Unsecured Creditors KRATOS DEFENSE: S&P Affirms 'B' Corp. Credit Rating; Outlook Pos KRONOS WORLDWIDE: Moody's Assigns Ba2 CFR, Rates Term Loan Ba3 LAGUNA BRISAS: Files Schedules of Assets and Liabilities LAGUNA BRISAS: Taps M. Jonathan Hayes as Bankruptcy Counsel LAWSON-CURRELL: Case Summary & 20 Largest Unsecured Creditors LIBBEY GLASS: Moody's Rates New $450MM Senior Secured Notes 'B2' LIGHTSQUARED INC: May File for Bankruptcy by Monday Evening LODGENET INTERACTIVE: Files Form 10-Q, Incurs $2.1MM Loss in Q1 LODGENET INTERACTIVE: S&P Lowers Corporate Credit Rating to 'B-' MAGIC CITY DOUGHNUT: Case Summary & 17 Largest Unsecured Creditors MALABAR MOTEL: Case Summary & 10 Largest Unsecured Creditors MARRICK PROPERTIES: Case Summary & 15 Largest Unsecured Creditors MERRILL CORP: S&P Cuts Corp. Credit Rating to 'CCC-'; Outlook Neg MILLAR WESTERN: Moody's Affirms 'B2' CFR/PDR; Outlook Stable MISSISSIPPI HIGHER: Moody's Cuts Ratings on 20 Bonds to 'Ba1' MOMENTIVE PERFORMANCE: Moody's Cuts Corp. Family Rating to Caa1 MOMENTIVE PERFORMANCE: Names J. Dandolph as Unit EVP & President MONTANA ELECTRIC: Trustee Taps Harper Lutz as Valuation Consultant MS PARTNERSHIP: 2 McClung & Spangler Joint Ventures in Chapter 11 NEWMAN REAL ESTATE: Case Summary & 2 Largest Unsecured Creditors NEXSTAR BROADCASTING: Swings to $3 Million Net Income in Q1 NEXTWAVE WIRELESS: Has $28.5 Million Net Loss for March 31 Qtr OM PC LLC: Case Summary & 3 Largest Unsecured Creditors OMNIA ALEXIS: Voluntary Chapter 11 Case Summary ORDWAY RESEARCH: Judge Approves Armory Sale to Saga for $675,000 OXFORD INDUSTRIES: Moody's Raises CFR, Senior Notes Rating to Ba3 PETTUS PROPERTIES: Seeks $500,000 Loan From Sole Shareholder PINNACLE AIRLINES: USW Blames Delta for Financial Woes PRM REALTY: Taps NHB Advisors as to Provide Financial Services QUALITY DISTRIBUTION: Files Form 10-Q, Posts $6.7MM Income in Q1 QUANTUM CORP: Incurs $11 Million Net Loss in Fiscal Q4 R.E. LOANS: County of Sonoma Balks at Second Amended Plan Outline RANCHER ENERGY: John Works Says Business Plan "Too Vague" RAYTHEON COMPANY: Former Unit Gets $3.5MM Judgment Overturned REAL MEX: Has Until May 31 to Decide on the Kilroy, et al., Leases RECKART EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors RECYCLED CONCRETE: Case Summary & 5 Largest Unsecured Creditors REDDY ICE: Unsec. Creditors Object to Official Equity Committee RESIDENTIAL CAPITAL: Said to File for Bankruptcy Sunday or Monday RIDGEVIEWTEL LLC: Plans to Emerge From Bankruptcy Next Few Months RIVER ISLAND: First Amended Reorganization Plan Confirmed ROBERTS HOTELS: Atlanta and Shreveport Hotels in Chapter 11 ROBERTS HOTELS: Voluntary Chapter 11 Case Summary ROOFING SUPPLY: Moody's Confirms 'B2' CFR/PDR; Outlook Stable RYLAND GROUP: Moody's Rates $150MM Convertible Senior Notes 'B1' RYLAND GROUP: S&P Gives 'BB-' Rating on $150-Mil. Senior Notes RYLAND GROUP: Reports 431 Net Orders for April RYLAND GROUP: BlackRock Discloses 10.2% Equity Stake SAGAMORE PARTNERS: Lender Say Exit Plan Unconfirmable SAGAMORE PARTNERS: Wants Control of Case Through Plan Confirmation SECURUS HOLDINGS: Moody's Lowers Corp. Family Rating to 'B3' SECURUS HOLDINGS: S&P Affirms 'B' Corporate Credit Rating SHERIDAN INVESTMENT: Moody's Upgrades CFR to B1; Outlook Stable SIERRA BLANCA: Voluntary Chapter 11 Case Summary SINCLAIR BROADCAST: Reports $29 Million Net Income in Q1 SMF ENERGY: Files Asset Purchase Agreement With Sun Coast SPRINT NEXTEL: BlackRock Discloses 4.9% Equity Stake SUPERMEDIA INC: Files Form 10-Q, Posts $62-Mil. Net Income in Q1 SUPERMEDIA INC: To Utilize $33 Million to Repurchase Debt TALON THERAPEUTICS: James Flynn Discloses 50% Equity Stake TELIK INC: Says Continued Net Loss Raises Going Concern Doubt TOWNLAKES SQUARE: Case Summary & 17 Largest Unsecured Creditors TREASURES INC: Voluntary Chapter 11 Case Summary TRIMAS COMPANY: Moody's Upgrades CFR to 'Ba3'; Outlook Stable TRIUS THERAPEUTICS: Files Form 10-Q, Incurs $7.6MM Loss in Q1 TROY LODGE: Case Summary & 2 Largest Unsecured Creditors UNITEK GLOBAL: S&P Keeps 'B+' Corp. Credit Rating; Outlook Stable VITRO SAB: Units Owe Interest on $1BB Debt, Appeals Court Says VWR FUNDING: Moody's Affirms B3 CFR; Revises Outlook to Positive VOICE ASSIST: Amends 2011 Quarterly Reports VOLKSWAGEN-SPRINGFIELD: Can Use BB&T Cash Collateral Thru May 23 VOLKSWAGEN-SPRINGFIELD: Sec. 341 Creditors' Meeting on June 14 VUANCE LTD: Swings to $1 Million Net Income in 2011 WASHINGTON GROUP: Appeals Court Rejects Alter Ego Claim v Raytheon WILLBROS GROUP: S&P Affirms 'B-' Corp. Credit Rating; Off Watch WOODCREST COUNTRY: Case Summary & 20 Largest Unsecured Creditors WP CAMP: Moody's Assigns 'B3' Corp. Family Rating; Outlook Stable YELLOW MEDIA: S&P Cuts Corp. Credit Rating to 'CCC'; on Watch Neg Z TRIM HOLDINGS: Edward Smith Discloses 67.6% Equity Stake ZUFFA LLC: Technical Default of Debt No Effect on Moody's Ba3 CFR * FDIC Wind-Down Plan Won't Be Pretty, But Just May Work * Congress Extends Temporary Bankruptcy Judgeships * Squire Sanders Promotes Sherri Dahl to Principal * BOND PRICING -- For Week From May 7 to 11, 2012 ********* 586 HART: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: 586 Hart Associates Inc. 211 West 92nd Street, Suite 41 New York, NY 10025 Bankruptcy Case No.: 12-11936 Chapter 11 Petition Date: May 8, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Terence McKindlon, Jr., Esq. LAW OFFICES OF J. DAVID O'BRIEN 211 West 92nd Street, Suite 41 New York, NY 10025 Tel: (917) 566-1255 Scheduled Assets: $1,000,000 Scheduled Liabilities: $4,084,988 The Company did not file a list of creditors together with its petition. The petition was signed by David Diamond, president. 614 PARTNERS: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: 614 Partners NYC Inc. 211 West 92nd Street, Suite 41 New York, NY 10025 Bankruptcy Case No.: 12-11935 Chapter 11 Petition Date: May 8, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Terence McKindlon, Jr., Esq. LAW OFFICES OF J. DAVID O'BRIEN 211 West 92nd Street, Suite 41 New York, NY 10025 Tel: (917) 566-1255 Scheduled Assets: $1,000,000 Scheduled Liabilities: $4,156,189 The Company did not file a list of creditors together with its petition. The petition was signed by David Diamong, president of 614 Partners, Inc. AHERN RENTALS: Proposes Settlement Conferences With PI Claimants ---------------------------------------------------------------- BankruptcyData.com reports that Ahern Rentals filed with the U.S. Bankruptcy Court a motion for approval of procedures, in addition to the motion to approve compromise under Rule 9019, requiring each personal injury claimant attend and participate in a settlement conference as a condition precedent to relief from the automatic stay. BankruptcyData.com says the filing explains, "Debtor's estate will benefit from mandatory Settlement Conferences because they will afford Debtor and its estate the opportunity to streamline the resolution of the PI Claims in the most economical and expeditious manner possible. This Court has ample cause and authority to require each Claimant attend a Settlement Conference as a condition precedent to this Court entering an order for relief from the automatic stay to allow the Claimant to liquidate his or her PI Claim. The Settlement Conferences will likely streamline and expedite liquidation of the PI Claims for the benefit of the Claimants and Debtor. The relief requested in this Amended Motion is thus warranted and is in the best interests of Debtor, its estate, and its creditors." About Ahern Rentals Founded in 1953 with one location in Las Vegas, Nevada, Ahern Rentals Inc. -- http://www.ahern.com/-- now offers rental equipment to customers through its 74 locations in Arizona, Arkansas, California, Colorado, Georgia, Kansas, Maryland, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and Washington. Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain an extension of the Aug. 21, 2011 maturity of its revolving credit facility. Judge Bruce T. Beesley presides over the case. Lawyers at Gordon Silver serve as the Debtor's counsel. The Debtor's financial advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to Bank of America, as the DIP Agent and First Lien Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer. Attorneys for the Majority Term Lenders are Paul Aronzon, Esq., and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP. Counsel for the Majority Second Lienholder are Paul V. Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq., at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert LLP argue for certain revolving lenders. Attorneys for U.S. Bank National Association, as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard, Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland & Hart. In its schedules, the Debtor disclosed $485.8 million in assets and $649.9 million in liabilities. The Official Committee of Unsecured Creditors has tapped Covington & Burling LLP as counsel, Downey Brand LLP as local counsel, and FTI Consulting as financial advisor. ALLIANCE LOCKSMITHS: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Alliance Locksmiths, Inc. 130 Wells Street Peekskill, NY 10566 Bankruptcy Case No.: 12-22907 Chapter 11 Petition Date: May 9, 2012 Court: U.S. Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Jeffrey A. Reich, Esq. REICH REICH & REICH, P.C. 235 Main Street, Suite 450 White Plains, NY 10601 Tel: (914) 949-2126 Fax: (914) 949-1604 E-mail: reichlaw@aol.com Scheduled Assets: $72,014 Scheduled Liabilities: $233,249 A copy of the Company's list of its 13 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb12-22907.pdf The petition was signed by Frank Parisi, president. ALLIED IRISH: Announces EUR395MM Prime RMBS Public Bond Issue ------------------------------------------------------------- Allied Irish Banks, p.l.c., closed its first public securitisation of Prime UK residential mortgages. This 3 year AAA rated deal was priced at Libor plus 250bps with interest from a wide range of international investors. David Duffy, Chief Executive of AIB, said "This is a positive return to the markets for AIB and forms part of our longer term, diversified, funding strategy. It is also a further indicator of the improving international sentiment towards Ireland and the Irish financial system." About Allied Irish Banks Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a major commercial bank based in Ireland. It has an extensive branch network across the country, a head office in Dublin and a capital markets operation based in the International Financial Services Centre in Dublin. AIB also has retail and corporate businesses in the UK, offices in Europe and a subsidiary company in the Isle of Man and Jersey (Channel Islands). Since the onset of the global and Irish financial crisis, AIB's relationship with the Irish Government has changed significantly. As at Dec. 31, 2010, the Government, through the National Pension Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary shares of the Company (the share of the voting rights at shareholders' general meetings), 10,489,899,564 convertible non- voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On April 8, 2011, the NPRFC converted the total outstanding amount of CNV shares into 10,489,899,564 ordinary shares of AIB, thereby increasing its holding to 92.8% of the ordinary share capital. In addition to its shareholders' interests, the Government's relationship with AIB is reflected through formal and informal oversight by the Minister and the Department of Finance and the Central Bank of Ireland, representation on the Board of Directors (three non-executive directors are Government nominees), participation in NAMA, and otherwise. The Company reported a loss of EUR2.29 billion in 2011, a loss of EUR10.16 billion in 2010, and a loss of EUR2.33 billion in 2009. Allied Irish's consolidated statement of financial position for the year ended Dec. 31, 2011, showed EUR136.65 billion in total assets, EUR122.18 billion in total liabilities and EUR14.46 billion in shareholders' equity. ALION SCIENCE: Employee Trust Bought Shares at $18 Apiece --------------------------------------------------------- Alion Science and Technology Corporation filed a current report on Form 8-K to report the March 31, 2012, sale of approximately $1.3 million of common stock to the Alion Science and Technology Corporation Employee Ownership, Savings and Investment Trust. The Company sold approximately 72,337 shares to the Trust at an average price of $18.00 per share for aggregate proceeds of approximately $1.3 million. The Company issued approximately 395,214 additional shares to the Trust, at an average price per share of $18.00, as a contribution to the employee stock ownership plan component of the Alion Science and Technology Corporation Employee Ownership, Savings and Investment Plan. The shares of common stock were offered to the Trust pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended. State Street Bank and Trust Company, as trustee of the ESOP, has selected a final value of $18.00 per share for Alion's common stock as of March 31, 2012. The Trustee engaged an outside independent third party valuation firm to assist the Trustee in establishing a value for the Company's common stock as of the Valuation Date using the following valuation methods: (i) Discounted Cash Flow; and (ii) Comparable Transaction. The methodology used for this valuation is consistent with the September 2011 valuation conducted by the valuation firm on behalf of the Trustee. The valuation firm did not use the Guideline Company Method in its current analysis or its September 2011 analysis. Current pricing multiples of guideline companies are near historical lows. They are significantly below the pricing multiples implied by recent merger and acquisition activity in the government contracting sector. The significant gap between the pricing multiples of guideline companies and recent transactions in the industry suggests that current pricing multiples for non-controlling ownership interests may not be meaningful for purposes of valuing a controlling ownership interest. Because the ESOP owns a controlling interest in Alion, the Trustee and the valuation firm deemed the Guideline Company Method to be non-meaningful for the purpose of the current analysis. Some of the factors that influenced the Trustee's decision to select the value of $18.00 per share were the following: * Revenue for the 12-month period ended March 31, 2012, decreased relative to revenue in fiscal year 2011 due to continued delays in contract awards, funding of current contracts and protests by competitors of contracts won by Alion; * Projected revenue and earnings for fiscal years 2012 through 2016 were slightly lower than the Sept. 30, 2011, analysis, consistent with the continued uncertainty in the government contracting industry regarding federal budgets and contract funding and award delays; * The fair market value of Alion's debt was higher at March 31, 2012, compared with Sept. 30, 2011, primarily due to the increase in the fair market value of the Senior Unsecured Bonds, consistent with a shorter maturity period and the accrual of paid-in-kind interest of $3.2 million, somewhat offset by a slight increase in the discount rate applied to the debt; and * Fully-diluted common shares outstanding increased by 336,784 shares between Sept. 30, 2011, and March 31, 2012, due to common shares issued by the Company. The valuation firm prepared a written report containing its procedures, analyses, and opinion as to the appropriate value of Alion's common stock. That report is solely for the Trustee's use in connection with its administration and operation of the ESOP and the exercise of its fiduciary responsibilities. In preparing its report, the third-party valuation firm used various financial and other information provided to the valuation firm by Alion's management or obtained from other private and public sources including financial projections prepared by Alion management, and relied on the accuracy and completeness of this information. There is no assurance that the valuation firm, or any other financial adviser that the Trustee might choose, will utilize the same process of methodologies in connection with future valuations of Alion common stock, or that such advisors will reach conclusions that are consistent with those presented herein. 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." AMBAC FINANCIAL: Dewey & LeBoeuf OK'd to Apply Retainer on Fees --------------------------------------------------------------- Judge Shelley Chapman authorized Dewey & LeBoeuf LLP to apply its retainer in certain outstanding fees and expenses incurred as counsel to Ambac Financial Group, Inc. In accordance with the Court's Interim Compensation Order, Dewey submitted to the Debtor for payment of monthly fee statements for November 2011 to March 2012 in the aggregate amount of $3,384,215, on account of which the firm is entitled to be compensated in the ordinary course for 80% of fees and 100% of expenses in the aggregate amount of $2,720,085. As of April 26, 2012, Dewey continues to hold a retainer in favor of the Debtor in the amount of $3,002,290. Dewey is specifically directed to apply the applicable portion of the Retainer to the Currently Owed Amount. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMERICAN AXLE: Thomas Claugus Discloses 8.6% Equity Stake --------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Thomas E. Claugus and his affiliates disclosed that, as of May 7, 2012, they beneficially own 6,438,200 shares of common stock of American Axle & Manufacturing Holdings, Inc., representing 8.6% of the shares outstanding. Mr. Claugus previously reported beneficial ownership of 5,628,700 common shares or a 7.5% equity stake as of Dec. 27, 2011. A copy of the amended filing is available for free at: http://is.gd/Raitwn 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. 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. * * * In January 2012, Fitch Ratings has affirmed the 'B+' Issuer Default Ratings (IDRs) of American Axle & Manufacturing. Fitch expects leverage to trend downward over the intermediate term, however, as the company gains traction on its new business wins. Looking ahead, Fitch expects free cash flow to be relatively weak, but positive, in 2012 with the steep ramp-up in new business and as the company continues to make investments in both capital assets and research and development work to support growth opportunities in its customer base and product offerings. Beyond 2012, free cash flow is likely to strengthen meaningfully as the new programs coming on line in the near term begin to produce higher levels of cash. AMES DEPARTMENT: Plan Exclusivity Extended Until Oct. 31 -------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended until Oct. 31, 2012, Ames Department Stores' exclusive periods to solicit acceptances for its proposed Chapter 11 plan. As reported in the Troubled Company Reporter on April 19, 2012, the Company explained its is seeking the extension, "because all parties require time to ensure that the estates will be administratively solvent and therefore warrant solicitation of votes in favor of the Plan." About Ames Department Stores Rocky Hill, Connecticut-based Ames Department Stores was founded in 1958. At its peak, Ames operated 700 stores in 20 states, including the Northeast, Upper South, Midwest and the District of Columbia. In April 1990, Ames filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. In Ames I, the retailer closed 370 stores and emerged from chapter 11 on Dec. 30, 1992. Ames filed a second bankruptcy petition under Chapter 11 (Bankr. S.D.N.Y. Case No. 01-42217) on Aug. 20, 2001. Togut, Segal & Segal LLP; Weil, Gotshal & Manges; Storch Amini Munves PC; Cadwalader, Wickersham & Taft LLP; and Dewey & LeBoeuf LLP represent the Debtors. When the Company filed for protection from their creditors, they reported $1,901,573,000 in assets and $1,558,410,000 in liabilities. The Company closed all of its 327 department stores in 2002. Ames and its affiliates filed a consolidated Chapter 11 Plan, and a related Disclosure Statement explaining the Plan with the Court on Dec. 6, 2004. A full-text copy of Ames' Chapter 11 Plan is available at no charge at: http://bankrupt.com/misc/ames_chapter_11_plan.pdf and a full-text copy of Ames' Disclosure Statement is available at no charge at: http://bankrupt.com/misc/ames'_disclosure_statement.pdf A hearing to determine the adequacy of the Disclosure Statement explaining Ames' Plan has not yet been scheduled. ARCAPITA BANK: Employs KPMG as Tax Consultants & Valuation Advisor ------------------------------------------------------------------ Arcapita Bank B.S.C.(c) and certain of its subsidiaries and affiliates filed formal applications with the Bankruptcy Court to employ KPMG LLP (US) to serve as tax consultants and KPMG LLP, a United Kingdom limited liability partnership, as valuation advisor. The Debtors have employed KPMG-US for 12 years. Mary C. Grande at KPMG-US attests that the firm does not hold any interest adverse to the Debtors' estates; and is a "disinterested person" as defined by Section 101(14) of the Bankruptcy Code. The hourly rates for tax consulting services to be rendered by KPMG-US are: Tax Consulting Services Discounted Rate ----------------------- --------------- Partners $620 - $860 Managing Directors $630 - $720 Senior Managers/Directors $508 - $680 Managers $403 - $492 Senior Associates $319 - $364 Associates $245 - $280 KPMG UK is a part of KPMG Europe LLP, a member firm of KPMG International, a Swiss cooperative of member firms, each a separate legal entity, located worldwide. The Debtors' court filings indicate KPMG UK is renowned for its depth of experience and its ability to handle restructuring valuation issues in a complex, global-scale business environment. KPMG International Cooperative member firms' global valuation services and restructuring teams comprise more than 2,700 professionals in over 60 countries. Prior to the Debtors' bankruptcy filing, KPMG UK performed, among other things, valuation services to the Debtors pursuant to an engagement letter, which engagement was principally focused on a potential refinancing or restructuring of the Debtors' $1.1 billion syndicated Murabaha facility. Under the Prior Engagement Letter, KPMG UK provided valuation services to the Debtors regarding certain private equity/infrastructure and real estate portfolio companies, including identifying key risks and opportunities in connection with their revised business plan and related financial model. With the commencement of Arcapita's Chapter 11 cases, a more comprehensive restructuring is now contemplated that would encompass more than the Murabaha facility alone. The valuation services now required by the Debtors have accordingly expanded in scope and geography. The Debtors and KPMG UK determined to terminate the Prior Engagement Letter, and have entered into the Engagement Letter, which reflects the necessary expanded valuation services. KPMG UK's services will be limited to providing valuation services for the specific portfolio assets in which the Debtors hold interests -- not in determining the Debtors' enterprise value, which will be provided by Rothschild Inc. and NM Rothschild & Sons Limited in the context of evaluating and developing strategic alternatives for the Debtors in connection with their ongoing restructuring efforts. The Debtors propose to pay KPMG UK at these hourly billing rates: Position Hourly Rate -------- ----------- Partner $950 Associate Partner and Director $840 Associate Director and Senior Manager $695 Manager $550 Assistant Manager $405 Senior Associate and Associate $305 Prior to the Petition Date, KPMG UK received a payment on account of $300,000 from the Debtors for services to be rendered and for reimbursement of expenses to be incurred in connection with the Prior Engagement Letter. As of the Petition Date, the remaining amount of the Retainer was $238,750. To the best of the Debtors' knowledge, KPMG UK (a) has no connection with the Debtors, their creditors, or other parties in interest in the Chapter 11 Cases that would negatively impact KPMG UK's disinterestedness; (b) does not hold any interest materially adverse to the Debtors' estate; and (c) believes it is a "disinterested person" as defined by Section 101(14) of the Bankruptcy Code. 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. Falcon Gas Storage Company, Inc., filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors 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 represents 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 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 but was 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. ARCAPITA BANK: Hiring Linklaters as Special Counsel --------------------------------------------------- Arcapita Bank B.S.C.(c) and certain of its subsidiaries and affiliates seek U.S. Bankruptcy Court authority to employ Linklaters LLP as special counsel, nunc pro tunc to the Petition Date. Linklaters has acted as counsel to the Debtors and certain of their portfolio companies in Europe, the Middle East and across Asia since 2003, primarily in connection with Shari'ah-compliant investments. Linklaters' services include advising the Debtors and assisting the Debtors' general bankruptcy counsel, Gibson, Dunn & Crutcher LLP in connection with the Debtors' prepetition credit, security and intercreditor agreements (which are, in the main, governed by the laws of England and Wales) and providing non-bankruptcy services and advice to the Debtors in connection with financing, security and capital structure, and negotiating and drafting documents with respect to non-U.S. laws, primarily the laws of England and Wales; advising the Debtors and assisting Gibson Dunn in relation to issues arising from the impact of the Debtors' Chapter 11 Cases on its underlying investments in portfolio companies; and advising the Debtors with respect to non-bankruptcy matters and assisting Gibson Dunn in formulating and drafting any disclosure statement accompanying any plan of reorganization. Linklaters intends to (a) charge for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date services are rendered and (b) seek reimbursement of actual and necessary out-of-pocket expenses according to its customary reimbursement policies, including reimbursements for its instruction of Antony Zacaroli QC, an external U.K. barrister. For timekeepers in the London office, applicable hourly rates in the chapter 11 proceedings, subject to periodic adjustments to reflect economic and other conditions, plus applicable Value Added Tax, if any, are: Partners GBP670 - GBP775 Counsels GBP600 Managing Associates GBP510 - GBP570 Associates GBP300 - GBP480 Trainee Solicitors GBP200 - GBP290 Paralegals GBP120 - GBP200 In the one-year period immediately preceding the Petition Date, Linklaters received payments totaling GBP934,960 -- or $1,495,936 -- on account of services rendered and expenses incurred by Linklaters in connection with its representation of the Debtors. The Prepetition Payments do not include GBP289,880 -- or $463,808 -- of fees and expenses incurred by Linklaters in connection with its representation of the Debtors that, subject to its retention to act as Debtors' special counsel in the Chapter 11 Cases, Linklaters has voluntarily written off and with respect to which Linklaters will not seek recompense. With the Debtors' consent, Linklaters has been engaged to provide advice to these non-Debtor affiliates: -- Honiton Energy Caymans Limited in connection with general corporate advice in matters including, but not limited to, shareholder and lender relationships and an ongoing group reorganization involving asset sales, amendments to corporate documents and the negotiation of employment contracts. In limited circumstances, Linklaters has advised Honiton on the impact of these Chapter 11 Cases on certain of its transactional documents; -- Freightliner Group Limited and Railway Investments Limited in connection with a dispute with its joint venture partner over whether the joint venture partner can enforce a buyout provision in the joint venture partnership agreement. Further, Linklaters is advising FGL regarding these Chapter 11 Cases as they relate to an ongoing sales process under English law; -- Viridian Group Investments Limited and Viridian Group Holdings Limited in connection with general corporate advice on an ongoing basis, including with respect to various financing options; and -- P3 (f/k/a PointPark Properties Sp. z o.o., together with Point Park Properties s.r.o.), a portfolio company, with regards to ongoing advice in connection with the acquisition and management of industrial development projects, including the drafting of leases and construction contracts, obtaining financing and matters related to corporate governance in Poland. Linklaters is advising P3 regarding the Chapter 11 Cases as they relate to P3's ongoing financing and development projects. Richard Good, Esq. -- richard.good@linklaters.com -- a partner at Linklaters, attests Linklaters does not represent or hold any interest adverse to the Debtors or their estates with respect to the matters as to which Linklaters is to be employed. The Official Committee of Unsecured Creditors raised concerns over the Linklaters retention with respect to potential duplication of services. The Committee said Linklaters should not be authorized to charge the Debtors' estates for services it may perform directly for non-Debtor portfolio companies (as opposed to giving advice to the Debtors in connection with their investments). Even if Linklaters' policy of charging its clients the fees and expenses of barristers instructed by it is consistent with U.K. practice, the Debtors should formally and separately retain Mr. Zacaroli, who is not a member of Linklaters. As such, Mr. Zacaroli must independently show that he meets the requirements for being retained as special counsel to the Debtors, including the "no adverse interest" standard of Section 327(e) of the Bankruptcy Code. Subject to Linklaters satisfactorily addressing those concerns, the Committee will not object to the Court granting the Linklaters retention. 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. Falcon Gas Storage Company, Inc., filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors 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 represents 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 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 but was 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. APPALACHIAN FUELS: Court Rules on GATX Suit Against Addingtons -------------------------------------------------------------- District Judge David L. Bunning dismissed GATX Corporation's claims against Stephen and Robert Addington, the co-trustees of the Larry Addington Irrevocable Trust f/b/o Maxwell Addington, and denied GATX's request to amend its complaint to include additional claims against the co-trustees. A copy of the Court's May 9, 2012 Memorandum Opinion and Order is available at http://is.gd/rXoIm0 from Leagle.com. GATX CORPORATION, Plaintiff, v. LARRY ADDINGTON, et al., Defendants, Civil Action No. 11-122-DLB (E.D. Ky.), stems from the 2009 case of GATX Corporation v. Appalachian Fuels, LLC, et al. (0:09-cv-41-DLB), where the District Court entered a $2,900,000 Agreed Judgment against Larry Addington. In the 2011 action, GATX alleges that Larry Addington anticipated he would be held liable for a substantial sum of money in the 2009 case, and that he fraudulently conveyed his real and personal property to the Larry Addington Irrevocable Trust for the Benefit of Maxwell Addington to place assets out of GATX's reach. GATX also alleges that Stephen and Robert Addington, both individually and in their capacity as Co-Trustees of the Irrevocable Trust, were involved in the fraudulent conveyances, rendering them liable under various Kentucky statutory and common law theories. GATX served as the lessor of coal mining equipment to Appalachian Fuels pursuant to various Master Lease Agreements executed in 2005 and 2006. Appalachian Fuels is a limited liability corporation organized and existing under the laws of the Commonwealth of Kentucky. It is wholly owned by Energy Coal Resources Inc. -- ECR -- another Kentucky corporation. Larry owns a 30% share in ECR. Larry Addington filed a personal Chapter 11 bankruptcy petition (Bankr. E.D. Ky. Case No. 12-10029) on Jan. 26, 2012. About Appalachian Fuels Ashland, Kentucky-based Appalachian Fuels, LLC, a coal mining company, produces and sells coal for electric utilities and coking coal plants. It has surface mines and underground mining operations in eastern Kentucky and West Virginia. Appalachian Fuels operates as a subsidiary of Energy Coal Resources, Inc. An involuntary petition for liquidation under Chapter 7 was filed against Appalachian Fuels (Bankr. E.D. Ky. 09-10343) on June 11, 2009. On June 29, 2009, the Bankruptcy Court converted the Debtor's Chapter 7 bankruptcy to a Chapter 11. Some of Appalachian Fuels' affiliates filed Chapter 11 petitions and on July 17, 2009, the Court ordered that the Debtor's Chapter 11 bankruptcy be jointly administered with the bankruptcies of its affiliates. The cases being jointly administered with Appalachian Fuels include: Appalachian Holding Company, Inc. (Case No. 09- 10372); Appalachian Premium Fuels, LLC (Case No. 09-10373); Appalachian Environmental, LLC (Case No. 09-10374); Kanawha Development Corporation (Case No. 09-10375); Appalachian Coal Holdings, Inc. (Case No. 09-10405); and Southern Eagle Energy, LLC (Case No. 09-10406). On July 14, 2009, the Court appointed the Official Committee of Unsecured Creditors. ATLANTIC & PACIFIC: NJ Landlord Fails in Bid to Nix Pathmark Lease ------------------------------------------------------------------ District Judge Cathy Seibel affirmed a bankruptcy court ruling that allowed The Great Atlantic & Pacific Tea Company, Inc., to assume a Pathmark Store lease at Allaire Village Plaza in Wall Township, New Jersey. The landlord, Androse Associates of Allaire LLC, had offered to pay the Debtors $1.25 million just to terminate the lease. The Debtors had suspended operations at the Pathmark store subject to the lease. The landlord said "the real reason" the Debtors assumed the Lease was because they could not give sufficient notice to their DIP Facility lender by the deadline by which the Debtors agreed that they would reject leases. The landlord argued that the Debtors' business judgment analysis in seeking to assume the Lease was flawed because (1) the store is dark and thus cannot be profitable to the bankruptcy estate, and (2) the Debtors did not introduce sufficient evidence of the value of the Lease to the estate or the extent to which the Lease could be monetized. The landlord challenged the bankruptcy judge's ruling, saying the bankruptcy court applied its own business judgment, rather than the Debtors' business judgment, by introducing "a speculative argument concerning which party stood to gain the most leverage from assumption and conclud[ing] that the [Debtors] could extract greater value for the lease by spending $700,000 per year to maintain a dark non-operating store -- an argument not even raised by the [Debtors]." District Judge Seibel said she did not find any clear factual error in the Bankruptcy Court's conclusion that the decision to assume the Lease was supported by the Debtors' sound business judgment. The District Court noted that Bankruptcy Judge Robert D. Drain, which handled the Debtors' cases, considered the Debtors' representations that, along with their advisors, they completed a thorough review of various leases to determine whether assuming the Lease was in the best interest of the estate. Further, the unsecured creditors' committee -- the group of creditors with the most to lose in a bankruptcy case -- was consulted and did not object to the Debtors' decision to assume the Lease, and the DIP Facility lender also approved. Pathmark Stores Inc. assumed the Lease when it acquired Supermarkets General Corporation. Supermarkets General entered into the lease in 1986 with Levcom-Allaire Village Associates. Levcom later assigned the Lease to Androse. The Lease is for a 25-year term, subject to possible extensions, at an annual rent of $470,630, exclusive of taxes and common area maintenance charges. The Lease contemplated that Pathmark's store was one of many stores in a "Shopping Center" named "Allaire Village Plaza." Great Atlantic & Pacific, which operated an A&P store directly across the street from Allaire Village Plaza, acquired Pathmark in 2007. Pathmark operated the Allaire Village Plaza store until sometime in 2009 when it "went dark" and ceased its operations there, although it remained the lessee of the property. In the time since the Pathmark store went dark, the landlord has contended with other tenants of Allaire Village Plaza vacating their locations and asking for rent concessions because the anchor store has not been operational and thus the shopping center has been attracting fewer customers. At the outset of the bankruptcy case, Great Atlantic & Pacific entered into an $800 million post-petition financing facility to aid their restructuring efforts. The Debtors were given until April 26, 2011, to reject any unexpired non-residential real property leases under 11 U.S.C. Sec. 365. Hilco Real Estate LLC, as real estate advisor, assisted the Debtors in the review of the Debtors' store portfolio. After completing the analysis, the Debtors decided to reject 150 "dark store" leases and subleases, and exit or sell 57 other operating locations. The Debtors also obtained rent concessions from certain landlords in efforts to generate roughly $14 million in savings over the life of certain leases they sought to assume. The case before the District Court is, ANDROSE ASSOCIATES OF ALLAIRE, LLC, Appellant, v. THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., et al., Appellees, No. 11-CV-5888 (S.D.N.Y.). A copy of the District Court's May 8, 2012 Opinion and Order is available at http://is.gd/1Q6egMfrom Leagle.com. Scott R. Kipnis, Esq., and Nicholas B. Malito, Esq. -- skipnis@hgg.com and nmalito@hgg.com -- at Hofheimer Gartlir & Gross, LLP, in New York, represent Androse Associates of Allaire. About Great Atlantic & Pacific Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific is a supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid-Atlantic and Northeastern United States. A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Case No. 10-24549) on Dec. 12, 2010, in White Plains, New York. Before filing for bankruptcy in 2010, A&P operated 429 stores in 8 states and the District of Columbia under the following trade names: A&P, Waldbaum's, Pathmark, Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees prior to the bankruptcy filing. In its petition, A&P reported total assets of $2.5 billion and liabilities of $3.2 billion as of Sept. 11, 2010. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. Lazard Freres & Co. LLC is the financial advisor. Huron Consulting Group is the management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent the Official Committee of Unsecured Creditors. A&P sold 12 Super-Fresh stores in the Baltimore-Washington area for $37.83 million, plus the value of inventory. Thirteen other locations didn't attract buyers at auction and were closed mid- July 2011. The Bankruptcy Court entered an order Feb. 27, 2012, confirming the First Amended Joint Plan of Reorganization filed Feb. 17, 2012. A&P consummated its financial restructuring and emerged from Chapter 11 as a privately held company in March 2012. Mount Kellett Capital Management LP, The Yucaipa Companies LLC and investment funds managed by Goldman Sachs Asset Management, L.P., provided $490 million in debt and equity financing to sponsor A&P's reorganization plan and complete its balance sheet restructuring. JP Morgan and Credit Suisse arranged a $645 million exit financing facility. AURASOUND INC: Weisshaupt Resigns; Tetzlaff Tapped as Interim CEO ----------------------------------------------------------------- Harald Weisshaupt resigned as Chief Executive Officer, President and Chief Financial Officer and as a director of Aurasound, Inc., effective May 3, 2012. Mr. Weisshaupt agreed to make himself reasonably available to assist the Company in the transition of his job duties for a 30-day period after his date of resignation in exchange for which he will receive from the Company 6-months severance and benefits. On May 3, 2012, the board of directors of the Company appointed Mr. Robert Tetzlaff, who is, and since 2010 has been, a director of the Company and who is, and since April 2012 has been, the Chairman of the Board, as interim Chief Executive Officer of the Company. Mr. Tetzlaff, age 60, serves as President of GGEC America, an OEM audiosystems and electronics manufacturer, a position he has held since April 2010. From October 2001 to April 2010, Mr. Tetzlaff served as a Vice President and Business Unit Manager with GGEX America. Prior to October 2001, Mr. Tetzlaff held various positions with a number of companies that provided audio systems or speakers to the automotive industry. Mr. Tetzlaff graduated from the University of Illinois with a degree in Electrical Engineering Technology. There are no family relationships known to the Company between Mr. Tetzlaff and any other officers or directors of the Company. Mr. Tetzlaff was originally appointed to the board of directors in 2010 in connection with the GGEC Transaction. On July 10, 2010, the Company entered into and consummated a Securities Purchase Agreement with GGEC America and its parent GGEC, pursuant to which the Company sold and issued to GGEC America: (i) 6,000,000 unregistered shares of common stock, which, following the consummation of the Securities Purchase Agreement, constituted approximately 55% of the Company's issued and outstanding shares of common stock; (ii) a 5 year warrant to purchase 6,000,000 shares of common stock at an exercise price of $1.00 per share; and (iii) a 3 year warrant to purchase 1,817,265 shares of common stock at an exercise price of $0.75 per share; for an aggregate purchase price of $3,000,000. GGEC America paid the purchase price for the shares and warrants by cancelling $3,000,000 of indebtedness owed by the Company to GGEC America and GGEC. In addition, pursuant to the Securities Purchase Agreement, the Company issued 3 year warrants to GGEC America to purchase a total of 60,000 shares of common stock at an exercise price of $0.75 per share. The foregoing warrants issued to GGEC America are exercisable for cash only. On July 30, 2010, the Company and GGEC entered into a Manufacturing Agreement which superseded and replaced the Manufacturing Agreement between the Company and GGEC dated Dec. 12, 2007. Pursuant to the Manufacturing Agreement, the Company granted to GGEC the right to manufacture and package the Company's products and to transfer this right to its affiliates. GGEC agreed that any new inventions or related products or processes developed by GGEC under the Company's intellectual property and know-how will be the property of the Company. For the manufacturing services performed pursuant to the Manufacturing Agreement, the Company agreed to pay GGEC the cost of all materials required to build the products, labor charges, finance charges, selling, general and administrative expenses, spoilage charges and an amount of profit. The Company also agreed to pay the costs of shipping the products and tooling charges for the improvement of products or for the development of new products. GGEC agreed to provide an office to host the Company's engineering and support team. GGEC has also agreed to provide the use of its audio testing facilities at no charge to the Company. The Company and GGEC also agreed to develop new products that will be manufactured by GGEC and sold by the Company. On May 3, 2012, the board of directors of the Company appointed Mr. Aman Singha, who is, and since 2010 has been, the Company's Chief Administrative Officer and Secretary, as President of the Company. Mr. Singha, age 41, brings 14 years of combined experience in operations, executive management and strategic planning at various portfolio companies as well as an attorney previously in private practice with experience in M&A, venture capital, public and private offerings and general corporate law. Mr. Singha also serves as Senior Vice President of Waveland Capital Group, LLC, a merchant bank located in Southern California focused on venture financing and energy project financing and is a member of the board of directors of Sonim Technologies, maker of rugged mobile phones. Mr. Singha has also been published in "The Venture Capital Legal Handbook." Mr. Singha received a Bachelor of Arts from Simon Fraser University and a Juris Doctor degree from New York Law School. There are no family relationships known to the Company between Mr. Singha and any other officers or directors of the Company. The Company has not yet appointed a new Chief Financial Officer to replace Mr. Weisshaupt. About AuraSound, Inc. Santa Ana, Calif-based AuraSound, Inc. (OTC BB: ARUZE) -- http://www.aurasound.com/-- develops, manufactures, and markets audio products. AuraSound's products include TV soundbars, high- drivers for TVs and laptops, subwoofers, and tactile transducers. Hein & Associates LLP, in Irvine, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. During the year ended June 30, 2011, the Company had negative cash flow from operating activities amounting to $1.91 million and an accumulated deficit of $36.9 million. The Company's balance sheet at Dec. 31, 2011, showed $40.8 million in total assets, $34.6 million in total liabilities, all current, and $6.14 million in total stockholders' equity. AVENTINE RENEWABLE: Incurs $22.5 Million Net Loss in Q1 ------------------------------------------------------- Aventine Renewable Energy Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $22.49 million on $200.51 million of net sales for the three months ended March 31, 2012, compared with a net loss of $19.26 million on $198.10 million of net sales for the same period a year ago. The Company reported a net loss of $43.39 million for the year ended Dec. 31, 2011, compared with a net loss of $25.46 million for the ten months ended Dec. 31, 2010. The Company's balance sheet at March 31, 2012, showed $384.90 million in total assets, $248.91 million in total liabilities and $135.98 million in total stockholders' equity. "The downturn in industry wide margins continued throughout the first quarter as the industry continues to be in an oversupply situation. The Company sustained its focus on what we can control and continues to takes steps to improve our cost profile," said John Castle, Chief Executive Officer. Mr. Castle added, "The industry has a well-developed seasonal pattern of margin expansion from early summer through late fall. With this in mind, the Company is taking steps to ensure all of our assets are capable of running if the market reflects this improvement." A copy of the Form 10-Q is available for free at: http://is.gd/RL8QhV About Aventine Renewable Pekin, Illinois-based Aventine Renewable Energy Holdings, Inc. (OTC BB: AVRW) -- http://www.aventinerei.com/-- markets and distributes ethanol to many of the leading energy companies in the U.S. In addition to producing ethanol, its facilities also produce several by-products, such as distillers grain, corn gluten meal and feed, corn germ and grain distillers dried yeast, which generate revenue and allow the Company to help offset a significant portion of its corn costs. The Company and all of its direct and indirect subsidiaries filed for Chapter 11 on April 7, 2009 (Bankr. D. Del. Lead Case No. 09-11214). The Debtors filed their First Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code on Jan. 13, 201. The Plan was confirmed by order entered by the Bankruptcy Court on Feb. 24, 2010, and became effective on March 15, 2010. * * * Aventine carries 'CCC+' issuer credit ratings, with negative outlook, from Standard & Poor's. Aventine carries a 'Caa1' probability of default rating, with stable outlook, from Moody's. In December 2011, when S&P issued the downgrade, it said, "The downgrade reflects problems the company has encountered in attempting to start its new facilities, and the risk of additional delays and cost overruns. It also reflects the commodity basis differentials its operating plants have experienced in 2011 that have compressed margins, especially in the second quarter of 2011 when index-based crush spreads were weak. Although performance has improved slightly since then, we believe liquidity may come under stress and that covenant violations are possible in 2012 unless operations and realized margins improve." BEL AIR RACING: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Bel Air Racing Group, Inc. aka Milan Dragway Dragways, Inc. P.O. Box 3186 Centerline, MI 48015 Bankruptcy Case No.: 12-51530 Chapter 11 Petition Date: May 8, 2012 Court: U.S. Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Steven W. Rhodes Debtor's Counsel: Robert A. Peurach, Esq. DAKMAK PEURACH, P.C. 615 Griswold, Suite 600 Detroit, MI 48226 Tel: (313) 964-0800 E-mail: rpeurach@gdakmak.com Scheduled Assets: $2,198,451 Scheduled Liabilities: $2,203,157 A copy of the Company's list of its seven largest unsecured creditors is available for free at: http://bankrupt.com/misc/mieb12-51530.pdf The petition was signed by William Kapolka, president. BIOCORAL INC: Delays Form 10-Q for First Quarter ------------------------------------------------ Biocoral, Inc., said it is not able to complete the preparation, review and filing of its quarterly report on Form 10-Q for the quarterly period ended March 31, 2012, within the prescribed time period without unreasonable effort and expense. About Biocoral, Inc. Headquartered in La Garenne Colombes, France, Biocoral, Inc. -- http://www.biocoral.com/-- was incorporated under the laws of the State of Delaware on May 4, 1992. Biocoral is a holding company that conducts its operations primarily through its wholly- owned European subsidiaries. The Company's operations consist primarily of research and development and manufacturing and marketing of patented high technology biomaterials, bone substitute materials made from coral, and other orthopedic, oral and maxillo-facial products, including products marketed under the trade name of Biocoral. Most of the Company's operations are conducted from Europe. The Company has obtained regulatory approvals to market its products throughout Europe, Canada and certain other countries. The Company owns various patents for its products which have been registered and issued in the United States, Canada, Japan, Australia and various countries throughout Europe. However, the Company has not applied for the regulatory approvals needed to market its products in the United States. Biocoral reported a net loss of $920,103 in 2011, compared with a net loss of $703,272 in 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.39 million in total assets, $4.53 million in total liabilities and a $3.14 million total stockholders' deficit. Michael T. Studer CPA P.C., in Freeport, New York, noted that the Company's present financial condition raises substantial doubt about its ability to continue as a going concern. The independent auditors added that the Company had net losses for the years ended Dec. 31, 2011, and 2010, respectively. Management believes that it is likely that the Company will continue to incur net losses through at least 2012. The Company had a working capital deficiency of approximately $1,570,000 and $2,125,000, at Dec. 31, 2011 and 2010, respectively. The Company also had a stockholders' deficit at Dec. 31, 2011, and 2010, respectively. BION ENVIRONMENTAL: Has $5.8-Mil. Net Loss for 3 Quarters --------------------------------------------------------- Bion Environmental Technologies, Inc., said in a regulatory filing it has not generated revenues and has incurred net losses (including significant non-cash expenses) of roughly $6,998,000 and $2,976,000 during the years ended June 30, 2011 and 2010, respectively, and a net loss of roughly $5,831,000 for the nine months ended March 31, 2012. At March 31, 2012, the Company has a working capital deficit and a stockholders' deficit of roughly $383,000 and $814,000 respectively. These factors raise substantial doubt about the Company's ability to continue as a going concern. During the year ended June 30, 2011, the Company sold 14,150 shares of the Company's Series C Preferred shares at $100 per share, which resulted in net proceeds to the Company of $1,231,050, and the Company sold 311,746 shares of its common stock for net proceeds of $813,200. Also during the year ended June 30, 2011, the Company sold 306,000 units at $2.50 per unit, and received proceeds of $765,000. The sales include 60,000 units to each of Mark A. Smith and Dominic Bassani, the Company's President and Chief Executive Officer, respectively. Each unit consisted of one share of the Company's restricted common stock and one warrant to purchase half of a share of the Company's restricted common stock at $3.00 per share until December 31, 2016. During the nine months ended March 31, 2012, the Company has sold an additional 110,000 2011 UNITS for proceeds of $275,000. In addition, during the nine months ended March 31, 2012, the Company sold 140,000 units under a new offering at $2.50 per unit, and received proceeds of $350,000. Each 2012 UNIT consisted of one share of the Company's restricted common stock and one warrant to purchase half of a share of the Company's restricted common stock at $3.10 per share until Dec. 31, 2014. The Company said it continues to explore sources of additional financing to satisfy its current operating requirements. While the Company currently does not face a severe working capital shortage, it is not currently generating any revenues. The Company also said it will need to obtain additional capital to fund its operations and technology development, to satisfy existing creditors, to develop projects and to finish construction and operate the Kreider Farm facilities. The Company anticipates that it will seek to raise from $5,000,000 to $50,000,000 or more (debt and equity) during the next 12 months. There is no assurance, especially in the extremely unsettled capital markets that presently exist, that the Company will be able to obtain the funds that it needs to stay in business, complete its technology development or to successfully develop its business. The Company also said there can be no assurance that funds required during the next 12 months or thereafter will be generated from operations or that those funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Further, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significantly dilutive effect on the Company's existing shareholders. As of March 31, 2012, Bion had total assets of $8,528,685, total liabilities of $9,214,838 and total deficit of $728,678. A copy of the Company's Form 10-Q report for the nine months ended March 31, 2012, filed with the Securities and Exchange Commission is available at http://is.gd/w7Cobk About Bion Environmental Bion Environmental Technologies Inc.'s patented and proprietary technology provides a comprehensive environmental solution to a significant source of pollution in US agriculture, large scale livestock facilities known as Confined Animal Feeding Operations. Bion's technology produces substantial reductions of nutrient releases (primarily nitrogen and phosphorus) to both water and air (including ammonia, which is subsequently re-deposited to the ground) from livestock waste streams based upon the Company's operations and research to date (and third party peer review). BLUE SPRINGS: Court OKs Polsinelli Shughart as Counsel ------------------------------------------------------ Blue Springs Ford Sales Inc. sought and obtained final approval from the U.S. Bankruptcy Court to employ Polsinelli Shughart PC as counsel. Michael M. Tamburini, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Polsinelli's hourly rates range from $275 to $500 per hour for shareholders, from $210 to $300 per hour for associates and senior counsel and from $110 to $190 per hour for paraprofessionals. Polsinelli received a $200,000 retainer from the Debtor. About Blue Springs Ford Blue Springs Ford Sales, Inc. -- http://www.bluespringsford.com/ -- is a Ford dealer, serving Blue Springs in Missouri. A jury verdict assessing actual damages of $171,500 and punitive damages in the amount of $1.75 million (54 times the actual damages) prompted Blue Springs Ford to seek Chapter 11 protection. The judgment was on account of a suit filed by a customer in Circuit Court of Jackson County, Missouri, under a variety of legal claims, including, but not limited to, the company's alleged failure to adequately disclose a full detailed vehicle history report in connection with a sale of a used Ford. Blue Springs Ford filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-10982) on March 21, 2012, listing $10 million to $50 million in assets and debts. Christopher A. Ward, Esq., at Polsinelli Shughart PC, serves as the Debtor's counsel. Donlin Recano & Company Inc. serves as the Debtor's claims agent. The petition was signed by Robert C. Balderston, president. Delaware Bankruptcy Judge Mary F. Walrath in a March 28 order transferred the case's venue following an oral motion by the judgment, creditors Kimberly and Michael von David, at a March 23 hearing. The case was transferred to the U.S. Bankruptcy Court Western District of Missouri Court (Case No. 12-41176) and assigned to the Hon. Jerry W. Venters. BLUE SPRINGS: Court Approves $8MM Revolving Credit From Ford ------------------------------------------------------------ Blue Springs Ford Sales Inc. sought and obtained final approval from the U.S. Bankruptcy Court to: -- obtain postpetition financing in the aggregate amount not to exceed $8,000,000 from Ford Motor Credit Company for ongoing working capital, general corporate and other financing needs; -- use cash collateral securing prepetition obligations to Ford Credit and provide Ford Credit adequate protection; and -- pay certain fees and expenses to Ford Credit. Without financing from FMCC under the DIP Financing Agreement and the ability to use Cash Collateral, the Debtor said it may not have sufficient alternative available sources of working capital to remain in business. Prior to the Petition Date, FMCC provided a wholesale line of credit and other financial accommodations to the Debtor. Under the Pre-Petition Financing Agreement, FMCC made advances to or on behalf of the Debtor to finance new and used vehicles and other merchandise. The Debtor had outstanding secured debt obligations to FMCC in the aggregate principal amount of $8 million, arising under the Pre- Petition Financing Agreement. In addition, the Debtor will be obligated to FMCC for certain post-petition extensions of credit. The Pre-Petition Obligations are secured by first priority liens on and continuing security interests in all the property described in the Pre-Petition Financing Agreement. The Debtor is not in default under the Pre-Petition Financing Agreement. As an authorized Ford dealer, the Debtor's financing of Merchandise is done entirely through FMCC. The wholesale line of credit available to the Debtor through FMCC currently provides the Debtor access to as much as $8 million in revolving credit on terms and conditions that the Debtor could not obtain from other sources. The credit facility permits the Debtor to continually replenish its floor plan inventory, following the sale of such inventory, through advances made to or for the benefit of the Debtor. For the Debtor to continue to operate, it is critical that it maintains on a post-petition basis the floor plan financing afforded to it by FMCC on substantially identical terms as provided for under the Pre-Petition Financing Agreement in order that the Debtor may continue to operate as an authorized Ford dealer and ensure its ability to purchase and sell Ford vehicles. The Debtor noted that its need to seek Chapter 11 relief was not due to poor operating performance, but rather was due to the imminent threat of execution by a single disputed judgment creditor against the Debtor's assets, which was certain to severely disrupt the Debtor's operations. As soon as the Debtor determined that it had no choice but to seek relief under the Bankruptcy Code, it contacted FMCC and engaged in substantive discussions concerning the terms and conditions of post-petition financing. The currently proposed structure of the DIP Financing Agreement would provide the Debtor with a wholesale line of credit up to the same approximate amount and upon the same terms and conditions of the Pre-Petition Financing Agreement. About Blue Springs Ford Blue Springs Ford Sales, Inc. -- http://www.bluespringsford.com/ -- is a Ford dealer, serving Blue Springs in Missouri. A jury verdict assessing actual damages of $171,500 and punitive damages in the amount of $1.75 million (54 times the actual damages) prompted Blue Springs Ford to seek Chapter 11 protection. The judgment was on account of a suit filed by a customer in Circuit Court of Jackson County, Missouri, under a variety of legal claims, including, but not limited to, the company's alleged failure to adequately disclose a full detailed vehicle history report in connection with a sale of a used Ford. Blue Springs Ford filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-10982) on March 21, 2012, listing $10 million to $50 million in assets and debts. Christopher A. Ward, Esq., at Polsinelli Shughart PC, serves as the Debtor's counsel. Donlin Recano & Company Inc. serves as the Debtor's claims agent. The petition was signed by Robert C. Balderston, president. Delaware Bankruptcy Judge Mary F. Walrath in a March 28 order transferred the case's venue following an oral motion by the judgment, creditors Kimberly and Michael von David, at a March 23 hearing. The case was transferred to the U.S. Bankruptcy Court Western District of Missouri Court (Case No. 12-41176) and assigned to the Hon. Jerry W. Venters. BOULDER HEIGHTS: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Boulder Heights Owner, LLC 445 Park Avenue, 9th Floor New York, NY 10022 Bankruptcy Case No.: 12-11958 Chapter 11 Petition Date: May 9, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Sean H. Lane Debtor's Counsel: Gabriel Del Virginia, Esq. LAW OFFICES OF GABRIEL DEL VIRGINIA 488 Madison Avenue, 19th Floor New York, NY 10022 Tel: (212) 371-5478 Fax: (212) 371-0460 E-mail: gabriel.delvirginia@verizon.net 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 seven largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb12-11958.pdf The petition was signed by Daniel Gordon, manager. BUFFETS INC: California FTB Allowed to Respond to Appeal on Claim ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a stipulation modifying the automatic stay and authorizing California Franchise Tax Board to respond to Buffets Restaurants Holdings, Inc., et al.'s appeal, including without limitation by filing a brief in opposition to the appeal and participating in oral argument. On April 13, 2009, the Debtors commenced Adversary Proceeding against FTB in the First Bankruptcy Case by filing a complaint that objected to FTB's claims and requested that the Court determine the Debtors' California franchise tax liabilities, if any, to FTB under Section 505 of the Bankruptcy Code. Both parties subsequently moved for summary judgment in the Adversary Proceeding. On Aug. 15, 2011, the Court issued a memorandum opinion and order granting, in part, FTB's motion for summary judgment. On Aug. 26, 2011, the Debtors appealed the Summary Judgment Order to the U.S. District Court for the District of Delaware, commencing Civil Action. Thereafter, on Jan. 18, 2012, the Debtors and certain affiliates commenced the Second Bankruptcy Case. FTB filed claims in the Second Bankruptcy Case that include the unpaid amounts that FTB claimed in the First Bankruptcy Case. The Debtors filed their opening brief in support of their appeal. Pursuant to the stipulation: 1. modifying the automatic stay will not prejudice the Debtors or their creditors; 2. FTB will be prejudiced if the automatic stay is not modified and the resolution of the Debtors' Appeal and FTB's ultimate recovery on its claims are further postponed; and 3. FTB prevailed before the Court on summary judgment in the first instance, FTB plainly has a reasonable chance at success on the merits in the Debtors' Appeal. A full-text copy of the stipulation is available for free at http://bankrupt.com/misc/BuffetsInc_AutomaticStay_motion.pdf 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 March 2012, Buffets Inc. received court approval for an incentive bonus program that may pay as much as $2.3 million to executives if cash flow targets are met. There was an April 30 hearing schedule on another program to pay bonuses for a successful sale of the business that could cost $2.7 million. 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. CAESARS ENTERTAINMENT: Incurs $281.1 Million Net Loss in Q1 ----------------------------------------------------------- Caesars Entertainment Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $281.10 million on $2.27 billion of net revenues for the quarter ended March 31 2012, compared with a net loss of $144.80 million on $2.17 billion of net revenues for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $28.40 billion in total assets, $27.56 billion in total liabilities and $849.20 million in total equity. A copy of the Form 10-Q is available for free at: http://is.gd/nj0pDd About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. --http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. The Company reported a net loss of $666.70 million in 2011, and a net loss of $823.30 million in 2010. * * * As reported by the TCR on March 28, 2012, Moody's Investors Service upgraded Caesars Entertainment Corp's Corporate Family Rating (CFR) and Probability of Default Rating both to Caa1 from Caa2. The upgrade of Caesars' ratings reflects very good liquidity, an improving operating outlook for gaming in a number of the company's largest markets that is expected to drive earnings growth, the completion of a bank amendment that resulted in the extension of debt maturities to 2018 from 2015, and the public listing of the company's equity that increases financial flexibility by providing it with another potential source of capital. The upgrade of the SGL rating reflects minimal debt maturities over the next few years, significant cash balances (approximately $900 million at December 31, 2011) and revolver availability that will be more than sufficient to fund the company's cash interest and capital spending needs. CALIFORNIA GREEN: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: California Green Designs, Inc. 18226 Ventura Boulevard, Suite 103 Tarzana, CA 91356 Bankruptcy Case No.: 12-14341 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Alan M. Ahart Debtor's Counsel: Robert D. Bass, Esq. GREENBERG & BASS LLP 16000 Ventura Blvd Ste 1000 Encino, CA 91436 Tel: (818) 382-6200 Fax: (818) 986-6534 E-mail: rbass@greenbass.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-14341.pdf The petition was signed by Sevan Varteressian, president and CEO. CANO PETROLEUM: Has Deal With U.S. on Claims Filing Deadlines ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas signed an agreed order permitting the United States to file proofs of claim against Cano Petroleum, Inc., et al. The Court ordered that: 1. The United States may timely file its proofs of claim for prepetition claims in the bankruptcy by: i. Sept. 4, 2012, with respect to its general unsecured claims, and; ii. June 28, 2012, with respect to its secured claims and other prepetition claims, including royalty claims, requiring full payment; 2. If the Debtors have not completed all of the reporting requirements under their oil and gas leases with the United States, as determined by the Department of the Interior, by May 29: i. the United States is entitled to move the Court, at any time after May 29, for an order extending the Full Payment Bar Date to 30 days after the Debtors' completion of the Reporting Requirements, and; ii. The Debtors waive any and all right to oppose, or otherwise object to, the United States' request for an extension based on the Debtors' failure to complete the reporting requirements. 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. CARNEGIE PIZZA: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Carnegie Pizza, LLC 1520 Macdonald Ranch Drive Henderson, NV 89012 Bankruptcy Case No.: 12-15525 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Steven L. Yarmy, Esq. 520 S. Sixth Street Las Vegas, NV 89101 Tel: (702) 586-3513 Fax: (702) 586-3690 E-mail: sly@stevenyarmylaw.com Scheduled Assets: $1,450,000 Scheduled Liabilities: $4,400,000 A copy of the Company's list of its three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb12-15525.pdf The petition was signed by Carmine Vento, managing member. CB HOLDING: Says Review of Plan Confirmation is Inappropriate ------------------------------------------------------------- CB Holding Corp., et al., and the Official Committee of Unsecured Creditors filed with the U.S. Bankruptcy Court for the District of Delaware their response to the U.S. Trustee's motion for reconsideration of the order confirming the Debtors' First Amended Plan of Liquidation. As reported in the Troubled Company Reporter on Feb. 29, 2012, Bankruptcy Judge Mary F. Walrath approved the Chapter 11 plan of CB Holding Corp. The disclosure statement says secured creditors with $73 million in claims will have an estimated 20% to 23% recovery on their claims and general unsecured creditors with claims aggregating $120 million will recover 0.01% to 1.1%. The plan was unanimously supported by the two classes of secured creditors. But only 41% in amount of unsecured claims voted in favor of the plan, notwithstanding the Official Committee of Unsecured Creditors' recommendation that the class support the plan. Notwithstanding the "no" votes, the Debtor obtained approval of the plan via the cramdown process. Copies of the Plan and Disclosure Statement dated Jan. 4, 2012, are available for free at: http://bankrupt.com/misc/CBHOLDING_PlanDSJan4.pdf According to the Debtor and the Committee, the motion does not address the requirements of the rules, and argues that "[r]econsideration is appropriate in the case both to correct manifest errors of law and fact and to present evidence that was not available at the confirmation hearing." Roberta A. DeAngelis, the U.S. Trustee, in her objection, said that, the Court's decision constituted a manifest error of law that is ripe for reconsideration. In addition, material statements of fact made at the Confirmation Hearing by the Debtors' witness and counsel were inaccurate based on evidence discovered by the U.S. Trustee subsequent to the Confirmation Hearing. About CB Holding New York-based CB Holding Corp. operated 20 Charlie Brown's Steakhouse, 12 Bugaboo Creek Steak House, and seven The Office Beer Bar and Grill restaurants when it filed for bankruptcy protection. The Company closed 47 locations before filing for Chapter 11. CB Holding and its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-13683) on Nov. 17, 2010. After filing for Chapter 11, CB Holding sold 20 Charlie Brown's locations for $9.5 million. The 12 remaining Bugaboo Creek stores realized $10.05 million while the seven The Office Restaurants produced $4.675 million. Joel H. Leviton, Esq., Stephen J. Gordon, Esq., Richard A. Stieglitz Jr., Esq., and Maya Peleg, Esq., at Cahill Gordon & Reindel LLP, in New York; and Mark D. Collins, Esq., Christopher M. Samis, Esq., and Tyler D. Semmelman, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, assist the Debtors in their restructuring effort. The Garden City Group, Inc., is the Debtors' notice, claims and solicitation agent. Jeffrey N. Pomerantz, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles; and Bradford J. Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. CB Holding estimated its assets at $100 million to $500 million and debts at $50 million to $100 million. At the outset of the Chapter 11 case, the lenders were owed $70.2 million. The Debtor completed sales of the three branches of the business between April and July, generating $20 million after payment of costs to run the Chapter 11 process. CDC CORP: Court to Consider Non-Debtor Assets Sale on May 15 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Georgia will convene a hearing on May 15, 2012, at 11:30 a.m., to consider CDC Corporation's motion to sell non-debtor assets. The Debtor proposes a sale of assets by OST International Corporation pursuant to the Asset Purchase Agreement, the salient terms of which are: Seller: OST International Corporation, a wholly owned subsidiary of CDC Business Solutions II, Inc., which is a wholly owned subsidiary of CDC Business Solutions, Inc. Buyer: 3RC-OST L.L.C. Purchased Assets: Acquired Contracts, Acquired Personnel, receivables, prepaid expenses, furniture and equipment at the Premises, the name OST International and OSTI, all domain names, all resume and candidate databases, all client lists, all logos and trademarks, all job board descriptions, copies of all books and records, right to telephone numbers and fax numbers, and rights certain identified bank accounts. Purchase Price: $600,000 Working Capital: Seller must have Working Capital of $900,000 as of the Measurement Date; if there is less than $900,000, the Purchase Price will be reduced on a dollar for dollar basis. Closing Date: Subject to satisfaction or waiver of any closing conditions, May 16. Termination: The APA may be terminated by either party if the Closing does not occur on or before the date that is 45 days after May 2. A full-text copy of the sale motion is available for free at: http://bankrupt.com/misc/CDCCorp_Sale_motion.pdf According to the Debtors' case docket, the Debtor also proposed to sell non-debtor assets consisting of the Debtor's indirect interest in Vis.Align, Inc., and its indirect interest in DB Professionals, Inc. The proposal will also be considered May 15. 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 Corp., 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 Corp. 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. The Debtor's Plan provides that in addition to paying creditors in full and distributing the excess to shareholders, the plan would allow filing lawsuits against insiders who CDC claims were behind the motion to dismiss. China.com filed a competing reorganization plan. CDC interprets the plan as giving releases of claims that CDC's plan would prosecute instead. CHARLIE MCGLAMRY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Charlie N. McGlamry 105 Orchard Lane Centerville, GA 31028 Bankruptcy Case No.: 12-51197 Chapter 11 Petition Date: May 9, 2012 Court: U.S. Bankruptcy Court Middle District of Georgia (Macon) Judge: James P. Smith Debtor's Counsel: Anna M. Humnicky, Esq. COHEN POLLOCK MERLIN & SMALL, P.C. 3350 Riverwood Parkway, Suite 1600 Atlanta, GA 30339 Tel: (770) 857-4770 Fax: (770) 857-4771 E-mail: ahumnicky@cpmas.com - and ? Garrett H. Nye, Esq. COHEN POLLOCK MERLIN & SMALL, P.C. 3350 Riverwood Parkway, Suite 1600 Atlanta, GA 30339 Tel: (770) 857-4790 Fax: (770) 763-3168 E-mail: gnye@cpmas.com - and ? Gus H. Small, Esq. COHEN POLLOCK MERLIN & SMALL, P.C. 3350 Riverwood Parkway, Suite 1600 Atlanta, GA 30339 Tel: (770) 857-4806 Fax: (770) 857-4807 E-mail: gsmall@cpmas.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $50,000,001 to $100,000,000 Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- USA Land Development, Inc. 12-51198 Barrington Hall Development Corp. 12-51199 Bear Branch, LLC 12-51200 By-Pass/Courthouse, LLC 12-51201 Chinaberry Place, LLC 12-51202 Eagle Springs, LLC 12-51203 Elmdale Development, LLC 12-51204 Gurr/Kings Chapel Road, LLC 12-51205 Jaros Development, LLC 12-51206 Lake Joy Development, LLC 12-51207 Old Hawkinsville Road, LLC 12-51208 South Houston Development, LLC 12-51209 The Villages at Nunn Farms, LLC 12-51210 Houston-Peach Investments, LLC 12-51212 The petitions were signed by Charlie N. McGlamry, as sole member. A. Charlie N. McGlamry's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Synovus Bank Personal Guaranty $35,085,059 871 Warren Drive Warner Robins, GA 31088 Wells Fargo Commercial Mort Personal Guaranty $18,160,646 Servicing 2010 Corporate Ridge, Suite 1000 McLean, VA 22102 KeyBank Real Estate Capital Personal Guaranty $15,845,499 11501 Outlook Street, Suite 300 Leawood, KS 66211 Votorantim Cimentos North Contract Claim $4,000,000 America, Inc. 8529 South Park Circle, Suite 320 Orlando, FL 32819 Planters First Bank Personal Guaranty $3,700,000 1620 East 16th Avenue Cordele, GA 31015 State Bank & Trust Company Personal Guaranty $3,625,194 3399 Peachtree Road NE, Suite 2050 Atlanta, GA 30326 Colony Bank Personal Guaranty $3,401,956 1290 South Houston Lake Road Warner Robins, GA 31088 Bank of Perry Personal Guaranty $1,786,888 P.O. Box 830 Perry, GA 31069 BB&T Personal Guaranty $1,349,213 3001 Watson Boulevard Warner Robins, GA 31093 Ag Georgia Farm Credit Various Tracts $1,000,000 P.O. Box 1820 Perry, GA 31069 Addison Harris III Personal Guaranty $808,495 9020 Northside Drive Perry, GA 31069 Certus Bank Personal Guaranty $599,005 1170 Peachtree Street, NE, Suite 2350 Atlanta, GA 30309 SunMark Bank Personal Guaranty $104,208 Houston County Tax Commissioner Property Tax $30,969 City of Warner Robins Property Tax $13,155 Castaway Storage Trade Debt $7,573 Integrated Control Trade Debt $7,444 Roy Willet Trade Debt $5,065 Warner Robins Supply Trade Debt $2,860 Cabinet Depot Trade Debt $2,000 B. Barrington Hall Development's List of Its Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Synovus Bank Guaranteed Debt $38,000,000 871 Warren Drive Warner Robins, GA 31088 Ag Georgia Farm Credit Bank Loan $1,000,000 P.O. Box 1820 Perry, GA 31069 Houston County Tax Commissioner Property Taxes $62,384 P.O. Box 7799 Warner Robins, GA 31095 City of Perry Tax Department Taxes $12,771 C. Houston-Peach Investments' List of Its Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ State Bank & Trust Bank Loan $914,212 3399 Peachtree Road, Suite 2050 Atlanta, GA 30326 Peach County Tax Commissioner Property Taxes $35,147 P.O. Box 931 Fort Valley, GA 31030 D. USA Land Development's List of Its 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Synovus Bank Land $1,877,797 871 Warren Drive Warner Robins, GA 31088 Synovus Bank Land $1,453,258 871 Warren Drive Warner Robins, GA 31088 Seyfarth Shaw LLP Attorney Fees $138,309 3807 Collections Center Drive Chicago, IL 60693 SDH Design Solutions Trade Debt $90,000 Weener & Nathan LLP Trade Debt $65,031 Houston County Tax Commissioner Property Tax $36,330 Waddle & Company Trade Debt $21,855 William Terrell Taylor Trade Debt $18,161 City of Perry Property Tax $10,842 City of Warner Robins Property Tax $7,579 Saunders Engineering Trade Debt $520 CHARLIE MCGLAMRY: Schedules Filing Deadline Extended to June 13 --------------------------------------------------------------- Charlie N. McGlamry and his affiliated debtors won a June 13 extension for filing schedules of assets and liabilities, and statements of financial affairs. Centerville, Georgia-based real estate developer Charlie N. McGlamry filed a petition for Chapter 11 protection, along with his 14 companies, in Macon, Georgia on May 9, 2012. Over the past 44 years, Mr. McGlamry has managed to successfully develop numerous real estate developments in and around Houston County, Georgia. Mr. McGlamry continues to operate his real estate development business through sole proprietorship McGlamry Properties -- http://www.mcglamryproperties.com-- and USA Land Development Inc. Mr. McGlamry individually owns, through his sole proprietorship, approximately, 74 acres of undeveloped commercial property at the intersection of Russell Parkway and Corder Road in Houston County, Georgia. Mr. McGlamry established a number of single member limited liability companies and sole shareholder corporations to own and develop specific tracts of land. Mr. McClamry and his affiliated companies sought joint administration of their Chapter 11 cases and have Mr. McGlamry's as the lead case (Bankr. M.D. Ga. Case No. 12-51197). Judge James P. Smith oversees the case. Cohen Pollock Merlin & Small, PC, serves as the Debtors' Chapter 11 counsel. Nichols, Cauley & Associates, LLC, serves as their accountant. Mr. McGlamry, as sole shareholder or member, signed Chapter 11 petitions for USA Land Development (Case No. 12-51198); Barrington Hall Development Corp. (12-51199); Bear Branch LLC; By- Pass/Courthouse LLC (12-51201); Chinaberry Place, LLC (12-51202); Eagle Springs LLC (12-51203); Elmdale Development, LLC (12-51204); Gurr/Kings Chapel Road, LLC (12-51205); Jaros Development LLC (12-51206); Lake Joy Development, LLC (12-51207); Old Hawkinsville Road, LLC (12-51208); South Houston Development, LLC (12-51209); The Villages at Nunn Farms, LLC (12-51210); and Houston-Peach Investments LLC (12-51212). Mr. McGlamry estimated up to $50 million in assets and up to $100 million in liabilities in his Chapter 11 filing. The Debtors tapped Cohen Pollock Merlin & Small, PC, as bankruptcy counsel. CHARLIE MCGLAMRY: Sec. 341(a) Creditors' Meeting Set for June 18 ---------------------------------------------------------------- The U.S. Trustee for the Middle District of Georgia in Macon, Georgia, will convene a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a) in the Chapter 11 cases of Charlie N. McGlamry and his bankrupt companies on June 18, 2012, at 10:00 a.m. at Macon 341(a) Meeting Room. Last day to oppose discharge or dischargeability is Aug. 17, 2012. Proofs of claim str due by Sept. 17, 2012. Financial management course is due Aug. 17, 2012. About Charlie N. McGlamry Centerville, Georgia-based real estate developer Charlie N. McGlamry filed a petition for Chapter 11 protection, along with his 14 companies, in Macon, Georgia on May 9, 2012. Over the past 44 years, Mr. McGlamry has managed to successfully develop numerous real estate developments in and around Houston County, Georgia. Mr. McGlamry continues to operate his real estate development business through sole proprietorship McGlamry Properties -- http://www.mcglamryproperties.com-- and USA Land Development Inc. Mr. McGlamry individually owns, through his sole proprietorship, approximately, 74 acres of undeveloped commercial property at the intersection of Russell Parkway and Corder Road in Houston County, Georgia. Mr. McGlamry established a number of single member limited liability companies and sole shareholder corporations to own and develop specific tracts of land. Mr. McClamry and his affiliated companies sought joint administration of their Chapter 11 cases and have Mr. McGlamry's as the lead case (Bankr. M.D. Ga. Case No. 12-51197). Judge James P. Smith oversees the case. Cohen Pollock Merlin & Small, PC, serves as the Debtors' Chapter 11 counsel. Nichols, Cauley & Associates, LLC, serves as their accountant. Mr. McGlamry, as sole shareholder or member, signed Chapter 11 petitions for USA Land Development (Case No. 12-51198); Barrington Hall Development Corp. (12-51199); Bear Branch LLC; By- Pass/Courthouse LLC (12-51201); Chinaberry Place, LLC (12-51202); Eagle Springs LLC (12-51203); Elmdale Development, LLC (12-51204); Gurr/Kings Chapel Road, LLC (12-51205); Jaros Development LLC (12-51206); Lake Joy Development, LLC (12-51207); Old Hawkinsville Road, LLC (12-51208); South Houston Development, LLC (12-51209); The Villages at Nunn Farms, LLC (12-51210); and Houston-Peach Investments LLC (12-51212). Mr. McGlamry estimated up to $50 million in assets and up to $100 million in liabilities in his Chapter 11 filing. The Debtors tapped Cohen Pollock Merlin & Small, PC, as bankruptcy counsel. CHARLIE MCGLAMRY: Hires Cohen Pollock as Chapter 11 Counsel ----------------------------------------------------------- Charlie N. McGlamry seeks Bankruptcy Court permission to employ the law firm of Cohen Pollock Merlin & Small, A Professional Corporation, as Chapter 11 counsel. CPM&S received a $60,006 retainer. The standard hourly rates of the attorneys and paralegals in CPM&S's Bankruptcy/Litigation Group who may be involved in the representation of the Debtor are: Gus H. Small $475 Karen Fagin White $460 Bruce Z. Walker $360 Anna M. Humnicky $325 Brent W. Herrin $325 Garrett H. Nye $225 Karla L. Lemons, Paralegal $180 Nicole M. Clements, Paralegal $170 Lesley Zebrowitz, Paralegal $170 Gus H. Small, Esq., a partner at CPM&S, attests that (a) CPM&S and its members have no connections with the Debtor, its creditors, any other party in interest in this case, or their attorneys or accountants which would be adverse to the estate, the United States Trustee, or any person employed in the Office of the United States Trustee; and (b) CPM&S has had no connection with any creditor of the Debtor. The firm may be reached at: Gus H. Small, Esq. Anna M. Humnicky, Esq. Brent W. Herrin, Esq. 3350 Riverwood Parkway, Suite 1600 COHEN POLLOCK MERLIN SMALL, P.C. Atlanta, GA 30339 Tel: (770) 858-1288 Fax: (770) 858-1277 E-mail: gsmall@cpmas.com ahumnicky@cpmas.com bherrin@cpmas.com About Charlie N. McGlamry Centerville, Georgia-based real estate developer Charlie N. McGlamry filed a petition for Chapter 11 protection, along with his 14 companies, in Macon, Georgia on May 9, 2012. Over the past 44 years, Mr. McGlamry has managed to successfully develop numerous real estate developments in and around Houston County, Georgia. Mr. McGlamry continues to operate his real estate development business through sole proprietorship McGlamry Properties -- http://www.mcglamryproperties.com-- and USA Land Development Inc. Mr. McGlamry individually owns, through his sole proprietorship, approximately, 74 acres of undeveloped commercial property at the intersection of Russell Parkway and Corder Road in Houston County, Georgia. Mr. McGlamry established a number of single member limited liability companies and sole shareholder corporations to own and develop specific tracts of land. Mr. McClamry and his affiliated companies sought joint administration of their Chapter 11 cases and have Mr. McGlamry's as the lead case (Bankr. M.D. Ga. Case No. 12-51197). Judge James P. Smith oversees the case. Cohen Pollock Merlin & Small, PC, serves as the Debtors' Chapter 11 counsel. Nichols, Cauley & Associates, LLC, serves as their accountant. Mr. McGlamry, as sole shareholder or member, signed Chapter 11 petitions for USA Land Development (Case No. 12-51198); Barrington Hall Development Corp. (12-51199); Bear Branch LLC; By- Pass/Courthouse LLC (12-51201); Chinaberry Place, LLC (12-51202); Eagle Springs LLC (12-51203); Elmdale Development, LLC (12-51204); Gurr/Kings Chapel Road, LLC (12-51205); Jaros Development LLC (12-51206); Lake Joy Development, LLC (12-51207); Old Hawkinsville Road, LLC (12-51208); South Houston Development, LLC (12-51209); The Villages at Nunn Farms, LLC (12-51210); and Houston-Peach Investments LLC (12-51212). Mr. McGlamry estimated up to $50 million in assets and up to $100 million in liabilities in his Chapter 11 filing. The Debtors tapped Cohen Pollock Merlin & Small, PC, as bankruptcy counsel. CHARLIE MCGLAMRY: Taps Nichols Cauley as Accountant --------------------------------------------------- Charlie N. McGlamry and its debtor-affiliates seek authority from the Bankruptcy Court to employ the accounting firm Nichols, Cauley & Associates, LLC, as their accountant. NCA proposes to undertake representation of Debtors at its normal hourly rates: Professional Staff Level Rate ------------------------ ---- Partner $280 Manager $200 Supervisor $160 Senior $130 Accountant $110 Paraprofessional $80 Farrell Nichols, Managing Partner of Nichols, Cauley & Associates, LLC, attests that neither NCA nor any employee of the firm holds any interests adverse to the Debtors or the Estates in the matters upon which it is to be engaged for Debtors, and its appointment will be in the best interest of the Estates; and NCA is qualified as a "disinterested person" within the meaning of 11 U.S.C. Sec. 101(14). NCA was established in 1978. The firm currently employs 90 team members, including 9 equity partners. The firm has offices in Warner Robins, Clarksville, Atlanta and Dublin, Georgia. The services provided by NCA include external audit, risk services, internal audit, management and advisory, tax consulting and preparation, business valuation, and small business accounting services. About Charlie N. McGlamry Centerville, Georgia-based real estate developer Charlie N. McGlamry filed a petition for Chapter 11 protection, along with his 14 companies, in Macon, Georgia on May 9, 2012. Over the past 44 years, Mr. McGlamry has managed to successfully develop numerous real estate developments in and around Houston County, Georgia. Mr. McGlamry continues to operate his real estate development business through sole proprietorship McGlamry Properties -- http://www.mcglamryproperties.com-- and USA Land Development Inc. Mr. McGlamry individually owns, through his sole proprietorship, approximately, 74 acres of undeveloped commercial property at the intersection of Russell Parkway and Corder Road in Houston County, Georgia. Mr. McGlamry established a number of single member limited liability companies and sole shareholder corporations to own and develop specific tracts of land. Mr. McClamry and his affiliated companies sought joint administration of their Chapter 11 cases and have Mr. McGlamry's as the lead case (Bankr. M.D. Ga. Case No. 12-51197). Judge James P. Smith oversees the case. Cohen Pollock Merlin & Small, PC, serves as the Debtors' Chapter 11 counsel. Nichols, Cauley & Associates, LLC, serves as their accountant. Mr. McGlamry, as sole shareholder or member, signed Chapter 11 petitions for USA Land Development (Case No. 12-51198); Barrington Hall Development Corp. (12-51199); Bear Branch LLC; By- Pass/Courthouse LLC (12-51201); Chinaberry Place, LLC (12-51202); Eagle Springs LLC (12-51203); Elmdale Development, LLC (12-51204); Gurr/Kings Chapel Road, LLC (12-51205); Jaros Development LLC (12-51206); Lake Joy Development, LLC (12-51207); Old Hawkinsville Road, LLC (12-51208); South Houston Development, LLC (12-51209); The Villages at Nunn Farms, LLC (12-51210); and Houston-Peach Investments LLC (12-51212). Mr. McGlamry estimated up to $50 million in assets and up to $100 million in liabilities in his Chapter 11 filing. The Debtors tapped Cohen Pollock Merlin & Small, PC, as bankruptcy counsel. CHEM RX CORP: Trustee Sues Paramount Board Over Bankruptcy ---------------------------------------------------------- Liz Hoffman at Bankruptcy Law360 reports that the trustee for Chem Rx Corp. on Wednesday sued board members of Paramount Acquisition Corp., the shell company that took it over in 2007, claiming they forced a risky $162 million leveraged buyout to protect their personal holdings. CRC Litigation Trust said the takeover by Paramount, an acquisition vehicle backed by biotech mogul Lindsay Rosenwald, saddled the company with debt and ultimately led to its collapse two and a half years later, according to Law360. About Chem RX Corp. Long Beach, N.Y.-based Chem RX Corporation, aka Paramount Acquisition Corp. -- http://www.chemrx.net/-- is a major institutional pharmacy serving the New York City metropolitan area, as well as parts of New Jersey, upstate New York, Pennsylvania and Florida. The Company and five affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 10-11567) on May 11, 2010. Dennis A. Meloro, Esq., and Scott D. Cousins, Esq., at Greenberg Traurig, LLP, in Delaware, represent the Company in its restructuring. Cypress Holdings, LLC, is the Company's financial advisor. RSR Consulting, LLC, is the Company's chief restructuring officer. Brunswick Group LLP is the Company's public relations consultant. Grant Thornton LLP is the Company's independent auditor. Lazard Middle Market LLC is the Company's investment banker. Eichen & Dimeglio PC is the Company's tax advisor. Kurtzman Carson Consultants is the Company's claims and notice agent. Attorneys at White & Case and Fox Rothschild LLP serve as co-counsel to the Official Committee of Unsecured Creditors Chanin Capital Partners LLC serves as Restructuring and Financial Advisor for the Official Committee of Unsecured Creditors. The Company disclosed $169,690,868 in assets and $178,281,128 in debts as of Feb. 28, 2010. Chem Rx changed its name to CRC Parent Corp. following the sale of its business to PharMerica Corp. at a bankruptcy court-sanctioned auction. PharMerica paid $70.6 million and assumed specified liabilities. The deal enabled PharMerica to move into the New York and New Jersey markets. CLEARWIRE CORP: FMR LLC Owns 8.1% of Class A Common Shares ---------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, FMR LLC and Edward C. Johnson 3d disclosed on May 9, 2012, that they beneficially own 41,436,551 shares of Class A common stock of Clearwire Corporation representing $8.10% of the shares outstanding. FMR previously reported beneficial ownership of 71,365,577 Class A common shares or a 15.15% equity stake as of Feb. 13, 2012. A copy of the amended filing is available for free at: http://is.gd/67yySO About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a provider of 4G mobile broadband network services in 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company reported a net loss of $2.30 billion in 2010 and a net loss of $1.25 billion in 2009. The Company also reported a net loss attributable to Clearwire Corporation of $480.48 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at March 31, 2012, showed $8.89 billion in total assets, $5.71 billion in total liabilities and $3.17 billion in total stockholders' equity. * * * As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured first- lien issue-level ratings on Bellevue, Wash.-based wireless provider Clearwire Corp. to 'CCC' from 'CCC+'. "The downgrade reflects our concerns that the company may choose to skip its $237 million of interest payments due on Dec. 1, 2011," explained Standard & Poor's credit analyst Allyn Arden. "With about $698 million of cash on the balance sheet, Clearwire has sufficient funds to pay the remaining interest expense due in 2011, although Standard & Poor's believes that it would still have to raise significant capital to maintain operations in 2012 despite the cost-reduction measures it has already achieved. If Clearwire elected to make the interest payment, we believe that it would exit 2011 with around $350 million to $400 million in cash, which assumes less than $100 million of capital expenditures and EBITDA losses. We do not believe that this cash balance will be sufficient to cover free operating cash flow (FOCF) losses and a Long-Term Evolution (LTE) wireless network overlay in 2012 and that the company will require additional funding during the year." COLDWATER PORTFOLIO: Lender Objects to Use of Cash Collateral ------------------------------------------------------------- U.S. Bank National Association, as Successor Trustee for GS Mortgage Securities Corporation II, Commercial Mortgage Pass- Through Certificates, Series 2006-G G6 and RBS Financial Products, Inc. objected to the request of Coldwater Portfolio Partner LLC to use rental income to pay for the Debtor's ordinary course and necessary operating expenses. U.S. Bank said it holds a first mortgage on the Debtor's 37 shopping centers located in 17 different states and the rent constitutes the bank's collateral. The Debtor filed a Chapter 11 case after the bank lender initiated proceedings in California seeking appointment of a receiver to operate and sell the properties. U.S. Bank noted that the Debtor assigned rent to the bank. The Debtor has not offered to provide adequate protection of the Lender's interest in the Rents and therefore may not use the Rents. The bank also said the Debtor's budget proposes to pay charges that are normal operating expenses and management fees to an affiliated company that cannot be paid until the Lender is paid full. As a result, the Court should deny the Cash Collateral Motion. The Debtor proposes to adequately protect the bank's interest by paying all overhead and operating expenses of the business using the Lender's Rent consistent with the operating budget. As additional adequate protection, the Debtor proposes that the Lender will receive replacement liens in the Debtor's new accounts receivable and new cash; provided, however, that the replacement liens will apply only to any category of post-petition collateral in which the Lender had a valid, perfectly security interest as of the Petition Date. About Coldwater Portfolio Partners Coldwater Portfolio Partners LLC filed a voluntary Chapter 11 petition (Bankr. N.D. Ind. Case No. 12-31182) on April 4, 2012. CPP, a limited liability company organized under the laws of the state of Delaware, was formed in January 2006 with the purpose of owning and operating 38 commercial real estate properties. The majority of the properties are shadow retail centers located adjacent to Wal-Mart Supercenters throughout the Midwest and Southern States. The Debtor has developed relationships with nationwide retailers who operate local stores at the Shadow Retail Centers, including Dollar Tree, Game Stop, Sally Beauty, and Fashion Bug. The Shadow Retail Centers are particularly attractive commercial retail properties with business arising from the Wal-Mart customer traffic. Bankruptcy Judge Harry C. Dees, Jr., oversees the case. Forrest B. Lammiman, Esq., and David L. Kane, Esq., at Meltzer, Purtill & Stelle LLC, serve as the Debtor's counsel. CPP estimated assets of $10 million to $50 million and debts of $50 million to $100 million. CPP is a subsidiary of CPP Holdings LLC. Kenneth S. Klein, manager of CPP, signed the Chapter 11 petition. A related entity, Coldwater Portfolio Partners II, LLC, owns and operates nine shadow retail centers in the Midwest and Southern United States. Klein Retail Centers, Inc., is the parent of Coldwater II. COMMUNITY MEMORIAL: Sale Scrapped; Committee Wants Ch. 11 Trustee ----------------------------------------------------------------- The Official Committee on Unsecured Creditors in the Chapter 11 case of Community Memorial Hospital asks the U.S. Bankruptcy Court for the Eastern District of Michigan to appoint a Chapter 11 trustee. According to the Committee, McLaren Health Care Corporation, the buyer, decided not to close its purchase of substantially all of the Debtor's assets as authorized by the sale order. The Committee adds that the Debtor now finds itself out of cash, its hospital facilities closed, no sales transaction in the offing, and no clear path through the Chapter 11 process. The Committee asserts that the appointment of a trustee will provide all parties-in-interest with comfort that an independent party is managing the estate for the best interests of all stakeholders pursuant to its fiduciary obligations. 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 disclosed $23,085,273 in assets and $26,329,103 in liabilities. 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. McLaren Health Care Corporation proposed to acquire substantially all of the Debtor's operating assets at its primary hospital campus, for $5,000,000, plus (2) all amounts required for the Debtor to cure and assume the assigned Assumed Contracts and Leases. Daniel M. McDermott, the U.S. Trustee for Region 9, appointed a five-member official committee of unsecured creditors in the Chapter 11 case of Community Memorial Hospital. Varnum LLP represents the Committee. COMMUNITY MEMORIAL: Conway MacKenzie Okayed as Financial Advisors ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan authorized Community Memorial Hospital to employ Conway MacKenzie as financial advisors. As reported in the Troubled Company Reporter on March 13, 2012, Conway MacKenzie is expected to assist the Debtor during the Chapter 11 case, and perform other consulting services necessary to the Debtor's continuing operations, effective as of the Petition Date. Conway has been consulting with the Debtor since October 2011. Among other things, Conway's prepetition work included marketing of substantially all of the Debtor's assets. During this period, the Debtor paid Conway current on an hourly basis, a total of $536,636. The Debtor paid Conway a $125,000 retainer prior to bankruptcy filing, and has agreed that the firm will hold the retainer in trust for application against its final allowed fees. The Debtor proposes to pay the firm on an hourly rate (plus costs) basis. Conway's professionals will charge hourly rates ranging from $100 to $450. Conway will also be entitled to a success fee for the execution of a transaction or series of transactions selling the Debtor's operating assets or otherwise execution of strategies that maintain healthcare in Cheboygan County, Michigan. The Success Fee is capped at $125,000. Michael J. Hausman, managing director at Conway, attests that the firm does not represent an interest adverse to the Debtor's bankruptcy estate and is a "disinterested person" as that term is defined in Section 101(14) and required by section 327(a) of the Bankruptcy Code. 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 disclosed $23,085,273 in assets and $26,329,103 in liabilities. 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. McLaren Health Care Corporation proposed to acquire substantially all of the Debtor's operating assets at its primary hospital campus, for $5,000,000, plus (2) all amounts required for the Debtor to cure and assume the assigned Assumed Contracts and Leases. Daniel M. McDermott, the U.S. Trustee for Region 9, appointed a five-member official committee of unsecured creditors in the Chapter 11 case of Community Memorial Hospital. Varnum LLP represents the Committee. The Committee requested for the appointment of a Chapter 11 trustee because McLaren decided not to close its purchase of substantially all of the Debtor's assets as authorized by the sale order. COMMUNITY MEMORIAL: Files Schedules of Assets and Liabilities ------------------------------------------------------------- Community Memorial Hospital filed with the U.S. Bankruptcy Court for the Eastern District of Michigan its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $10,647,313 B. Personal Property $12,437,960 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $4,285,453 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $12,043,650 ----------- ----------- TOTAL $23,085,273 $26,329,103 A full-text copy of the schedules is available for free at http://bankrupt.com/misc/COMMUNITY_MEMORIAL_sal.pdf 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. McLaren Health Care Corporation proposed to acquire substantially all of the Debtor's operating assets at its primary hospital campus, for $5,000,000, plus (2) all amounts required for the Debtor to cure and assume the assigned Assumed Contracts and Leases. Daniel M. McDermott, the U.S. Trustee for Region 9, appointed a five-member official committee of unsecured creditors in the Chapter 11 case of Community Memorial Hospital. Varnum LLP represents the Committee. The Committee requested for the appointment of a Chapter 11 trustee because McLaren decided not to close its purchase of substantially all of the Debtor's assets as authorized by the sale order. COMMUNITY MEMORIAL: McDonald Hopkins OK'd as Bankruptcy Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan authorized Community Memorial Hospital to employ McDonald Hopkins LLC as counsel. As reported in the Troubled Company Reporter on March 13, 2012, McDonald Hopkins is expected to render general legal services throughout the course of the Debtor's Chapter 11 case. McDonald Hopkins will charge the Debtor for legal services on an hourly basis at these rates: Billing Category Range ------- -------------- Members $280 - $660 Of Counsel $310 - $605 Associates $185 - $395 Paralegals $115 - $245 Law Clerks $60 - $125 In the 12 months prior to the Chapter 11 filing, the Debtor paid to McDonald Hopkins a "replenishing" retainer in the aggregate amount of $386,138 for legal services performed or to be performed in contemplation of the Debtor's Chapter 11 case. As of the Petition Date, McDonald Hopkins held $125,000 as a retainer, and holds no prepetition claim against the Debtor. McDonald Hopkins attests it does not represent any of the Debtor's secured creditors in any matters related to or adverse to the Debtor, except that McDonald Hopkins has represented General Electric Capital Corporation, which financed some of the Debtor's equipment, in tax matters unrelated to the Debtor. The firm says it is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. 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 disclosed $23,085,273 in assets and $26,329,103 in liabilities. 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. McLaren Health Care Corporation proposed to acquire substantially all of the Debtor's operating assets at its primary hospital campus, for $5,000,000, plus (2) all amounts required for the Debtor to cure and assume the assigned Assumed Contracts and Leases. Daniel M. McDermott, the U.S. Trustee for Region 9, appointed a five-member official committee of unsecured creditors in the Chapter 11 case of Community Memorial Hospital. Varnum LLP represents the Committee. The Committee requested for the appointment of a Chapter 11 trustee because McLaren decided not to close its purchase of substantially all of the Debtor's assets as authorized by the sale order. COMMUNITY MEMORIAL: Panel Can Retain Varnum LLP as Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of Community Memorial Hospital to retain Varnum LLP as its counsel. As reported in the Troubled Company Reporter on April 3, 2012, Michael S. McElwee, Esq., lawyer at Varnum LLP, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. 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 disclosed $23,085,273 in assets and $26,329,103 in liabilities. 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. McLaren Health Care Corporation proposed to acquire substantially all of the Debtor's operating assets at its primary hospital campus, for $5,000,000, plus (2) all amounts required for the Debtor to cure and assume the assigned Assumed Contracts and Leases. Daniel M. McDermott, the U.S. Trustee for Region 9, appointed a five-member official committee of unsecured creditors in the Chapter 11 case of Community Memorial Hospital. The Committee requested for the appointment of a Chapter 11 trustee because McLaren decided not to close its purchase of substantially all of the Debtor's assets as authorized by the sale order. COMPASS MINERALS: Moody's Affirms Ba1 CFR; Rates Term Loan Ba1 -------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Compass Minerals International, Inc.'s proposed term loan due 2017 and affirmed its Ba1 Corporate Family Rating (CFR) and other debt ratings. Moody's also assigned a SGL-2 Speculative Grade Liquidity rating. Proceeds from the new term loan will refinance existing term loans maturing in December 2012 and January 2016. The outlook is stable. The following summarizes the ratings activity: Compass Minerals International, Inc. Ratings affirmed: Corporate family rating -- Ba1 Probability of default rating -- Ba1 $125mm gtd sr sec revolving credit facility due 2015 -- Ba1 (LGD3, 42%) from Ba1 (LGD3, 39%) $100mm gtd sr unsec notes due 2019 -- Ba2 (LGD6, 90%) from Ba2 (LGD5, 89%) Gtd sr sec term loan due 2012 -- Ba1 (LGD3, 42%) from Ba1 (LGD3, 39%) ** Gtd sr sec term loan due 2016 -- Ba1 (LGD3, 42%) from Ba1 (LGD3, 39%) ** Ratings assigned: Gtd sr sec term loan due 2017 -- Ba1 (LGD3, 42%) Speculative Grade Liquidity assessment -- SGL-2 Outlook -- Stable ** Rating to be withdrawn upon completion of the refinancing. Ratings Rationale Compass Minerals is refinancing up to $384 million of term loan debt maturing in 2012 and 2016 (term loans A, B & C) with a five year secured term loan, thereby extending its debt maturities and improving its financing terms. The new debt will not result in a material change in the company's net debt. The transaction will improve Compass Minerals's liquidity, lower its cost of debt and improve its financial flexibility. The proposed term loan is rated Ba1, the same as the Ba1 CFR, as this debt represents the preponderance of the company's capital structure. Upon closing of the new term loan, Moody's will withdraw the ratings for the existing term loans. The Ba1 CFR reflects Compass Minerals' low leverage, its entrenched position as a leading North American producer of highway deicing salt, its access to extensive and high quality salt deposits, its efficient distribution network characterized by access to lower cost water transportation, as well as its position as a leading North American producer of sulfate of potash (SOP). The company's low leverage (Debt to EBITDA of 2.1x for the twelve months ended March 31, 2012; ratio incorporates Moody's global standard analytical adjustments) has benefited from a substantial increase in earnings from its specialty fertilizer business over the past four years. The ratings are tempered by the volatility in sales due to weather conditions and the mature nature of the highway deicing business (low single digit volume growth rates), as well as the need to pursue capital projects or acquisitions to provide more reasonable revenue and earnings growth over time. Compass Minerals has good liquidity as indicated by the SGL-2 Speculative Grade Liquidity rating. This assessment is supported by a large cash balance of over $180 million, full availability under its $125 million revolving credit facility due 2015 and expectations for positive free cash flow in 2012. The highway de- icing salt business is seasonal with most payments from customers received in or just after the winter. After the refinancing transaction, the company will have no material near-term maturities. The company is subject to financial covenants (maximum leverage and minimum interest coverage) under the credit facility, which Compass Minerals is expected to remain in compliance with during 2012-2013. The stable outlook is supported by strong pricing for its fertilizer business (relative to long-term historical pricing) and the ability of salt producers to post strong earnings (supported by price increases). The principal methodology used in rating Compass Minerals International, Inc. was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Compass Minerals International, Inc., headquartered in Overland Park, Kansas, is a North American producer of salt used for highway deicing, food grade applications, water conditioning, and other industrial uses. The company is also the largest producer in North America of sulfate of potash (SOP) used in specialty fertilizers. The company had revenues and net sales of $1.03 billion and $758 million, respectively, for the twelve months ended March 31, 2012. COMPLETE GENOMICS: Warns of Cash Crunch, Has Going Concern Doubt ---------------------------------------------------------------- Complete Genomics, Inc., a life sciences company that has developed and commercialized a DNA sequencing platform for whole human genome sequencing and analysis, said it has incurred net operating losses and significant negative cash flow from operations during every year since inception. At March 31, 2012, the Company had an accumulated deficit of $231.4 million. Management believes that based on the current level of operations and anticipated growth, cash and cash equivalents balances and interest income the Company will earn on these balances, will not be sufficient to meet the anticipated cash requirements for the nine months beyond March 31, 2012. The Company's recurring operating losses and negative cash flow from operations and its requirement for additional funding to execute its business objectives beyond this period gives rise to substantial doubt as to the Company's ability to continue as a going concern. The Company said it is exploring additional funding options, including equity offerings and strategic corporate alliances to obtain additional financing to continue the development of its service offerings and the expansion of its business. There can be no assurance that the Company will be successful in its efforts to raise additional capital. Should the Company be unable to raise adequate financing on a timely basis, operations will need to be scaled back or discontinued. Complete Genomics' Complete Genomics Analysis Platform combines its proprietary human sequencing technology with its advanced informatics and data management software and its end-to-end outsourced service model to provide customers with data that is immediately ready to be used for genome-based research. The Company's solution provides academic, biopharmaceutical and translational medicine researchers with whole human genome data and analysis without requiring them to invest in in-house sequencing instruments, high-performance computing resources and specialized personnel. In the DNA sequencing industry, whole human genome sequencing is generally deemed to be coverage of at least 90% of the nucleotides in the genome. The Company was incorporated in Delaware on June 14, 2005 and began operations in March 2006. As of March 31, 2012, Complete Genomics had total assets of $113.274 million, total liabilities of $48.834 million and total stockholders' equity of $64.440 million. The Company reported wider net loss of $20.232 million for the three months ended March 31, 2012, from $12.461 million for the same period in 2011. A copy of the Company's Form 10-Q is available at http://is.gd/U0DV3j CORNERSTONE BANCSHARES: Posts $76,000 Net Income in Q1 ------------------------------------------------------ Cornerstone Bancshares, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income available to common stockholders of $76,193 on $4.62 million of total interest income for the three months ended March 31 2012, compared with net income available to common stockholders of $159,200 on $5.21 million of total interest income for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $417.47 million in total assets, $381.58 million in total liabilities and $35.88 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/myr6Wq About Cornerstone Bancshares Chattanooga, Tenn.-based Cornerstone Bancshares, Inc. is a bank holding company. Its wholly-owned subsidiary, Cornerstone Community Bank, is a Tennessee-chartered commercial bank with five full-service banking offices located in Hamilton County, Tennessee. Cornerstone reported net income of $1.03 million in 2011, compared with a net loss of $4.70 million in 2010. Cornerstone said in its 2011 annual report that as of Dec. 31, 2011, the Company had one loan, currently being serviced by Midland Loan Services for the FDIC, which totaled approximately $3 million. The loan contains certain compliance covenants which include stated minimum or maximum target amounts for Cornerstone's capital levels, the Bank's capital levels, nonperforming asset levels at the Bank and the ability of Cornerstone to meet the required debt service coverage ratio, which is computed on the four most recent consecutive fiscal quarters. Due to the level of nonperforming assets of the Bank and not currently meeting the required debt service coverage ratio, Cornerstone was not in compliance with these two covenants at Dec. 31, 2011. However, Cornerstone had previously obtained waivers through Dec. 31, 2011. During March 2012, Cornerstone obtained from the FDIC a waiver of the covenant compliance requirements through Dec. 31, 2012, granted that all payments are made in accordance with the aforementioned repayment schedule. However, if the Company is unable to comply with those covenants or obtain an additional waiver from the lender for violations that occur after Dec. 31, 2012, if any, the lender may declare the loan in default and take possession of the Bank's common stock. If this event were to occur, Cornerstone's assets and operations would be substantially reduced and therefore its ability to continue as a going concern would be in substantial doubt. Consent Order The Company disclosed in 10-Q for the quarter ended June 30, 2010, that following the issuance of a written report by the Federal Deposit Insurance Corporation and the Tennessee Department of Financial Institutions concerning their joint examination of Cornerstone Community Bank in October 2009, the Bank entered a consent order with the FDIC on April 2, 2010, and a written agreement with the TDFI on April 8, 2010, each concerning areas of the Bank's operations identified in the report as warranting improvement and presenting substantially similar plans for making those improvements. The consent order and written agreement, which the Company collectively refers to as the "Action Plans", convey specific actions needed to address certain findings from the joint examination and to address the Company's current financial condition. The Action Plans contain a list of strict requirements ranging from a capital directive, which requires the Company to achieve and maintain minimum regulatory capital levels in excess of the statutory minimums to be well-capitalized, to developing a liquidity risk management and contingency funding plan, in connection with which the Company will be subject to limitations on the maximum interest rates it can pay on deposit accounts. The Action Plans also contain restrictions on future extensions of credit and requires the development of various programs and procedures to improve the Company's asset quality as well as routine reporting on its progress toward compliance with the Action Plans to the Board of Directors, the FDIC and the TDFI. As of April 2, 2010, the date of the Action Plans, the Bank was deemed to be "adequately capitalized." COPPERAS CREEK: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Copperas Creek, LLC 5401 San Diego Rd., NE Albuquerque, NM 87113 Bankruptcy Case No.: 12-11839 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court New Mexico (Albuquerque) Judge: Robert H. Jacobvitz Debtor's Counsel: Don F. Harris, Esq. 1120 Pennsylvania St, NE Albuquerque, NM 87110 Tel: (505) 299-4529 Fax: (505) 299-4524 E-mail: harrislaw@comcast.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Jeannie Duncan, sole member and sole officer. COREL CORPORATION: Moody's Confirms 'Caa1' Corp. Family Rating -------------------------------------------------------------- Moody's Investors Service confirmed Corel Corporation's ratings, including the Caa1 corporate family and probability of default ratings and the Caa1 rating for its maturity-extended term loans. The ratings outlook is positive reflecting the company's successful extension of the entire $73 million of outstanding term loans by approximately 2 years to May 2014 and the ratings agency's expectations of Corel's improving operating cash flow in the next 12 to 18 months. This rating action concludes Moody's review for upgrade initiated on March 19, 2012. Ratings Rationale The positive ratings outlook considers Corel's extension of term loan maturity which should allow the company more time to focus on product development, grow revenue from its core products, and improve profitability through restructuring of its cash-absorptive WinDVD product line. Moody's expects Corel's cash flow from operations to improve in the next 12-to-18 months from the contribution of Roxio assets, which Corel acquired in February 2012, the synergies from the combination of Roxio assets with Corel's digital media products, and the de-emphasizing of the company's cash absorptive WinDVD product line. However, in the interim Corel is expected to have thin operating cushion under the financial covenants contained in the amended credit agreement, notably in the company's quarter ending in August 2012, which constrains the company's liquidity. Corel's narrow headroom under financial covenants results in part from the company's weak trailing EBITDA from its legacy assets and the accelerated restructuring plans to drive improvement in operating cash flow in the longer term. The confirmation of Corel's Caa1 corporate family rating mainly reflects the company's limited financial flexibility while it executes restructuring and optimizes sales channels. The Caa1 corporate family rating reflects Corel's weak cash flow generation and challenges in driving revenue and operating cash flow growth from a portfolio of mature products. In addition, the rating considers the company's small operating scale and its modest market shares in key product segments which are dominated by Microsoft Corporation and Adobe Systems. The rating is supported by Corel's moderate debt leverage (2.3x Total Debt-to- EBITDA, Moody's adjusted) and its diverse and well-known product portfolio of desktop applications with a sizeable installed base of customers globally, and its portfolio of patents. Moody's could upgrade Corel's ratings if the company demonstrates progress in improving operating cash flow and liquidity, including the ability to maintain adequate operating cushion under financial covenants. Conversely, deterioration in liquidity or persistently weak cash flow from operations could trigger a ratings downgrade. Moody's has taken the following ratings actions: Issuer: Corel Corp. Corporate Family Rating -- Confirmed Caa1, previously Caa1, Review for Possible Upgrade Probability of Default Rating -- Confirmed Caa1, previously Caa1, Review for Possible Upgrade Unextended Senior Secured Bank Credit Facility due May 2012 -- Rating withdrawn, previously Caa1 LGD3 (48%), Review for Possible Upgrade Extended Senior Secured Bank Credit Facility due May 2014 -- Confirmed Caa1, LGD3 (47%), previously Caa1, LGD3 (47%), Review for Possible Upgrade Outlook Actions: Outlook, Changed To Positive from Rating under Review The principal methodology used in rating Corel Corporation was the Global Software Industry Methodology published in September 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. Corel Corporation is a packaged software vendor that develops and markets consumer software for the office productivity, graphics and digital media markets. The company's well-known brands include Word Perfect, WinZip, CorelDRAW, and Paint Shop Pro. CROSSRHYTHM CHURCH: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: CrossRhythm Church, Inc. aka Chesapeake Christian City Church, Inc. 1024 E. College Pkwy Annapolis, MD 21409-5735 Bankruptcy Case No.: 12-18810 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court District of Maryland (Baltimore) Debtor's Counsel: John C. Gordon, Esq. 532 Baltimore & Annapolis Blvd. Severna Park, MD 21146-3818 Tel: (410) 340-0808 Fax: (410) 544-1244 E-mail: johngordon@me.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/mdb12-18810.pdf The petition was signed by Michael J. Berry, president and trustee. CROSSTEX ENERGY: Moody's Rates $250MM Sr. Unsecured Notes 'B2' -------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Crosstex Energy, L.P.'s proposed $250 million senior unsecured notes due 2022. The notes are being co-issued by Crosstex Energy Finance Corporation. Crosstex's B1 Corporate Family Rating, SGL-3 Speculative Grade Liquidity Rating, and stable outlook remain unchanged. The proposed notes will be partially used to fund the recently announced $210 million acquisition of Clearfield Energy, Inc. and for general partnership purposes. Simultaneously, Crosstex announced a roughly $140 million equity offering also targeted to partially fund the Clearfield acquisition. Rating Assignments: $250 Million Senior Unsecured Notes due in 2022, Rated B2 (LGD 4, 69%) Moody's current ratings for Crosstex Energy, L.P. are: Corporate Family Rating of B1 Probability of Default Rating of B1 Senior Unsecured Notes, co-issued by Crosstex Energy Finance Corporation, rated B2 (LGD 4, 69%) Ratings Rationale The B2 rating on the proposed senior unsecured notes ratings reflect both the overall probability of default of Crosstex, to which Moody's assigns a Probability of Default Rating of B1, and a loss given default of LGD 4, 69%. The proposed notes will rank pari passu with the company's existing notes. Crosstex has a $635 million senior secured revolving credit facility. The notes are unsecured and are contractually subordinate to the senior secured credit facility's potential priority claim to the company's assets. The size of the potential senior secured and other structurally superior claims relative to the unsecured notes results in the notes being notched one rating beneath the B1 Corporate Family Rating under Moody's Loss Given Default Methodology. Crosstex's B1 Corporate Family Rating is supported by the relatively high proportion of its gross margin that is considered non-commodity based and management's conservative business strategy in recent years, which Moody's expects to remain in place as the company pursues growth opportunities. The rating is restrained by Crosstex's high level of exposure to the relatively mature Barnett Shale, and inherent volume and price risk in gathering and processing natural gas. The rating further reflects the expected rise in financial leverage over the near-term to fund increased growth spending. The rating also considers the risks inherent to the MLP business model. The Clearfield Energy acquisition represents another step taken by Crosstex to diversify its asset portfolio while providing opportunities for organic growth. It is the company's first foray into Midcontinent producing basins. Clearfield Energy's assets have the benefit of a base of earnings and cash flows from legacy production in the region combined with the strategic access to the upcoming and developing Utica Shale unconventional oil and liquids play. Crosstex's $210 million acquisition implies an estimated 9x EBITDA multiple (based on run-rate EBITDA) and is estimated to increase pro-forma debt/EBITDA by just under half a turn to around 4.7x. The acquired assets carry low commodity price risk and are mostly based on liquids transportation in the area. The Clearfield acquisition provides Crosstex with an inventory of organic growth opportunities that should benefit the company in the medium to the longer term. However, Crosstex faces execution risk by integrating and entering new lines of business in a new geographic area. In addition, despite the presence of many major players, the Utica Shale is still a relatively new basin at an early developmental stage, with most activity currently being undertaken by Chesapeake Energy Corporation. Early results have been encouraging, but Crosstex would require more long-term commitments from producers in order to achieve its volume dependent growth targets. Nevertheless, with the company's two core areas of North Texas and Louisiana operations facing steady or slightly declining volume projections over the near to medium term, the Midcontinent expansion can provide material organic growth opportunities and its deemed overall credit accretive, particularly given Crosstex's upfront partial equity funding. The outlook is stable. While Moody's expects financial leverage to rise somewhat in 2012 as the company increases its growth capital spending, the stable outlook assumes sufficient equity funding component to limit leverage exceeding 5.0x debt/EBITDA. A rating upgrade is possible if Crosstex demonstrates that it can consistently maintain leverage around 4x, and at the same time maintain a high proportion of more durable fee-based revenues as it pursues growth projects. Successful execution of both its growth projects and Clearfield Energy's integration, enabling a sustainable presence in geographical areas outside of the Barnett, as well as prudent financing of its growth, could support positive rating action. On the other hand, the rating could be downgraded if Crosstex's operating performance shows a substantial weakening trend, making its leverage unsustainable under 5x. A downgrade could also result due to poor liquidity or a significant leveraging transaction. The principal methodology used in rating Crosstex 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. Crosstex Energy, L.P., headquartered in Dallas, Texas, is a publicly traded master limited partnership. CROSSTEX ENERGY: S&P Affirms 'B+' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit and senior unsecured debt ratings on Crosstex Energy L.P., a master limited partnership (MLP) focused on the midstream energy sector, pursuant to the partnership's acquisition of Clearfield Energy Inc. The rating outlook is stable. "At the same time, we assigned a 'B+' issue rating and a '4' recovery rating to the $250 million senior unsecured notes due 2022. The 'B+' rating on the notes and '4' recovery rating indicates expectations that lenders would receive average recovery (30%-50%) in the event of a payment default," S&P said. "The partnership intends to use the net proceeds from this offering to fund a portion of the Clearfield Energy Inc. acquisition. The remaining amounts will be used for general partnership purposes, including capital expenditures for the Cajun-Sibon natural gas liquids pipeline expansion," S&P said. "Crosstex Energy L.P. is purchasing 100% of Clearfield Energy, Inc., a crude and water logistics company serving Ohio, West Virginia, and Kentucky, for $210 million. Clearfield produces about 75% of its cash flows from fee-based contracts transporting crude and condensate to refineries in the region, although the remaining 25% is sourced from higher-risk activities relating to the transportation and disposal of brine. Exposure to oil plays and dry and wet gas regions in the Utica shale area add geographic diversification to the partnership's assets and provide opportunities for growth. These strengths are offset by the partnership's short-term contracts, which lack volume protection provisions, and low barriers to entry," S&P said. "The rating on Dallas-based midstream energy partnership Crosstex reflects the partnership's 'weak' business risk profile and 'aggressive' financial risk profile under our criteria," said Standard & Poor's credit analyst Manish Consul. "Somewhat limited geographic and asset diversity, exposure to commodity price fluctuations, and volume risk characterize the partnership's weak business risk profile. The aggressive financial risk profile incorporates the partnership's high leverage and our expectation of weak cash flow metrics due to a large capital spending program in the near term. The partnership's predominately fee-based contract mix and good liquidity partly offset these risks." "The stable rating outlook reflects our view that Crosstex will continue to generate stable cash flows in 2012. However, we expect its debt leverage to increase primarily due to significant growth capital spending. We could raise the rating if the recontracting risk on the North Texas pipeline decreases, if the construction of the Cajun-Sibon pipeline were to proceed on time and on budget, or if the partnership can reduce total adjusted debt to EBITDA to about 4x. We could lower the rating if commodity prices cause processing margins to decline notably, or if overall throughput volumes are significantly lower, resulting in leverage consistently in the 5x area," S&P said. CUI GLOBAL: Incurs $1 Million Net Loss in First Quarter ------------------------------------------------------- CUI Global, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss allocable to common stockholders of $1.07 million on $8.46 million of total revenue for the three months ended March 31, 2012, compared with a net loss allocable to common stockholders of $93,523 on $9.54 million of total revenue for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $35.72 million in total assets, $11.25 million in total liabilities and $24.47 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/kGaCtr About CUI Global Tualatin, Ore.-based CUI Global, Inc., formerly known as Waytronx, Inc., is a platform company dedicated to maximizing shareholder value through the acquisition, development and commercialization of new, innovative technologies. CUI Global reported a net loss allocable to common stockholders of $48,763 in 2011, compared with a net loss allocable to common stockholders of $7.01 million in 2010. As reported by the TCR on April 8, 2011, Webb & Company, in Boynton Beach, Florida, expressed substantial doubt about CUI Global's ability to continue as a going concern. The independent auditors noted that the Company has a net loss of $7,015,896, a working capital deficiency of $675,936 and an accumulated deficit of $73,596,738 at Dec. 31, 2010. Webb & Company did not include a "going cocern qualification" in its report on the Company's 2011 financial results. DEAN FOODS: Moody's Outlook Still Negative Despite Q1 Earnings -------------------------------------------------------------- Moody's Investors service commented on Dean's strong first quarter earnings and increased full year guidance saying that the stronger performance and resulting lower leverage is a credit positive for Dean Foods, although the company will need to sustain continued improvements for Moody's to move away from the negative outlook. Dean Foods yesterday reported that its adjusted consolidated operating income rose 42% to $152 million on the back of solid growth across all operating segments and tight expense control. A more favorable commodity environment and more rational pricing at retail also contributed to the result. The company raised its full year guidance for earnings per share. Moody's outlook on the credit remains negative despite this positive development, largely because even with the improvements, the company's credit metrics, though improving, remain weak for the current Ba3 rating, falling into the B category on the packaged goods methodology grid. Leverage at the end of the first quarter per Moody's adjusted calculation was 5.3 times, which is still high for the Ba rating category but down from 5.6 times at year end 2011. While Moody's expects further improvement in the course of the year, variables such as commodity costs could still impact or derail the pace of improvement. To stabilize the rating outlook Moody's would expect to see further improvement in metrics and a sustained positive operating trend. Moody's analyzes Dean Foods in the context of the Global Consumer Products Industry Rating Methodology (published July 2009). Dean Foods is the largest processor and distributor of milk and various other dairy products in the United States and the largest producer of soy milk in Europe. The company also markets and sells a variety of branded dairy and dairy-related products including, Silk (R) soymilk and almondmilk, Horizon Organic (R) dairy products, International Delight (R) coffee creamers, LAND O'LAKES (R) creamers and fluid dairy products, and cultured dairy products. Headquartered in Dallas, Texas, Dean Foods had sales of approximately $13.2 billion for the twelve months ended March, 2011. DEWEY & LEBOEUF: Bienenstock Moves to Proskauer Rose ---------------------------------------------------- Proskauer Rose said Friday that Martin J. Bienenstock, one of the nation?s most renowned corporate restructuring and governance lawyers, will join the firm together with his nationally regarded colleagues Philip M. Abelson, Irena M. Goldstein, Timothy Q. Karcher, Michael P. Kessler and Judy G.Z. Liu. Mr. Bienenstock and Proskauer's other new partners have brought their expertise in business solutions, governance, restructuring and bankruptcy to many of the most challenging and important cases in the area, including Enron, General Motors, Owens Corning, U.S. Gypsum, G-I Holdings, Texaco, Capmark, New Page and M.F. Global Holdings. Mr. Bienenstock also serves on the faculty at both the University of Michigan Law School and Harvard Law School and is a widely respected author and lecturer on business solutions and governance issues. Proskauer Chairman Joseph M. Leccese said, "We have admired and respected Martin and our other new partners for many years. They are nationally known for innovative and extraordinary legal work and dedicated client service. Our partners felt an immediate personal and professional connection with each member of the group. We are thrilled to have them join our other premier practices at a time of dynamic domestic and international growth for our firm." Mr. Bienenstock said, "We are very excited to join a firm with the reputation for excellence that Proskauer enjoys. We look forward to joining with Jeff Marwil, Mark Thomas and our other new colleagues to form one of the nation?s elite groups in business solutions, governance, restructuring and bankruptcy. We aim to continue developing our multidisciplinary approach to take restructuring and governance to the next level." Mr. Bienenstock joined Dewey from Weil, Gotshal & Manges in February 2008. Only Landraf Left at Chairman's Office Reuters notes that Mr. Bienenstock has been part of a small management team overseeing Dewey since a leadership shakeup in March. The departure by Biennenstock and two other members would leave L. Charles Landgraf as a member of the chairman's office. Mr. Bienenstock had been a leading force in seeking to avoid the firm's dissolution since being put in the firm's office of the chairman in March. Aside from Mr. Bienenstock, most recent defections include leaders of the corporate and litigation groups who were also part of the office of the chairman. About Dewey & LeBoeuf Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey employed about 2,000 people -- roughly 1,000 lawyers in 25 offices across the globe and the other half support staff including legal secretaries, mailroom clerks and paralegals. The firm is trying to stave off bankruptcy amid struggles with high debt and partner defections. Dewey has lost more than 40% of its partners since January. The firm is being investigated by the New York District Attorney for alleged false statements by former chairman Stephen Davis. In April 2012, The Wall Street Journal reported that Greenberg Traurig LLP has called off discussions on a possible deal with Dewey, and that Dewey is in talks with Washington D.C.-based Patton Boggs LLP. On May 4, the firm sent "conditional advance notice" to all US employees under the Federal WARN Act that their employment may be terminated. The letter advised all employees of their rights under Federal and New York State law in the event of termination. The letter provided the firm's first formal acknowledgement to employees that the firm could ultimately close On May 10, the U.S. Pension Benefit Guaranty Corporation said it would take responsibility for three pension plans covering 1,800 current and future retirees at Dewey. The plans were underfunded by $80 million, the agency said. Dewey has pursued talks with bank lenders that include JPMorgan Chase and Citigroup to renegotiate a $100 million credit line. Dewey is facing a May 15 deadline with a syndicate of banks, according to WSJ. DEWEY & LEBOEUF: Bond Debt Trading at between 50 And 65 Cents ------------------------------------------------------------- The Wall Street Journal's Steve Eder, Matt Wirz and Leslie Scism report that some hedge-fund investors are seeking to profit by buying debts of Dewey & LeBoeuf LLP. WSJ, citing traders and investors, relates there are at least $125 million of Dewey bonds, and portions of those were trading at between 50 cents and 65 cents on the dollar over the past two week as hedge funds bought them from the insurance companies that initially purchased the debt in 2010. The wide price range reflects investors' uncertainty about how much creditors will recover, according to WSJ. In a bankruptcy, WSJ says, the bonds would stand in line to receive liquidation proceeds alongside roughly $75 million in bank loans and would rank above any vendor claims and some $80 million of pension obligations. According to WSJ, an investor on Thursday said his firm was contacted by a broker about an interest in an $1 million unsecured claim, which could eventually be subject to various objections or set-offs in a future bankruptcy. Another investor on Wednesday said his fund was similarly approached. WSJ notes Dewey aims to wind down its affairs without going through bankruptcy court, a tactic that Dewey bankruptcy partner Martin Bienenstock says has the support of its bank lenders. But other creditors could tip the firm into an involuntary filing, WSJ says, as happened in other law firm failures in recent years. The firm could also change course and file voluntarily. WSJ notes under a potential liquidation, a bankruptcy trustee would chase down money owed to the firms on the behalf of creditors. WSJ reports distressed-debt investors are betting that a trustee would recover more from Dewey's clients and partners than they are paying for the law firm's debts. WSJ notes to two investors who studied the claims said as of the beginning of this year, Dewey was owed about $320 million on accounts receivables and works in progress by Dewey attorneys. A Dewey spokesman declined to comment. According to WSJ, the largest chunk of Dewey's debt is the notes originally sold to insurance companies in a 2010 private placement, according to 2011 filings to U.S. state insurance departments crunched by research firm SNL Financial and the insurers. WSJ, citing figures from SNL and people familiar with the matter, reports the insurers who had the biggest exposure as of Dec. 31 were: * Hartford Financial Services Group Inc., at $40 million; * British insurer Aviva PLC, $35 million; * Dutch company Aegon NV, $25 million; * French insurer AXA SA, $20 million; and * CUNA Mutual Group in Wisconsin, $15 million. About Dewey & LeBoeuf Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey employed about 2,000 people -- roughly 1,000 lawyers in 25 offices across the globe and the other half support staff including legal secretaries, mailroom clerks and paralegals. The firm is trying to stave off bankruptcy amid struggles with high debt and partner defections. Dewey has lost more than 40% of its partners since January. The firm is being investigated by the New York District Attorney for alleged false statements by former chairman Stephen Davis. In April 2012, The Wall Street Journal reported that Greenberg Traurig LLP has called off discussions on a possible deal with Dewey, and that Dewey is in talks with Washington D.C.-based Patton Boggs LLP. On May 4, the firm sent "conditional advance notice" to all US employees under the Federal WARN Act that their employment may be terminated. The letter advised all employees of their rights under Federal and New York State law in the event of termination. The letter provided the firm's first formal acknowledgement to employees that the firm could ultimately close On May 10, the U.S. Pension Benefit Guaranty Corporation said it would take responsibility for three pension plans covering 1,800 current and future retirees at Dewey. The plans were underfunded by $80 million, the agency said. Dewey has pursued talks with bank lenders that include JPMorgan Chase and Citigroup to renegotiate a $100 million credit line. Dewey is facing a May 15 deadline with a syndicate of banks, according to WSJ. DEWEY & LEBOEUF: Partners Likely to Face Wrath of Creditors ----------------------------------------------------------- Megan Leonhardt at Bankruptcy Law360 reports that Dewey & LeBoeuf LLP partners owed potentially millions of dollars in unpaid compensation are not only unlikely to recover any of that money, but could also end up on the hook for payments to creditors should the tottering firm file for bankruptcy protection, experts said. While the struggling firm has denied plans to file for bankruptcy, experts said this week that equity partners seeking millions in unpaid compensation would be doing so as unsecured creditors if the firm does enter bankruptcy, Law360 relates. About Dewey & LeBoeuf Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey employed about 2,000 people -- roughly 1,000 lawyers in 25 offices across the globe and the other half support staff including legal secretaries, mailroom clerks and paralegals. The firm is trying to stave off bankruptcy amid struggles with high debt and partner defections. Dewey has lost more than 40% of its partners since January. The firm is being investigated by the New York District Attorney for alleged false statements by former chairman Stephen Davis. In April 2012, The Wall Street Journal reported that Greenberg Traurig LLP has called off discussions on a possible deal with Dewey, and that Dewey is in talks with Washington D.C.-based Patton Boggs LLP. On May 4, the firm sent "conditional advance notice" to all US employees under the Federal WARN Act that their employment may be terminated. The letter advised all employees of their rights under Federal and New York State law in the event of termination. The letter provided the firm's first formal acknowledgement to employees that the firm could ultimately close On May 10, the U.S. Pension Benefit Guaranty Corporation said it would take responsibility for three pension plans covering 1,800 current and future retirees at Dewey. The plans were underfunded by $80 million, the agency said. Dewey has pursued talks with bank lenders that include JPMorgan Chase and Citigroup to renegotiate a $100 million credit line. Dewey is facing a May 15 deadline with a syndicate of banks, according to WSJ. DEWEY & LEBOEUF: Partners Didn't Know Extent of Guarantees ---------------------------------------------------------- Law firm Dewey & LeBoeuf LLP hadn't told its partners until financial problems began to surface last year that about one-third of the 300 partners had been granted guaranteed compensation, former Dewey partner Stuart Saft told Bloomberg in a televised interview. Until the announcement at a partners' meeting last year, Mr. Saft said he thought there were 20 or 25 guarantees. As much as 80% of Dewey partners' compensation was guaranteed, a person with knowledge of the firm's finances told Bloomberg. About Dewey & LeBoeuf Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey employed about 2,000 people -- roughly 1,000 lawyers in 25 offices across the globe and the other half support staff including legal secretaries, mailroom clerks and paralegals. The firm is trying to stave off bankruptcy amid struggles with high debt and partner defections. Dewey has lost more than 40% of its partners since January. The firm is being investigated by the New York District Attorney for alleged false statements by former chairman Stephen Davis. In April 2012, The Wall Street Journal reported that Greenberg Traurig LLP has called off discussions on a possible deal with Dewey, and that Dewey is in talks with Washington D.C.-based Patton Boggs LLP. On May 4, the firm sent "conditional advance notice" to all US employees under the Federal WARN Act that their employment may be terminated. The letter advised all employees of their rights under Federal and New York State law in the event of termination. The letter provided the firm's first formal acknowledgement to employees that the firm could ultimately close On May 10, the U.S. Pension Benefit Guaranty Corporation said it would take responsibility for three pension plans covering 1,800 current and future retirees at Dewey. The plans were underfunded by $80 million, the agency said. Dewey has pursued talks with bank lenders that include JPMorgan Chase and Citigroup to renegotiate a $100 million credit line. Dewey is facing a May 15 deadline with a syndicate of banks, according to WSJ. EAST COAST: BB&T Granted Relief from Stay on Unimproved Properties ------------------------------------------------------------------ The Hon. Randy D. Doub of the U.S. Bankruptcy Court for the Eastern District of North Carolina granted Branch Banking and Trust Company, relief from the automatic stay against East Coast Development II, LLC. BB&T is the owner and holder of a certain commercial note dated June 1, 2005, executed by 100 Block of Market Street, LLC in the original principal amount of $2,800,000 payable to Coastal federal Bank. The balance due on the note, exclusive of attorney's fees and costs, as of the Petition Date, was $744,553. Interest continues to accrue at the rate of $122 per day. The amount of arrearage on the note as of the Petition date was $59,236. As of the Petition Date, BB&T held a validly perfected security interest in two unimproved properties owned by the Debtor located at 119 Market Street and 126 Princess Street, Wilmington, North Carolina. According to B&T, among other things: -- the Debtor was in default on the note prior to the Petition Date for failure to make contractual payments and has not made any adequate protection payments for the interest of BB&T in the properties during the pendency of the bankruptcy case; -- BB&T has not been offered adequate protection for its interest in the properties; and -- the properties are not necessary to an effective reorganization. As reported in the Troubled Company Reporter on April 17, 2012, the Court permitted First Bank to enforce its rights and remedies against the real property. The Court ordered that the automatic stay on the Debtor's certain assets is modified to allow Ciena Capital, LLC , servicer for Bank of New York Mellon Trust Company, N.A., to institute and complete a foreclosure of the collateral under its loan documents. In a separate filing, Ciena Capital has withdrawn its motion to dismiss the Debtor's case. About East Coast Development II Wilmington, North Carolina-based East Coast Development II, LLC, dba 100 Block of Market Street, LLC, is in the business of renting real property located in Onslow County, New Hanover County, Guilford County, Wake County, Brunswick County, North Carolina, and Greenville County, Charleston County, and Richland County, South Carolina. East Coast filed for Chapter 11 bankruptcy protection (Bankr. E.D. N.C. Case No. 11-02792) on April 8, 2011. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., serves as bankruptcy counsel. Laurie R. Brown, CPA, serves as accountant. The Debtor disclosed $24.8 million in assets and $12.2 million in liabilities as of the Chapter 11 filing. The U.S. Trustee has not appointed a creditors committee in the Debtor's case. ELO TOUCH: Moody's Gives 'B2' Corp. Family Rating; Outlook Stable ----------------------------------------------------------------- Moody's Investors Service assigned ratings to the debt of ELO Touch Solutions, Inc. -- Corporate Family Rating (CFR) and Probability of Default Rating (PDR) of B2, a B1 rating to the Senior Secured First Lien Credit Facilities and a Caa1 rating to the Senior Secured Second Lien Credit Facility. The proceeds of the Facilities will be used to finance TGG TS Acquisition Company's ("Holdings") $380 million acquisition of ELO from TE Connectivity Ltd. Holdings is an acquisition vehicle owned by private equity firm The Gores Group. The rating outlook is stable. This is the first time Moody's has assigned rating to ELO's debt. Ratings Rationale The B2 CFR reflects ELO's high financial leverage given the cyclical demand, limited growth prospects due to ELO's small scale and mature segment focus, and the execution risk of separating from TE Connectivity. The rating is supported by ELO's diverse patent portfolio, which supports ELO's market position as a touchscreen provider supporting multiple applications, and its asset-lite operating model, which limits required capital expenditures and thus adds some stability to free cash flow (FCF). Moody's expects ELO to generate FCF of at least $10 million in 2012. The stable outlook is supported by Moody's expectation that ELO will generate at least low single digit revenue and EBITDA growth over the near term. Due to the expected growth in EBITDA and ELO's use of free cash flow (FCF) to reduce debt, Moody's expects that ELO will reduce debt to EBITDA (standard adjustments) to below 5x in the near term. It is unlikely that the rating would be upgraded in the near term, given the high financial leverage, ELO's focus on the low-growth segments of the touchscreen market, and the potential for further shareholder friendly policies by the financial sponsor. Nevertheless, the rating could be upgraded if ELO executes well on its separation from TE Connectivity and profitably enters new, growth segments of the touchscreen market resulting in overall operating performance improvements, and ELO demonstrates conservative financial policies such that debt to EBITDA (standard adjustments) is sustained below 4x. The rating could be pressured if ELO fails to achieve revenue and profitability growth or makes additional cash distributions prior to meaningful debt reduction. Moreover, if debt to EBITDA (standard adjustments) is sustained above 5.5x, the ratings could be downgraded. Assignments: Issuer: ELO Touch Solutions, Inc Corporate Family Rating -- B2 Probability of Default Rating -- B2 $15 Million Senior Secured Revolver due 2017 -- B1 (LGD-3, 35%) $180 Million Senior Secured First Lien Term Loan due 2018 -- B1 (LGD-3, 35%) $90 Million Senior Secured Second Lien Term Loan due 2018 -- Caa1 (LGD-5, 85%) The principal methodology used in rating ELO was the Global Technology Hardware Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. ELO, based in Menlo Park, California, produces touchscreen panels used in point-of-sale devices, industrial automation, and airport ticketing kiosks, among other uses. EMISPHERE TECHNOLOGIES: Needs to Raise Funds Before Sept. 26 ------------------------------------------------------------ Emisphere Technologies, Inc., warned it needs to raise additional capital or obtain substantial cash inflows from existing partners prior to Sept. 26, 2012, or it could be forced to cease operations. As of March 31, 2012, Emisphere had roughly $3.2 million in cash and cash equivalents, roughly $33.9 million in working capital deficiency, a stockholders' deficit of roughly $65.2 million and an accumulated deficit of roughly $466.6 million. It posted an operating loss for the three months ended March 31, 2012, of $1.8 million. Emisphere anticipates its existing capital resources will enable it to continue operations through September 26, 2012, at which time the so-called MHR Convertible Notes come due, or earlier if unforeseen events or circumstances arise that negatively affect its liquidity. Emisphere said it has limited capital resources and operations to date have been funded with the proceeds from collaborative research agreements, public and private equity and debt financings and income earned on investments. Emisphere anticipates it will continue to generate significant losses from operations for the foreseeable future, and that its business will require substantial additional investment that it has not yet secured. Further, Emisphere has significant future commitments and obligations. On September 26, 2005, Emisphere executed a Senior Secured Loan Agreement with MHR Fund Management, LLC and entities affiliated with it. The Loan Agreement, as amended, provides for a seven year, $15 million secured loan from MHR to Emisphere at an interest rate of 11%. Under the Loan Agreement, MHR requested, and on May 16, 2006, Emisphere effected, the exchange of the Loan for 11% senior secured convertible notes with substantially the same terms as the Loan Agreement, except that the MHR Convertible Notes are convertible, at the sole discretion of MHR or any assignee thereof, into shares of Emisphere common stock at a price per share of $3.78. Interest will be payable in the form of additional MHR Convertible Notes. The MHR Convertible Notes are secured by a first priority lien in favor of MHR on substantially all of Emisphere's assets. As of March 31, 2012, the book value of MHR Convertible Notes outstanding including principal, interest and discount for warrant purchase option and embedded conversion features is $27.1 million. The amount payable at maturity will be $30.5 million. The MHR Convertible Notes are secured by a first priority lien in favor of MHR on substantially all of Emisphere's assets, and provide for certain events of default including, among other things, failure to perfect liens in favor of MHR created by the transaction, failure to observe any covenant or agreement, failure to maintain the listing and trading of Emisphere common stock, sale of a substantial portion of Emisphere assets, merger with another entity without the prior consent of MHR, or the occurrence of any governmental action that renders Emisphere unable to honor or perform its obligations under the MHR Convertible Notes or results in a material adverse effect on operations. If an event of default occurs, the MHR Convertible Notes provide for the immediate repayment of the Notes and certain additional amounts as set forth in the MHR Convertible Notes. On September 26, 2012, the maturity date of the MHR Convertible Notes, or earlier if an event of default occurs, if Emisphere is unable to make the required payments, the resulting default would enable MHR to foreclose on all of its assets. Emisphere currently has a waiver from MHR for failure to perfect liens on certain intellectual property rights through September 26, 2012. In addition to funding required to meet obligations under the MHR Convertible notes, Emisphere expects to continue to spend substantial amounts on research and development, including amounts spent on conducting clinical trials for product candidates. Further, Emisphere said it does not have sufficient resources to develop fully any new products or technologies unless it is able to raise substantial additional financing on acceptable terms or secure funds from new or existing partners. "We cannot assure that financing will be available on favorable terms or at all. Additionally, these conditions may increase the cost to raise capital. If additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities would result in dilution to our existing stockholders," Emisphere said. "Our failure to raise capital when needed would adversely affect our business, financial condition and results of operations, and could force us to reduce or cease our operations. These conditions raise substantial doubt about our ability to continue as a going concern." Audit reports prepared by independent registered public accounting firm relating to Emisphere's financial statements for the years ended December 31, 2011, 2010 and 2009 include an explanatory paragraph expressing the substantial doubt about the Company's ability to continue as a going concern. Emisphere Technologies a net loss of $736,000 for the quarter ended March 31, 2012, from net income of $10.999 million for the same period in 2011. As of March 31, 2012, Emisphere had total assets of $4.262 million and total liabilities of $69.444 million in total liabilities. A copy of the Company's Form 10-Q report for the quarter ended March 31, 2012, filed with the Securities and Exchange Commission is available at http://is.gd/aNzfD4 About Emisphere Technologies Based in Cedar Knolls, New Jersey, Emisphere Technologies, Inc. (OTC BB: EMIS) -- http://www.emisphere.com/-- is a biopharmaceutical company that focuses on a unique and improved delivery of pharmaceutical compounds and nutritional supplements using its Eligen(R) Technology. The Eligen(R) Technology can be applied to the oral route of administration as well other delivery pathways, such as buccal, rectal, inhalation, intra-vaginal or transdermal. Since its inception in 1986, Emisphere has generated significant losses from operations. Emisphere anticipates it will continue to generate significant losses from operations for the foreseeable future, and that its business will require substantial additional investment that it has not yet secured. EPICEPT CORP: Incurs $3.5 Million Net Loss in First Quarter ----------------------------------------------------------- EpiCept Corporation reported a net loss of $3.52 million on $241,000 of revenue for the three months ended March 31, 2012, compared with a net loss of $2.46 million on $238,000 of revenue for the same period a year ago. The Company's selected balance sheet data at March 31, 2012, showed $6.16 million in total assets, $22.99 million in total liabilities and a $17.14 million total stockholders' deficit. "EpiCept achieved an important milestone with respect to AmiKet during the first quarter of 2012," stated Jack Talley, President and CEO of EpiCept. "Following a successful meeting with the U.S. Food and Drug Administration (FDA) in December 2011 regarding the Phase III program for AmiKet, we were awarded Fast Track Status last month by the FDA in the treatment of chemotherapy-induced peripheral neuropathy (CIPN). In the meantime, our efforts to identify and execute a strategy to exploit AmiKet's commercial opportunity have progressed to the point where multiple parties are considering becoming involved in advancing the development program, including a potential sale of the Company. We are focused on securing a positive outcome to this effort as quickly as possible." A copy of the press release is available for free at: http://is.gd/qRdhZK About EpiCept Corporation Tarrytown, N.Y.-based EpiCept Corporation (Nasdaq and Nasdaq OMX Stockholm Exchange: EPCT) -- http://www.epicept.com/-- is focused on the development and commercialization of pharmaceutical products for the treatment of cancer and pain. The Company's lead product is Ceplene(R), approved in the European Union for the remission maintenance and prevention of relapse in adult patients with Acute Myeloid Leukemia (AML) in first remission. In the United States, a pivotal trial is scheduled to commence in 2011. The Company has two other oncology drug candidates currently in clinical development that were discovered using in-house technology and have been shown to act as vascular disruption agents in a variety of solid tumors. The Company's pain portfolio includes EpiCept(TM) NP-1, a prescription topical analgesic cream in late-stage clinical development designed to provide effective long-term relief of pain associated with peripheral neuropathies. The Company reported a net loss of $15.65 million in 2011, a net loss of $15.53 million in 2010, and a net loss of $38.81 million in 2009. For 2011, Deloitte & Touche LLP, in Parsippany, New Jersey, noted that the Company's recurring losses from operations and stockholders' deficit raise substantial doubt about its ability to continue as a going concern. EVERGREEN DEVELOPMENT: Pre-Trial Conference Set for June 26 ----------------------------------------------------------- The Bankruptcy Court will hold a telephonic pre-trial conference in the involuntary Chapter 11 bankruptcy commenced against Evergreen Development Inc. on June 26, 2012, at 9:00 a.m. Four individual creditors filed an involuntary Chapter 11 petition against Lynnwood, Wash.-based Evergreen Development Inc. (Bankr. W.D. Wash. Case No. 12-14835) in Seattle on May 7, 2012. Judge Karen A. Overstreet presides over the case. The petitioners appeared pro se. FAIRFIELD SENTRY: Liquidator Seeks $7-Mil. in 3 New Clawback Suits ------------------------------------------------------------------ Brian Mahoney at Bankruptcy Law360 reports that the foreign representative tasked with liquidating Bernard L. Madoff feeder fund Fairfield Sentry Ltd. launched three more clawback suits in New York bankruptcy court Wednesday, seeking to recover some $7 million from financial institutions like Barclays Private Bank and Trust Ltd. According to Law360, Kenneth Krys, who is in charge of winding down Fairfield Sentry, Fairfield Sigma Ltd. and Fairfield Lambda Ltd. in a British Virgin Islands proceeding, filed the complaints in New York against Barclays, Luxembourg-based Select Absolute Strategies SICAV and Hyposwiss Private Bank Geneve SA. About Fairfield Sentry Fairfield Sentry is being liquidated under the supervision of the Commercial Division of the High Court of Justice in the British Virgin Islands. It is one of the funds owned by the Fairfield Greenwich Group, an investment firm founded in 1983 in New York City. Fairfield Sentry and other Greenwich funds had among the largest exposures to the Bernard L. Madoff fraud. Fairfield Sentry Limited filed for Chapter 15 protection (Bankr. S.D.N.Y. Case No. 10-13164) on June 14, 2010. Greenwich Sentry, L.P., and an affiliate filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-16229) on Nov. 19, 2010, hoping to settle lawsuits filed against it in connection with its investments with Bernard L. Madoff. On May 18, 2009, Irving H. Picard, the trustee liquidating the estate of Mr. Madoff and his firm, Bernard L. Madoff Investment Securities, LLC, filed a lawsuit against Fairfield Sentry and Greenwich, seeking the return of US$3.55 billion that Fairfield withdrew from Madoff during the period from 2002 to Mr. Madoff's arrest in December 2008. Since 1995, the Fairfield funds invested about US$4.5 billion with BLMIS. Mr. Picard claims that Fairfield knew or should have known about the fraud give that it received from BLMIS unrealistically high and consistent annual returns of between 10% and 21% in contrast to the vastly larger fluctuations in the S&P 100 Index. FANNIE MAE: Reports $2.7 Billion Net Income for First Quarter ------------------------------------------------------------- Federal National Mortgage Association filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $2.71 billion on $33.78 billion of total interest income for the three months ended March 31, 2012, compared with a net loss of $6.47 billion on $37.11 billion of total interest income for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $3.20 trillion in total assets, $3.20 trillion in total liabilities and $268 million in total equity. "Today's results exemplify the tremendous progress we have made since 2009," said Michael J. Williams, president and chief executive officer. "Our financial performance has improved significantly and we successfully limited losses on the legacy book of business through our efforts to help homeowners avoid foreclosure. Our credit-related expenses have decreased substantially due in part to stabilizing home prices, lower delinquency rates, and selling foreclosed properties at market competitive prices. In tandem, we continue to be the primary source of funding in the mortgage market and our new book of business is growing, profitable, and built on strong lending standards. I'm proud of the people of Fannie Mae who have delivered this significant forward progress and are focused on maintaining this momentum." A copy of the Form 10-Q is available for free at: http://is.gd/KCdA4u A copy of the press release announcing the results is available for free at http://is.gd/e3bLDn About Fannie Mae Federal National Mortgage Association, aka Fannie Mae, is a government-sponsored enterprise that was chartered by U.S. Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. Fannie Mae has been under conservatorship, with the Federal Housing Finance Agency acting as conservator, since September 6, 2008. As conservator, FHFA succeeded to all rights, titles, powers and privileges of the company, and of any shareholder, officer or director of the company with respect to the company and its assets. The conservator has since delegated specified authorities to Fannie Mae's Board of Directors and has delegated to management the authority to conduct day-to-day operations. The U.S. Department of the Treasury owns Fannie Mae's senior preferred stock and a warrant to purchase 79.9% of its common stock, and Treasury has made a commitment under a senior preferred stock purchase agreement to provide Fannie with funds under specified conditions to maintain a positive net worth. Fannie Mae reporte a net loss of $16.85 billion in 2011, a net loss of $14.01 billion in 2010, and a net loss of $72.02 billion in 2009. GAVILON LLC: Moody's Assigns 'Ba2' Rating to Amended Facility ------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Gavilon LLC's amended and extended $2.75 billion senior secured asset based revolving credit facility due 2014. With the amendment, Gavilon is seeking to extend the maturity of its facility by one year. Gavilon's Corporate Family Rating remains at Ba3 and the rating outlook is stable. Ratings Rationale "Despite somewhat uneven performance over the past two quarters, Gavilon's balance sheet remains strong and its credit metrics continue to be robust for the rating," stated John Rogers, a Senior Vice President at Moody's. Gavilon's Ba3 Corporate Family Rating (CFR) reflects the company's modest scale relative to other rated global companies in the merchandising and distribution of agricultural commodities (grains, fertilizers, feed ingredients, oils, fats, etc), the size of its trading and distribution operations for non-agricultural products (crude oil, natural gas, biofuels, weather, etc.), and limited vertical integration (relative to larger agricultural commodity competitors and mid-stream oil companies). However, Moody's believes these negatives are offset by a very strong balance sheet with a Debt/Net Working Capital ratios of 0.8 and $1.9 billion of shareholders equity, as well as management's demonstrated ability to maintain an elevated level of liquidity and financial flexibility. The ratings are also supported by the detailed disclosure of its derivative and commodity exposures, and an incentive compensation program for traders that discourages excessive risk taking. The stable outlook reflects the expectation of relatively strong financial metrics for the remainder of 2012 due to expectations of large US harvest and strengthening agricultural commodity prices. If the company is able to demonstrate continued adherence to conservative risk management policies, maintain a very strong liquidity profile, and reduce the volatility in quarterly earnings, there could be upside to the ratings over the next year or two. A rating downgrade is unlikely, but if credit metrics weaken significantly and the variability of its trailing four quarter earnings and cash flow increases markedly versus other companies in the industry, Moody's could lower the rating. The senior secured asset-based (ABL) credit facility is only rated one notch above the CFR due to the substantial amount of senior secured debt in the capital structure, despite a first lien on a substantial amount of collateral (receivables and inventory constitute a majority of assets on the balance sheet). The ABL has a working capital borrowing base formula combined with terms and conditions that provide more onerous restrictions and more timely access to information if availability declines below 10%. In addition, lenders get cash dominion once availability has fallen below $250 million for five consecutive days. Ratings Assigned: Issuer: Gavilon LLC $2.75 billion senior secured asset based revolving credit facility due 2014, Ba2 (LGD3, 41%) Ratings Affirmed: Issuer: Gavilon LLC Corporate Family Rating, Ba3 Probability of Default Rating, Ba3 The principal methodology used in rating the Gavilon Group LLC was the Rating Methodology for Commodity Merchandising & Processing Companies published in December 2011. Gavilon LLC, headquartered in Omaha, Nebraska, is a global merchandiser and distributor of agricultural commodities (grains, fertilizers, feed ingredients, oils, fats, etc), and petroleum and fuel commodities (crude oil, natural gas, biofuels, etc). Gavilon is majority owned by an affiliate of Ospraie Management L.L.C. Revenues for the LTM ending March 31, 2012 were $18.1 billion. GENERAC POWER: S&P Gives 'BB-' Rating to $800-Mil. Term Loan B -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating to Waukesha, Wisc.-based Generac Power Systems Inc.'s proposed $800 million Term Loan B (one notch above its expected corporate credit rating upon completion of the financing), with a recovery rating of '2', indicating S&P's expectation for substantial (70% to 90%) recovery in the event of payment default. "We also assigned a 'B-' rating to Generac's proposed $425 million senior unsecured financing (two notches below the expected corporate credit rating), with a recovery rating of '6', indicating our expectation for negligible (0% to 10%) recovery in the event of payment default," S&P said. "Generac's existing ratings, including the 'BB-' corporate credit rating, remain on CreditWatch, where they were placed with negative implications on May 8, 2012," S&P said. "The rating actions follow Generac Power System Inc.'s announcement that it is seeking to raise $1.2 billion to refinance its existing debt and to pay shareholders a special cash dividend of up to $10 per share," said Standard & Poor's credit analyst Megan Johnston. "Generac intends to enter into an $800 million Term Loan B due 2018 and $425 million of senior unsecured financing due 2020. In addition, the company plans to enter into a new $150 million asset-based lending (ABL) credit facility due 2017, which would replace its existing $150 million revolving credit facility due 2017." "Based on our initial analysis, we have determined that if the transaction is completed as currently proposed, we would lower the corporate credit rating on Generac Power Systems Inc. to 'B+' from 'BB-'. The rating outlook would be stable. The lower rating would reflect the company's weaker credit metrics following the addition of $650 million of debt. Our base-case scenario for 2012 assumes that Generac's operating results in 2012 will be aided by storm activity in 2011, which we believe will translate into greater sales of higher margin residential standby generators. However, we previously assumed that leverage would be 3x or less by year-end, given roughly $575 million of existing balance sheet debt. As a result of the significant increase in debt, leverage will likely rise to about 5.5x by year-end 2012, which is more in line with an 'aggressive' financial risk profile and a lower rating," S&P said. "Generac primarily manufactures standby and portable generators for residential, industrial, light commercial, and telecommunications use in the U.S. The company derives about half of its sales from the residential generator market, where customer purchases are largely discretionary and driven by storm preparedness and the threat of power outages due to an aging electrical grid," S&P said. "We expect to resolve our CreditWatch listing upon completion of Generac's refinancing transactions. In resolving the CreditWatch listing, assuming the transaction is completed as currently proposed, we would likely lower the rating to 'B+'," S&P said. GEO GROUP: S&P Keeps 'B+' Issuer Credit Rating; Outlook Stable -------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BBB' long-term rating on Municipal Corrections Finance L.P. (MCF), Del.'s series 2001 taxable revenue bonds on CreditWatch with negative implications. "The CreditWatch placement follows MCF's May 7, 2012, announcement that The GEO Group Inc. has signed a definitive agreement to purchase 100% of the partnership interest in MCF," said Standard & Poor's credit analyst Richard Marino. "We are concerned that the transaction will reduce the current separation between the MCF general partner and The GEO Group, which operates 11 prison facilities. We believe that the separation between the parties is a critical factor in the rating," Mr. Marino added. Currently, Provident Resources Group Inc. (formerly known as Provident Foundations Inc.) is the sole member of Municipal Corrections Finance Holdings LLC, which is the general partner in MCF. "Standard & Poor's expects to review the related documents and meet with the parties involved before the transaction closes. Provident has indicated to Standard & Poor's that the purchase has been structured to maintain the current separation between the companies, and verification of this will be the primary focus of our review," S&P said. "Provident is an independent third party with no relationship to The GEO Group (B+/Stable). Under the current structure, if The GEO Group, as the operator, fails to meet the requirements of the respective government contracts, those contracts can be voided. MCF has the ability to terminate the lease with the operator and has covenanted to seek a new operator who will either assume the existing agreement or enter into a similar agreement regarding these facilities. Provident has been considered to participate in this decision," S&P said. "Closing of the transaction is subject to third-party approvals, including consent of the MCF bond trustee. The GEO Group expects to close the transaction in the second quarter of fiscal 2012," S&P said. Standard & Poor's will resolve this CreditWatch once it can verify the separation in the structure between MCF and The GEO Group. GIBSON ENERGY: Moody's Rates Revolver & Term Loan 'Ba3' ------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Gibson Energy ULC's proposed $375 million senior secured revolving credit facility and $650 million senior secured term loan B. Gibson Energy ULC is a wholly-owned subsidiary of publicly-traded Gibson Energy Inc (Gibson), which will provide a downstream guarantee for the rated debt. Gibson's other ratings are unchanged. The outlook is stable. Ratings Rationale 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 (42%) 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. 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$180 million of negative free cash flow, which will be funded with cash and revolver drawings. At March 31, 2012, proforma for the proposed US$375 million revolver, Gibson had about C$75 million of cash and US$330 million available under the revolver, after C$45 million in letters of credit. The revolver matures in June 2016 and the term loan B in 2018. There are no other debt maturities. 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), 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 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: S&P Rates $1.025-Bil. Secured Debt Facilities 'BB-' ------------------------------------------------------------------ Standard & Poor's Rating Services assigned its 'BB-' issue-level debt rating and '3' recovery rating to Calgary, Alta.-based Gibson Energy ULC's proposed $375 million secured revolver due 2016 and $650 million term loan B due 2018. "The '3' recovery rating indicates our expectation of meaningful recovery (50%-70%) in the event of default," S&P said. "Gibson is amending its existing credit agreement. It is increasing its revolver to $375 million from $275 million, and re- pricing its existing $650 million Term Loan B. The repricing of the term loan will reduce Gibson's interest expense while the increase in revolver size will allow the company to fund future growth opportunities," S&P said. "Standard & Poor's assumes default to occur in 2016, at which point the company is no longer able to fund its fixed charges and available liquidity has been exhausted. Our default scenario assumes a precipitous decline in crude oil production and demand related to sharply lower crude oil prices and weak economic conditions in western Canada. The corresponding reduction in industry production and demand limits the volume of hydrocarbon products transferred through Gibson's facilities, and negatively affects its processing and marketing activities," S&P said. "The ratings on Gibson reflect what Standard & Poor's believes is a fair business risk profile, with diversified revenue streams, a solid market position in certain segments, and moderate commodity price exposure. The ratings also reflect our view of a significant financial risk profile, with somewhat weak credit metrics, volatile cash flows in key segments due to cyclicality, exposure to throughput volume fluctuation, and the company's acquisitive strategy," S&P said. RATINGS LIST Gibson Energy ULC Corporate credit rating BB-/Stable/-- Rating Assigned Prop bank facilities BB- Recovery rating 3 GREEN ENDEAVORS: Nexia Now Holds 100% of Supervoting Pref. Stock ---------------------------------------------------------------- Green Endeavors, Inc., on April 27, 2012, authorized the issuance of 4,150,000 shares of Supervoting Preferred Stock to Nexia Holdings, Inc., in exchange for $85,000 in debt settlement of related party obligation owed to Nexia by the Company. This amount of debt will be removed from the Company's liabilities. The shares were issued with a restrictive legend to Nexia, the parent corporation of the Company. The issuance of the shares took place on May 4, 2012. The issuance results in Nexia holding 100% of the 10 million shares of Supervoting Preferred Stock authorized for the Company, resulting in Nexia holding 1 billion votes in any shareholder action. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. About Green Endeavors Salt Lake City, Utah-based Green Endeavors, Inc., runs two hair care salons that feature Aveda(TM) products for retail sale. The Company reported a net loss of $264,379 in 2011, compared with net income of $13,939 in 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.03 million in total assets, $7.39 million in total liabilities, and a $6.35 million total stockholders' deficit. For 2011, Madsen & Associates CPA's, Inc., in Salt Lake City, Utah, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company will need additional working capital for its planned activity and to service its debt. H D GERLACH: Case Summary & 9 Largest Unsecured Creditors --------------------------------------------------------- Debtor: H D Gerlach Company Inc 3914 SW Lincolnshire Rd Topeka, KS 66610 Bankruptcy Case No.: 12-40685 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court District of Kansas (Topeka) Judge: Janice Miller Karlin Debtor's Counsel: Paul D. Post, Esq. 5897 SW 29th St Topeka, KS 66614 Tel: (785) 273-1353 E-mail: paulpost@paulpost.com Scheduled Assets: $3,799,456 Scheduled Liabilities: $1,483,646 A copy of the Company's list of its nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ksb12-40685.pdf The petition was signed by Harold D. Gerlach, president and director. HAMPTON ROADS: Files Form 10-Q, Incurs $7.4MM Net Loss in Q1 ------------------------------------------------------------ Hampton Roads Bankshares, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $7.40 million on $21.60 million of total interest income for the three months ended March 31, 2012, compared with a net loss of $31.65 million on $27.18 million of total interest income for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $2.13 billion in total assets, $2.02 billion in total liabilities and $105.29 million in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/JF65Y4 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 in 2011, compared with a net loss of $210.35 million in 2010. HARBOR FREIGHT: S&P Keeps 'B+' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Rating Services revised its recovery rating on Calabasas, Calif.-based Harbor Freight Tools USA Inc.'s (HFT) $750 million term loan to '3' from '4'. "The '3' recovery rating indicates our expectation for meaningful (50%-70%) recovery of principal in the event of a payment default," S&P said. "This action reflects better recovery prospects for the term loan lenders, given the proposed downsizing of the term loan to $750 million from $1 billion," said Standard & Poor's credit analyst Mariola Borysiak. "The issue-level rating on this debt instrument and our corporate credit rating on the company remain unchanged at 'B+'. The outlook remains stable," S&P said. "The proposed dividend recapitalization and results in pro forma debt to EBITDA increasing to about 3.8x on Jan. 31, 2011, from about 2.7x before the transaction. We expect pro forma EBITDA interest coverage to weaken to about 4.7x from about 5.3x before the dividend. 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," S&P said. "In addition, our revised better assessment of the company's profitability provides additional capacity to support this increased leverage and weaker coverage of interest," S&P said. "The ratings on HFT reflect our expectation that the company's niche position in the tools and equipment retailing industry and its value-proposition strategy will continue to drive operational gains. Although we believe that some modest de-leveraging will occur over the next year because of EBITDA growth, this will likely be temporary. The company's financial policies are very aggressive, in our view, as a history of debt financed dividends demonstrates, and we believe this will continue for the foreseeable future," S&P said. "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 $420 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 keep credit measures in line with our view of the aggressive financial risk profile," S&P said. HAWKER BEECHCRAFT: Has 7-Member Unsecured Creditors' Committee -------------------------------------------------------------- Tracy Hope Davis, the U.S. Trustee for Region 2, appointed seven members to serve on the Official Committee of Unsecured Creditors, pursuant to 11 U.S.C. Sec. 1102(a) and Sec. 1102(b), in the Chapter 11 bankruptcy cases of Hawker Beechcraft, Inc., and its affiliates. The Committee members are: 1. Pension Benefit Guaranty Corporation 1200 K Street NW, Washington, DC 20005-4026 Attention: Dana Cann, Senior Financial Analyst Tel: (202) 326-4070, Ext. 3810 Fax: (202) 842-2643 2. Deutsche Bank National Trust Company 100 Plaza One, 6th Floor Jersey City, NJ 07311-3901 Attention: Rodney Gaughan, Vice President Tel: (201) 593-4016 Fax: (732) 380-2345 3. Wilmington Trust, N.A. 50 South Sixth Street - Suite 1200 Minneapolis, MN 55402 Attention: Peter F. Finkel Tel: (612) 217-5629 Fax: (612) 217-5651 4. International Association of Machinists & Aerospace Workers 9000 Machinist Place Upper Marlboro, Maryland 20772 Attention: Ron Eldridge, Aerospace Coordinator Tel: (301) 967-4510 Fax: (301) 967-4594 5. Rockwell Collins, Inc. 400 Collins Road, NE Cedar Rapids, IA 52498 Attention: David H. Brehm, Vice President and Controller, Finance Tel: (319) 295-1940 Fax: (319) 295-9367 6. Pratt & Whitney Canada Corp. Pratt & Whitney 400 Main Street, M/S/ 133-54 East Hartford, CT 06108 Attention: F. Scott Wilson, Esq. Tel: (860) 565-7364 Fax: (860) 557-9946 7. A.M. Castle & Co. 1420 Kensington Road - Suite 220 Oak Brook, IL 60523 Attention: Jeffrey Torf, Deputy General Counsel Tel: (847) 349-2307 Fax: (847) 241-8166 PBGC said in a statement it will push the company and its creditors to successfully reorganize without killing its pension plans. "When Hawker Beechcraft entered bankruptcy the company put current and future retirees on edge by suggesting that the pension plans could be terminated," said J. Jioni Palmer, PBGC's Director of Communications. "Filing for bankruptcy doesn't give companies a pass on their pension obligations." Collectively, the company's three plans are underfunded by more than $600 million, making PBGC the largest creditor. Palmer said the agency is committed to producing a winning outcome for all parties. "Within the past year, we worked with dozens of companies in and out of bankruptcy to preserve their plans. The payoff is that some 200,000 people will keep their pension benefits. That's the outcome we're striving for here." PBGC protects the pension benefits of 44 million Americans in 27,500 private-sector pension plans. The agency is directly responsible for paying the benefits of more than 1.5 million people in failed pension plans. PBGC receives no taxpayer dollars and never has. Its operations are financed by insurance premiums and with assets and recoveries from failed plans. Meanwhile, Export Development Canada, which is listed by the Debtors as being owed $59,600,000 on account of Unsecured Notes, has engaged U.S. counsel to represent its interest in the case: Craig E. Reimer, Esq. Joshua M. Grenard, Esq. MAYER BROWN LLP 71 South Wacker Drive Chicago, IL 60606 Tel: (312) 701-7049 Fax: (312) 706-8236 E-mail: creimer@mayerbrown.com jgrenard@mayebrown.com - and - Christine A. Walsh, Esq. MAYER BROWN LLP 1675 Broadway New York, NY 10019 Tel: (212) 506-2500 Fax: (212) 262-1910 E-mail: cwalsh@mayerbrown.com About Hawker Beechcraft Hawker Beechcraft Inc., a designer and manufacturer of light and medium-sized jet, turboprop and piston aircraft, filed for Chapter 11 reorganization together with 17 affiliates (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan, to be filed by June 30, will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. 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. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The Pension Benefit Guaranty Corp. is represented by Kelley Drye & Warren LLP. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. HAWKER BEECHCRAFT: Has Court OK to Hire Epiq as Claims Agent ------------------------------------------------------------ Hawker Beechcraft, Inc., and its debtor-affiliates won Bankruptcy Court authority to employ Epiq Bankruptcy Solutions, LLC, as their notice and claims agent to, among other things, (i) distribute required notice to parties-in-interest, (ii) receive, maintain, docket and otherwise administer the proofs of claim filed in the Debtors' chapter 11 cases, and (iii) provide other administrative services as required by the Debtors that would fall within the purview of services to be provided by the Clerk of Court's office. By separate application, the Debtors seek authority to employ Epiq as administrative advisor. Prior to the Petition Date, the Debtors paid Epiq a $25,000 retainer that has been replenished as appropriate. The firm's hourly rates are: Title Standard Hourly Rates Discounted Rates ----- --------------------- ---------------- Clerk $40 ? $60 $28.00 ? $42.00 Case Manager $95 ? $145 $66.50 ? $101.50 IT/Programming $140 ? $190 $98.00 ? $133.00 Snr. Case Manager/ Consultant $165 ? $220 $115.50 ? $154.00 Senior Consultant $225 - $275 $157.50 - $192.50 Vice President $295 $200.00 Epiq's Jason D. Horwitz attests that his firm neither holds nor represents any interest materially adverse to the Debtors' estates in connection with any matter on which it would be employed and that it is a "disinterested person," as defined in section 101(14) of the Bankruptcy Code. About Hawker Beechcraft Hawker Beechcraft Inc., a designer and manufacturer of light and medium-sized jet, turboprop and piston aircraft, filed for Chapter 11 reorganization together with 17 affiliates (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan, to be filed by June 30, will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. 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. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The Pension Benefit Guaranty Corp. is represented by Kelley Drye & Warren LLP. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. HAWKER BEECHCRAFT: Schedules Filing Deadline Extended Thru June 16 ------------------------------------------------------------------ Hawker Beechcraft Inc. and their affiliates obtained a 30-day extension -- through June 16, 2012 -- of their deadline to file schedules of assets and liabilities, schedules of executory contracts and unexpired leases, and statements of financial affairs. Pursuant to 11 U.S.C. Sec. 521 and Fed.R.Bankr.P. 1007(c), absent an extension, the Debtors would be required to file the Schedules and Statements within 14 days after the Petition Date. The Debtors estimate that they have many thousands of creditors and parties in interest. Their business operations require them to maintain voluminous records that are widely dispersed throughout the Debtors' businesses and complex accounting systems. According to the Debtors, these reasons -- combined with the pressures incident to the commencement of the chapter 11 cases and the fact that they have yet to receive or enter certain prepetition invoices into their financial accounting system -- the Debtors have begun, but have not yet completed, compiling the information required to complete the Schedules and Statements. As a result, the Debtors anticipate they will be unable to complete the Schedules and Statements in the time required under Bankruptcy Rule 1007(c). About Hawker Beechcraft Hawker Beechcraft Inc., a designer and manufacturer of light and medium-sized jet, turboprop and piston aircraft, filed for Chapter 11 reorganization together with 17 affiliates (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan, to be filed by June 30, will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. 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. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The Pension Benefit Guaranty Corp. is represented by Kelley Drye & Warren LLP. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. HAWKER BEECHCRAFT: To Protect Tax Attributes From Ownership Change ------------------------------------------------------------------ Hawker Beechcraft, Inc., and its debtor-affiliates are seeking to limit the trading of claims against and equity securities in the Debtors' estates. The Debtors seek to establish an effective date for notice and sell-down procedures for trading in claims to preserve the Debtors' ability to formulate a plan of reorganization that maximizes the use of their tax attributes. The Debtors said they are currently incurring significant net operating losses and have substantial net unrealized built-in losses in their assets. Notably, the Debtors may lose the ability to use the Tax Attributes if they experience an "ownership change" for tax purposes. To protect their ability to use their Tax Attributes, the Debtors may ultimately need to seek an order -- Sell-Down Order -- requiring any persons or entities that have acquired unsecured claims against the Debtors during the chapter 11 cases in such an amount that the holders of such claims would be entitled to receive more than 4.75% of the equity of the reorganized Debtors to sell-down their claims below this threshold amount. At this stage of their case, the Debtors said it is too early to determine whether it is necessary for the Debtors to obtain a Sell-Down Order. The Debtors' determination of whether to seek approval of a Sell-Down Order will most likely occur once they have formulated a reorganization plan. Pursuant to sections 39(a), 59(e), l72(b), and 904(c) of the Internal Revenue Code of 1986, the Debtors are able to carry back and then forward the Tax Attributes to offset future taxable income and tax liability so that they may obtain a cash refund and improved liquidity in the future. For instance, the Debtors can carry back their NOLs two taxable years to obtain a cash refund of federal income taxes previously paid in those years and carry forward any remaining NOLs to offset their future taxable income for up to 20 taxable years, thereby potentially recovering cash for the benefit of their estates and potentially reducing their future aggregate tax obligations to the extent NOLs remain available to be carried forward. The Debtors may also use the NOLs to offset any taxable income generated by transactions completed during the chapter 11 cases. In addition, the Debtors may use the Built-in Losses to offset other taxable income. The Debtors reported NOL carryforwards of $363.4 million for the taxable year ending Dec. 31, 2010 and project additional tax losses of $236.6 million for the taxable year ending Dec. 31, 2011, thus a total of $600 million of NOLs remain to carry forward to future taxable years. The Court's Interim Order dated May 4 provides that "Claimholders and potential purchasers of claims against the Debtors are hereby deemed notified that, if that the Court ultimately approves a Sell-Down Order, claimholders that acquire claims after the date of this Record Date Order in an amount that would entitle them to receive more than 4.75% of the stock of the reorganized Debtors may be subject to a required sell-down of any claims purchased after the Record Date." "Entry of this Record Date Order shall in no way be deemed a determination of any kind that entry of a Sell-Down Order is necessary or warranted in these cases and this Court's review of any request for the entry of a Sell-Down Order shall be without regard to entry of this Record Date Order. "The entry of this Record Date Order shall in no way prejudice the rights of any party to oppose the entry of a Sell-Down Order, on any grounds, and all parties' rights are expressly preserved hereby." The Debtors also have filed a separate request seeking interim and final orders (a) establishing notification and hearing procedures regarding the trading of, or declarations of worthlessness for federal or state tax purposes with respect to equity securities that must be complied with before trades or transfers of those securities or declarations of worthlessness become effective, and (b) ordering that any purchase, sale, or other transfer of, or declaration of worthlessness with respect to, Equity Securities in violation of the procedures will be void ab initio. The Debtors said this request also will protect and preserve their valuable tax attributes, including the NOLs, as well as certain other tax and business credits. Unrestricted trading of Equity Securities could adversely affect the Debtors' NOLs if (a) too many 5% or greater blocks of Equity Securities are created or (b) too many shares are added to or sold from such blocks such that, together with previous trading by 5% shareholders during the preceding three-year period, an ownership change within the meaning of section 382 of the IRC is triggered prior to emergence and outside the context of a confirmed chapter 11 plan. Likewise, if a 50% or greater shareholder were, for federal or state tax purposes, to treat its Equity Securities as having become worthless prior to the Debtors emerging from chapter 11 protection, such a claim could trigger an ownership change under IRC Sec. 382(g)(4)(D), thus causing an adverse affect on the Tax Attributes. About Hawker Beechcraft Hawker Beechcraft Inc., a designer and manufacturer of light and medium-sized jet, turboprop and piston aircraft, filed for Chapter 11 reorganization together with 17 affiliates (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan, to be filed by June 30, will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. 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. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The Pension Benefit Guaranty Corp. is represented by Kelley Drye & Warren LLP. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. HAWKER BEECHCRAFT: Final DIP Hearing Set for May 30 --------------------------------------------------- Hawker Beechcraft Acquisition Company, Inc., will return to the Bankruptcy Court May 30 to seek final approval of its request to incur postpetition secured financing. The hearing is set at 10:00 a.m. Any objections to the DIP financing request are due May 25. Following a multi-week, competitive process, the Debtors obtained a commitment for a fully underwritten $400 million DIP financing facility from Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, which loan is being financed by at least four of the Debtors' prepetition lenders holding in the aggregate 66% of the obligations under the Debtors' prepetition credit agreement. The facility consists of $400 million in delayed-draw loans on a superpriority, administrative claim and first priority priming lien basis, a portion of which may be applied to provide cash collateral for the issuance of letters of credit with an aggregate maximum face amount of up to $75 million and cash collateralized in an amount equal to 104% of the face amount thereof. In an order dated May 7, the Bankruptcy Court granted the Debtors interim permission to access $300 million of the DIP Facility. In addition, the Debtors obtained interim authority to use cash collateral of their existing secured lenders to support the Debtors' working capital needs throughout these cases. The Debtors' Prepetition Lenders have consented to the Debtors' continued use of Cash Collateral. Among others, the DIP facility will: -- allow the Debtors to repay in full the $124.5 million of obligations under a Senior Tranche Advance bridge financing facility by May 12; and -- provide the Debtors roughly $161 million in incremental liquidity to fund the Debtors' operations through a secured superpriority, priming, senior, term loan facility. The Debtors said all of their prepetition lenders will be allowed to participate in the DIP Facility, subject to the terms and conditions set forth in the DIP Orders, the DIP Documents, and subject to entering into a Restructuring Support Agreement. Therefore, even though the DIP Facility involves priming the secured liens of the Prepetition Lenders, the Prepetition Lenders are effectively priming themselves. The Debtors said the DIP Facility commitment is a remarkable endorsement of the Debtors and their reorganization efforts. Hawker Beechcraft Acquisition is the borrower under the DIP facility. Hawker Beechcraft Inc. and the other debtor-affiliates serve as guarantors. The Debtors said the DIP Facility will allow them to utilize chapter 11's tools to reorganize in a controlled and deliberate manner and provide the Debtors with liquidity through emergence from chapter 11. Upon the filing of the bankruptcy, the Debtors and the holders of a significant majority of the Debtors' secured bank debt and senior bond claims have agreed to a restructuring term sheet and have executed a restructuring support agreement. According to the Restructuring Support Agreement, the Debtors will file a plan by June 30 that will give 81.9% of the new stock to holders of $1.83 billion of secured debt. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. The $780.9 million unsecured deficiency claims of secured lenders are to participate in the pool of unsecured claims to share in 18.9% of the new equity. The $308.3 million in subordinated debt will be allowed as an allowed unsecured claim, and holders of these claims will share in the new equity allocated for unsecured creditors. However, holders of the subordinated debt claims will turn over their recovery to holders of senior notes. Holders of existing equity interests won't receive anything. Key deadlines agreed to by the parties include: * The Debtors' disclosure statement and Chapter 11 plan of reorganization must be filed by June 30, 2012. * The adequacy of the information in the Disclosure Statement must be approved by Aug. 31, 2012. * The Plan must be confirmed by Nov. 15, 2012. The DIP facility will expire Dec. 15, 2012, or earlier in an event of default. About Hawker Beechcraft Inc., Hawker Beechcraft Inc., a designer and manufacturer of light and medium-sized jet, turboprop and piston aircraft, filed for Chapter 11 reorganization together with 17 affiliates (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. 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. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The Pension Benefit Guaranty Corp. is represented by Kelley Drye & Warren LLP. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. HAWKER BEECHCRAFT: S&P Withdraws 'D' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew all of its ratings, including the 'D' corporate credit rating, on Hawker Beechcraft Inc. "As part of our final recovery analysis prior to withdrawing the ratings, we revised the recovery rating on the company's secured debt to '5', indicating our expectation of modest (10%-30%) recovery in a default scenario, downward from '4', and maintained our '6' recovery rating, indicating our expectation of negligible (0-10%) recovery, on the company's senior unsecured and subordinated debt," S&P said. "Hawker Beechcraft Inc. filed for Chapter 11 bankruptcy protection on May 3, 2012, after reaching an agreement with the majority of its debtholders that will eliminate almost all of its debt. We have completed a final recovery analysis based on the information provided in the bankruptcy filing," S&P said. HORIZON LINES: Incurs $32.5 Million Net Loss in First Quarter ------------------------------------------------------------- Horizon Lines, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net losso of $32.51 million on $263.35 million of operating revenue for the quarter ended March 25, 2012, compared with a net loss of $34.07 million on $240.72 million of operating revenue for the quarter ended March 27, 2011. The Company's balance sheet at March 25, 2012, showed $640.74 million in total assets, $828.54 million in total liabilities and a $187.79 million total stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/oyUo8m About Horizon Lines Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the nation's leading domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. The Company provides express trans-Pacific service between the U.S. West Coast and the ports of Ningbo and Shanghai in China, manages a domestic and overseas service partner network and provides integrated, reliable and cost competitive logistics solutions. Horizon Lines reported a net loss of $229.41 million in 2011, a net loss of $57.97 million in 2010, and a net loss of $31.27 million in 2009. Refinancing The Company was not in compliance with the maximum senior secured leverage ratio and the minimum interest coverage ratio under its Senior Credit Facility at the close of its third fiscal quarter ended Sept. 25, 2011. Non-compliance with these financial covenants constituted an event of default, which could have resulted in acceleration of the maturity. None of the indebtedness under the Senior Credit Facility or Notes was accelerated prior to the completion of a comprehensive refinancing on Oct. 5, 2011. The Senior Credit Facility and 99.3% of the 4.25% Convertible Senior Notes were repaid as part of the refinancing. In addition, as a result of the completion of the refinancing, the short-term obligations under the Senior Credit Facility, the Notes and the Bridge Loan have been classified as long-term debt. As a result of the efforts to refinance the Company's debt and the 2011 amendments to the Senior Credit Facility, the Company paid $17.3 million in financing costs and recorded a loss on modification of debt of $0.6 million during 2011. * * * As reported by the TCR on Aug. 26, 2011, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Horizon Lines Inc. to 'SD' from 'CCC'. The rating action on Horizon Lines follow the company's decision to defer the interest payment on its $330 million senior convertible notes due August 2012, exercising the 30-day grace period. "Under our criteria, we view failure to make an interest payment within five business days after the due date for payment a default, regardless of the length of the grace period contained in an indenture," said Standard & Poor's credit analyst Funmi Afonja. HORNE INTERNATIONAL: Delays Form 10-Q for First Quarter ------------------------------------------------------- Due to reduced staffing levels, Horne International, Inc., experienced delays in closing its quarter, and consequently the Company's independent registered public accounting firm was unable to complete its review of the Company's quarterly rreport on Form 10-Q for the period ended March 25, 2012, within the prescribed time period without unreasonable effort or expense. The Form 10-Q will be filed no later than the fifth calendar day following the prescribed due date. About Horne International Fairfax, Va.-based Horne International, Inc., is an engineering services company focused on provision of integrated, systems approach based solutions to the energy and environmental sectors. The Company reported a net and total comprehensive loss of $121,000 for the 12 months ended Dec. 25, 2011, compared with a net and total comprehensive loss of $1.04 million for the 12 months ended Dec. 26, 2010. The Company's balance sheet at Dec. 25, 2011, showed $1.33 million in total assets, $2.18 million in total liabilities and a $853,000 total stockholders' deficit. For 2011, Stegman & Company, in Baltimore, Maryland, expressed substantial doubt as to the Company's ability to continue as a going concern. The independent auditors noted that the Company has experienced continuing net losses for each of the last four years and as of Dec. 25, 2011, current liabilities exceeded current assets by $900,000. HOST HOTELS: S&P Affirms 'BB-' Corp. Credit Rating; Outlook Pos --------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Host Hotels & Resorts Inc. to positive from stable. "We affirmed all ratings on the company, including the 'BB-' corporate credit rating," S&P said. "The positive rating outlook revision reflects our belief that Host may improve credit measures over the intermediate term to levels that would be in line with our targets for a one notch higher rating, even incorporating our expectation that the company will continue to pursue a significant level of hotel acquisitions," said Standard & Poor's credit analyst Emile Courtney. "We expect that U.S. RevPAR growth and Host's demonstrated willingness and ability to incorporate a significant amount of equity to finance acquisitions may be supportive of both deleveraging and external growth." "Our 'BB-' corporate credit rating on Host Hotels & Resorts Inc. reflects our assessment of the company's financial risk profile as 'highly leveraged' and our assessment of the company's business risk profile as 'satisfactory,' according to our criteria," S&P said. HOSTESS BRANDS: PBGC Urges Teamsters to Mind ERISA in Deal ---------------------------------------------------------- Amanda Bransford at Bankruptcy Law360 reports that the Pension Benefit Guaranty Corporation on Wednesday weighed in on the Teamsters union's proposal for an agreement with Hostess Brands Inc. in New York bankruptcy court, saying the proposed deal's pension provisions are permissible as long as they comply with labor laws. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. Hostess in April concluded the trial seeking authorization to terminate contracts with the Teamsters and bakery workers, the two largest unions. The trial to reject contracts with other unions is scheduled to begin May 21. The company says costs must be reduced to attract new capital required to exit bankruptcy. IMAGEWARE SYSTEMS: Amends 44-Mil. Shares Sale Prospectus -------------------------------------------------------- Imageware Systems, Inc., filed with the U.S. Securities and Exchange Commission amendment no. 2 to the Form S-1 relating to the offering of 44,140,614 shares of common stock, $0.01 per share, of ImageWare Systems, Inc., by Bruce Toll, Goldman Capital Management MPP, Neal Goldman, et al. All of the shares being offered, when sold, will be sold by the selling stockholders. The selling stockholders will offer their shares of the Company's common stock at a price of $1.05 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/ajFD2I 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. IMH FINANCIAL: CEO Sees Signs of Real Estate Market Recovery ------------------------------------------------------------ IMH Financial Corporation sent a letter to its shareholders regarding several positive developments relative to its progress in 2012. The Company said that as a result of the actions it has taken since the pervasive economic collapse that began in late 2008, it has positioned itself to be successful in a variety of operating environments. "[W]e believe there are emergent signs of a real estate market recovery, as several key indicators appear to be trending in the right direction," Will Meris, President & CEO of IMH Financial Corporation said. Mr. Willis added that the Company has made positive strides in overcoming the challenges over the last few years, including the resolution of multiple investigations and audits involving the Company and its officers; the most costly and exhaustive of which was the SEC investigation that began in mid-2010. "While focused on the various initiatives at hand, the Company's officers and outside consultants remain nimble and poised to redirect our efforts as economic circumstances unfold. We are eager to demonstrate improved financial results to our shareholder constituency, but also realistic enough to know that much work is still ahead of us," Mr. Willis said. A copy of the letter is available for free at: http://is.gd/xZ0ErJ About IMH Financial Scottsdale, Ariz.-based IMH Financial Corporation was formed from the conversion of IMH Secured Loan Fund, LLC, or the Fund, a Delaware limited liability company, on June 18, 2010. The conversion was effected following a consent solicitation process pursuant to which approval was obtained from a majority of the members of the Fund to effect the Conversion Transactions and involved (i) the conversion of the Fund from a Delaware limited liability company into a Delaware corporation named IMH Financial Corporation, and (ii) the acquisition by the Company of all of the outstanding shares of the manager of the Fund Investors Mortgage Holdings Inc., or the Manager, as well as all of the outstanding membership interests of a related entity, IMH Holdings LLC, or Holdings on June 18, 2010. The Company is a commercial real estate lender based in the southwest United States with over 12 years of experience in many facets of the real estate investment process, including origination, underwriting, documentation, servicing, construction, enforcement, development, marketing, and disposition. The Company focuses on a niche segment of the real estate market that it believes is underserved by community, regional and national banks: high yield, short-term, senior secured real estate mortgage loans. The intense level of underwriting analysis required in this segment necessitates personnel and expertise that many community banks lack, yet the requisite localized market knowledge of the underwriting process and the size of the loans the Company seeks often precludes the regional and community banks from efficiently entering this market. The Company reported a net loss of $35.19 million in 2011, a net loss of $117.04 million in 2010, and a net loss of $74.47 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $240.32 million in total assets, $75.07 million in total liabilities, and $165.25 million in total stockholders' equity. INMET MINING: Moody's Assigns 'B1' CFR/PDR; Rates $1BB Notes 'B1' ----------------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Inmet Mining Corporation, including a corporate family rating of B1, a probability of default rating of B1, and a B1 rating to the company's proposed $1.0 billion of guaranteed senior unsecured notes. At the same time, Moody's assigned a speculative grade liquidity rating of SGL-2. The outlook is stable. Moody's took the following rating actions: Assignments: Issuer: Inmet Mining Corporation Probability of Default Rating, Assigned B1 Corporate Family Rating, Assigned B1 Senior Unsecured Regular Bond/Debenture, Assigned B1, LGD4- 51% Speculative Grade Liquidity Rating, Assigned SGL-2 Ratings Rationale Inmet's B1 corporate family rating reflects its limited diversity and relatively small size, short remaining lives of the existing mines, stable operating performance, and strong leverage and liquidity metrics. Moody's recognizes that after the proposed transaction, the debt levels will remain relatively low and the company will have a significant cash balance. However, the rating considers the operating risks associated with the mining sector, particularly smaller miners such as Inmet, as well as the execution risk surrounding the Cobre Panama project and the substantive capital expenditure requirements over the rating horizon. Moody's also considered the favorable fundamental backdrop for copper and the relatively low risk jurisdictions that the company operates in. The company's current operations consist of Cayeli copper and zinc underground mine in Turkey (approximately 30 thousand tonnes of copper per annum), Pyhasalmi copper and zinc underground mine in Finland (approximately 15 thousand tonnes of copper per annum), and Cobre las Cruces open pit copper mine in Spain (approximately 40 thousand tonnes of copper per annum). The production at Cobre las Cruces is expected to increase to approximately 60 thousand tonnes in 2012, as a result of a new leach feed tank and oxygen distributors installed late in 2011, which accelerates copper leaching and supports higher copper recoveries. The ratings reflect that the company's production is essentially concentrated in a single commodity, is reliant on a relatively small number of mines and represents a small proportion of global copper supply. A negative operational event at one of the mines, or unforeseen deterioration in market fundamentals for copper could significantly affect the company. The ratings also reflect short remaining reserve lives of the company's mines. At current production levels, the remaining life of the company's producing reserves is less than 10 years, which makes it critical for the company to develop new production, such as the Cobre Panama project in Panama. Short remaining reserve life also increases the risk of margin compressions due to declining ore grades, although Moody's expects margins to remain relatively stable over the next two to three years. The ratings also reflect the relatively low cost position, stable operating performance, and long operating history in stable jurisdictions. Moody's expects that the company's EBIT margins will track over 30% over the rating horizon, providing a stable level of cash flows to help finance the development of Cobre Panama. Moody's expects that cash from operations will approximate $500 million in 2012 and remain at healthy levels over the rating horizon. The Cobre Panama project, located in the Donoso District of Panama, is owned by Minera Panama, S.A. (MPSA), an 80% owned subsidiary of Inmet. Korea Panama Mining Corporation (KPMC), a consortium of LS-Nikko Copper Inc. and Korea Resources Corporation, owns 20 percent of MPSA and is a partner in the project. Cobre Panama is one of the largest undeveloped copper porphyry deposits in the world, and is a transformational project for the company, with the potential to substantially boost reserves and operating capacity. That said, the project is not expected to be in full production until 2016 at the earliest. The ratings reflect both the transformational nature of the project, and the extensive capital investments needed to bring it into production. Total remaining capital expenditures are estimated at $6.2 billion, of which Inmet's pro-rata share is $4.9 billion. Inmet expects to partially finance this expansion with current cash and marketable securities of approximately $1.7 billion and the proceeds from the note offering of approximately $1.0 billion. The remaining funding is expected to come from cash from operations, as well as other financing sources, including the minority partner's capital contributions, an equity offering, a sale of precious metals stream from Cobre Panama, or additional debt. With the current note offering Moody's expects Debt/ EBITDA, as adjusted, to remain relatively conservative for the rating, approximately 3.0x over the rating horizon. That said, there is a risk that the leverage would be higher should the company raise more debt to finance the expansion or if capital expenditures escalate. The company's SGL-2 rating reflects its strong liquidity position. Pro forma for the debt issuance Inmet will have approximately $2.7 billion of cash and marketable securities, and liquidity should remain adequate, even in a more moderate copper price environment. However, as discussed above, Inmet will have to make cash contributions for their portion of the development requirements surrounding Cobre Panama. The B1 rating on the senior unsecured notes reflects the preponderance of the unsecured debt in the capital structure. The stable outlook reflects Moody's expectation that market conditions and prices for copper and other base metals over the next twelve to fifteen months will remain favorable. This should provide for a reasonable level of cash generation to support the substantive capital expenditures over this time frame. The outlook also anticipates that the company will continue to maintain discipline with respect to the use of debt in its capital structure and adjust or slow capital spending should market conditions deteriorate. Going forward, the ratings could be lowered if Inmet experiences any significant operational difficulties at either of its primary mines, capital requirements for Cobre Panama increase significantly, or if their liquidity position deteriorates. A downgrade would be considered if Debt/ EBITDA, as adjusted, is expected to exceed 4.5x. Upward rating pressure is limited at this time due to the significant capital expenditures required over the next several years. That said, ratings could be upgraded once the company expands its productive capacity and increases diversification with new mines coming online. The principal methodology used in rating Inmet was the Global Mining Industry Methodology, published May 2009. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Inmet Mining Corporation is a Canadian-based global mining company that engages in the development and production of mineral properties in Turkey, Spain, Finland and Panama. The company produces copper, zinc, and pyrite concentrates and is developing one of the world's largest copper deposits, Cobre Panama. Inmet produced over 84,000 tons of copper and 80,000 tons of zinc during 2011, and generated roughly C$1 billion in revenue. INTERACCIONES BANKING: Chapter 15 Case Summary ---------------------------------------------- Chapter 15 Petitioner: Charles Walwyn and Robert Wilkinson PricewaterhouseCoopers in Antigua, as Joint Liquidators Chapter 15 Debtor: Interacciones Banking Corporation, Ltd. Jasmine Court, Suite 19 Friars Hill Road St. John's Antigua Chapter 15 Case No.: 12-33561 Chapter 15 Petition Date: May 9, 2012 Court: U.S. Bankruptcy Court Southern District of Texas (Houston) Judge: Karen K. Brown About the Debtor: The Antiguan liquidators filed the Chapter 15 petition to stop a U.S. lawsuit involving assets of the winding up company. The liquidators filed a petition to wind up IBC in October 2011. They concluded in June 2011 that IBC was insolvent and unable to pay creditors, with a deficit of $18.8 million as of June 30, 2011. Petitioners' Counsel: Alison Leigh Smith, Esq. MCDERMOTT WILL & EMERY, LLP 1000 Louisiana Street, 39th Floor Houston, TX 77002 Tel: (713) 653-1753 E-mail: alsmith@mwe.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 JDCK LLC: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------ Debtor: JDCK, LLC 11600 SW Shilo Lane Portland, OR 97225-0000 Bankruptcy Case No.: 12-26468 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Robert N. Kwan Debtor's Counsel: David B. Golubchik, Esq. LEVENE NEALE BENDER RANKIN & BRILL LLP 10250 Constellation Blvd., Ste 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 E-mail: dbg@lnbrb.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A copy of the Company's list of its two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-26468.pdf The petition was signed by Christopher Campbell, authorized agent. Affiliates that previously filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- LSSR, LLC 12-24557 04/25/12 Shilo Inn, Seaside Oceanfront, LLC 11-34569 06/07/11 KRATOS DEFENSE: S&P Affirms 'B' Corp. Credit Rating; Outlook Pos ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'B' corporate credit rating, on California-based Kratos Defense & Security Solutions Inc. "At the same time, we revised the outlook to positive from stable," S&P said. "We based the outlook revision on a moderate reduction in our leverage expectation following the planned $155 million acquisition of Composite Engineering Inc.," said Standard & Poor's credit analyst Chris Mooney. "Kratos plans to fund the purchase with the proceeds of a recent $100 million stock sale, $20 million of Kratos stock, cash on hand and revolver borrowings. Because the company will use only a minimal amount of debt to finance the acquisition, Standard & Poor's expects better credit metrics than its previous expectations. The acquisition is expected to close by the beginning of third-quarter 2012," S&P said. "However, 'although the acquisition improves Kratos' financial risk profile somewhat, we believe significant uncertainty surrounds the near-term U.S. defense budget, which could result in lower earnings if funding for Kratos' programs is reduced or eliminated," Mr. Mooney said. "The acquisition of CEI expands Kratos' capabilities in tactical missile defense, which is a relatively high-priority area of defense spending. Key customers include the U.S. Air Force and Navy, which are better positioned in the current defense budget environment than the Army and Marines. Kratos currently provides electronics and avionics that CEI aircraft use, as well as ground flight control stations and electronics for the command and control of CEI aerial systems. No material cost reduction or efficiency improvements are likely from this acquisition because the two companies have little product overlap," S&P said. KRONOS WORLDWIDE: Moody's Assigns Ba2 CFR, Rates Term Loan Ba3 -------------------------------------------------------------- Moody's Investors Service assigned a Ba2 Corporate Family Rating (CFR) to Kronos Worldwide, Inc. (KWW) and Ba3 (LGD4, 66%) rating to its proposed $600 million senior secured term loan B. KWW is refinancing its capital structure, using the term loan proceeds to refinance EUR279.2 million of outstanding notes due 2013 at subsidiary Kronos International, Inc. (KII), repay borrowings under KII's revolver and to provide finding for general corporate purposes and potentially for a special dividend to KWW shareholders. An SGL-1 Speculative Grade Liquidity rating was assigned to KWW. KWW will also establish a five year $125 million revolving credit facility and KII will amend the terms of its EUR80 million ABL revolving credit facility to extend the maturity. The outlook is stable. This a first time rating for KWW. Once the KII notes due 2013 are repaid, Moody's will withdrawn KII's CFR and SGL-1 Speculative Grade Liquidity rating, and the rating on the notes due 2013. The following summarizes the ratings actions: Kronos Worldwide, Inc. Ratings assigned: Corporate family rating -- Ba2 Probability of default rating -- Ba2 $600mm sr sec term loan B due 2019 -- Ba3 (LGD4, 66%) Speculative Grade Liquidity rating -- SGL-1 Outlook: Stable Kronos International Inc. Ratings affirmed: Corporate family rating -- Ba3** Probability of default rating -- Ba3** 6.5% Sr Sec Notes due 2013 -- B1 (LGD5, 76%)** Speculative Grade Liquidity rating assigned: SGL-1** Outlook: Stable ** ** to be withdrawn after the notes due 2013 are retired. Ratings Rationale Moody's views the move of Kronos' borrowings to its global holding entity as a credit positive given the additional revenue, EBITDA, and geographic diversity at KWW. KWW had 2011 revenues of $1.9 billion, compared to KII's $1.4 billion. KWW's Ba2 CFR reflects its strong operating performance and credit metrics, and Moody's expectation that the current favorable TiO2 industry conditions will continue to support strong free cash flow generation. The TiO2 industry has experienced dramatic improvements in profitability for the past two years and could continue to enjoy elevated margins, even with the large increases in titanium feedstock prices being implemented in 2012. KWW's EBITDA margins expanded from 17% (include Moody's analytical adjustments) for 2010 to 32% for 2011. The company also achieved record production levels in 2011 and actual sales volumes have recovered to pre-2008 levels. The company also paid down EUR120.8 million of its EUR400 million notes due 2013, during 2011, helping to reduce leverage to 0.9x at December 31, 2011. At the close of the transaction, pro forma leverage is expected to be roughly 1.3x after Moody's standard adjustments. The term loan is rated one notch lower than the KWW CFR, as a result of being structurally subordinated to the revolver debt at its European subsidiaries and trade payables at its non-guarantor operating subsidiaries. It will have a second lien on the working capital of certain of its North American subsidiaries and security in the stock of operating subsidiaries. However, it will not have security in any fixed assets. Moody's assigned a speculative grade liquidity assessment of SGL-1 to KWW. Its liquidity is supported by its positive cash flow from operations, cash balances, and full availability under its new $125 million ABL revolver and amended European revolver. The firm generated $174 million of free cash flow in 2011, a record during the past ten years. The outlook is stable. In 2012, Moody's expects the company to continue to generate credit metrics supportive of a higher rating, but KWW's CFR is tempered by recognition that the TiO2 industry is experiencing peak cyclical conditions and by the company's reliance on the market for a single commodity chemical - TiO2. Despite investment grade credit metrics, there is currently limited upside to the rating absent a diversification of its revenue streams. The principal methodology used in rating Kronos Worldwide was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Kronos Worldwide, Inc., headquartered in Dallas, TX, produces and markets TiO2 pigments in the U.S., Canada, and Europe. The company reported sales of $1.9 billion for the twelve months ended December 31, 2011. LAGUNA BRISAS: Files Schedules of Assets and Liabilities -------------------------------------------------------- Laguna Brisas, LLC filed with the U.S. Bankruptcy Court for the Central District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $14,000,000 B. Personal Property $1,097,815 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $10,007,070 E. Creditors Holding Unsecured Priority Claims $10,000 F. Creditors Holding Unsecured Non-priority Claims $3,965,594 ----------- ----------- TOTAL $15,097,815 $13,982,664 A full-text copy of the schedules is available for free at http://bankrupt.com/misc/LAGUNA_BRISAS_sal.pdf About Laguna Brisas Laguna Beach, California-based Laguna Brisas, LLC doing business as Best Western Laguna Brisas Spa Hotel, is owned by A&J Mutual, LLC, which is owned and operated by Dae In "Andy" Kim and his wife Jane. The Company owns a Best Western Plus Hotel and Spa in Laguna Beach, California. The Company filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 12-12599) on Feb. 29, 2012. Bankruptcy Judge Mark S. Wallace presides over the case. The Debtor filed the Chapter 11 petition to stop foreclosure sale of the first priority trust deed holder, Wells Fargo Bank. The hotel has been in possession of and operated by a receiver, Bryon Campbell, since Oct. 3, 2011. M. Jonathan Hayes, Esq., at the Law Office of M. Jonathan Hayes represents the Debtor in its restructuring effort. The petition was signed by Dae In "Andy" Kim, managing member. LAGUNA BRISAS: Taps M. Jonathan Hayes as Bankruptcy Counsel ----------------------------------------------------------- Laguna Brisas, LLC, asks the U.S. Bankruptcy Court for the Central District of California for permission to employ M. Jonathan Hayes, Esq. at the Law Office of M. Jonathan Hayes as its general bankruptcy counsel. The hourly rates of the firm's personnel assigned the case are: Mr. Hayes $435 Roksana Moradi, associate $265 Elizabeth Massad, law clerk $95 - $165 Carolyn Afari, law clerk $95 - $165 Mr. Hayes received a prepetition retainer of $20,000, plus the filing fee of $1,046 which was deposited into his client trust account. The source of the funds was a loan by the Debtor from Kae Nam Kim, a creditor of the Debtor. To the best of the Debtor's knowledge, Mr. Hayes is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Laguna Brisas, LLC Laguna Beach, California-based Laguna Brisas, LLC doing business as Best Western Laguna Brisas Spa Hotel, is owned by A&J Mutual, LLC, which is owned and operated by Dae In "Andy" Kim and his wife Jane. The Company owns a Best Western Plus Hotel and Spa in Laguna Beach, California. The Company filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 12-12599) on Feb. 29, 2012. Bankruptcy Judge Mark S. Wallace presides over the case. The Debtor filed the Chapter 11 petition to stop foreclosure sale of the first priority trust deed holder, Wells Fargo Bank. The hotel has been in possession of and operated by a receiver, Bryon Campbell, since Oct. 3, 2011. M. Jonathan Hayes, Esq., at the Law Office of M. Jonathan Hayes represents the Debtor in its restructuring effort. The Debtor disclosed $15,097,815 in assets and $13,982,664 in liabilities. The petition was signed by Dae In "Andy" Kim, managing member. LAWSON-CURRELL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Lawson-Currell Centre, LLC 3636 Nobel Dr., Suite 350 San Diego, CA 92122 Bankruptcy Case No.: 12-53559 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Stephen L. Johnson Debtor's Counsel: Stuart J. Wald, Esq. LAW OFFICES OF STUART J. WALD 13206B Fiji Way Marina Del Rey, CA 90292 Tel: (310) 429-3354 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 together with the petition is available for free at http://bankrupt.com/misc/canb12-53559.pdf The petition was signed by Phil Jemmett, managing member, Breakwater Southeast Holdings LLC. LIBBEY GLASS: Moody's Rates New $450MM Senior Secured Notes 'B2' ---------------------------------------------------------------- Moody's Investors Service assigned a B2 to Libbey Glass Inc.'s proposed $450 million senior secured notes due 2020. At the same time, Moody's affirmed Libbey's Corporate Family and Probability of Default Ratings of B2 and its Speculative Grade Liquidity Rating of SGL-2. The B2 rating on Libbey's $360 million existing senior secured notes due 2015 was also affirmed. Moody's expects to withdraw this rating once the transaction closes. The rating outlook remains positive. "In our opinion, the proposed transaction is neutral in terms of debt leverage as the underfunded pension obligation adjustment will be replaced with balance sheet debt," stated Moody's Analyst Mariko Semetko. The positive outlook continues to reflect Moody's expectation that Libbey will strengthen its credit profile through a combination of earnings growth, expense control, and a continuation of conservative financial policies. Proceeds from the new senior secured notes will be used primarily to repay the company's $360 million existing senior secured notes due 2015 and to fund $80 million of the company's U.S. pension plan's underfunded obligation. The rating assigned to the proposed notes is subject to receipt and review of final documentation. Concurrently, the company also plans to refinance its asset-based revolving facility (ABL) expiring in 2016 with a new $100 million ABL (unrated by Moody's) expiring in 2017. The following rating was assigned: - Proposed $450 million senior secured notes due 2020, B2 (LGD4, 53%) The following ratings were affirmed: - Corporate Family Rating, B2 - Probability of Default Rating, B2 - Speculative Grade Liquidity Rating, SGL-2 - $360 (originally $400) million senior secured notes due 2015, B2 (LGD3, 47%) Rating Rationale Libbey's B2 Corporate Family Rating incorporates the company's significant presence in the U.S. foodservice and retail glassware industries, a revenue base that is diversified internationally and by customer, its extensive distribution channels, its well recognized brand names, and its good liquidity. The cyclicality of the company's revenues and the capital intensive nature of its operations constrain the rating. Ratings could be upgraded if debt/EBITDA is sustained below 4.5 times while improving profitability and maintaining good liquidity. The outlook could be stabilized if global demand for glassware declines materially, liquidity deteriorates, or financial policies become less conservative. In addition, ratings could be downgraded if debt/EBITDA is expected to be maintained above 5.0 times or if EBITA/interest expense is expected to approach 1.0 times. The principal methodology used in rating Libbey Glass Inc. was the Global Consumer Durables Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Toledo, Ohio, Libbey Glass Inc. manufactures glass tableware, ceramic dinnerware and flatware. The company serves foodservice, retail, and business-to-business customers in over 100 countries. Libbey reported sales in the last twelve months ended March 31, 2012 of roughly $820 million. Libbey Glass Inc. is the operating subsidiary of Libbey Inc. LIGHTSQUARED INC: May File for Bankruptcy by Monday Evening ----------------------------------------------------------- The Wall Street Journal's Mike Spector and Dow Jones Newswires' Greg Bensinger report that people familiar with the matter said LightSquared Inc. was preparing Sunday to file for bankruptcy protection after negotiations with lenders to avoid a potential debt default faltered. According to the report, LightSquared and its lenders still have until 5 p.m. Monday to reach a deal that would keep the company out of bankruptcy court, and there were some indications over the weekend that a final decision hadn't yet been reached on its fate. Still, the two sides remained far apart, and people involved in the negotiations expected LightSquared to begin making bankruptcy preparations in earnest. Some of the sources said LightSquared's board had planned tentatively to meet Sunday to discuss authorizing a bankruptcy filing. It is likely a Chapter 11 bankruptcy filing would come sometime before Monday evening, the sources said. According to the report, people familiar with the matter said LightSquared received a waiver from lenders to keep it from defaulting. The lenders have extended the waiver twice, but aren't expected to do so again before it expires Monday evening. According to the report, the sources said Philip Falcone, whose Harbinger Capital Partners is LightSquared's main backer, couldn't agree with lenders on how to cede ownership stakes in the company to them over time. The sources also said there were a number of other terms separating the two sides. According to the report, the lenders wanted LightSquared to be overseen by an independent board that didn't include Mr. Falcone. The hedge-fund manager tacitly agreed to that, but the financial restructuring created a gulf between the two sides. The lenders also wanted to hold Mr. Falcone personally liable for a future bankruptcy filing under certain circumstances, but Mr. Falcone balked at that term, especially since he was poised to no longer sit on LightSquared's board or make major decisions for the firm, the people said. The report notes the lenders hold more than half of the company's $1.6 billion in senior debt, allowing them to block any reorganization plan not to their liking. The report also notes several people familiar with the matter said Sound Point Capital, a small hedge fund with ties to Charlie Ergen, the satellite mogul and head of Dish Network Corp., engaged in a transaction with investor Carl Icahn to unload Mr. Icahn's LightSquared position earlier this month. The bank-debt trade hasn't yet settled, leaving those in the negotiations unsure of the ultimate buyer, said people close to the matter. LODGENET INTERACTIVE: Files Form 10-Q, Incurs $2.1MM Loss in Q1 --------------------------------------------------------------- LodgeNet Interactive Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing 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 $107.72 million of total revenues for the same period during the prior year. 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. A copy of the Form 10-Q is available for free at: http://is.gd/9NCC0g 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: S&P Lowers Corporate Credit Rating to 'B-' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on U.S.-based in-room entertainment and data services provider LodgeNet Interactive Corp. to 'B-' from 'B'. The rating outlook is stable. "We also lowered our issue-level rating on LodgeNet's senior secured bank debt to 'B-' from 'B' (at the same level as the 'B-' corporate credit rating on the company). The recovery rating on this debt remains unchanged at '3', indicating our expectation of meaningful (50%-70%) recovery for lenders in the event of a payment default," S&P said. "The downgrade reflects LodgeNet's weaker-than-expected first quarter operating performance resulting in a narrow cushion of compliance with its leverage covenant, which tightens to 3.75x from 4.00x in the fourth quarter of 2012," said Standard & Poor's credit analyst Jeanne Shoesmith. "The company had an 8% EBITDA cushion of compliance against its leverage covenant at March 31, 2012. We believe LodgeNet will need to amend covenants or significantly reduce debt in order to maintain compliance with covenants, based on our expectation that EBITDA will keep declining for the rest of 2012." "The 'B-' rating reflects our expectation that the company may face difficulty in maintaining compliance with its bank covenants because of continued pressure on guest entertainment revenue and fewer rooms served, as well as high capital expenditures that we believe will reduce cash flow available for debt repayment. We view LodgeNet's business risk profile as 'vulnerable', because of negative secular and cyclical trends at its guest entertainment business. We view LodgeNet's financial risk profile as 'highly leveraged' (based on our criteria), because of our expectation that the company's cushion of compliance with covenants will remain narrow and that the majority of operating cash flow will be used for capital spending," S&P said. "LodgeNet is a provider of in-room entertainment and data services to hotels and to a lesser extent, hospitals and other guest-based businesses. Its operating results are subject to trends in consumer and corporate travel; the discretionary nature of traveler purchases; the unpredictable success of movies, which generate the majority of room revenue; and consumers' changing habits in accessing entertainment. We see a risk that longer term increases in broadband access (complementary or fee-based) in hotel rooms, along with growing usage of portable devices, could continue to reduce demand for LodgeNet's core on-demand movie services. Higher margin guest entertainment revenue (53% of revenue in 2011) continues to be under cyclical and secular pressure, declining 14% in 2011, 13% in 2010, and 19% in 2009. We do not expect guest entertainment revenue to return to growth as a result of the increased penetration of broadband and high-speed cellular networks, combined with a shift by consumers to viewing more content online. Thus far, the company has been able to maintain its EBITDA margin in the mid-20% area by reducing operating expenses. Nevertheless, EBITDA fell 5% in 2011 and 12% in 2010," S&P said. MAGIC CITY DOUGHNUT: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Magic City Doughnut Corp. dba Krispy Kreme Doughnuts P.O. Box 569 Augusta, GA 30903 Bankruptcy Case No.: 12-07126 Chapter 11 Petition Date: May 8, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Judge: Michael G. Williamson Debtor's Counsel: Harley E. Riedel, Esq. STICHTER RIEDEL BLAIN & PROSSER, P.A. 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 E-mail: hriedel.ecf@srbp.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 17 largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb12-07126.pdf The petition was signed by Robert L. McCoy, vice-president. MALABAR MOTEL: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Malabar Motel and Mobile Home Park, L.L.C. dba Malabar Motel 1111 Ponce De Leon Boulevard Saint Augustine, FL 32084 Bankruptcy Case No.: 12-03149 Chapter 11 Petition Date: May 9, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Jacksonville) Judge: Paul M. Glenn Debtor's Counsel: Jason A. Burgess, Esq. THE LAW OFFICES OF JASON A. BURGESS, LLC 118 West Adams Street, Suite 900 Jacksonville, FL 32202 Tel: (904) 354-5065 E-mail: jason@jasonaburgess.com Scheduled Assets: $825,959 Scheduled Liabilities: $1,648,789 A copy of the Company's list of its 10 largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb12-03149.pdf The petition was signed by Farid Ashdji, managing member. Affiliate that previously filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Rena Four, Inc. 11-08080 11/03/11 MARRICK PROPERTIES: Case Summary & 15 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Marrick Properties, LLC dba The Pier Hotel 5434 Adams Morgan Way New Port Richey, FL 34653 Bankruptcy Case No.: 12-07179 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: Catherine Peek McEwen Debtor's Counsel: Sheila D Norman, Esq. NORMAN AND BULLINGTON, P.A. 1905 West Kennedy Blvd Tampa, FL 33606 Tel: (813) 251-6666 Fax: (813) 254-0800 E-mail: sheila@normanandbullington.com Scheduled Assets: $698,650 Scheduled Liabilities: $1,415,417 A copy of the Company's list of its 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb12-07179.pdf The petition was signed by Miguel Perez, managing member. Affiliates that previously filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Maritza Perez 11-21898 11/30/11 Townlakes Square, LLC 12-07178 05/09/12 MERRILL CORP: S&P Cuts Corp. Credit Rating to 'CCC-'; Outlook Neg ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on St. Paul, Minn.-based Merrill Corp. to 'CCC-'from 'CCC+'. The outlook is negative. "At the same time, we lowered our issue-level ratings on subsidiary Merrill Communications LLC's first-lien facilities to 'CCC' and the second-lien term loan to 'C'. Our recovery ratings on the credit facilities remain unchanged (first-lien at '2' and second-lien at '6')," S&P said. "The downgrade reflects the potential for a near-term covenant violation and technical default, as well as risks to completing a refinancing," said Standard & Poor's credit analyst Chris Valentine. "Merrill would have limited liquidity absent a refinancing as the revolving credit facility (67% of which was drawn as of October reporting) matures on June 29, 2012 and access is constrained by financial covenants. We understand the company may have made progress towards a refinancing but our rating action reflects the risks surrounding the pending maturity dates." "We view Merrill Corp.'s financial risk profile as 'highly leveraged' because of its high debt leverage, near term debt maturities, and historically narrow cushion of covenant compliance. Merrill Corp.'s business risk profile, in our opinion, is 'vulnerable' because of the high degree of volatility in operating performance given the company's reliance on the financial services industry, and niche segments of the printing and document services industry. Our negative rating outlook reflects the potential for a downgrade, if Merrill cannot refinance its term loan and revolving credit facility, or if it encounters obstacles refinancing," S&P said. "Merrill is structured as two distinct operating units: Legal and Financial Transaction Services (LFTS) and Marketing and Communication Solutions (MCS). We estimate that LFTS generated roughly 70% of Merrill's consolidated revenue in the nine months ended Oct. 31, 2011. Though revenues are dominated by services to businesses, Merrill is still exposed to declining trends in print volumes, and increasing use of digital composition and transmission of financial documents. The company's results tend to be highly correlated with conditions in the financial services and legal fields," S&P said. MILLAR WESTERN: Moody's Affirms 'B2' CFR/PDR; Outlook Stable ------------------------------------------------------------ Moody's Investors Service lowered the short-term liquidity rating to SGL-3 from SGL-2 for Millar Western Forest Products Ltd. This action reflects Moody's expectation that expected cash consumption is likely to erode Millar Western's liquidity position. Moody's affirmed the company's B2 Corporate Family Rating ("CFR"), B2 Probability of Default Rating, and the B3 rating on its senior unsecured notes due 2021. The rating outlook is stable. Actions: Issuer: Millar Western Forest Products Ltd. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2 $210 million Senior Notes due 2021, Affirmed B3 (adjusted point estimates to LGD4 63% from LGD4 62%) Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Outlook is Stable. Ratings Rationale The downgrade of the short-term liquidity rating to SGL-3 from SGL-2 reflects Moody's view that Millar Western could burn up to $25 million of cash during 2012. Moody's anticipates the recent expiration of lumber hedges will result in weakened segment performance despite Moody's expectations for modestly higher benchmark lumber prices. Moody's also believes the pulp business will be challenged by lower prices in 2012 relative to 2011 levels. As a result, despite lower capital spending following the recent completion of the Fox Creek sawmill rebuild project, Moody's believes the company will continue to consume cash absent an improvement in end market conditions. An undrawn $50 million asset-based revolving credit facility provides good back-up liquidity to fund seasonal needs or unforeseen developments. Millar Western completed an amend-and-extend transaction on this facility, which now matures in July 2015, and is a key factor in Moody's view of the company's liquidity. Moody's has maintained the CFR at the B2 level because the company's liquidity position is adequate to support operations over the near-term and mid-cycle credit metrics remain supportive of the company's intermediate term credit profile. The stable outlook incorporates expectations for up to $25 million of cash consumption in 2012 and anticipates a return to cash generation with improved market conditions in 2013. Moody's could revise the outlook to negative or downgrade the ratings if Moody's expects the company to continue to consume cash beyond 2012 and further erode its liquidity position, or if Moody's expects worsening business conditions. Upward rating momentum is limited. A rating upgrade likely would require a combination of increased scale and a sizeable cash balance to withstand a future downturn with greater financial cushion. The principal methodology used in rating Millar Western Forest Products, Ltd was the Global Paper and Forest Products Industry Methodology published in September 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. Millar Western Forest Products Ltd., headquartered in Edmonton, Alberta, is a privately-held producer of lumber and pulp. The company reported revenues of C$285 million in 2011. MISSISSIPPI HIGHER: Moody's Cuts Ratings on 20 Bonds to 'Ba1' ------------------------------------------------------------- Moody's Investors Service downgraded 20 classes of senior bonds issued by Mississippi Higher Education Assistance Corporation under a master indenture established as of July 1, 1999. The underlying collateral consists of a pool of Federal Family Education Loan Program (FFELP) student loans that are guaranteed by the Department of Education for a minimum of 97% of defaulted principal and accrued interest. RATINGS: The complete actions are as follows: Issuer: Mississippi Higher Education Assistance Corporation (1999 Indenture) Senior 99A-1, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade Senior 99A-3, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade Senior 2000-A-1, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade Senior 2000A-2, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade Senior 2000A-3, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade Senior 2000A-4, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade Senior 2001-A-1, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade Sr. 2003-A-1, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade Sr. 2003-A-2, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade 2003A-3, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade 2004A-2, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade 2004A-3, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade 2004A-4, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade 2005A-1, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade 2005A-2, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade 2005A-3, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade 2005A-4, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade 2005A-5, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade 2006A-1, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade 2006A-2, Downgraded to Ba1 (sf); previously on Oct 17, 2011 Aaa (sf) Placed Under Review for Possible Downgrade Ratings Rationale Moody's downgraded the bonds because of insufficient credit enhancement including overcollateralization, cash in the trust accounts and excess spread necessary to protect the investors against losses due to the negative excess spread generated in high interest rate cash flow scenarios. The application of high interest rate and higher default rates in various cash flow scenarios under the "Moody's Approach to Rating Securities Backed by FFELP Student Loans" methodology, published on April 2, also contributed to the downgrade of the senior bonds. Negative excess spread erodes the collateral base by using principal collections to cover interest shortfalls, thus causing further reduction in excess spread. Although both total parity, i.e. the ratio of total assets to total liabilities, and senior parity, i.e. the ratio of total assets to total senior liabilities, were high at 110.50% and 125.42%, respectively, as of the March 31, 2012, reporting date, the higher parity levels are not sufficient to cover the significant parity erosion due to the negative excess spread, which was approximately -1.4% and -2.4% per annum in Moody's expected and Baa stress cash flow scenarios, respectively. In addition, the excess spread is very sensitive to the level of interest rate tested in the cash flow scenarios. As of the March 31, 2012 reporting date, 43% of the transaction liability was funded by tax-exempt auction rate securities. Because the coupon payments for tax-exempt auction rate securities are a multiple of an interest rate index while the asset yield is equal to an index plus a spread, the transaction will have a disproportionate increase in the coupon payments as compared to the asset yield in a higher interest rate scenario, leading to lower excess spread in high interest rate scenario. The downgrades of some senior bonds are also prompted by the lack of the mandatory redemption provisions in the transaction's documents. The Corporation can choose when to pay down the bonds and which bonds to pay down, subject to the maintenance of the total and senior parity requirements for the redemption of the subordinate bonds. In the absence of mandatory redemption, the Corporation can choose to keep the cash collections without paying down bonds. Because the interest earnings on the cash are much lower than the coupon payments on the bonds, thus accumulated cash will reduce the transaction's excess spread, which will lead to a decline in parity and the eventual principal default on the legal maturity dates. To address such risk, Moody's assumed in its cash flow scenarios that the Corporation will hold cash collections for a few years before using them to pay down the bonds. The principal methodology used in these rating actions was "Moody's Approach to Rating Securities Backed by FFELP Student Loans", published on April 2, 2012, and is available at www.moodys.com in the Rating methodologies subdirectory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issue can also be found in the Rating Methodologies sub-directory on Moody's website. The performance expectations for a given variable indicate Moody's forward-looking view of the likely range of performance over the medium term. From time to time, Moody's may, if warranted, change these expectations. Performance that falls outside the given range may indicate that the collateral's credit quality is stronger or weaker than Moody's had anticipated when the related securities ratings were issued. Even so, a deviation from the expected range will not necessarily result in a rating action nor does performance within expectations preclude such actions. The decision to take (or not take) a rating action is dependent on an assessment of a range of factors including, but not exclusively, the performance metrics. Primary sources of uncertainty with regard to excess spread are increased basis risk. Ratings on Class A would not be upgraded if spread between LIBOR index on the liability side and the 1 month LIBOR index on the asset side is 10 bps lower, or downgraded if the spread is 10 bps higher. To assess rating implications of the higher expected losses, each individual transaction was run through a variety of stress scenarios using the Structured Finance Workstation(R)(SFW), a cash flow model developed by Moody's Wall Street Analytics. MOMENTIVE PERFORMANCE: Moody's Cuts Corp. Family Rating to Caa1 --------------------------------------------------------------- Moody's Investors Service lowered Momentive Performance Materials Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Caa1 from B3, and lowered the company's outstanding debt ratings (see below). These actions follow the company's weak first quarter results and expectations for a slower than expected recovery in volumes in 2012. The Speculative Grade Liquidity Rating was lowered to SGL-3 from SGL-2 due to the lower level of cash on the balance sheet and the limited ability to generate meaningful free cash flow with earnings near current levels. The outlook for the company's ratings is stable. "Volumes are expected to recover slower than previously anticipated in 2012 and margins are likely to remain under continued pressure, especially in Asia, as new industry capacity is absorbed," stated John Rogers, Senior Vice President at Moody's. "The lack of meaningful near-term debt maturities or liquidity concerns limits further downside to the rating over the next two years." Ratings Rationale The downgrade to a Caa1 CFR reflects the slower than expected recovery in EBITDA as a result of new industry capacity, weaker than anticipated demand in key downstream markets -- automotive and electronics. While quarterly EBITDA should improve to the $70- 90 million per quarter for the remainder of the year, credit metrics will continue to be extremely weak. MPM's leverage (Debt/EBITDA of 12.5x at March 31, 2012), outweigh its strong business profile and the expectation that earnings and cash flow will improve over the next four quarters. As of March 31, 2012 the companys weak credit metrics include minimal Retained Cash Flow/Debt (RCF/Debt; less than 1%) and negative Free Cash Flow/Debt (FCF/Debt). The aforementioned ratios reflect Moody's Global Standard Adjustments, which include the capitalization of pensions and operating leases, as well as MPM's HoldCo PIK debt (the PIK debt has a value of $708 million at March 31, 2011 and is accreting at 11% per year, or roughly $80 million/year). The stable outlook reflects that operating performance will improve modestly through the year, as well as the good liquidity position with no near-term maturities. Moody's expects continued soft demand through 2012 and anticipates a slower recovery in volumes, such that unadjusted EBITDA could remain below $300 million on an LTM basis for several quarters. The ratings would decline if the company's EBITDA remains below $300 million at the end of 2012, or if cash and revolver availability falls, or appears likely to fall, below $200 million for a sustained period. Moody's expects that the company will continue to improve its liquidity and actively manage their capital structure and upcoming debt maturities. While an upgrade is unlikely in the near-term, if MPM is able to raise its EBITDA above $450 million/year Moody's would consider a higher rating. Moody's would also look for FCF/Debt above 2% and RCF/Debt above 6% on a sustainable basis. The Speculative Grade Liquidity Rating was lowered to SGL-3 from SGL-2 as a result of the decrease in balance sheet cash and expectations for negative free cash flow through the year as volumes will continue to be pressured by macroeconomic issues, specifically reflected by slowdowns in Europe and China. MPM's liquidity is supported by cash of $122 million and revolver availability of $259 million, as of March 31, 2012, with minimal usage under the revolver. There is little concern regarding MPM's ability to maintain compliance with covenants given their covenant-light terms. Maturities of long term debt will be of greater concern by the end of 2013; maturities are $179 million in 2014 and $994 in 2015. Ratings downgraded: Momentive Performance Materials Inc. Corporate Family Rating to Caa1 from B3 Probability of Default Rating to Caa1 from B3 Speculative Grade Liquidity Rating to SGL-3 from SGL-2 Guaranteed senior secured revolver due 2014 to B1 (LGD2, 12%) from Ba3 (LGD2, 12%) Guaranteed senior secured term loan due 2015 to B1 (LGD2, 12%) from Ba3 (LGD2, 12%) Guaranteed senior secured 2nd lien notes due 2014 to B3 (LGD3, 40%) from B2 (LGD3, 35%) Guaranteed senior unsecured notes due 2021 to Caa1 (LGD4, 57%) from Caa1 (LGD4, 58%) Senior subordinated notes due 2016 to Caa3 (LGD5, 84%) from Caa2 (LGD5, 84%) The outlook is stable. The principal methodologies used in rating Momentive Performance Material Inc were the Global Chemical Industry rating methodology published in December 2009, and the Loss Given Default methodology for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website. Momentive Performance Materials Inc., headquartered in Albany, New York, is the second largest producer of silicones and silicone derivatives worldwide. The company has two divisions: silicones (which accounted for roughly 90% of revenues) and quartz. Revenues were roughly $2.6 billion for the LTM ending March 31, 2012. MOMENTIVE PERFORMANCE: Names J. Dandolph as Unit EVP & President ---------------------------------------------------------------- Momentive Performance Materials Inc. promoted of John Dandolph to Executive Vice President and President of the Company's Silicones and Quartz Division. Mr. Dandolph will be responsible for leading all functions of Momentive's global Silicones, Quartz and Ceramics businesses. Mr. Dandolph most recently served as President and CEO for Momentive's Silicones business in the Asia Pacific region for more than two years. He previously was Chief Financial Officer for the Company's Silicones Asia Pacific business. He joined Momentive in December 2006 from General Electric (GE) through the acquisition of GE Advanced Materials. Prior to Momentive, Mr. Dandolph served as Financial Planning and Analysis Manager for the Pacific and Finance Manager for Japan and Korea at GE Advanced Materials. He also held various finance roles in North America and Mexico for GE Plastics. Mr. Dandolph began his career at GE in 2001. "John Dandolph is a talented, well-respected executive and strategic thought leader," said Craig O. Morrison, Chairman, President and CEO of Momentive. "John understands our customers' needs and at the same time, has clearly established himself as a proven champion of fiscal responsibility. I am confident that John will serve as a catalyst for driving continued growth, sustainability and success for Momentive's Silicones and Quartz Division. We look to his leadership and experience to take the division to the next level in the industry." Mr. Dandolph earned a bachelor's degree in business from Boston University. 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 in 2011, following a net loss of $63 million in 2010. Net loss in 2009 was $42 million. The Company's balance sheet at March 31, 2012, showed $3.07 billion in total assets, $3.90 billion in total liabilities, and a $832 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. MONTANA ELECTRIC: Trustee Taps Harper Lutz as Valuation Consultant ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Montana authorized Lee A. Freeman, the duly appointed and acting Chapter 11 trustee for Southern Montana Electric Generation and Transmission Cooperative, Inc., to employ Harper Lutz Zuber Hofer and Associates as valuation consultant. Harper Lutz is expected to provide valuation consultation services, including those related to (i) opining on the values of the Debtor's wholesale power contracts with its members; and (ii) serving as a consulting expert on valuation issues related to the Contracts. The trustee may also use the firm for litigation support; if so, the trustee will separately move to expand the scope of the firm's retention. The hourly rates for the professionals and assistants who are expected to work on the case are: Melinda M. Harper, member $360 Mitchell S. Hoffman, senior associate $310 Randi Morgan, associate $130 In addition, the hourly rates for the professionals and assistants who may work on the case are: Greg R. Weiss, senior associate $210 Kristene L. Roper, associate $210 Heather A. MacKendrick, associate $125 Sheri L. Kelley, associate $65 The trustee has agreed to provide a $10,000 security retainer. To the best of the trustee's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. MS PARTNERSHIP: 2 McClung & Spangler Joint Ventures in Chapter 11 ----------------------------------------------------------------- Annie Johnson, staff reporter at Nashville Business Journal, reports two joint venture entities of developers Mack McClung and James Spangler sought voluntary Chapter 11 bankruptcy protection. MS Partnership listed $6.3 million in liabilities and $3.7 million in assets. In a separate proceeding, Marquis Homes of Tennessee, a single-asset entity, listed $5.3 million in liabilities and $4.1 million in assets. The report relates Mr. McClung said both bankruptcy filings are an effort to block foreclosure of property by a Dallas lender, which purchased the assets of the failed Birmingham bank that Messrs. McClung and Spangler used for their original financing. Mr. McClung said LPP Mortgage hasn't accepted traditional payments by the developers. The report notes MS Partnership's largest secured creditor is LPP for $5.2 million related to 17 acres of property off Duplex Road in Spring Hill. Unsecured creditors include Maury, Williamson and Davidson counties for unpaid property tax totaling about $11,000. LPP Mortgage also is listed as the largest secured creditor in the Marquis Homes of Tennessee case for $4 million related to property in Brentwood. Williamson County is among the unsecured creditors, to which Marquis owes more than $12,000 in property taxes. NEWMAN REAL ESTATE: Case Summary & 2 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Newman Real Estate LLC 16100 Dora Avenue Eustis, FL 32726 Bankruptcy Case No.: 12-06327 Chapter 11 Petition Date: May 9, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: Raymond J. Rotella, Esq. KOSTO & ROTELLA, P.A. 619 East Washington Street Orlando, FL 32801 Tel: (407) 425-3456 Fax: (407) 423-5498 E-mail: rrotella@kostoandrotella.com Scheduled Assets: $385,000 Scheduled Liabilities: $1,398,536 Debtor-affiliate that simultaneously filed separate Chapter 11 petition: Debtor Case No. ------ -------- Newman LLC 12-06328 Assets: $26,641 Liabilities: $1,481,541 The petitions were signed by Peter James Miller. A copy of Newman Real Estate's list of its two largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-06327.pdf A copy of Newman LLC's list of its 19 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-06328.pdf NEXSTAR BROADCASTING: Swings to $3 Million Net Income in Q1 ----------------------------------------------------------- Nexstar Broadcasting Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $3.01 million on $83.64 million of net revenue for the three months ended March 31, 2012, compared with a net loss of $6.31 million on $69.94 million of net revenue for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $578.20 million in total assets, $758.09 million in total liabilities and, a $179.89 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/iptUJJ About Nexstar Broadcasting Group Irving, Texas-based Nexstar Broadcasting Group Inc. currently owns, operates, programs or provides sales and other services to 62 television stations in 34 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama, New York, Rhode Island, Utah and Florida. Nexstar's television station group includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches approximately 13 million viewers or approximately 11.5% of all U.S. television households. The Company reported a net loss of $11.89 million in 2011, a net loss of $1.81 million in 2010, and a net loss of $12.61 million in 2009. * * * As reported by the Troubled Company Reporter on Aug. 30, 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Nexstar Broadcasting Group to 'B' from 'B-'. The rating outlook is stable. "The 'B' corporate credit rating reflects S&P's expectation that Nexstar's core ad revenue will continue growing modestly in 2010 and 2011," said Standard & Poor's credit analyst Deborah Kinzer. The EBITDA growth resulting from the rebound in core advertising, combined with political ad revenue from the 2010 midterm elections, should, in S&P's view, enable Nexstar to reduce its leverage significantly by the end of the year. NEXTWAVE WIRELESS: Has $28.5 Million Net Loss for March 31 Qtr -------------------------------------------------------------- NextWave Wireless Inc. generated net losses of $28.5 million and $61.0 million for the three months ended March 31, 2012 and April 2, 2011, and has an accumulated deficit of $1,599.7 million at March 31, 2012. NextWave used cash from operating activities of continuing operations of $3.8 million and $3.6 million during the three months ended March 31, 2012 and April 2, 2011, respectively. The Company's unrestricted cash, cash equivalents and marketable securities included in current assets of continuing operations totaled $14.9 million at March 31, 2012. The Company had a net working capital deficit of $1,042.8 million at March 31, 2012. NextWave funded operations, business combinations, strategic investments and wireless spectrum license acquisitions primarily with the $550.0 million in cash received in its initial capitalization in April 2005, the net proceeds of $295.0 million from its issuance of Senior Secured Notes in 2006 and 2010, the net proceeds of $351.1 million from its issuance of Series A Senior Convertible Preferred Stock in March 2007, which, in October 2008, the Company exchanged for Third Lien Subordinated Secured Convertible Notes in the aggregate principal amount of $478.3 million, and the net proceeds of $101.0 million from the Company's issuance of Senior Subordinated Secured Second Lien Notes in October 2008 and July 2009. The Company did not receive any proceeds from the issuance of the Third Lien Notes. NextWave also said as of March 31, 2012, the aggregate principal amount of its secured indebtedness was $1,061.8 million. This amount includes its Senior Notes with an aggregate principal amount of $142.8 million, its Second Lien Notes with an aggregate principal amount of $200.5 million and Third Lien Notes with an aggregate principal amount of $718.5 million. NextWave said its current cash reserves are not sufficient to meet payment obligations under its secured notes at their current maturity dates. Additionally, NextWave said it may not be able to consummate sales of its wireless spectrum assets yielding sufficient proceeds to retire the debt at the current scheduled maturity dates. "If we are unable to further extend the maturity of our secured notes, or identify and successfully implement alternative financing to repay our secured notes, the holders of our Notes could proceed against the assets pledged to collateralize these obligations," NextWave said. "These conditions raise substantial doubt about our ability to continue as a going concern." "Insufficient capital to repay our debt at maturity would significantly restrict our ability to operate and could cause us to seek relief through a filing in the United States Bankruptcy Court. Any alternative financing and/or maturity extension of our Notes may be costly to obtain, and could involve the issuance of equity securities that could cause significant dilution to our existing stockholders and potentially limit our net operating loss carry forwards," NextWave said. During 2011, NextWave had capital expenditure needs associated with certain build-out or substantial service requirements which apply to its domestic licensed wireless spectrum, which generally must be satisfied as a condition of the license. The Company listed total assets of $457.139 million, total current liabilities of $1,064.058 million, deferred income tax liabilities of $84.148 million and long-term obligations, net of current portion of $14.854 million, and total stockholders' deficit of $705.921 million. A copy of the Company's Form 10-Q report filed with the Securities and Exchange Commission for the quarter ended March 31, 2012, is available at http://is.gd/fy5Joy NextWave Wireless Inc. (PINK: WAVE) is a holding company for holding company for a significant wireless spectrum portfolio. Its continuing operations are focused on the management of ikts wireless spectrum interests. Total domestic spectrum holdings consist of approximately 3.9 billion MHz POPs. Its international spectrum included in continuing operations include 2.3 GHz licenses in Canada with 15 million POPs covered by 30 MHz of spectrum. OM PC LLC: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------- Debtor: OM PC, LLC 1146 Macarthur Drive Alexandria, LA 71303 Bankruptcy Case No.: 12-80524 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court Western District of Louisiana (Alexandria) Judge: Henley A. Hunter Debtor's Counsel: Thomas E. St. Germain, Esq. WEINSTEIN & ST. GERMAIN 1414 NE Evangeline Thruway Lafayette, LA 70501 Tel: (337) 235-4001 Fax: (337) 235-4020 E-mail: ecf@weinlaw.com Scheduled Assets: $1,217,300 Scheduled Liabilities: $1,875,926 A copy of the Company's list of its three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/lawb12-80524.pdf The petition was signed by Bharatbhai Patel, manager/owner. OMNIA ALEXIS: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Omnia Alexis, LLC P.O. Box 60405 Palo Alto, CA 94306 Bankruptcy Case No.: 12-53515 Chapter 11 Petition Date: May 8, 2012 Court: U.S. Bankruptcy Court Northern District of California (San Jose) Judge: Charles Novack Debtor's Counsel: Charles B. Greene, Esq. LAW OFFICES OF CHARLES B. GREENE 84 W. Santa Clara Street, #770 San Jose, CA 95113 Tel: (408) 279-3518 E-mail: cbgattyecf@aol.com Scheduled Assets: $7,501,000 Scheduled Liabilities: $6,320,000 The Company's list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by Manar Zarroug, managing member. ORDWAY RESEARCH: Judge Approves Armory Sale to Saga for $675,000 ---------------------------------------------------------------- Michael DeMasi, reporter at The Business Review, reports U.S. Bankruptcy Court Judge Robert E. Littlefield said he would approve a motion to sell an old state armory in Albany, New York, to The Sage Colleges for $675,000 after no other bidders expressed interest in the New Scotland Avenue property. The report says the historic, 68,450-square-foot armory at 130 New Scotland Ave. is located steps away from the college's Albany campus. The school wants to preserve and convert the building into classrooms, faculty offices and an assembly space for graduation ceremonies and other events. Built in 1914 and listed on the National Register of Historic Places, the armory was last used by the New York National Guard in 1999. Ordway Research Institute, a biomedical research organization, paid $1.45 million for the armory in June 2010, with the intention of turning it into a biotech incubator. The plan never came to fruition. The report says, of the $675,000 purchase price, $165,000 will be paid to The Marty and Dorothy Silverman Foundation to resolve a secured claim on the property. Ordway had borrowed $3.5 million from the charitable foundation to pay for the acquisition and renovations to the armory. The report relates KeyBank also has a secured claim, $150,000, that will be paid. Also, real estate broker John Nigro will be paid a $40,500 commission. Mr. Nigro is principal of The Nigro Cos. in Albany, one of the area's largest commercial real estate developers. That leaves $319,500 to pay other creditors in the bankruptcy case. About Ordway Research Albany, New York-based Ordway Research Institute, Inc., was formed in 2002 to facilitate inter-institutional and interdisciplinary collaborations in basic and translational biomedical research in New York's Capital District. Ordway's research is focused on drug development in cancer, emerging infections and signal transduction/endocrinology. Ordway filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 11-11322) on April 28, 2011. Bankruptcy Judge Robert E. Littlefield, Jr., presides over the case. Gregory J. Mascitti, Esq., at LeClairRyan, A Professional Corporation, represents the Debtor in its restructuring effort. In its schedules, the Debtor disclosed $6,615,279 in assets and $18,703,061 in liabilities. The Troubled Company Reporter on Sept. 1, 2011, reported the conversion of the Debtor's Chapter 11 case to a Chapter 7 liquidation. OXFORD INDUSTRIES: Moody's Raises CFR, Senior Notes Rating to Ba3 ----------------------------------------------------------------- Moody's Investor Service upgraded the Corporate Family Rating, Probability of Default Rating, and the $105 million senior secured notes rating of Oxford Industries, Inc. to Ba3 from B1. The Speculative Grade Liquidity Rating was changed to SGL-2 from SGL- 1. The rating outlook is stable. The upgrade recognizes Oxford's success in growing its earnings and reducing its financial leverage. "The company has continued to report solid sales and earnings growth following debt reductions in early 2011," commented Moody's analyst Mariko Semetko. The ratings reflect Moody's expectations that the company should be able to sustain moderate leverage, double-digit EBITA margins, and good liquidity. The company's products cater towards the higher- income population, a group that has continued to shop through the somewhat tepid retail shopping environment. "We expect Lilly Pulitzer and Tommy Bahama to continue to report solid sales and earnings driven by comparable store sales growth and new store openings, which should further strengthen the company's credit metrics over time," added Semetko. The company's liquidity position has weakened from very strong levels but remains sufficiently robust to support the Ba3 rating. Last year's debt repayment reduced the company's cash balances, and modest cash generated from operations may not fully cover Oxford's near-term working capital needs and growth capital expenditures. Moody's expects Oxford to have ample capacity under its revolving credit facility to fund any capital needs over the next twelve months but notes that the facility expires in August 2013. The following ratings were upgraded: Corporate Family Rating to Ba3 from B1 Probability of Default Rating to Ba3 from B1 $105 million senior secured notes to Ba3 (LGD4, 55%) from B1 (LGD4, 57%) The following rating was downgraded: Speculative grade liquidity rating was downgraded to SGL-2 from SGL-1 Ratings Rationale Oxford's Ba3 Corporate Family Rating reflects its good credit metrics, including its relatively low debt leverage and solid operating profitability. The rating also incorporates the company's well recognized brand names sold at a high price point that offers modest cushion from volatility in input costs. Partly offsetting these are the company's modest scale, concentration of sales from Tommy Bahama, and its use of cash for somewhat aggressive retail store expansion in lieu of debt repayment. The stable outlook incorporates Moody's view that Oxford will maintain current levels of EBITA margins, while continuing to diversify its retail store base both domestically and internationally as well as increasing e-commerce business. Additionally, the stable outlook reflects the expectation that Oxford will successfully refinance its $175 million asset based revolving credit facility well in advance of the August 2013 expiration. A ratings upgrade would be unlikely in the near term because of Oxford's limited scale and the high concentration of its sales in the Tommy Bahama business. Over the long term, there could be positive ratings momentum if Oxford were to materially increase its scale and geographic presence while decreasing its reliance on Tommy Bahama and improving its credit metrics and liquidity profile. Ratings could be downgraded if Oxford were to pursue a more aggressive financial policy, if comparable store sales were to become negative in consecutive quarters or if Oxford became promotional such that margins started to fall. In addition, ratings could be downgraded if debt/EBITDA were sustained above 4.0 times or if liquidity deteriorated for any reason. The principal methodology used in rating Oxford was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Atlanta, Georgia, Oxford Industries, Inc. is a retailer and wholesaler of branded and private label apparel. Major brands include Tommy Bahama, Lilly Pulitzer and Ben Sherman. As of January 28, 2012, Oxford operated 128 retail locations. Revenues for the fiscal year ended January 28, 2012 were approximately $775 million. PETTUS PROPERTIES: Seeks $500,000 Loan From Sole Shareholder ------------------------------------------------------------ Pettus Properties, Inc., asks the U.S. Bankruptcy Court for permission to borrow $500,000 from Jerry H. Pettus Sr., through Wingfoot Land Management LLC, the sole shareholder of the Debtor. The loan is to be secured with the Debtor's real property located in North Carolina. The lots are subject to a mortgage lien owed to VFC Partners LLC in the amount of $2,900,000. As part of the global settlement between VFC, the Debtor and Sterling Properties of the Carolinas LLC, another entity owned by Wingfoot Land, the settlement agreement provides for Pettus -- on behalf of Wingfoot -- to pay $500,000 to VFC as initial payment. The Debtor has no revenue or any way of raising the funds necessary to make the settlement possible. Mr. Pettus is the only source of funds that the Debtor has. Providing Mr. Pettus with a security interest will allow him to be repaid from the sale of the Debtor's real estate that will be the ultimate source of completing the settlement with VFC. The hearing to consider approval of the loan is set for May 15, 2012, at 9:30 a.m. in U.S. Bankruptcy Court in Charlotte. Charlotte, North Carolina-based Pettus Properties, Inc., filed for Chapter 11 bankruptcy protection (Bankr. W.D.N.C. Case No. 10-31632) on June 8, 2010. The Company estimated its assets and debts at $10 million to $50 million. In 2011, the Debtor filed a Chapter 11 plan of reorganization, which was challenged by VFC Partners 8 LLC. Terms of the Plan and VFC's objections were reported by the Troubled Company Reporter on June 24 and July 15, 2011. Robert A. Cox, Jr., Esq., at McGuireWoods LLP, represents VFC. A full-text copy of the disclosure statement is available for free at http://bankrupt.com/misc/PETTUS_DS.pdf PINNACLE AIRLINES: USW Blames Delta for Financial Woes ------------------------------------------------------ Wayne Risher at the Commercial Appeal reports the United Steelworkers, which represents about 2,800 Pinnacle flight attendants and ground services workers, blamed Pinnacle Airlines Corp.'s brand-name partner Delta for putting the financial squeeze on Pinnacle employees. According to the report, Pinnacle last week opened negotiations with three unions -- USW, the Air Line Pilots Association and Transport Workers Union -- representing about 5,600 employees and detailed how a Chapter 11 bankruptcy would affect non-union employees. The USW said Pinnacle proposed to take back certain gains from a recently negotiated agreement with flight attendants because of a cost-cutting imperative established by Pinnacle's contract with Delta. "What is also clear is that Delta is trying to take advantage of Pinnacle's fragile finances to unfairly squeeze our members in order to reduce Delta's own costs," the report quotes the union as saying. According to the report, Delta spokeswoman Gina Laughlin responded, "We disagree with the USW's claim. Pinnacle is an important partner for Delta and our customers. We have invested in their future and want Pinnacle to be successful for many years to come. A key element of Pinnacle's future success will be a competitive cost structure, with pay rates reflective of the regional airline industry." Pinnacle plans to wind down flying for United/Continental and US Airways and revert to exclusively flying regional airline flights for Delta under terms of a proposed restructuring plan. Delta has agreed to provide debtor-in-possession financing that would give Pinnacle a net $30 million more in operating cash. According to the report, a memo sent to non-union employees on behalf of Pinnacle CEO Sean Menke reaffirmed the company's intent to roll back salaries by 5%. It also said the company intends to reduce the company match for 401(k) retirement plans and replace the traditional PPO health plan with two consumer-driven health plan options. Also proposed are 100% employee paid extended sick leave and a 25% employee contribution to the long-term disability insurance plan, the report says. The report notes pay cuts would occur when labor agreements are modified, and benefit changes are targeted for 2013. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems - Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. A seven-member official committee of unsecured creditors has been appointed in the case. The Committee selected Goodrich Corporation as its chairperson. The Committee tapped Morrison & Foerster LLP as its counsel. PRM REALTY: Taps NHB Advisors as to Provide Financial Services -------------------------------------------------------------- Peter R. Morris, president and chief executive officer of PRM, and PRM Realty Group LLC, ask the U.S. Bankruptcy Court for the Northern District of Texas for permission to employ NHB Advisors, Inc. as their financial advisor. NHB will, among other things: -- assist in review and analysis of proposed transactions for which the Debtors seek Court approval; -- assist with preparation of any plan of reorganization; and -- assist with preparation of budgets and analyses with respect to Debtors performance related thereto. The Debtors propose to compensate NHB for its services on these terms: a. If NHB is successful in arranging exit financing, NHB will be paid "Success Fees" equal to 5% of each of (i) the total financing facilities for senior secured debt, (ii) the total financing facilities for all other debt; and (iii) the total financing facilities for equity or forgiveness or assumption of debt; b. In consideration for the financial advisory services, NHB will be entitled to the sum of 5% of all the net proceeds of the post-confirmation Debtors' dispositions of any and all assets of the estate inuring to the benefit of Debtors. c. Notwithstanding the foregoing, NHB will not be entitled to any fee related to forgiveness or assumption of debt resulting from (i) the settlement of litigation; or (ii) debt reduction, forgiveness or assumption pursuant to a successful plan of reorganization "cramdown" of a secured or unsecured claimant unless otherwise agreed by NHB and the Debtors. d. NHB will be reimbursed for expenses incurred by reason of its employment, including, without limitation, for travel, phone, fax and courier. The expenses will be reimbursed on approval of the Bankruptcy Court, pursuant to fee applications made on a monthly basis. NHB will comply with the United States Trustee Guidelines for Reviewing Applications for Compensation when incurring and seeking reimbursement for expenses. The Debtors will pre-approve in writing any expenses that exceed $1,000 for any single transaction or $1,000 in aggregate over a single week period; e. The Agreement will terminate upon mutual agreement by the parties, and such agreement will not be unreasonably withheld. To the best of Debtors' knowledge, NHB is a "disinterested person" as that term is defined in Section 101 (14) of Bankruptcy Code. About PRM Realty Group Chicago, Illinois-based PRM Realty Group, LLC, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-30241) on Jan. 6, 2010. The Company's affiliates -- Peter R. Morris; Bon Secour Partners, LLC; PM Transportation, LLC; Rangeline Properties, LLC; PRS II, LLC; and Morris Radio Enterprises, LLC -- filed separate Chapter 11 bankruptcy petitions. Gerrit M. Pronske, Esq., at Pronske & Patel, P.C., assists PRM Realty in its bankruptcy effort. PRM Realty disclosed $34,054,818 in assets and $225,611,600 in liabilities as of the Petition Date. No committee of unsecured creditors has been appointed. QUALITY DISTRIBUTION: Files Form 10-Q, Posts $6.7MM Income in Q1 ---------------------------------------------------------------- Quality Distribution, Inc., reported net income of $6.70 million on $191.91 million of total operating revenues for the three months ended March 31 2012, compared with net income of $2.72 million on $177.91 million of total operating revenues for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $330.79 million in total assets, $398.38 million in total liabilities and a $67.58 million total shareholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/GsUIaD About Quality Distribution Quality Distribution, LLC, and its parent holding company, Quality Distribution, Inc., are headquartered in Tampa, Florida. The company is a transporter of bulk liquid and dry bulk chemicals. The company's 2010 revenues are approximately $686 million. Apollo Management, L.P., owns roughly 30% of the common stock of Quality Distribution, Inc. The Company reported net income of $23.43 million on $745.95 million of total operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $7.40 million on $686.59 million of total operating revenues during the prior year. Bankruptcy Warning In its Form 10-K for 2011, the Company noted that it had consolidated indebtedness and capital lease obligations, including current maturities, of $307.1 million as of Dec. 31, 2011. The Company must make regular payments under the New ABL Facility and its capital leases and semi-annual interest payments under its 2018 Notes. The New ABL Facility matures August 2016. However, the maturity date of the New ABL Facility may be accelerated if the Company defaults on its obligations. If the maturity of the New ABL Facility or such other debt is accelerated, the Company does not believe that it will have sufficient cash on hand to repay the New ABL Facility or such other debt or, unless conditions in the credit markets improve significantly, that the Company will be able to refinance the New ABL Facility or such other debt on acceptable terms, or at all. The failure to repay or refinance the New ABL Facility or such other debt at maturity will have a material adverse effect on the Company's business and financial condition, would cause substantial liquidity problems and may result in the bankruptcy of the Company or its subsidiaries. Any actual or potential bankruptcy or liquidity crisis may materially harm the Company's relationships with its customers, suppliers and independent affiliates. QUANTUM CORP: Incurs $11 Million Net Loss in Fiscal Q4 ------------------------------------------------------ Quantum Corp. reported a net loss of $11.05 million on $160.30 million of total revenue for the three months ended March 31, 2012, compared with a net loss of $1.65 million on $165.09 million of total revenue for the same period a year ago. The Company reported a net loss of $8.81 million on $652.37 million of total revenue for the 12 months ended March 31, 2012, comapred with net income of $4.54 million on $672.27 million of total revenue during the prior year. The Company's balance sheet at March 31, 2012, showed $395.34 million in total assets, $442.02 million in total liabilities and a $46.68 million stockholders' deficit. "The March quarter capped off a year of strong performance in key growth areas," said Jon Gacek, president and CEO of Quantum. "In fiscal 2012, we increased overall branded revenue for the second consecutive year, with record revenues from both branded DXi and branded StorNext sales. It was also a year of continued technology and product innovation, as we enhanced our entire DXi product line, introduced a series of new StorNext appliances and added new features to our Scalar tape libraries. Shortly after acquiring Pancetera Software last June, we also launched Quantum vmPRO virtual server protection solutions and laid the groundwork for our recently announced cloud-based data protection platform." A copy of the press release is available for free at: http://is.gd/P856nt About Quantum Corp. Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive. Quantum provides a comprehensive, integrated range of disk, tape, and software solutions supported by a world-class sales and service organization. * * * In January 2011, Moody's Investors Service upgraded Quantum Corporation's Corporate Family and Probability of Default ratings to B2 from B3 and revised the ratings on the senior secured debt obligations to Ba3 from B1. The rating outlook is positive. The upgrade of the CFR to B2 reflects Quantum's improved operating performance, which stems from strong customer adoption and growth of its higher margin branded disk-based systems and software products, which Moody's expects to continue in FY12. In March 2011, Standard & Poor's Ratings Services raised its corporate credit rating on storage manufacturer Quantum Corp. to 'B' from 'B-'. The outlook is stable. "The upgrade reflects that the company has posted four sequential quarters of sustained EBITDA generation, despite ongoing declines in its core tape business and the absence of an EMC licensing arrangement," said Standard & Poor's credit analyst Lucy Patricola. In addition, debt/EBITDA has been stable for the last four quarters at about 4x and reduced from 2009 levels, primarily reflecting application of free cash flow to debt reduction. R.E. LOANS: County of Sonoma Balks at Second Amended Plan Outline ----------------------------------------------------------------- The County of Sonoma asks the U.S. Bankruptcy Court for the Northern District of Texas to (i) sustain its objection to R.E. Loans, LLC, et al.'s Second Amended Disclosure Statement; (ii) find that the Second Amended Disclosure Statement still does not provide proper treatment for the County's Secured Tax Claim, and (iii) provide further relief as the Court deems just and proper. According to the County: -- the proposed treatment of the County's Secured Tax Claim in the Second Amended Disclosure satisfies some of the County's original objections, in that i) payments are now to be paid within five years from the Petition Date, and ii) interest will be paid. -- the Second Amended Disclosure still fails in that i)it does not fully disclose the interest, penalties, charges, and costs due now and in the future pursuant to non-bankruptcy (California) law, and ii) it does not identify the County's Secured Tax Claims as senior and having priority over all other liens on the properties securing the County's Secured Tax Claims. Second Amended Plan of Reorganization According to the Disclosure Statement dated April 26, 2012, the Plan is intended to maximize the recoveries of creditors by (1) re-vesting all assets of the Debtors, other than Causes of Action, in the Reorganized Debtors, (2) issuing the New Equity Interests in Reorganized R.E. Loans to the Liquidating Trust for the benefit of Creditors, and (3) transferring the Causes of Action to the Liquidating Trust, which will investigate and prosecute or settle the Causes of Action and distribute the proceeds thereof to the Beneficiaries. The Liquidating Trustee will be an independent third party approved by the Court. Under the Plan, among other things: 1. DIP Financing Claims -- Wells Fargo, as the Holder of the Allowed DIP Financing Claims, will be indefeasibly paid in full in cash on the Effective Date from the proceeds of the Wells Fargo Exit Facility. 2. Priority Tax Claims against all Debtors -- The Debtors do not believe that there are any Priority Tax Claims against the Debtors. 3. Wells Fargo R.E. Loans Secured Claims -- Wells Fargo, as the Holder of the Class 1 Claims, will be refinanced and deemed to be indefeasibly paid in full in cash on the Effective Date through the Wells Fargo Exit Facility. 4. Other Secured Claims -- The Debtors believe there are no Allowed Claims in Class 2. 5. Secured Tax Claims -- Allowed Class 3 Claims will retain their liens and will be paid interest only at the statutory rate on a quarterly basis following the Effective Date of the Plan until the five year anniversary of the Petition Date, at which time the entire principal balance will be all due and payable. 6. Priority Non-Tax Claims -- The Debtors believe that there are no Class 4 Claims. 7. General Unsecured Claims -- Each holder of an Allowed General Unsecured Claim will receive a Beneficial Interest, based on which it will receive from the Liquidating Trust a Pro Rata Distribution of the net Trust Proceeds. 8. Intercompany Claims (excluding Intercompany Notes) -- The Debtors believe there are no material Intercompany Claims (which do not include Intercompany Notes). 9. Subordinated Claims -- Class 7 subordinated Claims include securities fraud claims and other claims subject to subordination. Because the Claims will be subordinate to the Noteholders' Claims regardless of the treatment of the Noteholders' Claims, and the assets of the Reorganized Debtors and the Liquidating Trust will not be sufficient to pay the Noteholders' Claims in full, Class 7 will receive nothing under the Plan. 10. Claims of Noteholders and DSI (unless DSI must be separately classified) -- If Class 8 votes to accept the Plan, the Plan Compromise will be implemented. Subject to the Potential Recovery Remedies, the Holders of Allowed Claims in Class 8 will receive Beneficial Interests in the Liquidating Trust, entitling them to a Pro Rata Distribution of the net Trust Proceeds, together with Class 5 (General Unsecured Claims), in exchange for the waiver of the Liens granted pursuant to the Exchange Agreement Security Agreement. The Liquidating Trust will have the right to seek to recover all payments made to Holders of Class 8 Claims after the Exchange Agreement. A full-text copy of the Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/RE_LOANS_ds_secondamendment.pdf About R.E. Loans R.E. Loans, LLC, was, for many years, in the business of providing financing to home builders and developers of real property. R.E. Future LLC and Capital Salvage own the real property obtained following foreclosure proceedings initiated by R.E. Loans against its borrowers. R.E. Loans is the sole shareholder of Capital Salvage and the sole member of R.E. Future. B-4 Partners LLC is the sole member of R.E. Loans. As a result of the multiple defaults by R.E. Loans' borrowers, R.E. Loans has transitioned from being a lender to becoming a property management company. Lafayette, California-based R.E. Loans, R.E. Future and Capital Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge Barbara J. Houser presides over the case. Stutman, Treister & Glatt Professional Corporation, in Los Angeles, and Gardere, Wynne Sewell LLP, in Dallas, represent the Debtors as counsel. James A. Weissenborn at Mackinac serves as R.E. Loans' chief restructuring officer. The Debtors tapped Hines Smith Carder as their litigation and outside general counsel. The Debtors tapped Alixpartners, LLP as noticing agent, and Latham & Watkins LLP as special counsel in real estate matters. R.E. Loans disclosed $713.6 million in assets and $886.0 million in liabilities as of the Chapter 11 filing. Akin Gump Strauss Hauer & Feld LLP, in Dallas, represents the Official Committee of Note Holders as counsel. RANCHER ENERGY: John Works Says Business Plan "Too Vague" --------------------------------------------------------- John Works objected to Rancher Energy Corp.'s second amended disclosure statement. John Works said there are factual errors to the Plan submitted by the Debtor specifically when the Debtor said that "to confirm the Plan, the Court must [determine] that the Plan provides to each member of each impaired class of Allowed Claims a recovery at least equal to the distribution that such member would receive if the Debtor were liquidated under Chapter 7." The Plan then indicated "The Debtor believes the result under the Plan is slightly better [than if the Debtor were liquidated under Chapter 7.] The Disclosure Statement also stated "the Plan also proposes the possibility of the Debtor's resumption of business in some form." The Plan stated that "the focus of the Debtor's activities would be the purchase of the non-operating interests in producing oil & gas properties in the Rocky Mountain area, with the decision to purchase such interest depending on the economies of each project. In addition to the foregoing, the Debtor may seek strategic transactions with other existing public and private companies to raise additional capital and invest other oil & gas enterprises." John Works said the so-called business plan is too vague and uncertain to give confidence to any creditor or shareholder that the Debtor can actually continue as a viable going-concern -- particularly with its lack of staff and dismal track record. About Rancher Energy Denver, Colorado-based Rancher Energy Corp. (OTC BB: RNCHQ) -- http://www.rancherenergy.com/-- is an independent energy company that explores for and develops produces, and markets oil and gas in North America. Through March 2011, the Company operated four oil fields in the Powder River Basin, Wyoming. The Company was formerly known as Metalex Resources, Inc., and changed its name to Rancher Energy Corp. in 2006. Rancher Energy was incorporated in the State of Nevada on Feb. 4, 2004. Rancher Energy filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No. 09-32943) on Oct. 28, 2009. In its petition, the Company estimated assets and debts of between $10 million and $50 million each. The Debtor is represented by Michael J. Guyerson, Esq. and Christian C. Onsager, Esq., at Onsager, Staelin & Guyerson, LLC. The Company sold substantially all of its assets effective March 1, 2011, to Linc Energy Petroleum (Wyoming), Inc. in exchange for $20 million cash plus other potential future consideration up to $825,000, and subject to other adjustments. The deal was approved Feb. 24, 2011. As reported in the Troubled Company Reporter on March 25, 2011, the Company delivered to the Bankruptcy Court a first amended Chapter 11 plan of reorganization, and first amended disclosure statement explaining that plan. RAYTHEON COMPANY: Former Unit Gets $3.5MM Judgment Overturned ------------------------------------------------------------- Steven Melendez at Bankruptcy Law360 reports that a Texas appeals court has overturned Boccard USA Corp.'s $3.5 million jury verdict against Raytheon Co. over a contract dispute involving an African methanol plant, ruling Thursday that only a former Raytheon subsidiary's bankruptcy estate had standing to sue Raytheon as the subsidiary's alter ego. According to Law360, the court ruled that under the law in Delaware and Pennsylvania, where Raytheon and its former subsidiary United Engineers International Inc. are incorporated, an insolvent company can pierce its own corporate veil to access the assets of its parent. Headquartered in Waltham, Massachusetts, Raytheon Company is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world. REAL MEX: Has Until May 31 to Decide on the Kilroy, et al., Leases ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approved a stipulation extending until May 31, 2012, Real Mex Restaurants, Inc., et al.'s time to assume or reject the Kilroy Lease. In a separate order, the Court also approved stipulations extending until May 31, the Debtors' time to assume or reject the GGP Lease, the Westgate Lease, and the Woodfield Lease. About Real Mex Based in Cypress, California, Real Mex Restaurants, Inc., owns and operates restaurants, primarily through its major subsidiaries El Torito Restaurants, Inc., Chevys Restaurants, LLC, and Acapulco Restaurants, Inc. It has 178 restaurants, with 149 in California. There are also 30 franchised locations. It acquired Chevys Inc. for $90 million through confirmation of Chevy's Chapter 11 plan in 2004. Real Mex Restaurants and 16 of its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-13122 to 11- 13138) on Oct. 4, 2011. Judge Brendan Linehan Shannon oversees the case. Judge Peter Walsh was initially assigned to the case. The Debtors are represented by Mark Shinderman, Esq., Fred Neufeld, Esq., and Haig M. Maghakian, Esq., at Milbank, Tweed, Hadley & McCloy LLP; and Laura Davis Jones, Esq., and Curtis A. Helm, Esq., at Pachulski Stang Ziehl & Jones LLP as counsel. The Debtors' financial advisors are Imperial Capital, LLC. The Debtors' claims, noticing, soliciting and balloting agent is Epiq Bankruptcy Solutions, LLC. Assets are $272.2 million while debt totals $250 million, according to the Chapter 11 petition. The petitions were signed by Richard P. Dutkiewiez, chief financial officer and executive vice president. Counsel to GE Capital Corp., the DIP Agent and the Prepetition First Lien Secured Agent, are Jeffrey G. Moran, Esq., and Peter P. Knight, Esq., at Latham & Watkins LLP; and Kurt F. Gwynne, Esq., at Reed Smith LLP as counsel. Counsel to the Prepetition Secured Second Lien Trustee are Mark F. Hebbeln, Esq., and Harold L. Kaplan, Esq., at Foley & Lardner LLP. Counsel to the Majority Prepetition Second Lien Secured Noteholders are Adam C. Harris, Esq., and David M. Hillman, Esq., at Schulte Roth & Zabel LLP; and Russell C. Silberglied, Esq., at Richards Layton & Finger. Z Capital Management LLC, which holds nearly 70% of the Opco term loan, is represented by Derek C. Abbott, Esq., and Chad A. Fights, Esq., at Morris Nichols Arsht & Tunnell LLP; and Lee R. Bogdanoff, Esq., and Whitman L. Holt, Esq., at Klee Tuchin Bogdanoff & Stern LLP. RECKART EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Reckart Equipment Co., Inc. dba Reckart Equipment Co P.O. Box 216 Beverly, WV 26253 Bankruptcy Case No.: 12-00670 Chapter 11 Petition Date: May 8, 2012 Court: U.S. Bankruptcy Court Northern District of West Virginia (Elkins) Judge: Patrick M. Flatley Debtor's Counsel: A. Carter Magee, Jr., Esq. MAGEE GOLDSTEIN LASKY AND SAYERS, PC P.O. Box 404 Roanoke, VA 24003 Tel: (540) 343-9800 Fax: (540) 343-9898 E-mail: cmagee@mglspc.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 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/wvnb12-00670.pdf The petition was signed by Darrell E. Reckart, president. Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- DSTS, LLC 12-00671 Reckart, LLC 12-00672 RECYCLED CONCRETE: Case Summary & 5 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Recycled Concrete Materials LLC P.O. Box 26125 New Orleans, LA 70186 Bankruptcy Case No.: 12-11418 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court Eastern District of Louisiana (New Orleans) Debtor's Counsel: Edwin M. Shorty, Jr., Esq. SHORTY, DOOLEY & HALL, LLC 650 Poydras Street, Suite 2110 New Orleans, LA 70130 Tel: (504) 949-2545 Fax: (504) 949-2547 E-mail: EShorty@sdhlawllc.com Scheduled Assets: $1,200,000 Scheduled Liabilities: $137,000 A copy of the Company's list of its five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/laeb12-11418.pdf The petition was signed by Clifford Smith, member manager. REDDY ICE: Unsec. Creditors Object to Official Equity Committee --------------------------------------------------------------- BankruptcyData.com reports that Reddy Ice Holdings' official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to the ad hoc shareholders' motion to appoint an official committee of equity interest holders. The committee asserts, "The Motion is a misguided and unjustified attempt to saddle the estates with the Ad Hoc Group's expenses incurred in contesting confirmation of the Plan, and potentially delaying the Debtors' emergence from bankruptcy, to the detriment of all of the Debtors' constituencies." The Debtors filed an objection to motion, explaining, "...the Ad Hoc Shareholder Group cannot show that this case is the 'rare exception' warranting the appointment of an Equity Committee. Instead, the Debtors will demonstrate that there is, unfortunately, no equity value in the Reddy Holdings estate to justify the costs of an Equity Committee and that the interests of the current holders of Reddy Holdings' public equity (the 'Shareholders') have been and will continue to be adequately represented in these Chapter 11 cases." The ad hoc group of first lien and second lien noteholders also filed an objection to the same motion. 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. A hearing to approve the Disclosure Statement and confirm the Plan has been set for May 18, 2012. Judge Stacey G. Jernigan presides over the case. Reddy Ice's 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. RESIDENTIAL CAPITAL: Said to File for Bankruptcy Sunday or Monday ----------------------------------------------------------------- Andrew R. Johnson, writing for The Wall Street Journal, reports a person familiar with the matter said Residential Capital -- Ally Financial Inc.'s mortgage subsidiary -- is expected to file for bankruptcy late Sunday or early Monday morning. The source told WSJ Rescap's board was scheduled to meet late Sunday to vote on the move. WSJ says a ResCap bankruptcy could pave the way for Ally to revive plans for an initial public offering, which were halted last year as mortgage woes weighed on the company, delaying efforts to pay back a government bailout of more than $17 billion. The Wall Street Journal reported last week Fortress Investment Group LLC is expected to make a $2.4 billion opening bid for ResCap assets in a court-supervised auction as part of the unit's filing. Sources familiar with the matter also told WSJ Ally is likely to make a roughly $1.6 billion bid for a portfolio of ResCap loans, though that amount could change. The report relates ResCap has secured a so-called debtor-in- possession loan of about $1.45 billion from Barclays PLC, which would allow it to keep operating under bankruptcy protection while it works to sell assets. By severing itself from ResCap, Ally hopes to focus on its core auto-lending and online banking business. About Ally Financial & Rescap 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. Residential Capital is Ally's mortgage subsidiary. 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 reported a net loss of $157 million in 2011, compared with net income of $1.07 billion in 2010. Net income was $310 million for the three months ended March 31, 2012. Ally'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. Sources told Reuters in March 2012 that White & Case, which announced in January it represents some ResCap secured bondholders, is currently representing investors who hold more than 45% of junior secured notes at ResCap. The sources also said billionaire Warren Buffett's Berkshire Hathaway has another 45% of the junior secured notes and also holds a significant portion of ResCap unsecured notes that mature in May 2012. The U.S. Treasury owns a 73.8% stake in Ally after a bailout during the financial crisis in 2008, while GM and its trust have 9.9% and Cerberus Capital Management owns 8.9%. * * * 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. RIDGEVIEWTEL LLC: Plans to Emerge From Bankruptcy Next Few Months ----------------------------------------------------------------- Beth Potter at Boulder County Business Report relates Nicolae Toderica, president of RidgeviewTel LLC, said the Company plans to emerge from Chapter 11 bankruptcy within the next few months. According to the report, Mr. Toderica said RidgeviewTel has been struggling since being hit by the bankruptcy of telecommunications customer FairPoint Communications Inc. RidgeviewTel had a $20 million contract with the Charlotte, North Carolina-based firm. The report relates unfulfilled promises from telecommunications company Cincinnati Bell in Ohio also caused problems for RidgeviewTel. The report relates Mr. Toderica said RidgeviewTel expects to be back on even footing by late summer, and is losing less money today than it did nine months ago. The company also is hoping to find new investors, he said. Based in Longmont, Colorado, RidgeviewTel LLC filed for Chapter 11 protection (Bankr. D. Col. Case No. 12-18239) on April 24, 2012. Judge Howard R Tallman presides over the case. Cynthia T. Kennedy, Esq., at Kennedy Law Firm, represents the Debtor. The Debtor listed assets of less than $50,000, and debts of between $1 million and $10 million. RIVER ISLAND: First Amended Reorganization Plan Confirmed --------------------------------------------------------- Judge Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida confirmed the First Amended Chapter 11 Plan of Reorganization filed by River Island Farms, Inc. The Court will conduct a post confirmation status conference on July 17, 2012 at 9:30 a.m., to determine (i) whether the Effective Date has occurred and the Plan has been substantially consummated, and (ii) whether River has complied with the provisions of this Order. Secured creditor Gibraltar Private Bank & Trust Company has earlier filed an objection to the confirmation of the First Amended Plan. Thomas R. Lehman, Esq., at Levine Kellogg Lehman Schneider + Grossman LLP, representing Gibraltar Private Bank, told the Court that the Debtor's Plan is premised on its insider creditors' hopes that the Treasure Coast real estate market will improve over the next year to allow the Debtor to eventually sell its remaining home subject to Gibraltar's mortgage, the 2001 S.E. St. Lucie Property, for more than it can today. Mr. Lehman noted the Debtor has not had any meaningful sales activity concerning the 2001 S.E. St. Lucie Property since it began marketing the Property in 2008. Notwithstanding, without any demonstrated ability to fund the Plan, the Debtor proposes to delay all its repayment obligations to Gibraltar until July 2012, and also delay Gibraltar's foreclosure remedies against the Property until May 2013 in return for 10 monthly, 6% interest payments of $29,730.84. Meanwhile, the Plan proposes to fully repay $49,425 in unsecured claims by July 2012 and the claim of the only other secured creditor, Eurotrade, by December 2012. The Debtor's bad faith attempt to buy votes in favor of the Plan is contrary to the "cramdown" requirements governing treatment of Gibraltar's Secured Claim. Mr. Lehman believes the Debtor cannot meet its burden to demonstrate that the Plan should be confirmed. The evidence previously admitted in this case demonstrates that Plan is not feasible, it does not provide for adequate implementation of the Debtor's business plan, and the Plan unfairly prejudices Gibraltar's rights against the Debtor's 2001 S.E. St. Lucie Property. Consequently, the Court should deny confirmation and dismiss the Debtor's bankruptcy case. Gibralta Private Bank is represented by: Thomas R. Lehman, Esq. Jennifar M. Hill, Esq. LEVINE KELLOGG LEHMAN SCHNEIDER + GROSSMAN LLP 201 South Biscayne Blvd. Miami, Florida 33131-4301 Tel: (305) 403-8788 Fax: (305) 403-8789 As reported in the Troubled Company Reporter on Feb. 1, 2012, the Plan will be funded in its entirety by the Debtor's principal (Sid Corrie, Jr.) through available funds, capital contributions and future revenue. The Debtor's business plan is to aggressively sell the 2001 SE St. Lucie Boulevard property located in Stuart, Florida, to satisfy all indebtedness owed to Gibraltar Private Bank and Trust Company and satisfy the indebtedness owed Eurotrade Short Term Loans, Ltd. by the contribution of capital by the shareholder. The Plan divides the respective creditors and equity security interests of the Debtor into six classes: Class 1 - General Unsecured Claims Class 2 - Secured claim of Gibraltar Class 3 - Secured claim of Eurotrade Class 4 - Unsecured claim of Corrie Development Corp. Class 5 - Unsecured claim of Sid Corrie, Jr. Class 6 - Common stock owned by Sid Corrie, Jr. The Plan proposes to pay unsecured creditors 100% of their claims with an initial payment of 10% of the allowed amount of each claim 10 days after the Effective Date after Confirmation of the Plan. The balance is to be paid in 2 monthly installments thereafter, one payment 30 days after the Effective Date and the last payment 60 days after the Effective Date, until the claims are paid in full. The Reorganized Debtor proposes full payment to Gibraltar the allowed amount of its claim against the Debtor, including such interest as allowed by the Court and fees, costs and expenses as may be allowed by the Court. Full payment is to be made on or before one year from the Effective Date of the Plan. Partial payment on account of Gibraltar's allowed claim will be made when there is a sale or refinance of any property securing the indebtedness owed Gibraltar that occurs prior to that date. Eurotrade will retain its lien on the Collateral as defined in the Stipulation for Adequate Protection dated Nov. 17, 2011, which was approved by court order dated Nov. 18, 2011. Provided that, and for so long as, there is no default or event of default under Section IV C of the Plan or the Pre-Petition Loan Documents, the maturity date of the loan is to be extended to Aug. 26, 2012, at which time Reorganized Debtor will pay all principal, interest accrued from Aug. 1, 2012, through Aug. 26, 2012, and any other charges due to the holder of the Class III Secured Claim under the Pre-Petition Loan Documents. A copy of the First Amended Disclosure Statement is available for free at http://bankrupt.com/misc/riverisland.doc167.pdf About River Island Farms Fort Lauderdale, Florida-based River Island Farms, Inc., was initially formed as a single asset entity that acquired an 80% interest in 55 acres of developable property opposite Blackhawk in Danville, California. On June 30, 2004, the Company sold the 55 acre property to Shapell Industries. The sale was structured as an Internal Revenue Code Section 1031 exchange. Due to the requirements that River Island purchase property within a specified time period in order to take advantage of the IRS Code provision, River Island purchased property in Ft. Lauderdale and Stuart, Florida consisting of 2328 Aqua Vista Blvd., Ft. Lauderdale, Florida; 2521 Mercedes Drive, Ft. Lauderdale, Florida; 2001 SE St. Lucie Blvd., Stuart, Florida; and 1735 SE St. Lucie Blvd., Stuart, Florida. The Mercedes Drive residence was sold in June 2011. The other remaining properties are being actively marketed. The Company filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 11-15410) on Feb. 28, 2011. Martin L. Sandler, Esq., at Sandler & Sandler, in Miami, Fla., serves as the Debtor's bankruptcy counsel. The Debtor disclosed $23,974,222 in assets and $14,467,808 in liabilities as of the Chapter 11 filing. The bankruptcy case was commenced as a result of a pending foreclosure sale regarding one of the properties owned by the Debtor. ROBERTS HOTELS: Atlanta and Shreveport Hotels in Chapter 11 ----------------------------------------------------------- Amir Kurtovic at St. Louis Business Journal reports that Michael and Steven Roberts, the brothers behind the diversified Roberts Cos., threw two more of their hotels into Chapter 11 bankruptcy. The hotels, both under the Clarion flag, are located in Atlanta and Shreveport, La. Each listed between $1 million and $10 million in assets and between $10 million and $50 million in liabilities. In each case the hotels listed as having between 50 and 99 creditors. According to the report, the bankruptcies come as a responses to a $34 million lawsuit filed by Bank of America against the Roberts brothers in April. The lawsuit alleges the brothers defaulted on a $43 million loan issued in 2007 to renovate hotels the Roberts brothers acquired outside St. Louis. St. Louis Business Journal notes Michael Roberts said The Roberts Cos. would strategically place hotels affected by that lawsuit into bankruptcy. "The purpose of the Chapter 11 is to stay the activities of Bank of America and their pursuits and hold us in default," the report quotes Mr. Roberts as saying. "We don't know why they're doing this in the first place. We've been timely on our bank payments to them." According to the report, a majority of the creditors are not local companies. The exceptions are law firm Armstrong Teasdale, which is listed as a creditor in both bankruptcies; the Muensk Tax Co., listed as a creditor in the Atlanta hotel bankruptcy; and accounting firm Melman, Alton & Co., a creditor to the Shreveport hotel. The Roberts Cos. also placed a Tampa, Fla.-based hotel into Chapter 11 bankruptcy May 7. About Roberts Hotels Roberts Hotels Spartanburg, LLC, filed a bare-bones Chapter 11 petition (Bankr. E.D. Mo. Case No. 12-43756) in its hometown in St. Louis, Missouri, on April 19, 2012. The Debtor estimated assets of up to $50 million and debts of up to $10 million. Roberts Hotels Spartanburg owns the Clarion Hotel, formerly named Radisson Hotel & Suites Spartanburg. The Debtor is represented by A. Thomas DeWoskin, Esq., at Danna McKitrick, PC, in St. Louis. Roberts Hotels Houston LLC, dba Holiday Inn Houston and Holiday Inn Southwest, filed for Chapter 11 bankruptcy (Bankr. E.D. Mo. Case No. 12-43590) on April 16, 2012. Judge Charles E. Rendlen III presides over the case. The Danna McKitrick firm also serves as counsel. Roberts Hotels Houston estimated under $50,000 in assets and $10 million to $50 million in debts. The petition was signed by Michael W. Kirtley, chief operating officer. On Dec. 15, 2011, Roberts Hotels Jackson LLC, which owns Roberts Walthall Hotel, filed for Chapter 11 protection (Bankr. S.D. Miss. Case No. 11-04341), estimating both assets and debts of between $1 million and $10 million. John D. Moore, P.A., represents the Debtor. ROBERTS HOTELS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Roberts Hotels Atlanta, LLC dba Crowne Plaza Marietta dba Crowne Plaza Atlanta dba The Roberts Crowne Plaza dba Clarion Hotel Atlanta dba Wyndham Garden Hotel 1408 N. Kingshighway, Suite 300 Saint Louis, MO 63113 Bankruptcy Case No.: 12-44493 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court Eastern District of Missouri (St. Louis) Judge: Kathy A. Surratt-States Debtor's Counsel: A. Thomas DeWoskin, Esq. DANNA MCKITRICK, PC 7701 Forsyth, Suite 800 St. Louis, MO 63105 Tel: (314) 726-1000 E-mail: tdewoskin@dmfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Mike Kirtley, chief operating officer. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Roberts Hotels Dallas, LLC N/A N/A Roberts Hotels Houston, LLC 12-43590 04/16/12 Roberts Hotels Spartanburg, LLC 12-43756 04/01/12 Roberts Hotels Tampa, LLC 12-44391 05/07/12 Roberts Hotels Shreveport, LLC 12-44495 05/09/12 Assets: $1,000,001 to $10,000,000 Debts: $10,000,001 to $50,000,000 ROOFING SUPPLY: Moody's Confirms 'B2' CFR/PDR; Outlook Stable ------------------------------------------------------------- Moody's Investors Service assigned the following ratings to CDRR MS, Inc., which will become Roofing Supply Group, LLC ("RSG") upon the closing of the acquisition of RSG by Clayton, Dubilier & Rice ("CD&R"): Corporate Family and Probability of Default Ratings -- B2; proposed senior secured term loan due 2019 -- B2; proposed senior unsecured notes due 2020 -- B3. The outlook is stable. In assigning these ratings, Moody's effectively confirmed RSG's existing B2 Corporate Family and Probability of Default ratings, thereby concluding the review initiated April 24, 2012. The term loan and notes are being issued to finance the purchase of RSG by Clayton, Dubilier & Rice's ("CD&R") from the current equity sponsor, The Sterling Group, for an aggregate price of approximately $685 million, including an equity contribution of about $210 million. RSG's existing senior secured notes will be redeemed upon closing of the transaction and the rating will be withdrawn. The following ratings were affected by this rating action: - Corporate Family Rating confirmed at B2; - Probability of Default Rating confirmed at B2; - Proposed $290.0 million Senior Secured Term Loan B due 2019 assigned a rating of B2 (LGD4, 51%) - Proposed $200.0 million Senior Unsecured Notes due 2020 assigned a rating of B3 (LGD5, 73%) Ratings Rationale The confirmation of RSG's ratings primarily reflects Moody's expectations that company will have a good liquidity profile. Moody's anticipates that RSG will generate consistent free cash flow and have ample availability under the proposed revolving credit facility. Also, upon closing of the leveraged buyout of the company, it will have extended each of its long-term debt maturities. In addition, RSG maintains healthy operating margins in the high-single digits. Despite the addition of more debt to the capital structure, albeit at a lower average interest rate, the company's pro forma adjusted (EBITDA -- Capex) to adjusted interest expense, though lower, remains within the range expected for the B2 rating category. The rating also reflects Moody's expectations for modest improvement in the roofing sector during 2012, which will allow the company to maintain or slightly improve its current operating performance. Moody's also believes RSG faces no substantial threat of significant deterioration in operating performance as Moody's views roofing as one of the only pockets of strength within the building products sector. However, RSG will have a highly leveraged capital structure. Adjusted debt to EBITDA will increase by almost two and a half turns to approximately 6.5x as a result of the proposed transaction. Although this is a significant constraint to the rating, Moody's believes that RSG's commitment to reducing balance sheet debt, its good liquidity profile and Moody's expectations for gradual improvement in operating performance free cash flow generation provide some offset to its levered capital structure. The B2 rating assigned to the senior secured term loan due 2019 is the same as the corporate family rating, as the term loan will represent the preponderance of debt in RSG's capital structure. The B3 rating assigned to the senior unsecured notes due 2020 reflects the notes' position as the junior-most debt obligation in the new capital structure. The stable outlook is supported by Moody's belief that RSG's will continued to apply free cash flow to debt reduction, as well as Moody's expectations for a slow and steady recovery in RSG's end markets, and hence, modest improvement in the company's key credit metrics. Moody's does not expect positive rating movement in RSG's ratings over the near term primarily due to the company's elevated debt leverage. However, if the company were to reduce its term loan balance using free cash flow and achieve debt to EBITDA below 5.0x, the ratings may be considered for an upgrade. The ratings or outlook may be revised downward if the company abandons its commitment to debt reduction and adjusted debt to EBITDA is sustained above 6.0x or if adjusted (EBITDA-Capex) to adjusted interest expense falls below 1.5x. Negative rating actions may also be taken if RSG's liquidity profile deteriorates. The principal methodology used in rating RSG was the Global Distribution and Supply Chain Services Industry Methodology, published in November 2011. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. RSG is headquartered in Dallas, Texas, and is one of the largest wholesale distributors by revenues of roofing supplies and related building materials in the United States. RSG provides products directly from the manufacturer to roofing contractors, home builders, retailers and other end users. Sterling Group, LP, through its respective affiliates, is currently the primary owner of RSG, but ownership will be transferred to Clayton Dubilier & Rice ("CD&R") following the close of the proposed transaction. Revenues for the fiscal year ending December 31, 2011 totaled about $0.9 billion. RYLAND GROUP: Moody's Rates $150MM Convertible Senior Notes 'B1' ---------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the proposed $150 million convertible senior notes due 2018 of The Ryland Group, Inc., proceeds of which will be used for general corporate purposes including repayment or repurchase of outstanding indebtedness. In the same rating action, Moody's affirmed the company's B1 corporate family and probability of default ratings, B1 rating for its existing senior unsecured notes, and SGL-2 speculative grade liquidity assessment. The rating outlook is stable. The following rating actions were taken: Proposed $150 million convertible senior notes due 2018 assigned B1 (LGD4, 52%); Corporate family rating affirmed at B1; Probability of default rating affirmed at B1; Existing senior unsecured notes affirmed at B1 (LGD4, 52%); Speculative grade liquidity assessment affirmed at SGL-2; Ratings Rationale The B1 corporate family reflects Moody's view that Ryland's key credit metrics will improve slightly over the next 12 to 18 months in line with the positive developments emerging in the homebuilding industry, including improving orders and closings as well as pricing stability in certain key markets. Despite this improvement, the key credit metrics will remain weak in the intermediate term as the homebuilding industry remains pressured by numerous negative factors, including high unemployment, weak consumer confidence, elevated foreclosure activity, and declining overall average home prices. In addition, the company's debt leverage position is elevated, with pro forma homebuilding debt to capitalization increasing to 68% from 64% at March 31, 2012, although repayment of the company's 2013 notes will bring this ratio back to 64%. Additionally, in Moody's view Ryland will continue to generate negative cash flow in 2012 as it replenishes its inventory position. At the same time, Ryland's operating losses are narrowing and the company is approaching profitability, which Moody's believes may occur in the next 12 to 18 months. The rating also considers Ryland's solid liquidity position, bolstered by its unrestricted cash and investments position of $468 million at March 31, 2012, absence of any bank debt covenants with which to comply, and limited off-balance sheet exposure as well as its disciplined operating philosophy. The stable rating outlook reflects Moody's expectation that Ryland will maintain capital structure discipline even as it pursues emerging growth opportunities. The ratings could be lowered if the company were to continue to underperform its peer group, if adjusted debt leverage were to exceed 65% on a sustained basis, if liquidity weakens such that cash and equivalents fall below $300 million without a backup revolver in place, if pre-impairment losses accelerate, and/or if impairment charges begin spiking anew. Upward pressure on the rating is unlikely in the intermediate term. However, over a longer time horizon, the ratings could be considered for an upgrade when the company restores its profitability and improves debt leverage to below 50% while maintaining strong liquidity. The principal methodology used in rating Ryland was the Global Homebuilding Industry Methodology published in March 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Founded in 1967 and headquartered in Calabasas, California, The Ryland Group, Inc. is a mid-sized homebuilder with homebuilding revenues and consolidated net income for the last twelve months ended March 31, 2012 of $904 million and ($36) million, respectively. RYLAND GROUP: S&P Gives 'BB-' Rating on $150-Mil. Senior Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating and '4' recovery rating to The Ryland Group Inc.'s (Ryland's) proposed $150 million convertible senior notes due 2018. The company could upsize the offering to $172.5 million at the underwriter's option. "Our '4' recovery rating indicates our expectation for an average (30%-50%) recovery in the event of default," S&P said. "The notes will be guaranteed, jointly and severally, by substantially all of Ryland's direct and indirect wholly-owned homebuilding subsidiaries. Ryland's newly issued notes will rank equally with its $824 million of existing senior unsecured notes. The company intends to use the net proceeds for general corporate purchases. The company's next debt maturity is in June 2013 when $167 million 6.9% senior notes mature. We believe the company will ultimately use the additional liquidity raised through this offering to repay its 2013 debt maturity," S&P said. "Our ratings on Ryland Group Inc. reflect an aggressive financial risk profile, which reflects EBITDA-based metrics that remain weak for the rating. We view Ryland's business risk profile to be fair because of the company's less-capital-intensive land strategies that result in a shorter years supply and predominantly developed supply of land. Profitability, however, has remained elusive. Community count growth should help volume growth, and Ryland could achieve modest profitability in 2012," S&P said. "Our stable outlook reflects our expectation that Ryland's community count growth and modest margin expansion will result in steady improvement and a return to modest profitability in 2012. Ryland's strong cash position, relative to its near-term capital needs, is a critical ratings support as well. We would lower ratings if operating results do not improve as expected and if key credit metrics are not on an improving trajectory, such that we believe adjusted debt-to-EBITDA will reach 6x or lower in 2013. We would also lower the rating if liquidity weakens significantly, which could occur if Ryland does not refinance its 2013 maturity and it cannot obtain a credit facility to provide additional liquidity. An upgrade is unlikely over the next 12 months due to our expectation that Ryland's leverage will remain elevated," S&P said. Ratings List The Ryland Group Inc. Corporate credit rating BB-/Stable New Rating The Ryland Group. Inc. $150 million convert. notes due 2018 BB- Recovery rating 4 RYLAND GROUP: Reports 431 Net Orders for April ---------------------------------------------- The Ryland Group, Inc., announced that net orders from continuing operations for April 2012 were 431, representing a 37% increase over April of 2011. "We are pleased that the sales momentum we experienced in the first quarter of 2012 carried over into April," said Ryland Group CEO Larry Nicholson. The Ryland Group will present at the JP Morgan Homebuilding and Building Products Conference in New York on Tuesday, May 15. 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 March 31, 2012, showed $1.54 billion in total assets, $1.06 billion in total liabilities, and $479.91 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. RYLAND GROUP: BlackRock Discloses 10.2% Equity Stake ---------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that, as of April 30, 2012, it beneficially owns 4,549,176 shares of common stock of The Ryland Group Inc. representing 10.24% of the shares outstanding. BlackRock previously reported beneficial ownership of 4,166,974 common shares or a 9.38% equity stake as of Dec. 30, 2011. A copy of the amended filing is available for free at: http://is.gd/v9BXvY 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 March 31, 2012, showed $1.54 billion in total assets, $1.06 billion in total liabilities, and $479.91 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. SAGAMORE PARTNERS: Lender Say Exit Plan Unconfirmable ----------------------------------------------------- JPMCC 2006-LDP7 Miami Beach Lodging LLC, secured creditor and first-mortgage holder of Sagamore Partners Ltd., objects to the disclosure statement explaining the Debtor's bankruptcy exit plan, saying the plan outline is confusing, misleading, and internally inconsistent. Sagamore Partners filed a disclosure statement in support of its reorganization plan with the Bankruptcy Court. The Plan is a plan of reinstatement and reorganization. Prior to the Effective Date, the Debtor will (i) continue to collect its income and operate the Property resulting in the Net Sales Proceeds, and (ii) may prosecute Third Party Litigation claims, if any. Further, Martin W. Taplin will deposit into a Trust Account of Meland Russin & Budwick, P.A., the sum of $5,000,000, to be used together with the DIP Lockbox Account funds in an amount in excess of $3,000,000, totaling at least $8,000,000, creating the Distribution Fund. The classification and treatment of claims under the plan are: A. Allowed Administrative Claims, including professional and U.S. Trustee fees, will receive, on account of such claims, cash in the amount of the claims (i) on the later of the Effective date or within 14 days any such claims are detennined to be Allowed or (ii) at the option of the Debtor, in accordance with the ordinary business terms of payment of these claims. B. Class 1 (Secured Claim of JPMCC 2006-LDP7 Miami Beach Lodging LLC) will be determined by a final, non-appealable order in this Bankruptcy Proceeding or the Adversary Proceeding. The Secured Lender filed Claim No. 20-2 in the amount of $46,593,593 to which the Debtor objects. The Debtor will reinstate the Loan on the Effective Date. Pending the resolution of the Debtor's objection to the other amounts sought in the Secured Lender's claim brought in the Adversary Proceeding, the Debtor will reserve $1,500,000 in the Distribution Fund. If the Order adjudicating the Debtor's objection to the Secured Lender's claim requires the Debtor to pay the Secured Lender any further amounts, the Debtor will pay the Claim Balance to the Secured Lender from the reserved $1,500,000 held in the Distribution Fund. In the event the Claim Balance is less than $1,500,000, the overage will revest to the Reorganized Debtor. C. Class 2 (Secured Claims of LodgeNet Entertainment Corp. and IPFS Corporation fdba Imperial Credit Corporation) will be paid pursuant to the terms of the respective original Agreements and will continue to be paid by the Debtor from its income. D. Class 3 (Non-Insider General Unsecured Claims) be paid from available Cash, in full, including post-petition interest as of the Effective Date. General unsecured claims are estimated to total $1,236,000. General unsecured claims will be paid within 3 years payable in quarterly distributions commencing 30 days after the Effective Date. E. Class 4 (Insider General Unsecured Claims) will be paid from available cash. Class 4 Claims will not be paid until all Allowed Class 3 Claims are paid in full. These claims are estimated total $18,054,000. F. Class 5 (Equity) will revest in the Reorganized Debtor on the Effective Date and will retain their equity interests. A full-text copy of the disclosure statement and reorganization plan is available for free at: http://bankrupt.com/misc/SAGAMORE_PARTNERS_ds.pdf Representing JPMCC 2006-LDP7 Miami Beach Lodging, Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, tells the Court the disclosure statement omits basic and fundamental information necessary for creditors to evaluate the Plan. The disclosures that are provided by Sagamore are incomplete and lack cogent explanation and support. The limited financial information attached to the Disclosure Statement is in a confusing, non- standard format that neglects to reflect, among other things, the payment of administrative expenses or the approximately $4.7 million in Note Rate interest that even Sagamore acknowledges must be paid on the Effective Date in order to reinstate the Loan. Mr. Baena contends that the Plan is fatally flawed. He notes the Debtor's sojourn into bankruptcy had the effect of staying ongoing foreclosure litigation in state court that had been pending for more than two years, that was one week away from summary judgment, and, failing that, was set for trial a few weeks thereafter. Mr. Baena says Sagamore filed the chapter 11 to pursue in adversary proceeding 11-3122-AJC substantially the same claims that it had raised by counterclaim and crossclaim in the state court seeking to reduce, avoid, or subordinate JPMCC's valid and enforceable first priority mortgage liens and security interests. Accordingly, it is in the Adversary Proceeding that the Court will determine the amount of JPMCC's allowed secured claim, including its entitlement to default interest, late fees, attorneys' fees, and other costs of enforcement. Given Sagamore's choice of forum and fierce resistance to JPMCC's requests for stay relief to return to state court, Mr. Baena states the Plan is both incongruous and disingenuous in that it seeks to check this Court's ability to resolve the Adversary Proceeding in any manner other than in the manner most favorable to the Debtor. If the Court finds in the Adversary Proceeding that a default occurred and that the Secured Lender is entitled to default interest, the Plan nevertheless proposes not to pay it. Instead, Mr. Baena notes that the Plan purports to "nullify all consequences of any alleged default, including the avoidance of default penalties" by paying accrued Note Rate interest and claims that this treatment leaves "unaltered the legal, equitable, and contractual rights respecting [JPMCC's Allowed Secured Claim] in accordance with section 1124 of the Bankruptcy Code . . .", thereby depriving JPMCC of its right to vote to reject the Plan. According to Mr. Baena, the Debtor's erroneous interpretation of section 1124 combines elements of two alternative subsections of the statute, while also ignoring that deacceleration and reinstatement of the maturity date requires the payment of cure in an amount that, pursuant to the underlying agreements and applicable nonbankruptcy law, will be determined to include several million dollars in default interest and late fees. Mr. Baena argues that even if the Bankruptcy Court determines that JPMCC is entitled to include all default interest and fees in its allowed secured claim, aggregating well over $6 million, the Debtor intends to reserve a woefully insufficient $1.5 million to fund such amounts plus such other amounts required to paid to JPMCC pursuant to section 1124(2)(C), and other expenses related to enforcement that may ultimately be allowed in the Adversary Proceeding. Notwithstanding Sagamore's statement to the contrary, the "heads I win, tails you lose" treatment afforded JPMCC under the Plan does not fall within the definition of unimpairment set forth in section 1124(2) because, among other reasons, it (a) fails to cure all defaults under nonbankruptcy law and the underlying loan documents, (b) provides insufficient reserves for attorneys fees and other costs of enforcement, and (c) otherwise alters JPMCC's rights beyond deacceleration and reinstatement by purporting to impose insider debt obligations and payments to insiders that are in derogation of the loan documents that it purports to reinstate. In addition, Mr. Baena contends that the Plan fails to enforce contractual provisions subordinating the claims of Martin Taplin notwithstanding Section 510(a) and violates the absolute priority rule on its face. Moreover, despite an advertised cash infusion, Sagamore cannot satisfy the new value exception without conducting an equity auction or terminating exclusivity and demonstrating that the proposed infusion is necessary, sufficient, and unavailable from any other source. About Sagamore Partners Bay Harbor, Florida-based Sagamore Partners, Ltd., owns and operates the oceanfront Sagamore Hotel, also known as The Art Hotel due to its captivating art collection from recognized artists and its contemporary design. The all-suite boutique hotel is situated within Miami's Art Deco Historic District on South Beach. Sagamore Partners is owned by Martin Taplin. Sagamore Partners filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-37867) on Oct. 6, 2011. Judge A. Jay Cristol presides over the case. Joshua W. Dobin, Esq., and Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, Fla., serve as the Debtor's counsel. The Debtor disclosed $71,099,556 in assets and $52,132,849 in liabilities as of the Chapter 11 filing. The petition was signed by Martin W. Taplin, Pres of Miami Beach Vacation Resorts, Inc., manager of Sagamore GP, LLC, general partner. SAGAMORE PARTNERS: Wants Control of Case Through Plan Confirmation ------------------------------------------------------------------ Sagamore Partners, Ltd., asks the U.S. Bankruptcy Court for the Southern District of Florida to enter an order granting a second extension of the exclusive period to obtain acceptances of its plan of reorganization, as may be amended, up to and including the date of conclusion of the confirmation hearing. Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, Fla., tells the Court that the Debtor has diligently worked to keep the business operating smoothly and without interruption since the Petition Date. The Debtor has constantly endeavored at all times to ensure that significant progress occurs in the administration of the bankruptcy case and bring the case to a quick resolution that benefits all interested parties. Mr. Russin notes the Debtor has been making its monthly adequate protection interest payments of more than $170,000 per month to the Secured Lender and has been working diligently to comply with the Bankruptcy Code's requirements for operating as a debtor-in- possession. Meeting the requirements of the Debtor's day-to-day operations, while at the same time complying with the various requirements of the Bankruptcy Code, has been a time-consuming process. Furthermore, the Debtor, its management, and its professionals have devoted significant time working with the Secured Lender and its professionals, providing them with significant requested information. Mr. Russin assures that under no circumstances is the Debtor seeking an extension to pressure creditors; rather, it has filed a viable Plan of Reorganization and is awaiting the hearing on the approval of the Disclosure Statement and thereafter the confirmation hearing. The Debtor cannot solicit until after approval of the Disclosure Statement, which is pending. About Sagamore Partners Bay Harbor, Florida-based Sagamore Partners, Ltd., owns and operates the oceanfront Sagamore Hotel, also known as The Art Hotel due to its captivating art collection from recognized artists and its contemporary design. The all-suite boutique hotel is situated within Miami's Art Deco Historic District on South Beach. Sagamore Partners is owned by Martin Taplin. Sagamore Partners filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-37867) on Oct. 6, 2011. Judge A. Jay Cristol presides over the case. Joshua W. Dobin, Esq., and Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, Fla., serve as the Debtor's counsel. The Debtor disclosed $71,099,556 in assets and $52,132,849 in liabilities as of the Chapter 11 filing. The petition was signed by Martin W. Taplin, Pres of Miami Beach Vacation Resorts, Inc., manager of Sagamore GP, LLC, general partner. SECURUS HOLDINGS: Moody's Lowers Corp. Family Rating to 'B3' ------------------------------------------------------------ Moody's Investors Service has lowered the corporate family rating (CFR) for Securus Holdings, Inc. to B3 from B2 following the company's proposal to issue additional secured debt and return cash to its equity sponsor. Moody's has also lowered Securus's probability of default rating (PDR) to B3 from B2, lowered ratings on the first lien credit facility and revolver to B2 from B1 and lowered ratings on the second lien credit facility to Caa2 from Caa1. The outlook is stable. Securus plans to add $60 million to its existing $231 million first lien term loan due 2017 and $8.5 million to its $97 million second lien term loan due 2018 held at Securus Technologies, Inc. ("Technologies"). The company will also increase the size of its first lien revolving credit facility by $5 million to $40 million. The proceeds of the new financing will be used to ultimately redeem preferred stock. Issuer: Securus Holdings, Inc. Downgrades: Probability of Default Rating, Downgraded to B3 from B2 Corporate Family Rating, Downgraded to B3 from B2 Issuer: Securus Technologies, Inc. US$97M Senior Secured Bank Credit Facility, Downgraded to Caa2 from Caa1 US$35M Senior Secured Bank Credit Facility, Downgraded to B2 from B1 US$233M Senior Secured Bank Credit Facility, Downgraded to B2 from B1 US$97M Senior Secured Bank Credit Facility, Downgraded to a range of LGD5, 89 % from a range of LGD5, 88 % US$35M Senior Secured Bank Credit Facility, Downgraded to a range of LGD3, 38 % from a range of LGD3, 37 % US$233M Senior Secured Bank Credit Facility, Downgraded to a range of LGD3, 38 % from a range of LGD3, 37 % Ratings Rationale Securus's B3 corporate family rating reflects its small scale, high leverage, aggressive financial policy and narrow business focus relative to other rated telecommunications companies. The ratings are supported the company's sophisticated, proprietary technology platform and its multi-year contracts with over 2,200 correctional facilities in the US and Canada. The ratings are also supported by improvements in operating margin and cash flow which have been achieved through cost containment and lower bad debt expense. These initiatives were critical in the company's turnaround, as providing communications services to corrections facilities is a low margin business characterized by competitive bidding for new and existing contracts and high commission payments to prison operators. The rating also incorporates Moody's view that the company may take on additional debt or weaken its liquidity position in order to distribute cash to shareholders in the future. Moody's does not expect the overall corrections facility telecommunications market to grow materially, and future cash flow generation will be dependent on cost saving measures and the company's ability to win business from competitors. Recent contract wins will lead to strong revenue growth of approximately 8% in 2012. However, Moody's expects a competitive response from Global Tel*Link and does not project recent contract success to lead to sustained growth above the low-single-digit percentage range. At the time of the LBO transaction in May of 2011, Moody's had anticipated that leverage would fall below 5x within two years, including Moody's adjustments for operating leases and full equity attribution of preferred stock. Securus's operating performance has allowed the company to de-lever more quickly than anticipated, with leverage of 4.9x (Moody's adjusted, excluding preferred stock) as of 1Q'12. This transaction will raise leverage to 5.9x, excluding preferred stock. However, the redemption of the preferred stock less than 12 months after issuance suggests it has more debt-like characteristics. Moody's believes that the company will seek to redeem the remaining $82 million in preferred stock as soon as it is able. Including 100% debt treatment of preferred stock, Moody's expects adjusted leverage to increase to approximately 6.9x at deal close, falling to 6.4x by year end 2012 and 6.2x at year end 2013. Leverage will improve due to EBITDA growth primarily from lower bad debt expense and the contract wins discussed above. Debt attribution of the remaining preferred stock following this transaction adds approximately 1x to the leverage metric. Therefore, even excluding the preferred equity from the debt, Moody's expects Securus's leverage will remain above the prior- established downgrade trigger of 5.0x through 2013. The transaction also increases the company's cash interest expense and weakens liquidity. Moody's anticipates that Securus will have good liquidity over the next 12 months, supported by the company's modest free cash flow generation and an undrawn $40 million revolver. As part of this transaction, the company will amend the credit facility covenant levels for both the consolidated fixed charge ratio as well as the consolidated total leverage ratio such that Moody's anticipates the company will not have compliance issues over the next four quarters. Moody's could lower Securus ratings further if leverage does not fall below 6.5x (Moody's adjusted, including full debt treatment of preferred stock) and free cash flow turns negative, both on a sustained basis. Moody's could upgrade the ratings if Securus maintains good liquidity, generates positive free cash flow and grows EBITDA such that leverage is on track to fall below 5x within 12-18 months. The principal methodology used in rating Securus Holdings was the Global Telecommunications 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. Based in Dallas, TX, Securus Technologies, Inc., is one of the largest providers of inmate telecommunication services to correctional facilities, with a presence in 45 states, Washington D.C., and Canada. The company generated approximately $321 million of revenue for the twelve months ending December 31, 2011. SECURUS HOLDINGS: S&P Affirms 'B' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Dallas-based prison telecommunications provider Securus Holdings Inc. The outlook is stable. "At the same time, we lowered our issue-level ratings on Securus' upsized first-lien debt to 'B' from 'B+' and revised the recovery ratings to '3' from '2', as a result of a higher debt claim in our default scenario. The '3' recovery rating reflects our expectation of meaningful (50% to 70%) recovery in the event of a payment default. The proposed first-lien debt includes an upsized $40 million revolving credit facility due 2016 and an upsized $291 million term loan B due 2017," S&P said. "We also affirmed our 'CCC+' issue-level ratings on the company's upsized $105.5 million second-lien debt due 2018. The recovery rating remains '6', indicating our expectation of negligible (0% to 10%) recovery in the event of a payment default. Our ratings are based on preliminary terms and conditions," S&P said. "The proposed debt adds $60 million to the term loan B, $8.5 million to the second lien, and $5 million of capacity to the revolving credit facility. The company expects to use the additional debt, along with cash from the balance sheet, to primarily fund a $76.5 million dividend payment to the company's preferred shareholders, including private-equity sponsor Castle Harlan Partners," S&P said. "The ratings on Securus reflect the company's niche focus on a mature prison phone market and high debt," said Standard & Poor's credit analyst Ketul Gondha. "These risks overshadow the company's contracted recurring revenue stream, defensible competitive position, improving EBITDA margins, and positive free operating cash flow (FOCF). We characterize the business risk profile as 'weak' and the financial risk profile as 'highly leveraged.'" "We project new contract wins and improving call volume over the next two years to drive revenue up over 8% in 2012 and 3% in 2013," added Mr. Gondha. "While competitive forces could result in rising commission rates, we expect Securus to maintain margins over the next two years as top-line growth and improved bad-debt expense (from a continued shift to prepaid accounts) results in EBITDA growth," S&P said. "The stable outlook incorporates our expectation that Securus will continue to increase revenue and EBITDA, resulting in margins remaining above 20%. However, the stable outlook also considers the limited industry growth potential and the likelihood that debt levels will remain high, primarily due to financial policies that favor debt-financed dividends, which makes an upgrade unlikely," S&P said. "Conversely, we could lower the rating over the next year if inmate call volumes drop because of contract losses to competitors or the company's gross margin declines 300 basis points from current levels. This could potentially result in limited FOCF, restricted liquidity, or interest coverage of 2.0x or lower with no near-term prospects for improvement," S&P said. SHERIDAN INVESTMENT: Moody's Upgrades CFR to B1; Outlook Stable --------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family Rating to B1 from B2 for each of Sheridan Investment Partners I, LLC, Sheridan Production Partners I-A, L.P., and Sheridan Production Partners I-M, L.P. (collectively Sheridan). The probability of default ratings were also upgraded to B2 from B3, and the senior secured debt ratings were upgraded to B1 from B2. These actions conclude the ratings reviews that were announced on April 2, 2012 and incorporates, but is not conditioned upon, the recently announced plans to increase the size of the senior secured term loan to $800 million. The outlook for each partnership is stable. "The B1 CFR reflects Sheridan's low-risk reserve base and strong operating margins," said Stuart Miller, Moody's Vice President -- Senior Analyst. "The rating also considers our expectations for limited reserve growth and significant shareholder distributions now that the investor equity commitments have been exhausted." Ratings Rationale Since its inception, Sheridan has invested about $2.1 billion in seven property acquisitions using $1.3 billion of equity contributed by a group of individuals and investors. Once the equity commitments were fully utilized in late 2011, Sheridan began its transition from its acquisition stage to become an entity with stable to declining production and a greater focus on providing a sustainable distribution stream to its investors. Sheridan's reserve base is very low-risk with older properties that have been on production for many years. Many of the properties are undergoing waterflood operations to maintain production levels and extend their economic lives. While these types of properties can be more costly to operate, reserve estimates and production rates can be forecast with a higher degree of certainty. And unlike more traditional exploration and production companies, Sheridan's drilling risk is modest as its capital expenditures are primarily ear-marked for the drilling of infill and delineation wells in and around well-defined producing reservoirs. Sheridan has an unusual organizational structure that was created to address business and tax considerations of a diverse mix of individual, corporate, and tax-exempt investors. Moody's ratings recognize the inter-dependence of the three issuers, including the common borrowing base. However, certain structural elements require evaluation of each entity separately and could result in different ratings across the three partnerships in the future. The more complex organizational structure and the different types of investors involved introduce uncertainty into the timing and potential outcome of an event of default. The business plan for the partnership is designed around using equity and debt to create a fixed pool of assets. With the equity commitments fully utilized, future investments are expected to be more modest, and growth will be muted as the partnership converts finite amounts of undeveloped, probable, and possible reserves into producing reserves. Inevitably, production will begin to decline and the partnership will be forced to find the correct balance between distributions to shareholders and debt reductions in order to remain in compliance with its borrowing base. The borrowing base was re-determined in April 2012 at $1.3 billion which results in just over $200 million of borrowing base availability. Based on projections for cash flow from operations and capital expenditure requirements through 2013, Moody's does not expect debt reductions in the near term. However, Moody's does expect equity distributions of $30 to $40 million per quarter. Approximately 70% of Sheridan's production is oil and natural gas liquids, and the partnership has benefited from strong commodity prices which is reflected in its unleveraged cash margin of about $44 per Boe in 2011. The high operating margin offsets the relatively high level of finding, development, and operating cost -- Sheridan's leveraged full cycle ratio was in excess of 2.0x at year-end 2011. Because of the proportion of equity that was used to purchase its portfolio of assets, Sheridan has relatively strong leverage metrics. At year end 2011, debt to proved developed reserves was under $8 per Boe. In its analysis, Moody's de-emphasizes the importance of the relatively high ratio of debt to average daily production -- $53,000 per Boe at year-end 2011 -- as this metric does not take into account the company's 15+ year proved developed reserve life. Sheridan has good liquidity with positive free cash flow, a high degree of flexibility for capital expenditures and distributions, and over $200 million of borrowing capacity under a $710 million credit facility that matures in March 2015. Financial covenant restrictions in its credit facility allow for significant business deterioration. The semi-annually re-determined borrowing base provides the most meaningful governor on leverage. With an aggressive commodity price hedging program in place, Sheridan is well-insulated from commodity price deterioration over the next three years which reduces the possibility of a large borrowing base reduction. Secondary liquidity is limited because the vast majority of the company's assets are pledged as security for the credit facility. Given the limited growth prospects for Sheridan and its business strategy, further ratings improvements are unlikely. However, if the company chooses to apply its free cash flow to debt reduction so that the ratio of debt to proved developed reserves is less than $5 per Boe or retained cash flow to debt exceeds 30%, it could signal a change in financial policies that could warrant an upgrade. A ratings downgrade could be appropriate if debt to proved developed reserves exceeds $10 per Boe. The principal methodologies used in this rating were Independent Exploration and Production (E&P) Industry published in December 2008, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. SIERRA BLANCA: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Sierra Blanca Rehabilitation, LLC 3401 N. Lockwood Dr. Lakeside, AZ 85929 Bankruptcy Case No.: 12-10157 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Donald W. Powell, Esq. CARMICHAEL & POWELL, P.C. 7301 N. 16th St., #103 Phoenix, AZ 85020 Tel: (602) 861-0777 Fax: (602) 870-0296 E-mail: d.powell@cplawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Matthew K. Meyer, managing member. SINCLAIR BROADCAST: Reports $29 Million Net Income in Q1 -------------------------------------------------------- Sinclair Broadcast Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $29.07 million on $223.83 million of total revenues for the three months ended March 31, 2012, compared with net income of $15.12 million on $182.61 million of total revenues for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $1.77 billion in total assets, $1.85 billion in total liabilities, and a $87.21 million total deficit. A copy of the Form 10-Q is available for free at: http://is.gd/9tW7j0 About Sinclair Broadcast Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches roughly 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT, and CW affiliates. The Company said in the report that any insolvency or bankruptcy proceeding relating to Cunningham, one of its LMA partners, would cause a default and potential acceleration under a Bank Credit Agreement and could, potentially, result in Cunningham's rejection of the Company's seven LMAs with Cunningham, which would negatively affect the Company's financial condition and results of operations. * * * As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.- based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. Moody's raised its ratings for Sinclair Broadcast Group, Inc., and subsidiary Sinclair Television Group, Inc., including the Corporate Family Rating and Probability-of-Default Rating, each to Ba3 from B1, and the ratings for individual debt instruments, concluding its review for possible upgrade as initiated on Aug. 5, 2010. Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed $250 million issuance of Senior Unsecured Notes due 2018 by STG. The Speculative Grade Liquidity Rating remains unchanged at SGL-2. The rating outlook is now stable. As reported by the Troubled Company Reporter on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.-based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. SMF ENERGY: Files Asset Purchase Agreement With Sun Coast --------------------------------------------------------- BankruptcyData.com reports that SMF Energy filed with the U.S. Bankruptcy Court an asset purchase agreement between the Company, H & W Petroleum Company, SMF Services and Sun Coast Resources. Pursuant to the agreement, Sun Coast proposes to acquire certain assets associated with the business of the Companies in their various operating locations in the State of Texas and used in such operations as a going concern and the vehicles outside of Texas not used directly in the operation of the Companies' business in the State of Texas. Under the Agreement, Sun Coast would acquire these assets and vehicles outside of Texas for a total purchase price of $9 million plus the value of the Companies' inventory that is acquired plus the cure amounts necessary to assume and assign executory contracts. Sun Coast entered into the agreement as the stalking horse bidder, and other interested bidders who submit qualifying offers are permitted to participate in an auction in accordance with Section 363 of the United States Bankruptcy Code. The Company subsequently filed with the Court a first amendment to its asset purchase agreement, changing the termination provision to read as follows: "at any time following the expiration of the Due Diligence Review Period and after the Auction has occurred, by Purchaser unless Purchaser is the Winning Bidder at any Auction with respect to either the Assets or any of the Vehicles Outside Texas." About SMF Energy SMF Energy Corporation, a provider of fuel and lubricants for the trucking, manufacturing and construction industries, and three of its subsidiaries filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Lead Case No. 12-19084) on April 15, 2012. The affiliates are SMF Services, Inc., H&W Petroleum Company, Inc., and Streicher Realty, Inc. Fort Lauderdale, Florida-based SMF Energy -- dba Streicher Mobile Fueling and SMF Generator Fueling Services -- disclosed $37.0 million in assets and $25.17 million in liabilities as of Dec. 31, 2011. On March 22, 2012, the Company appointed Soneet Kapila of Kapila & Company, Ft. Lauderdale, Florida, as its Chief Restructuring Officer to direct the Company's efforts to increase revenues and reduce expenses required by the decision to change the Company's pricing structure. Judge Raymond B. Ray oversees the case. Lawyers at Genovese Joblove & Battista, P.A., serve as the Debtors' counsel. The petition was signed by Soneet R. Kapila, the CRO. SMF filed for bankruptcy reorganization when the lender Wells Fargo Bank. The bank is owed $11.2 million, including $8 million on a revolving credit secured by all assets. SPRINT NEXTEL: BlackRock Discloses 4.9% Equity Stake ---------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that, as of April 30, 2012, it beneficially owns 149,006,183 shares of common stock of Sprint Nextel Corp representing 4.97% of the shares outstanding. A copy of the filing is available for free at: http://is.gd/yCFZlB About Sprint Nextel Overland Park, Kan.-based Sprint Nextel Corp. (NYSE: S) -- http://www.sprint.com/-- is a communications company offering a comprehensive range of wireless and wireline communications products and services that are designed to meet the needs of individual consumers, businesses, government subscribers and resellers. The Company's balance sheet at March 31, 2012, showed $50.61 billion in total assets, $40.02 billion in total liabilities, and $10.59 billion in total shareholders' equity. * * * In February 2012, Moody's Investors Service assigned a B3 rating to Sprint Nextel's proposed offering of Senior Unsecured Notes and a Ba3 rating to Sprint's proposed offering of Junior Guaranteed Unsecured Notes. The proceeds will be used for general corporate purposes, the repayment of existing debt, network expansion and modernization, and the potential funding of Clearwire. All of Sprint's ratings remain on review for possible downgrade, including those assigned and the company's B1 corporate family rating and B1 probability of default rating. Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating and '2' recovery rating to Sprint's proposed $1 billion of senior guaranteed notes due 2020. These notes have subordinated guarantees from all the subsidiaries that guarantee the existing $2.25 billion revolving credit facility. The '2' recovery rating indicates expectations for substantial (70% to 90%) recovery in the event of payment default. Fitch Ratings has assigned ratings to Sprint's $2 billion notes offering. This includes a 'BB/RR2' rating to the junior guaranteed unsecured notes due 2020 and a 'B+/RR4' rating to the unsecured senior notes due 2017. SUPERMEDIA INC: Files Form 10-Q, Posts $62-Mil. Net Income in Q1 ---------------------------------------------------------------- Supermedia Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $62 million on $363 million of operating revenue for the three months ended March 31, 2012, compared with net income of $30 million on $438 million of operating revenue for the same period during the prior year. The Company reported a net loss of $771 million in 2011, and a net loss of $196 million in 2010. The Company's balance sheet at March 31, 2012, showed $1.61 billion in total assets, $2.33 billion in total liabilities and a $725 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/IRpkPp About SuperMedia Inc. DFW Airport, Texas-based SuperMedia Inc. and its subsidiaries sells advertising solutions to its clients and places their advertising into its various advertising media. The Company's advertising media include Superpages yellow page directories, Superpages.com, its online local search resource, the Superpages.com network, an online advertising network, Superpages direct mailers, and Superpages mobile, its local search application for wireless subscribers. The Company is the official publisher of Verizon Communications Inc. print directories in the markets in which Verizon is currently the incumbent local telephone exchange carrier. The Company also has agreements with FairPoint Communications, Inc., and Frontier Communications Corporation in various Northeast and Midwest markets in which FairPoint and Frontier are the local exchange carriers. On March 31, 2009, SuperMedia Inc., formerly known as Idearc Inc., and all of its domestic subsidiaries filed voluntary petitions for Chapter 11 relief (Bankr. N.D. Tex. Lead Case No. 09-31828). On Sept. 8, 2009, the Company filed its First Amended Joint Plan of Reorganization with the Bankruptcy Court, which was later modified on Nov. 19, 2009, and on Dec. 22, 2009, the Bankruptcy Court entered an order approving and confirming the Amended Plan. On Dec. 31, 2009 (the "Effective Date"), the Debtors consummated the reorganization and emerged from the Chapter 11 bankruptcy proceedings. On Dec. 29, 2011, the Bankruptcy Court entered final decrees closing the bankruptcy cases for the Debtors. * * * As reported in the TCR on Dec. 27, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Dallas-based SuperMedia Inc. to 'CCC+' from 'SD' (selective default). The rating outlook is negative. In the April 2, 2012, edition of the TCR, Moody's Investors Service has changed the corporate family rating (CFR) for SuperMedia Inc. to Caa3 from Caa1 based on Moody's view that a debt restructuring is likely. Moody's expects ultimate recoveries will be about 50%. SuperMedia is attempting to reinvent its business by reducing its reliance on print advertising through the development of online and mobile directory service applications but Moody's has doubts that the company will be able to transition its business away from a reliance on print directories quickly enough to stabilize its revenues and earnings and prevent a debt restructuring. SUPERMEDIA INC: To Utilize $33 Million to Repurchase Debt --------------------------------------------------------- As previously announced, on Nov. 8, 2011, SuperMedia Inc., entered into the Second Amendment to the Loan Agreement, dated as of Dec. 31, 2009, by and among the Company, lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as collateral agent and administrative agent for the lenders. The Amendment, among other things, allows the Company to repurchase and retire debt below par, subject to the procedures and conditions set forth in the Loan Agreement. Under the terms and conditions of the Loan Agreement, the Company has commenced an offer to utilize up to approximately $33,000,000 to repurchase debt at a price of 55% to 59% of par. The offer will expire at 5:00 p.m., New York City time, May 14, 2012, unless extended by the Company. About SuperMedia Inc. DFW Airport, Texas-based SuperMedia Inc. and its subsidiaries sells advertising solutions to its clients and places their advertising into its various advertising media. The Company's advertising media include Superpages yellow page directories, Superpages.com, its online local search resource, the Superpages.com network, an online advertising network, Superpages direct mailers, and Superpages mobile, its local search application for wireless subscribers. The Company is the official publisher of Verizon Communications Inc. print directories in the markets in which Verizon is currently the incumbent local telephone exchange carrier. The Company also has agreements with FairPoint Communications, Inc., and Frontier Communications Corporation in various Northeast and Midwest markets in which FairPoint and Frontier are the local exchange carriers. On March 31, 2009, SuperMedia Inc., formerly known as Idearc Inc., and all of its domestic subsidiaries filed voluntary petitions for Chapter 11 relief (Bankr. N.D. Tex. Lead Case No. 09-31828). On Sept. 8, 2009, the Company filed its First Amended Joint Plan of Reorganization with the Bankruptcy Court, which was later modified on Nov. 19, 2009, and on Dec. 22, 2009, the Bankruptcy Court entered an order approving and confirming the Amended Plan. On Dec. 31, 2009 (the "Effective Date"), the Debtors consummated the reorganization and emerged from the Chapter 11 bankruptcy proceedings. On Dec. 29, 2011, the Bankruptcy Court entered final decrees closing the bankruptcy cases for the Debtors. The Company reported a net loss of $771 million in 2011 and a net loss of $196 million in 2010. The Company's balance sheet at March 31, 2012, showed $1.61 billion in total assets, $2.33 billion in total liabilities and a $725 million total stockholders' deficit. * * * As reported in the TCR on Dec. 27, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Dallas-based SuperMedia Inc. to 'CCC+' from 'SD' (selective default). The rating outlook is negative. In the April 2, 2012, edition of the TCR, Moody's Investors Service has changed the corporate family rating (CFR) for SuperMedia Inc. to Caa3 from Caa1 based on Moody's view that a debt restructuring is likely. Moody's expects ultimate recoveries will be about 50%. SuperMedia is attempting to reinvent its business by reducing its reliance on print advertising through the development of online and mobile directory service applications but Moody's has doubts that the company will be able to transition its business away from a reliance on print directories quickly enough to stabilize its revenues and earnings and prevent a debt restructuring. TALON THERAPEUTICS: James Flynn Discloses 50% Equity Stake ---------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, James E. Flynn and his affiliates disclosed that, as of March 31, 2012, they beneficially own 19,712,567 shares of common stock of Talon Therapeutics, Inc., representing 50.02% of the shares outstanding. Mr. Flyn previously reported beneficial ownership of 15,347,159 common shares or a 44.23% equity stake as of March 14, 2012. A copy of the filing is available for free at http://is.gd/C2pLdT 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. TELIK INC: Says Continued Net Loss Raises Going Concern Doubt ------------------------------------------------------------- Telik, Inc., which is engaged in the discovery and development of small molecule therapeutics, said it has incurred net losses since inception and expects to incur substantial losses for at least the next several years as it continues research and development activities. The Company said it has funded, to date, its operations primarily through the sale of equity securities, non-equity payments from collaborators and interest income. The Company was incorporated in the state of Delaware in October 1988. "The process of developing our products will require significant additional research and development, preclinical testing and clinical trials, as well as regulatory approval. We expect these activities, together with general and administrative expenses, to result in substantial operating losses for the foreseeable future. We will not receive product revenue unless we, or our collaborative partners, complete clinical trials, obtain regulatory approval and successfully commercialize one or more of our products, the Company said in a regulatory filing with the Securities and Exchange Commission. "We believe our existing cash resources will not be sufficient to fund our projected operating requirements beyond the end of the current fiscal year," the Company disclosed. "We have been and are currently seeking collaborative arrangements with corporate partners to fund the development and commercialization of TELINTRA, our lead product candidate and TELCYTA, our other product candidate. We are also evaluating options to raise additional funds through equity or debt financings and sales transactions as well as other sources such as research grants from non-profit organizations. However, we cannot provide any assurances that we will be successful in obtaining additional funding. If we are unable to secure additional financing on a timely basis or on terms favorable to us, we will be required to cease or reduce certain research and development projects, to sell some or all of our technology or assets or to merge all or a portion of our business with another entity. Insufficient funds will require us to delay, scale back, or eliminate some or all of our activities. There is a substantial doubt about our ability to continue as a going concern beyond the current fiscal year unless we are able to obtain additional and sufficient funding for our operations." Telik listed $9.8 million in total assets, $2.3 million in total current liabilities and $1.2 million in non-current portion of facility exit costs, and $6.3 million in total stockholders' equity at March 31, 2012. It posted a net loss of $2.3 million for the three months ended March 31, 2012, from a net loss of $3.7 million for the same period in 2011. A copy of Telik's Form 10-Q report filed with the Securities and Exchange Commission for the quarter ended March 31, 2012, is available at http://is.gd/jajQKE TOWNLAKES SQUARE: Case Summary & 17 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Townlakes Square, LLC 5434 Adams Morgan Way New Port Richey, FL 34653 Bankruptcy Case No.: 12-07178 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court Middle District of Florida (Ft. Myers) Judge: Caryl E. Delano Debtor's Counsel: Sheila D. Norman, Esq. NORMAN AND BULLINGTON, P.A. 1905 West Kennedy Blvd. Tampa, FL 33606 Tel: (813) 251-6666 Fax: (813) 254-0800 E-mail: sheila@normanandbullington.com Scheduled Assets: $2,126,148 Scheduled Liabilities: $8,189,874 A copy of the Company's list of its 17 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb12-07178.pdf The petition was signed by Miguel Perez, managing member. TREASURES INC: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Treasures, Inc. dba Treasures Furniture 7480 Miramar Road, Suite 105 San Diego, CA 92126 Bankruptcy Case No.: 12-06689 Chapter 11 Petition Date: May 8, 2012 Court: U.S. Bankruptcy Court Southern District of California (San Diego) Judge: Margaret M. Mann Debtor's Counsel: Christine E. Baur, Esq. LAW OFFICE OF CHRISTINE E. BAUR 4653 Carmel Mountain Road, Suite 308 #332 San Diego, CA 92130 Tel: (858) 350-3757 Fax: (858) 876-9480 E-mail: christine@baurbklaw.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 Alan D. Glass, CEO. TRIMAS COMPANY: Moody's Upgrades CFR to 'Ba3'; Outlook Stable ------------------------------------------------------------- Moody's Investors Service upgraded all of TriMas Company LLC's credit ratings by one notch and affirmed the SGL-2 Speculative Grade Liquidity rating. The Corporate Family Rating and Probability of Default Rating were upgraded to Ba3 from B1. The rating outlook was changed to stable from positive. Ratings Rationale The ratings upgrade for TriMas reflects the company's improving leverage with debt to EBITDA of 3.3 times for the 12 month period ending March 31, 2012, and EBITA to interest coverage of 3.0 times for the same period. The ratings benefit from a broad mix of industry verticals that provide end market and product diversity and the company's solid performance since the 2009 downturn. The ratings are constrained by the cyclicality of the company's operating performance demonstrated by the sharp decline in revenues and profitability during the recent economic downturn, pressures from a weakening European economy and the likelihood of slow growth in the U.S. Currently, all five of the company's operations are performing well but Cequent's North American business experienced sales and margin pressure during the quarter ended March 31, 2012. Upgrades: Issuer: TriMas Company LLC Senior Secured Bank Credit Facility, upgraded to Ba1 LGD2, 23% from Ba2, LGD2, 24% Issuer: TriMas Corporation Senior Secured Regular Bond/Debenture, upgraded to B1, LGD4, 69% from B2, LGD5, 70% Affirmations: SGL-2 Outlook: The ratings outlook is stable. The company's Speculative Grade Liquidity Rating was affirmed at SGL-2, reflecting Moody's view that the company has good liquidity. Liquidity benefits from positive cash flow, committed revolver availability and adequate cushion under financial maintenance covenants. To be considered for a higher rating, the company should demonstrate sustained organic revenue growth, improving margins, sustainable debt to EBITDA below 3.0 times and EBITA to interest coverage approaching 4.0 times. Also important to positive rating traction is good liquidity including effective working capital management. The rating could be downgraded if the company's leverage (debt to EBITDA) was to increase to over 3.75 times, or if its free cash flow to debt was anticipated to be below 7.0%, both on a sustained basis. The principal methodology used in rating TriMas was the Global Manufacturing Industry Methodology, published December 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. TriMas Corporation is a diversified industrial manufacturer. The Company is engaged in five business segments with diverse products and market channels in packaging, energy, aerospace & defense, engineered components and Cequent. Last twelve months revenues through March 31, 2012 totaled approximately $1.1 billion. TRIUS THERAPEUTICS: Files Form 10-Q, Incurs $7.6MM Loss in Q1 ------------------------------------------------------------- Trius Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $7.60 million on $9.83 million of total revenues for the three months ended March 31, 2012, compared with a net loss of $10.06 million on $2.71 million of total revenues for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $106.55 million in total assets, $15.04 million in total liabilities and $91.50 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/kBy2Hc About Trius Therapeutics San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) -- http://www.triusrx.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of innovative antibiotics for serious, life-threatening infections. The Company's first product candidate, torezolid phosphate, is an IV and orally administered second generation oxazolidinone being developed for the treatment of serious gram-positive infections, including those caused by MRSA. In addition to the company's torezolid phosphate clinical program, it is currently conducting two preclinical programs using its proprietary discovery platform to develop antibiotics to treat infections caused by gram-negative bacteria. In the Form 10-K for the year ended Dec. 31, 2011, the Company said it has incurred losses since its inception and it anticipates that it will continue to incur losses for the foreseeable future. As of December 31, 2011, the Company had an accumulated deficit of $95.4 million. The Company has funded, and plan to continue to fund, its operations from the sale of securities, through research funding and from collaboration and license payments, including payments under the Bayer collaboration. However, the Company has generated no revenues from product sales to date. The Company reported a net loss of $18.25 million in 2011, a net loss of $23.86 million in 2010, and a net loss of $22.68 million in 2009. TROY LODGE: Case Summary & 2 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Troy Lodge, LLC 11600 SW Shilo Lane Portland, OR 97225-5995 Bankruptcy Case No.: 12-26469 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Neil W. Bason Debtor's Counsel: John-Patrick M. Fritz, Esq. LEVENE NEALE BENDER RANKIN ET AL 10250 Constellation Blvd., Ste. 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 E-mail: jpf@lnbrb.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A copy of the Company's list of its two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-26469.pdf The petition was signed by Christopher Campbell, authorized agent. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- LSSR, LLC 12-24557 04/25/12 Shilo Inn, Seaside Oceanfront, LLC 11-34569 06/07/12 UNITEK GLOBAL: S&P Keeps 'B+' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services' ratings on Blue Bell, Pa.- based UniTek Global Services Inc., including the 'B+' corporate credit rating and stable outlook, remain unchanged following the company's proposed $20 million add-on to the term loan facility due 2018. "The proposal will increase the size of the facility to $120 million from $100 million, and the issue-level rating on this facility remains a 'B' and the recovery rating remains '5'. We expect the company to use funds from the transaction primarily to replenish liquidity and fund an earnout payment for the Pinnacle acquisition completed in April 2011," S&P said. "The ratings on UniTek reflect its 'aggressive' financial risk profile. Pro forma for the transaction, leverage was about 4.0x (compared with 3.7x at year-end 2011) and liquidity was 'less than adequate' based on our expectation that the leverage covenant cushion could drop below 15% during 2012 and that UniTek would not be able to absorb low-probability, high-impact events without refinancing. The ratings also reflect the company's 'weak' business risk profile, with high customer concentration and participation in a very competitive and fragmented industry. Partially tempering factors include our expectation for good growth prospects over the next two years, driven by healthy capital expenditures by the telecommunications industry over the intermediate term and reflected in the company's sizable backlog," S&P said. RATINGS LIST UniTek Global Services Inc. Corporate Credit Rating B+/Stable/-- Senior Secured $120 mil term loan facility due 2018 B Recovery Rating 5 VITRO SAB: Units Owe Interest on $1BB Debt, Appeals Court Says -------------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that a New York appeals court on Thursday upheld a decision that put nondebtor affiliates of Vitro SAB de CV on the hook for interest on $1.2 billion in debt held by bondholders including Aurelius Capital Management LP and Elliott Management Corp. Law360 relates that a five-judge appeals panel rejected the defendants' argument that principles of comity require the state court to defer the matter to the Mexican district court overseeing Vitro's bankruptcy. About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global glass producer, serving the construction and automotive glass markets and glass containers needs of the food, beverage, wine, liquor, cosmetics and pharmaceutical industries. Vitro is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009, and sought to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. Concurso Mercantil & Chapter 15 Proceedings Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, commencing its voluntary concurso mercantil proceedings -- the Mexican equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on Dec. 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. But an appellate court in Mexico reinstated the reorganization in April 2011. Following the reinstatement, Vitro SAB on April 14, 2011, re-filed a petition for recognition of its Mexican reorganization in U.S. Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11- 11754). The Vitro parent received sufficient acceptances of its reorganization by using the US$1.9 billion in debt owing to subsidiaries to vote down opposition by bondholders. The holders of US$1.2 billion in defaulted bonds opposed the Mexican reorganization plan because shareholders could retain ownership while bondholders aren't being paid in full. Vitro announced in March 2012 that it has implemented the reorganization plan approved by a judge in Monterrey, Mexico. In the present Chapter 15 case, the Debtor seeks to block any creditor suits in the U.S. pending the reorganization in Mexico. Chapter 11 Proceedings A group of noteholders opposed the exchange -- namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P. Together, they held US$75 million, or approximately 6% of the outstanding bond debt. The Noteholder group commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders, known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. A bankruptcy judge in Fort Worth, Texas, denied involuntary Chapter 11 petitions filed against four U.S. subsidiaries. On April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro America LLC and three other U.S. subsidiaries -- that were subject to the involuntary petitions into voluntary Chapter 11. The Texas Court on April 21 denied involuntary petitions against the eight U.S. subsidiaries that didn't consent to being in Chapter 11. Kurtzman Carson Consultants is the claims and notice agent to Vitro America, et al. Alvarez & Marsal North America LLC, is the Debtors' operations and financial advisor. The official committee of unsecured creditors appointed in the Chapter 11 cases of Vitro America, et al., has selected Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, as counsel. Blackstone Advisory Partners L.P. serves as financial advisor to the Committee. The U.S. Vitro companies sold their assets to American Glass Enterprises LLC, an affiliate of Sun Capital Partners Inc., for US$55 million. U.S. subsidiaries of Vitro SAB are having their cases converted to liquidations in Chapter 7, court records in January 2012 show. In December, the U.S. Trustee in Dallas filed a motion to convert the subsidiaries' cases to liquidations in Chapter 7. The Justice Department's bankruptcy watchdog said US$5.1 million in bills were run up in bankruptcy and hadn't been paid. VWR FUNDING: Moody's Affirms B3 CFR; Revises Outlook to Positive ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of VWR Funding, Inc. including the Corporate Family Rating and Probability of Default Rating of B3 and assigned a B1 to the proposed amended and extended term loans and revolver. Moody's also changed the outlook to positive from stable. Ratings Affirmed: Corporate Family Rating, B3 Probability of Default Rating, B3 Speculative Grade Liquidity Rating, SGL-2 $250 Multi-Currency Revolving Credit Facility due 2013, rated B1 (LGD-2, 25%) $598 Million USD Senior Secured Term Loan B due 2014, rated B1 (LGD-2, 25%) EUR583 Million Euro Senior Secured Term Loan B due 2014, rated B1 (LGD-2, 25%) $713 Million 10.25% Senior Notes due 2015, rated Caa1 (LGD-5, 73%) Ratings Assigned: Proposed Extended Revolving Credit Facility due 2016, rated B1 (LGD-2, 25%) Proposed Extended USD and EURO Term Loans due 2017, rated B1 (LGD- 2, 25%) The ratings outlook is positive. The change in the outlook to positive reflects Moody's belief that VWR will continue to reduce debt to EBITDA through organic means and through accretive acquisitions. While adjusted leverage remains high, at around 7.0 times, the company has made substantial progress in reducing leverage and improving profitability margins over the past several years. VWR's B3 Corporate Family Rating reflects the company's high leverage and modest interest coverage and free cash flow relative to debt. The ratings are supported by VWR's good scale and market position as the #2 global life science distributor (behind Thermo Fisher, A3) as well as the stability of revenue and profitability. The company has demonstrated consistent revenue growth and improved profit margins driven both by organic growth and acquisitions. While the company's acquisition strategy has added to its global scale and geographic diversity, it increases the complexity of the organization and could pose some business practice compliance risk, particularly in emerging markets. Moody's could upgrade the ratings if VWR continues to grow revenue and EBITDA such that Moody's expects adjusted leverage to be sustained below 6.5 times and free cash flow to remain above 3% of total adjusted debt. If Moody's expects sustained negative free cash flow or leverage to rise above 8 times either due to deterioration in EBITDA, acquisitions or shareholder friendly payouts, the ratings could be downgraded. Further, material deterioration in liquidity including failure to extend a significant portion of the revolver or subsequent challenges in refinancing could also lead to rating pressure. The principal methodology used in rating VWR Funding, Inc. was the Global Distribution & Supply Chain Services Industry Methodology published in November 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. VWR Funding, Inc., headquartered in Radnor, Pennsylvania, is a global leader in the distribution of laboratory scientific supplies, including chemicals, glassware, equipment, instruments, protective clothing, and production supplies. Services include technical services, onsite storeroom services and laboratory and furniture design, supply and installation. The company serves customers in the pharmaceutical, biotechnology, medical device, chemical, technology, food processing and consumer product industries, as well as governmental agencies, universities and research institutes, and environmental organizations. For the twelve months ended March 31, 2012, VWR reported revenues of $4.2 billion. VOICE ASSIST: Amends 2011 Quarterly Reports ------------------------------------------- Voice Assist, Inc., filed with the U.S. Securities and Exchange Commission amendments to its quarterly reports for the periods ended March 31, 2011, June 30, 2011, and September 30, 2011. The restated unaudited quarterly financial statements in this Form 10-Q/A account for the non-recording of the valuation of personal shares transferred from the Chief Executive Officer of the Company to a former executive officer for services rendered to the Company. The adjustment results in an increase in the total net loss for the period and has no effect on the Company's historical or future revenues, cash or total assets. The Company's restated statement of operations reflects a net loss of $9.26 million on $725,495 of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $335,799 on $986,083 of revenue for the nine months ended Sept. 30, 2010. The Company originally reported a net loss of $7.3 million on $725,495 of revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $335,799 on $986,083 of revenues for the nine months ended Sept. 30, 2010. The Company's restated balance sheet at Sept. 30, 2011, showed $1.27 million in total assets, $2.52 million in total liabilities and a $1.24 million total stockholders' deficit. The Company originally reported $1.3 million in total assets, $522,673 in total current liabilities, and stockholders' equity of $750,332 for the period ended Sept. 30, 2011. A copy of the March 31 Form 10-Q/A is available for free at: http://is.gd/Q6ymEV A copy of the June 30 Form 10-Q/A is available for free at: http://is.gd/T1lqnk A copy of the Sept. 30 Form 10-Q/A is available for free at: http://is.gd/v9obiV About Voice Assist Lake Forest, Calif.-based Voice Assist, Inc., operates a cloud- based speech recognition platform that supports speech recognition based enterprise services such as Customer Relationship Management (CRM), field force automation, as well as direct-to-enterprise services such as virtual assistants that unify communications and direct-to-consumer "safe driving" services that allow SMS, email, and social media messaging through a single personal phone number. For 2011, Mantyla McReynolds LLC, in Salt Lake City, Utah, expressed substantial doubt about Voice Assist's ability to continue as a going concern. The independent auditors noted that the Company has working capital deficits and has incurred losses from operations and negative operating cash flows during the years ended Dec. 31, 2011, and 2010. The Company reported a net loss of $10.24 million on $872,010 of revenues for 2011, compared with a net loss of $1.30 million on $1.26 million of revenues for 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.09 million in total assets, $2.92 million in total liabilities, and a stockholders' deficit of $1.83 million. VOLKSWAGEN-SPRINGFIELD: Can Use BB&T Cash Collateral Thru May 23 ---------------------------------------------------------------- The Bankruptcy Court signed off on a consent order that permits Volkswagen-Springfield, Inc., to use cash collateral of Branch Banking and Trust Company through May 23, 2012. As adequate protection for and to the extent of any diminution in the value of the Cash Collateral during the Interim Period resulting from the use, sale or lease of the Cash Collateral, the Debtor will grant to BB&T, pursuant to 11 U.S.C. Section 364(c)(2) a first priority perfected replacement lien on the Debtor's rights in accounts receivable and cash generated from the sale or other disposition of collateral of BB&T during the Interim Period; and any tangible or intangible assets of the Debtor created or acquired during the Interim Period to the extent acquired using Cash Collateral or proceeds of pre-petition collateral of BB&T. The Postpetition Liens granted to BB&T will not attach to the estate's interest in any avoidance actions pursuant to chapter 5 of the Bankruptcy Code or the proceeds. The Court will hold another hearing May 23 at 1:30 p.m. on the Debtor's continued use of cash collateral. About Volkswagen-Springfield Springfield, Virginia-based Volkswagen-Springfield, Inc., filed a Chapter 11 petition (Banrk. E.D. Va. Case No. 12-12905) in Alexandria on May 7, 2012. The Debtor operates one of the largest Volkswagen franchised dealerships in the Mid-Atlantic region. The Debtor estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. Judge Robert G. Mayer oversees the case. The Debtor is represented by Dylan G. Trache, Esq., and John T. Farnum, Esq., at Wiley Rein LLP, in McLean, Virginia. Pursuant to recent default notices, Branch Banking and Trust Company has asserted that it is owed $19.6 million. Jonathan L. Hauser, Esq. -- jonathan.hauser@troutmansanders.com -- at Troutman Sanders LLP, represents BB&T. VOLKSWAGEN-SPRINGFIELD: Sec. 341 Creditors' Meeting on June 14 -------------------------------------------------------------- The U.S. Trustee for the Eastern District of Virginia will convene a Meeting of Creditors under 11 U.S.C. Sec. 341 in the Chapter 11 case of Volkswagen-Springfield, Inc., on June 14, 2012, at 3:00 p.m. at Office of the U.S. Trustee, 115 South Union Street, Suite 206, in Alexandria. Proofs of claim are due by Sept. 12, 2012. Complaints for determination of dischargeability of debt ARE due by Aug. 13, 2012. About Volkswagen-Springfield Springfield, Virginia-based Volkswagen-Springfield, Inc., filed a Chapter 11 petition (Bankr. E.D. Va. Case No. 12-12905) in Alexandria on May 7, 2012. The Debtor operates one of the largest Volkswagen franchised dealerships in the Mid-Atlantic region. The Debtor estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. Judge Robert G. Mayer oversees the case. The Debtor is represented by Dylan G. Trache, Esq., and John T. Farnum, Esq., at Wiley Rein LLP, in McLean, Virginia. Pursuant to recent default notices, Branch Banking and Trust Company has asserted that it is owed $19.6 million. Jonathan L. Hauser, Esq., at Troutman Sanders LLP, represents BB&T. VUANCE LTD: Swings to $1 Million Net Income in 2011 --------------------------------------------------- Vuance Ltd. filed with the U.S. Securities and Exchange Commission its annual report on Form 20-F disclosing net income of US$1.02 million on US$7.92 million of revenue in 2011, compared with a net loss of US$1.96 million on US$7.38 million of revenue in 2010. The Company's balance sheet at March 31, 2012, showed US$2.45 million in total assets, US$8.05 million in total liabilities and a US$5.60 million total shareholders' deficit. For 2011, Fahn Kanne & Co. Grant Thornton Israel expressed substantial doubt about the Company's ability to continue as a going concern. The indepdent auditors noted that the Company has incurred substantial recurring losses and negative cash flows from operations and, as of Dec. 31, 2011, the Company had a working capital deficit and total shareholders' deficit. A copy of the Form 20-F is available for free at: http://is.gd/V2fm56 About Vuance Ltd. Qadima, Israel-based Vuance Ltd. is a leading provider of Wireless Identification Solutions. The Company currently offers an Active RFID technology, a long, active radio frequency identification equipment that utilizes active radio frequency communications to track assets, people and objects for potential governmental agency and commercial customers. WASHINGTON GROUP: Appeals Court Rejects Alter Ego Claim v Raytheon ------------------------------------------------------------------ Boccard USA Corporation sued Raytheon Company seeking to hold it liable for a breach of contract by Raytheon Company's former third-tier subsidiary, United Engineers International, Inc., based on the theory of alter ego. A jury found United Engineers had breached its contract with Boccard and made an affirmative finding on Boccard's alter ego claim against Raytheon Company. Based on the jury's verdict, the trial court rendered judgment against Raytheon Company in favor of Boccard. Raytheon appealed to the Court of Appeals of Texas, First District, Houston. Of the four issues raised by Raytheon on appeal, the dispositive issue addressed by the appellate court is whether Boccard had standing to pursue its alter ego claim. In an Opinion dated May 10, 2012, penned by Justice Laura Carter Higley, available at http://is.gd/go3p07from Leagle.com, the appellate court held that Boccard did not have standing to pursue the claim, and vacated the trial court's judgment and dismissed the appeal. In May 1998, United Engineers entered into a turnkey agreement with Atlantic Methanol Production Company LLC in which United Engineers agreed to provide "all design, engineering, procurement, construction,. . . [and] other work necessary to build a methanol production facility" for AMPCO in Equatorial Guinea. To build the plant, United Engineers needed fabricated piping spool, and Boccard agreed to supply such material to United Engineers. In June 1999, the two companies entered into a contract, in the form of a purchase order, setting out the terms of the agreement by which Boccard would supply piping spool to United Engineers. The contract stated that the total price of the order was not to exceed $5.5 million. Over the next year, disputes arose between the two companies regarding the order. Each side accused the other of not sufficiently performing its obligations under the agreement. For example, Boccard asserted that United Engineers failed to timely supply Boccard with drawings and other information necessary for it to complete the order, and United Engineers contended that Boccard was causing unnecessary delays. Over time, the scope and the cost of order incrementally increased. After the last of the product was shipped by Boccard to United Engineers in May 2000, Boccard claimed that United Engineers still owed it over $3.9 million. United Engineers claimed that Boccard had deviated from the agreement and, as a result, owed money to United Engineers. Around this same time, United Engineers and its parent company, Raytheon Engineers & Constructors, Inc., were sold to Morrison Knudsen, a construction company. Before the sale, United Engineers was a wholly owned subsidiary of RE&C, and RE&C was a wholly owned subsidiary of Raytheon Engineers and Constructors International, Inc., which is in turn, was a wholly owned subsidiary of Raytheon Company. Following the sale, Raytheon and RECI remained as parent and subsidiary. After purchasing RE&C and its subsidiaries, including United Engineers, Morrison Knudsen and RE&C merged to form Washington Group International, Inc. At that point, United Engineers became a wholly owned subsidiary of Washington Group. About a year after the corporate merger, Washington Group and its subsidiaries, including United Engineers, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in Reno, Nevada. As a creditor, Boccard filed a proof of claim in the bankruptcy court for the amounts it claimed were owed by United Engineers on the AMPCO methanol plant project. When the bankruptcy petition was filed, Washington Group became the debtor-in-possession, acting in the capacity of a bankruptcy trustee. As debtor-in-possession, Washington Group filed an adversary proceeding in the bankruptcy court against Raytheon and RECI. Among its claims, Washington Group alleged that, before Morrison Knudsen purchased RE&C, Raytheon had depleted RE&C of its working capital rendering it insolvent. It further alleged that Raytheon had misrepresented to Morrison Knudsen the true financial condition of RE&C, failing to disclose a number of RE&C's liabilities. In January 2002, Raytheon and Washington Group entered into a settlement agreement whereby each party mutually released the other from all claims. In July 2003, Boccard filed an adversary proceeding seeking to resolve its claim against Washington Group. On Jan. 27, 2004, the bankruptcy court signed a stipulated order dismissing Boccard's adversary proceeding with prejudice but allowing Boccard a claim in the bankruptcy proceeding in the amount of $3.1 million. The order expressly provided that it had no res judicata or other preclusive effect. On April 8, 2004, Boccard sued Raytheon, asserting that United Engineers breached its contract by failing to pay all amounts owed to Boccard for supplying the fabricated piping spool for the construction of the AMPCO methanol plant. Boccard sought to hold Raytheon liable for United Engineers's breach of contract based on the theory of alter ego. Boccard alleged that, prior to selling RE&C and United Engineers to Morrison Knudsen, Raytheon, and its linear subsidiaries, had disregarded the corporate form to the point that each wholly owned subsidiary and its respective parent company were the alter egos of one another. In other words, United Engineers and its parent, RE&C, were alter egos of each other; RE&C and RECI were alter egos; and RECI and Raytheon were alter egos. Boccard claimed that Raytheon, as the ultimate parent corporation in the chain, was liable for United Engineers's breach of contract. Raytheon filed a motion for partial summary judgment in which it challenged Boccard's alter ego claim. Raytheon asserted, inter alia, that Boccard did not have standing to assert an alter ego claim because the claim belonged exclusively to the bankruptcy estate. Raytheon argued that, pursuant to the Bankruptcy Code, only the bankruptcy trustee, or the debtor-in-possession, has standing to assert a claim owned by the bankruptcy estate. The trial court denied Raytheon's motion for partial summary judgment. The case proceeded to trial before a jury. The jury found in favor of Boccard on its breach of contract and alter ego claims. The trial court rendered judgment on the jury's verdict, awarding Boccard $3,444,513.62 in damages. The appeal followed. According to the Texas appeals court, Washington Group was the only party with standing to assert an alter ego claim against Raytheon. Boccard did not have standing to assert the alter ego claim. "Thus, we hold that the trial court was without subject- matter jurisdiction to render judgment based on the equitable claim of alter ego," the appeals court said. The appellate case is RAYTHEON COMPANY, Appellant, v. BOCCARD USA CORPORATION, Appellee, No. 01-10-00950-CV (Tex. App. Ct.). About Washington Group Washington Group, an international engineering and construction firm, offers a full life-cycle of services as a preferred provider of premier science, engineering, construction, program management, and development. Washington Group International, Inc., et al., sought Chapter 11 protection (Bankr. D. Nev. Case No. 01-31627), on May 14, 2001, and filed their Plan of Reorganization, as subsequently amended and modified, on July 24, 2001. That Plan took effect on January 25, 2002. The Company listed combined assets of $3,761,700,000 and liabilities of $3,297,800,000 at the time of the bankruptcy filing. Timothy R. Pohl, Esq., Gregg M. Galardi, Esq., and Eric M. Davis, Esq., at SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP, guided the company through its successful restructuring. WILLBROS GROUP: S&P Affirms 'B-' Corp. Credit Rating; Off Watch --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'B-' corporate credit rating, on Houston-based engineering and construction (E&C) company Willbros Group Inc. "At the same time, we removed the ratings from CreditWatch, where we had placed them with negative implications on March 2, 2012. The outlook is negative," S&P said. "Although Willbros' operating results are improving and the company continues to repay debt, the company's revolving credit facility ($59 million outstanding as of March 31, 2012) matures June 30, 2013. The company also has limited headroom under the maximum total leverage ratio covenant in its bank credit agreement, which steps down to 3.25x on Dec. 31, 2012. Covenant- calculated total leverage was less than 3x as of March 31, 2012," S&P said. "Because of a series of execution challenges in its businesses, Willbros' recent performance record has been worse than our expectations," said Standard & Poor's credit analyst Robyn Shapiro. "Operating losses associated with the company's current and previous operations illustrate the inherent risks associated with projects in the E&C industry." "Willbros provides engineering, construction, maintenance, life- cycle extension, and facilities development and operations services in three markets: hydrocarbon infrastructure, including natural gas pipelines, refining and processing plants (oil and gas); Canadian operations; and the North American electric power transmission and distribution market (utility transmission and distribution)," S&P said. WOODCREST COUNTRY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Woodcrest Country Club 300 Evesham Road Cherry Hill, NJ 08003 Bankruptcy Case No.: 12-22055 Chapter 11 Petition Date: May 9, 2012 Court: United States Bankruptcy Court District of New Jersey (Camden) Judge: Judith H. Wizmur Debtor's Counsel: William Mackin, Esq. WILLIAM MACKIN, ESQ., P.C. 105 N. Broad Street P.O. Box 304 Woodbury, NJ 08096 Tel: (856) 848-2152 Fax: (856) 848-4280 E-mail: bill.mackin@verizon.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/njb12-22055.pdf The petition was signed by Irvin E. Richter, president. WP CAMP: Moody's Assigns 'B3' Corp. Family Rating; Outlook Stable ----------------------------------------------------------------- Moody's Investors Service has assigned ratings, including a B3 corporate family rating, to WP CAMP Holding Company, reflecting the planned leveraged buy-out of CAMP by entities of the financial sponsor GTCR, LLC, a $700 million transaction. Concurrently, a B1 rating has been assigned to the planned first-lien credit facility and a Caa2 rating to the planned second lien credit facility. The B3 corporate family rating anticipates steady revenue growth ahead and continuation of CAMP's historically strong operating margins, but also recognizes a very high beginning leverage level despite the LBO's large equity component. Ratings Rationale Although a rather small company with annual revenues below $100 million, CAMP has attained a good business position as a provider of business jet maintenance record keeping services, which heavily supports the CFR. An established subscriber base, historically high subscriber renewal rates, and long-term exclusive arrangements with several business jet manufactures should help the subscriber count grow in the low single digit percentage range annually. Further, because the annual cost to end users of purchasing business maintenance record keeping services versus the total jet ownership cost is low, the company's ability to continue obtaining annual price increases seems intact. Moody's expects that the risk of a newcomer duplicating the company's service offering is limited because the company already occupies much of its niche and a relatively large amount of investment would be required to duplicate the numerous aircraft models that CAMP's database handles. Revenue stability is supported by the existing business jet fleet size and Moody's expects that that annual business jet deliveries should rise in coming years as the U.S. economic recovery gradually takes hold. Very high financial leverage heavily weighs against the good business position however, and constrains the rating. On a Moody's adjusted basis, the ratio of debt (pro forma for the LBO) to 2011 revenues would be 5x, while debt to EBITDA would exceed 8.5x. These leverage ratios are very high for both aerospace/defense and software sector issuers. High beginning financial leverage limits prospects for debt reduction from free cash flow and makes the credit less resilient against negative operational developments. The rating outlook is stable, focused on adequate beginning liquidity and likelihood of gradual debt reduction. Moody's expects that modest working capital needs and low capital spending planned should permit a free cash flow to debt ratio in the low single digit percentage range. A minimal cash on hand balance will follow transaction close and the planned $30 million revolving credit facility is large versus CAMP's revenue base. The only planned financial maintenance covenant of the $260 million first lien credit facility will be a maximum first lien net leverage test, whose threshold will decline over time. However, the test will only apply when revolver utilization exceeds $3 million. In a stress scenario, effective revolver availability could diminish with the financial ratio covenant, which somewhat offsets the large revolver size consideration. Beginning covenant headroom should be sufficient to effectively permit some light revolver borrowing if need be. Upward rating momentum would depend on expectation of debt to EBITDA below 6x, free cash flow to debt above 10% and sustained adequate liquidity. Downward rating pressure would mount with weak liquidity and a lack of leverage metric improvement. Ratings are: Corporate family, B3 Probability of default, B3 $30 million first lien revolving credit facility due 2017, B1, LGD3, 31% $230 million first lien term loan due 2019, B1, LGD3, 31% $115 million second lien term loan due 2019, Caa2, LGD5, 84% Rating Outlook, Stable The principal methodology used in rating WP Camp Holdings Company was the Global Aerospace and Defense Industry Methodology published in June 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. WP CAMP Holding Company, based in Ronkonkoma, New York, provides maintenance, inventory control and scheduling services management programs in North America and Europe. Revenues in 2011 revenues were $70 million. The company is expected to be renamed CAMP International Holding Company at transaction close. YELLOW MEDIA: S&P Cuts Corp. Credit Rating to 'CCC'; on Watch Neg ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Montreal-based Yellow Media Inc. by two notches to 'CCC' from 'B-'. "At the same time, Standard & Poor's lowered its issue-level rating on the company's senior unsecured debt to 'CCC' (the same as the corporate credit rating on Yellow Media) from 'B-'. The recovery rating on the debt is unchanged at '4', indicating our expectation of average (30%-50%) recovery in the event of a default. Standard & Poor's also lowered its issue-level rating on Yellow Media's subordinated debt to 'CC' (two notches below the corporate credit rating on the company) from 'CCC'. The recovery rating on this debt is unchanged at '6', indicating our expectation of negligible (0%-10%) recovery in a default situation," S&P said. "In addition, we lowered the ratings on the company's preferred shares outstanding to 'D' (default) from 'C', owing to the nonpayment of dividends on these securities when due," S&P said. "Finally, we are keeping all our ratings on the company on CreditWatch, where they were placed with negative implications Dec. 5, 2011. At March 31, 2012, the company had about C$2 billion of gross debt and about C$732 million of preferred shares outstanding," S&P said. "The downgrade primarily reflects Yellow Media's heightened risk of a near-term debt restructure given the significant refinancing risk for its debt maturities in 2013 and beyond," said Standard & Poor's credit analyst Madhav Hari. "The downgrade also reflects our view that the company's current capital structure is unsustainable against the backdrop of deteriorating revenue and cash flow trends," Mr. Hari added. "For the quarter ended March 31, 2012, Yellow Media's normalized revenue decline accelerated to 13.3% (17.3% on a reported basis) on a year-over-year basis, driving a 21.3% (23.2%) drop in normalized EBITDA; normalized revenue and EBITDA exclude the impact of the divested LesPAC operations as well as contribution from Canpages and YPG USA. While print revenue erosion (which accelerated to about 19% year-over-year) was fairly consistent with our recently lowered expectations, growth in organic online revenue (7.8%) was substantially weaker than our assumption of a percent growth in the mid-to-high teens and well below the 22% that the company posted in fourth-quarter 2011. The sharp slowdown of online revenue growth at Yellow Media is of particular concern to us since market share gain in this segment is critical to the company's long-term viability. Also, key operating metrics such as customer count, customer renewal rates, and average revenue per advertiser, have weakened notably relative to previous quarters. Furthermore, in its quarterly reporting Yellow Media management cautioned that in the most recent quarter it had observed changes in revenue trends that led it to believe that online revenue growth would be slower than previously expected and print declines would be steeper based on a more rapid and enduring change than expected in late-2011," S&P said. "The company remains on CreditWatch negative. This CreditWatch placement indicates that we could either affirm or lower the ratings on Yellow Media by one or more notches in the near future. Standard & Poor's will likely resolve this CreditWatch once it has had an opportunity to fully evaluate the measures company management is taking to address its debt maturities," S&P said. Z TRIM HOLDINGS: Edward Smith Discloses 67.6% Equity Stake ---------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Edward B. Smith, III, and his affiliates disclosed that, as of May 8, 2012, they beneficially own 31,142,057 shares of common stock of Z Trim Holdings, Inc., representing 67.6% of the shares outstanding. Mr. Smith previously reported beneficial ownership of 30,397,346 common shares or a 70.9% equity stake as of March 29, 2012. A copy of the amended filing is available for free at: http://is.gd/mVbzes About Z Trim Mundelein, Ill.-based Z Trim Holdings, Inc., is a functional food ingredient company which provides custom product solutions that help answer the food industry's problems. Z Trim's revolutionary technology provides value-added ingredients across virtually all food industry categories. Z Trim's all-natural products, among other things, help to reduce fat and calories, add fiber, provide shelf-stability, prevent oil migration, and add binding capacity -- all without degrading the taste and texture of the final food products. The Company reported a net loss of $6.94 million in 2011, compared with a net loss of $10.91 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $4.27 million in total assets, $13.01 million in total liabilities, $3.85 million in total commitment and contingencies and a $12.59 million total stockholders' deficit. M&K CPAs,PLLC, in Houston, Texas, expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 financial results. The independent auditors noted that the Company had a working capital deficit and reoccurring losses as of Dec. 31, 2011. ZUFFA LLC: Technical Default of Debt No Effect on Moody's Ba3 CFR ----------------------------------------------------------------- Moody's Investors Service said that Zuffa, LLC's technical default will not impact its Ba3 Corporate Family Rating (CFR). The default was a result of an omission of recording an accrued liability for contingent future obligations related to the company's employee incentive plan. This amounted to the company's past financial statements not being prepared in accordance with generally accepted accounting principles and hence not in compliance with its loan agreement for a short period until they are restated. Moody's expects the omission to be cured quickly through the restatement of Zuffa's financial statements. Moody's believes that upon restatement, the inclusion of the charge will not materially impact the company's leverage (including Moody's adjustments) or exceed the company' senior secured leverage covenant of 5.0x (which applies when the company's revolver is drawn) in what Moody's expects to be the restated historical periods. In addition, Moody's expects the company to take definitive steps to modify its employee incentive plan, in order to eliminate the contingent liability and reverse the need for the accrued contingent liability going forward. Moody's does not believe the company had any motive to intentionally omit such a charge in its financial statements. In Moody's view, this is a minor technicality which will be quickly remedied, and doesn't warrant a change in the company's rating or positive rating outlook. Zuffa, LLC d/b/a Ultimate Fighting Championship (Zuffa) is the world's largest promoter of mixed martial arts (MMA) sports competition events. Its most prominent brand, the Ultimate Fighting Championship or "UFC", has the largest platform in the sport today, and its name is now synonymous with MMA. MMA is an individual combat sport with international appeal, which uses a combination of rules and fighting genre, such as boxing, karate, judo, jiu-jitsu, kickboxing, and wresting among others and is currently sanctioned by 46 out of 48 state athletic commissions in the U.S. under the "Unified Rules of MMA". * FDIC Wind-Down Plan Won't Be Pretty, But Just May Work -------------------------------------------------------- Evan Weinberger at Bankruptcy Law360 reports that the Federal Deposit Insurance Corp.'s plan, detailed Thursday, to wind down failed major financial institutions would allow a company's subsidiaries to survive while the parent is put to rest -- and that might be the only way to prevent a massive creditor run, attorneys say. * Congress Extends Temporary Bankruptcy Judgeships -------------------------------------------------- The U.S. Congress has passed, and the President is expected to sign into law, legislation saving temporary bankruptcy judgeships that could have expired in 19 judicial districts. The Temporary Bankruptcy Judgeships Extension Act of 2012 extends 29 existing temporary judgeships previously created by Congress for an additional five years. The legislation, considered in Congress for more than a year, comes just in time for many bankruptcy courts. By statute, five years after a judge fills the office, the first bankruptcy judgeship vacancy to occur in that same district cannot be filled. The five years are up for most, and vacancies are beginning to occur in the 19 districts that received those temporary judgeships. A list of the affected districts and temporary judgeships is available at http://is.gd/VCChly * Squire Sanders Promotes Sherri Dahl to Principal -------------------------------------------------- Squire Sanders on May 8 disclosed that Sherri L. Dahl has been promoted to principal. Ms. Dahl is among five lawyers the global legal practice promoted to principal this year and is based in the Cleveland office. Ms. Dahl's practice focuses on complex corporate and municipal bankruptcy reorganization, sales, and litigation. She represents debtors, lenders, creditors' committees, and individual creditors in Chapter 7, 9, and 11 matters in bankruptcy and district courts across the United States. Ms. Dahl represented the holding company for the U.S.'s fourth largest bank failure in 2009. She has also represented companies involved in the steel, automotive, entertainment, manufacturing, healthcare, aluminum, mortgage, construction, coal mining, and plastics industries. "We are proud to recognize Sherri's hard work with this promotion," said Stephen D. Lerner, leader of Squire Sanders' Restructuring and Insolvency Practice Group. "We are fortunate to have her skills and talent, which contribute to the outstanding service we provide our clients." * BOND PRICING -- For Week From May 7 to 11, 2012 ------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- AMBAC INC 9.375 8/1/2011 18.200 AMBAC INC 9.500 2/15/2021 18.500 AMBAC INC 7.500 5/1/2023 19.100 AMBAC INC 6.150 2/7/2087 0.625 AES EASTERN ENER 9.000 1/2/2017 26.500 AGY HOLDING COR 11.000 11/15/2014 36.027 AHERN RENTALS 9.250 8/15/2013 63.850 ALION SCIENCE 10.250 2/1/2015 41.750 AMER GENL FIN 5.200 5/15/2012 98.799 AMR CORP 9.000 8/1/2012 48.550 AM AIRLN PT TRST 10.180 1/2/2013 67.550 AM AIRLN PT TRST 7.379 5/23/2016 31.000 A123 SYSTEMS INC 3.750 4/15/2016 30.000 BROADVIEW NETWRK 11.375 9/1/2012 86.500 BLOCKBUSTER INC 11.750 10/1/2014 1.688 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 18.375 DIRECTBUY HLDG 12.000 2/1/2017 18.375 DUNE ENERGY INC 10.500 6/1/2012 92.750 EDISON MISSION 7.500 6/15/2013 74.125 EASTMAN KODAK CO 7.250 11/15/2013 29.100 EASTMAN KODAK CO 7.000 4/1/2017 28.000 EASTMAN KODAK CO 9.950 7/1/2018 30.100 EASTMAN KODAK CO 9.200 6/1/2021 28.375 ENERGY CONVERS 3.000 6/15/2013 51.250 FIRST METRO 6.900 1/15/2019 15.000 GLB AVTN HLDG IN 14.000 8/15/2013 33.250 GMX RESOURCES 5.000 2/1/2013 73.256 GMX RESOURCES 5.000 2/1/2013 73.750 GMX RESOURCES 4.500 5/1/2015 44.000 GLOBALSTAR INC 5.750 4/1/2028 49.250 HAWKER BEECHCRAF 8.500 4/1/2015 19.000 HAWKER BEECHCRAF 8.875 4/1/2015 19.000 HAWKER BEECHCRAF 9.750 4/1/2017 3.026 ELEC DATA SYSTEM 3.875 7/15/2023 95.000 HSBC FIN CORP 7.000 5/15/2012 100.016 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 59.500 MASHANTUCKET PEQ 8.500 11/15/2015 10.600 MF GLOBAL LTD 9.000 6/20/2038 45.875 MANNKIND CORP 3.750 12/15/2013 56.000 NEWPAGE CORP 10.000 5/1/2012 2.000 NETWORK EQUIPMNT 7.250 5/15/2014 35.100 PMI GROUP INC 6.000 9/15/2016 22.100 PENSON WORLDWIDE 8.000 6/1/2014 31.160 PENSON WORLDWIDE 12.500 5/15/2017 41.500 POWERWAVE TECH 3.875 10/1/2027 21.393 POWERWAVE TECH 3.875 10/1/2027 21.500 REDDY ICE HLDNGS 10.500 11/1/2012 55.500 REDDY ICE CORP 13.250 11/1/2015 28.000 REAL MEX RESTAUR 14.000 1/1/2013 46.000 RESIDENTIAL CAP 6.500 4/17/2013 35.000 RESIDENTIAL CAP 6.875 6/30/2015 47.470 SUPERVALU INC 7.500 5/15/2012 100.000 THORNBURG MTG 8.000 5/15/2013 8.750 TOUSA INC 9.000 7/1/2010 32.000 TOUSA INC 9.000 7/1/2010 31.000 TRAVELPORT LLC 11.875 9/1/2016 36.375 TRAVELPORT LLC 11.875 9/1/2016 37.500 TIMES MIRROR CO 7.250 3/1/2013 35.000 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 21.125 TEXAS COMP/TCEH 10.250 11/1/2015 23.750 TEXAS COMP/TCEH 10.250 11/1/2015 21.450 TEXAS COMP/TCEH 15.000 4/1/2021 29.500 TEXAS COMP/TCEH 15.000 4/1/2021 30.000 USEC INC 3.000 10/1/2014 45.500 WASH MUT BANK FA 6.875 6/15/2011 0.010 WASH MUT BANK FA 5.650 8/15/2014 0.010 WASH MUT BANK FA 5.125 1/15/2015 0.010 WASH MUT BANK NV 6.750 5/20/2036 0.875 XEROX CORP 5.500 5/15/2012 100.000 OSI PHARMACEUTIC 3.000 1/15/2038 79.510 ********* 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 ***